Civil war destroyed much of the economy of Liberia, particularly the infrastructure in and around Monrovia. Prior to the war the nation had promoted foreign investment in the development of its valuable natural resources, mainly rubber, iron ore, and timber; many investors have since departed. With 72 % of the labor force engaged in agriculture and forestry, the government had undertaken educational and vocational training programs to promote the development of other sectors. Those programs, too, were stopped by the war. In the late 1980s the annual budget showed revenues of $217 million and current and development expenditures of $248 million; by 1993 government income had been reduced to small revenues from registering merchant shipping. The principal port in Buchanan reopened in mid-1993, and the export of rubber and timber resumed.

The Liberian economy is predominantly agrarian, and raw materials, equipment, and consumer goods are imported. Production for export is carried out on a large scale through foreign investment in rubber, forestry, and mining. Foreign ships registering under a Liberian “flag of convenience” have made Liberia the world's foremost nation in registered shipping tonnage. Liberia nevertheless remains a primarily agricultural and underdeveloped nation. The distribution of wealth is uneven, the coastal districts receiving a greater share of economic benefits than the hinterland, after which the administrative centres are the next beneficiaries.

A civil war in 1989-96 destroyed much of Liberia's economy, particularly the infrastructure in and around Monrovia. Many businessmen fled the nation, taking capital and expertise with them. Some returned during 1997. Many will not return. valuablely endowed with water, mineral resources, forests, and a climate favorable to agriculture, Liberia had been a producer and exporter of basic products, while local manufacturing, mainly foreign owned, had been small in scope.The restoration of the infrastructure and the raising of incomes in this ravaged economy depend on the implementation of sound macro- and micro-economic policies of the new government, including the promotement of foreign investment. Recent growth has been from a low base, and continued growth will require major policy successes.