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IMANI Center for Policy Report: Liberia in Need of Smart Policies

IMANI Center for Policy Report: Liberia in Need of Smart Policies

Monrovia – A Ghana-based research group, IMANI Center for Policy and Education, has scrutinized campaign promises and manifestos of politicians and political parties in Liberia and has called on politicians here to come clear with their campaign messages.

IMANI scrutinized and analyzed the manifestos of five political parties based on their availability, looking at their various plans for economy, private sector development, currency depreciation, job creation, diversification of the economy, health, education and energy and mining. 

The Focus 

The research conducted by the IMANI revealed that Liberia has, in recent times, shown a keenness for improving its health sector, evident in the government’s commitment in 2015 to increase health spending from 4% to 10% from 2006 to 2015 and training over 200 mental health professionals since 2016 to add to the one psychiatrist in the country where an estimated 300,000 people need to seek this service.

While this is commendable, what is needed foremost before implementing any policy changes, such as the suggested by several political parties, is adequate data on the state of healthcare in Liberia.

The World Health Organization have highlighted a lack of data as a challenge hindering Liberia’s progress, with ‘latest’ data points collected from 2008 in their 2010 Progress report on Health-related Millennium Development Goals (MDGs). 

Similarly, the latest data point for the psychiatrists working in the mental health sector per 10,000, according to the World Health Organization, was from 2014, which was before the implementation of certain interventions, such as the training of mental health professionals in 2016, as stated above. Having this data is of particular importance given the context of an estimated 1 in 5 Liberians suffering from a mild to moderate mental health disorder.

This health data, while lacking before the Ebola crises, is especially necessary to ascertain the health situation of post-Ebola Liberia, after an era that saw provision of healthcare coming from many collaborations between the government, international donors and NGOs, such as USAID, UNICEF and the International Rescue Committee.

In the 2016/17 National Budget, donor pending on health was US$10M more than government expenditure on health. The foundation of adequate accurate data collection should help to guide political parties on how to coordinate funds and efficiently address health issues, such as the retention of health personnel. 

What are the Political Parties Plans for the Economy? 

According to IMANI, as Liberians head to the polls there’s the need to look at the plans or strategies of the 26 political parties in terms of their plans to revive the country’s ailing economy, and whether those plans are capable of providing a conducive environment to promote the much needed investment and growth. 

Addressing Currency Depreciation 

The group found that the ruling Unity Party, and the main opposition party, Coalition for Democratic Change (CDC), have both promised to address the depreciation of the Liberian dollar albeit through different means.

The Unity party intends to address the issue of dual currency as a way of curtailing the high exchange rate. It is however not clear whether they intend to dedollarise the economy, in which case whether via a market-based approach or a forced approach, or fully dollarise it. CDC on the other hand promises to stabilize the local currency by enhancing domestic production and exports through prudent management of the macro economy. 

Job Creation 

The main opposition party, CDC intends to create jobs by promoting a vibrant private sector and also by enforcing effective liberalisation programs in accordance with the local content policy in their first year in office.

The Liberty party also promises to adopt a labour intensive approach to tackle unemployment challenges by establishing a student service corp and investing in labour intensive infrastructure which will also address the current infrastructure deficit.

The Movement for Economic Empowerment like the CDC also intends to create better job opportunities rooted in an expanded private sector including developing the agricultural sector. 

Diversification of the Economy 

Two out of the four parties listed above have highlighted plans to diversify the economy. The main opposition party intends to develop and implement strategic manufacturing and industrial policies to promote a more diversified, productive and sustainable economy.

The Movement for Economic Empowerment (MEE) also promises to restructure the economy in order to reduce the Liberian economy’s dependence on a few primary commodities. 

Private Sector Growth 

With Liberia’s current rank in the World Bank Doing business index, a lot needs to be done to enhance the business environment. The Movement for Economic Empowerment Party seeks to promote private sector growth by encouraging and protecting foreign investment.

CDC also promises to strengthen Liberia’s current legal and fiscal regulations to improve government support services for both local and foreign investors. The CDC again promises to reform business legislation in order to remove red tapes that slow growth in the private sector. 

Given the importance of a vibrant private sector to the growth of the Liberian economy, voters and political parties should also carefully consider the following in their quest to promote a conducive business environment. 

Regulations that protect investors must be strengthened. Liberia ranked 179 out of 189 countries in terms of protecting minority investors in the 2017 Ease of Doing Business Index. A World Bank survey on investors identified insufficient legal protection of investors as the primary concern to Public Private Partnerships (PPPs). 

The number of days required to access electricity for business needs to be reduced. Currently it takes an average of 465 days and cost 4066.6 percent of income per capita to get electricity due to factors such long bureaucratic processes. This can greatly hinder investor interest.

A robust credit information system is needed to facilitate wider dissemination of credit information aimed at reducing credit risk and to encourage lending. Liberia has zero percent credit bureau coverage and very limited distribution of credit information on both firms and individuals. 

The Health Sector 

The progress in the health sector has been mixed. This is partly due to the civil wars and Ebola epidemic over the past few decades. For example, the numbers of physicians per 1,000 people in the country have dwindled from 0.107 in 1983 to 0.023 in 1997 to 0.014 in 2010.

Some health indicators, however, are slowly improving. The neonatal mortality rate in Liberia, which was 39.7 per 1,000 live births in 2002, has steadily decreased to 25.3 in 2013 to 24.1 per 1,000 live births in 2015. 

Among the problems that Liberia’s health sector continues to face are a lack of data to adequately shape policy making, as the World Health Organization has highlighted, a lack of psychological services especially after the trauma of prolonged war, malnutrition, and poor access to clean drinking water.

As well as this, there is an issue of poor access to healthcare services, as an estimated 30% of the population is located more than an hour’s walk away from any medical services. In the 2016/17 National Budget, government allocated 12.9% of total government expenditure to the health sector; an increase from the previous year’s allocation of 11.7% of total government expenditure.

The 2017 Parties’ Plans 

The 2017 election race sees 20 candidates competing for the opportunity to run the country. Among them, few candidates have made promises related to the health sector.

The incumbent party, Unity Party, have stated the promise to increase investment to build a robust health system that responds to emergencies. Details on the type of investment, where in the health system this investment will be targeted, or the time frame for the investment were not stated.

The main opposition party, the Coalition for Democratic Change (CDC), had five promises relating to the health sector, which mostly focused on increasing access to healthcare. These included legislating a health subsidy program for citizens, improving childhood vaccination coverage, and offering incentives for health professional trainees. 

Other parties, such as the All Liberia Party (ALP) stated 14 health and sanitation promises, such as improving the Health Information System (HIS), improving leadership and governance in the health sector, and developing an incentive plan to retain locally trained doctors and attract medical professionals, including from abroad.

Another opposition party, the Liberty Party, outlined 8 health-related promises.  These included realigning portions of the county development fund and social development for healthcare, and investing in enhancing the capacity of tertiary health institutions through training 1,000 new doctors over 25 years, 10,000 nurses over 15 years and other means. 

The Movement for Economic Empowerment party promises on healthcare included setting targets for the training of doctors and specialists, as part of their capacity building program and offering a healthcare system that would be affordable for all and free for the elderly. 

These parties had at least one promise addressing ways to increase access to healthcare, while few had promises addressing quality. Five of the six parties identified access and quality of training medical staff as an issue that needs to be addressed in the next government. The majority of the parties failed to provide figures, methods or further details as to how and when they will implement their promises. 

The Focus 

Liberia has, in recent times, shown a keenness for improving its health sector, evident in the government’s commitment in 2015 to increase health spending from 4% to 10% from 2006 to 2015 and training over 200 mental health professionals since 2016 to add to the one psychiatrist in the country where an estimated 300,000 people need to seek this service.

While this is commendable, what is needed foremost before implementing any policy changes, such as the suggested by several political parties, is adequate data on the state of healthcare in Liberia.

The World Health Organization have highlighted a lack of data as a challenge hindering Liberia’s progress, with ‘latest’ data points collected from 2008 in their 2010 Progress report on Health-related Millennium Development Goals (MDGs). 

Similarly, the latest data point for the psychiatrists working in the mental health sector per 10,000, according to the World Health Organization, was from 2014, which was before the implementation of certain interventions, such as the training of mental health professionals in 2016, as stated above. Having this data is of particular importance given the context of an estimated 1in 5 Liberians suffering from a mild to moderate mental health disorder.

This health data, while lacking before the Ebola crises, is especially necessary to ascertain the health situation of post-Ebola Liberia, after an era that saw provision of healthcare coming from many collaborations between the government, international donors and NGOs, such as USAID, UNICEF and the International Rescue Committee.

In the 2016/17 National Budget, donor spending on health was $10m more than government expenditure on health. The foundation of adequate accurate data collection should help to guide political parties on how to coordinate funds and efficiently address health issues, such as the retention of health personnel. 

Education Sector 

After 14 years of civil war and an Ebola epidemic in 2014, the education system in Liberia does not compare favourably with the education systems in the Africa region.

According to UNESCO, in 2015, 62.4% of primary school children are out of school higher than the sub-Saharan average of 25%; 20% of children enrolled in primary school complete secondary school; 55% of 15 to 25-year-olds are illiterate; the national literacy rate is 47.6% and teacher absenteeism at 60% show evidence of a broken education system.

Liberia’s education system has well-advertised troubles, including a shortage of teachers, under-qualified teachers and poor teacher performance, inadequate infrastructure, unequal funding, corruption and the biggest being the lack of capacity according to President Johnson Sirleaf.

In 2012, the government spent only 2-3% of its GDP of US$3.7 billion on education, below the 5% threshold established by UNESCO in achieving Education for All (EFA). 

The 2017 Liberian election has education at the apex of issues with numerous promises or proposals from political parties on addressing the access to quality education.

The main opposition party, Coalition for Democratic Change (CDC) led by George Weah and Liberty party led by Charles Brumskine promise to make education absolutely free from kindergarten to high school, Absorb the West African Examination Council (WAEC) fees for students and upgrade teaching and learning facilities and programs in existing technical education and vocational training institutions with well-equipped workshop and adequate and well-trained teachers.

The ruling party, Unity Party led by the current Vice President Boakai, has been silent on its education programme after President Sirleaf, describing it as a mess, opted to outsource public school education. The burning question is whether H.E. Joseph Boakai, who has thus far remained aloof and reticent on the topic, will continue to outsource the schools or not. 

In the midst of the promises made by the political parties, the private sector is absent from the education conversation. This is particularly interesting considering the recent launching of, the  Partnership Schools for Liberia (PSL),  a pilot public-private programme being run by the education ministry and non-state actors in education, aimed at providing every child, regardless of family background or income, access to high-quality education.

These schools have been seen as controversial in Liberia, receiving heavy criticism from national teachers’ associations and Kishore Singh, the UN Special Rapporteur on the Right to Education on this approach to improving the education system. 

Again, 54.8%of  the 12,168 K12 (kindergarten to grade 12) schools in the country are non-state owned (Private, mission, and community), suggesting the important role the private sector can play in fixing the broken education system, as promised by the political parties.

It will be prudent for the party that wins the Liberian election to engage various stakeholders on the capacity building, finance, technology, programmes and policies in education to help provide innovative ways of addressing the educational challenges. The Sustainable Development Goal 17 (SDG 17), which talks about partnerships, will be an important aspect of achieving the goals of education in Liberia. 

Extractives 

The Liberian extractives sector has experienced some growth since the sector reopened in 2006 after the end of the civil war. As at 2014, the extractive industry constituted 15% of Gross Domestic Product (GDP) and 26% of government revenue.

According to Liberia’s Extractive Industry Transparency initiative (LEITI), since it’s first report in 2009 that uncovered several discrepancies in terms of what multinational companies had paid and what government reported as received, total revenue from extractives increased from US$29 million in fiscal year 2007-8 to over US$148 million by fiscal year 2013-14 of which mining contributed 58%, oil and gas (exploration) contributed 23%, agriculture 14% and forestry 5%. 

Several challenges plague the sector concerning the allocation of revenues from the extractives sector. Allocation rules for revenue from extractives are derived from the Liberia Revenue Authority (LRA) Act which states that revenue collected by the LRA should be paid directly into the consolidated fund (Section 26).

All extractive industry revenues therefore go into and are distributed from the consolidated fund. In this case, revenue from extractives are not earmarked for specific developmental projects. Also, it becomes difficult to track the use of revenues from extractives. 

To buttress this, the Natural Resource Governance Institute’s (NRGI) Resource Governance Index (RGI) reveals that Liberia performs poorly in mining sector revenue management. 

The analysis disclosed that there was no numerical fiscal rule for government concerning mining revenues in its national budgeting thus no prompting for adherence in terms of revenue disbursement. Further, there was no requirement for the government to disclose revenue projections or its total expenditure. 

Power 

Economic growth in Liberia is seriously hampered by the insufficient supply of reliable and affordable electricity. The 14 year civil war in Liberia left in its wake a terribly deteriorated power sector leaving Liberia the challenge of fully reconstructing its power sector.

Since the 2006 elections however, the government has taken steps towards reconstruction of the electricity sector with clear developmental goals set out in the National Energy Policy (NEP) endorsed in June 2009.

The functions of the Liberia Electricity Company were restored by 2010 and supply of power was extended to about 2500 people in Monrovia. As at 2011, access to publicly provided electricity in the whole of Liberia was close to 0%, Monrovia, Liberia’s capital city had an urban access rate of 0.58% of its population.

In 2016, access rate had improved to 2% in the country and 6.7% in Monrovia. The general target as indicated by the NEP is to connect 70% of Monrovia to the electricity grid and to provide access to 35% of the rest of the country by 2030. 

The expansion of the electricity sector has been hampered by challenges in securing adequate and affordable fuel for thermal generation as well as inadequate infrastructure for generation (thermal and hydro), transmission and distribution.

The prices of supplying Heavy Fuel Oil (HFO) and diesel are considerably above the regional average as suppliers mark up prices to account for perceived risk of civil instability, poor condition of receiving terminal at the Monrovia port and the lack of international safety standards. Further, as at 2010, there were no facilities to supply HFO and diesel fuel supply facilities were in need of repair or replacement. The World Bank has however initiated some repair projects. 

Critical steps being taken to improve access to electricity include; the rebuilding of the Mt. Coffee hydro power plant, engaging the private sector for the provision of renewable small scale and utility scale electricity generation plants as well as investments for associated transmission and distribution. 

What the political parties are saying concerning energy & extractives 

The upcoming 2017 elections present the opportunity for Liberians to once again democratically select a candidate party which has the overall economic growth of the country at heart. Notably, the 20 political parties vying for the presidency have demonstrated the drive to bring Liberia out of the economic and social malady imposed on it by the civil war. 

However, little has been said concerning the leveraging of the energy and extractives sector to achieve socio-economic development of the country. The ruling Unity Party’s main focus is infrastructure development to drive growth and electricity is mentioned as key infrastructure required to support the economy  whereas the Liberty Party has employment and job creation as its priority.

The United People’s Party feels strongly about the manner in which concessions in the extractive sector have been handled and are concerned about the lack of efforts to spur value addition in the extractive industry. 

The Coalition for Democratic Change acknowledges access to electricity as a vital development driver and places this in the broader context of infrastructure development. It also notes that public investment in public utilities such as electricity is critical for stimulating private investment. 

Who wins the vote? 

Keeping in mind the potential of the extractives and power sectors of Liberia, this is what we think the political parties can think through and what voters should look out for in terms of leveraging these two sectors for growth and development: 

A commitment to prudent revenue management in the extractives sector: This will involve formulation of requisite policy that will determine the direction of allocations or earmarking of resource revenue preferably towards development in pro-poor sectors such as education, health, agriculture and infrastructure development.

This will also foster transparency and accountability as it will allow the tracking of the use of resource revenues. Ghana has been able to define the allocation of its petroleum revenues through its Petroleum Revenue Management Act, an example that Liberia could follow. 

A commitment to formulate targeted policy towards long term industrial growth that would facilitate value addition to natural resources. 

A commitment towards securing fuel supply for thermal power generation in the short to medium term from neighboring countries such as Ivory Coast and leveraging the country’s potential petroleum resources towards power generation in the long term. There should also be a critical look at diversifying sources of fuel for thermal generation. 

A structured investment plan that would ensure growth and expansion of the electricity network (generation, transmission and distribution) in the long term and in the short term, intensifying the proliferation of mini/micro grids and stand-alone renewable energy systems in urban as well as rural areas.  

Provision of and following clear timelines for the implementation of the policy recommendations in the National Energy Policy and a commitment to implementation. 

Conclusion 

With the scars of a civil war, an Ebola epidemic and 12 years of democratic governance, the upcoming Liberia election provides the litmus test for a new Liberia or the continuation of the status quo. The party that wins, must measure up to the expectations of Liberians for a positive change in their socio-economic conditions. 

The paper examined the promises of selected political parties, based on availability of information, and how the promises address the current challenges in the Liberian economy.

A few points are noted: there is limited information provided by the various political parties on their plans for the economy and there is also very little clarity on how the promises will address the challenges of the Liberian economy. 

On 10th October 2017, citizens of Liberia will go to the polls to choose a new government.

IMANI hopes that political parties in Liberia will make their promises clear and also aim to address the pertinent issues in Liberia. This paper will help to enhance the political environment in Liberia, move political parties to act in the interest of the citizens and help citizens to make more informed decisions to improve democratic rule.

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