By: Julius Konton
Liberia has formally stepped up its transition toward a cashless economy, with Finance and Development Planning Minister Augustine Kpehe Ngafuan declaring that digital finance is now central to the government’s economic transformation agenda.
Speaking at the official launch of Liberia’s Inclusive Instant Payment System (IIPS), Minister Ngafuan said the move marks a “giant step” toward modernizing the economy, widening financial inclusion, improving tax compliance, and reducing risks associated with cash-based transactions.
“We are moving to a cashless society,” Ngafuan said. “Transformation does not happen by waving a magic wand. It takes deliberate planning, sustained effort, and coordinated action”, he re-emphasized.
Addressing Structural Constraints to Growth
Minister Ngafuan stressed that the government’s push for digital payments is part of a broader strategy to address Liberia’s long-standing structural constraints to growth and job creation.
According to government and development partner assessments, Liberia continues to face challenges including:
Limited road connectivity, particularly in rural counties
Inadequate electricity supply, with national access rates still below 30 percent
Restricted access to finance, especially for small businesses and informal workers
“These are the key constraints to expansion and job creation,” Ngafuan noted. “That is why we are deliberately investing more in roads, energy, and access to finance. Everything is interlocking. They are all coming together”, he informed the gathering.
Over the past year, Liberia has increased capital spending on road rehabilitation, power transmission, and financial-sector reforms, with digital finance emerging as a key enabler across all sectors.
Digitization and the $1.2 Billion Budget
Ngafuan revealed that digital transformation is one of the pillars underpinning Liberia’s US$1.2 billion national budget, which lawmakers questioned during recent budget hearings.
“One of the questions asked was: what are you depending on to raise revenue?” Ngafuan said. “Let me give you the secret, digitizing the economy.”
He explained that digital payments make tax compliance easier, accelerate revenue collection, and bring more citizens and businesses into the formal tax net.
Liberia’s informal sector employs an estimated 70–80 percent of the workforce, according to World Bank data, significantly limiting the government’s revenue base. Digitization, Ngafuan argued, is essential to reversing this trend.
From Informality to Formal Employment
A major objective of the new payment system is to transition workers from informal and “vulnerable employment” into more stable, formal economic activity.
“Many of our people are classified as vulnerably employed,” the minister said. “If we want to make them fully employed, we must take deliberate actions to move them from informality to formality.”
The IIPS platform is expected to support digital salaries, merchant payments, government transfers, and small-business transactions opening pathways to credit, savings, and insurance for previously unbanked citizens.
Government officials estimate that mobile money and digital payment usage in Liberia has grown sharply in recent years, with registered mobile money accounts now exceeding 2 million, driven by telecom-led financial services.
Reducing Cash Risks, Improving Efficiency
Ngafuan also highlighted the security and operational risks associated with cash handling, particularly for commercial banks and large businesses.
“We know the risks of moving cash from one end to another,” he said. “This system helps reduce those risks while improving efficiency.”
From the fiscal side, he said the government expects faster revenue inflows, lower transaction costs, and improved transparency in public finance management.
“We will pay better, generate government revenue quicker, and put more people on the path of inclusivity,” he added.
Central Bank Partnership and Next Steps
The finance minister praised the close working relationship between the Ministry of Finance and the Central Bank of Liberia (CBL), describing the two institutions as “two sides of the same coin.”
“Our relationship with the Central Bank is excellent. To some extent, we are like Siamese twins,” Ngafuan added.
While acknowledging that the IIPS does not solve all challenges, Ngafuan said it represents an important milestone toward Liberia’s ultimate goal: a National Electronic Payment Switch, expected to be rolled out next year.
“This does not end all the problems, but it is a major step in the right direction,” he said. “And from the fiscal side, we will give all the support we can”, he noted.
Economists say Liberia’s digital finance push aligns with regional trends across West Africa, where cashless payment systems have helped improve revenue mobilization, reduce leakages, and expand financial inclusion.
If successfully implemented, Liberia’s transition to digital payments could strengthen fiscal stability, accelerate formal job creation, and position the country for more resilient, inclusive economic growth.
“Let us continue to work together to transform our economy”, the Finance Ministry boss reechoed.
Editor’s Note
Liberia’s decision to accelerate its shift toward a cashless economy comes at a critical moment in the country’s post-crisis recovery and fiscal reform efforts.
With a largely informal workforce, limited tax base, and persistent infrastructure gaps, the launch of the Inclusive Instant Payment System (IIPS) signals a strategic attempt by government to harness technology as a lever for growth, revenue mobilization, and social inclusion.
Finance Minister Augustine Kpehe Ngafuan’s remarks underscore a broader policy shift: moving beyond traditional cash-based systems toward digital platforms that can improve transparency, reduce leakages, and integrate millions of Liberians into the formal economy.
While challenges such as electricity access, digital literacy, and network reliability remain significant, regional experience suggests that well-sequenced digital payment reforms can deliver measurable gains in efficiency and public finance management.
This article situates Liberia’s cashless push within that wider West African context, highlighting both the promise and the practical hurdles ahead.
The success of IIPS will ultimately depend on sustained political commitment, strong coordination between fiscal and monetary authorities, and inclusive implementation that ensures rural communities and small businesses are not left behind.
