Many coastal fisheries are subject to harvesting externalities due to inadequate regulations compounded by limited enforcement. Coastal fisheries in Liberia consist of a fleet of dugout canoes (Kru) primarily targeting demersal finfish, larger open wooden boats propelled with outboard engines targeting small inshore pelagics (Fanti), and a small number of industrial trawlers employing midwater and bottom trawls targeting finfish and shrimp. This paper develops a bio-economic model for the coastal fisheries in Liberia and employs the model to identify economic optimal fishing effort and harvesting trajectories for the different coastal fleets. The results show under harvesting and disinvestments in the coastal fisheries in Liberia. In 2010 the Government of Liberia declared a six nautical mile inshore exclusion zone accessible only to small-scale fisheries (SSF), which was accompanied by increased enforcement. The coastal fleets in 2016 were profitable but the distribution of profits was tilted to the small-scale fleets. The government needs to evaluate what policy options are available to fully utilize the fisheries potential for different species complexes while at the same time reduce the risk of conflict and overharvesting. There appears to be a need for investment in new technologies, which can only take place if fishing in Liberia will remain profitable.