I was elated to learn that the Liberian government has reinforced its commitment to a 25 percent allocation in the national budget for procurement of goods and services from Liberian businesses. The set-aside is a value proposition that would cover a variety of industries that qualify as micro, small or medium enterprise (MSME), for instance, Wood, Carpentry, Metalwork, Furniture, and etcetera.
If done right, this program would empower local business and provide job opportunities to thousands of Liberians, thus putting a dent in the high unemployment rate, and by extension, helping to reduce poverty. This is great stuff, I thought. But my elation was short-lived when it dawned on me that there’s a darker side to some of these Liberianization incentives.
That some within the target group for these set-asides, Liberian businesses, in the apparent absence of any form of government monitoring or enforcement; tend to abuse the program by serving as fronts for Lebanese, Indians, and other Africans. There are lots of examples of these abuses, but one that is clear as day is the mushrooming of pharmacies in Liberia by foreigners.
The pharmacy sector, according to the amended Liberianization act of 1998, is the exclusive reserve of Liberians. It is one of 26 businesses, including the operation of gas stations, commercial printing, advertising agencies, to name a few, that fall under the Act.
But take a drive through Monrovia and the other 15 counties, one will notice that these businesses are owned and run by foreigners in a crass contravention of the Liberianization policy. The fact of the matter is that these foreign business people know the rules quite well; they know where the line in the sand is drawn with regards to the business sectors that they qualify to enter, and so they find very dishonest and pliant Liberians to stand as fronts for entry into these businesses. All the foreign entrepreneur has to do is present the Liberian as a business partner with a fake ownership of a set percentage of the business to the Ministry of Commerce and Industry during registration.
The issue of Liberianization, as I remember, has been a controversy since the days of the government of President William R. Tolbert; Tolbert admonished his countrymen that the engine of growth in any country’s economy was the private sector, not the government. Government would serve as an enabler, providing incentives for Liberians to use their entrepreneurial instincts to develop a buoyant private sector that would create jobs for thousands and thus spawn a middle class in the process; the Liberianization Act, created in 1975, would be front and center in that campaign, but it had very little success under Tolbert, for many reasons, including the fact that the population did not buy into the president’s vision of self-sufficiency and empowerment through entrepreneuralship.
Tolbert had also inherited a culture of patronage that was nurtured by his predecessor, William Tubman. The Tubman system introduced a syndrome of dependency that government was to be all and end all. The idea of small and medium sized Liberian-owned enterprises was an alien concept, at least from a Tubman regime perspective.
The Open Door Policy which he later crafted, as a policy to encourage foreign investors and businesses into Liberia, pretty much shut the door to home-grown entrepreneurialism. Hence, Tolbert took office with a humungous task on his hands, not only being a political leader, but playing the part of a national psychologist to reverse the dependency mentality; for instance, imploring his countrymen of the dangers of dependency on Asian countries and the U.S. for their staple food, rice.
Additionally, incentives were given to farmers to help boost productivity in the agricultural sector with an emphasis on having Liberian businesses invest and take advantage of the opportunities in this sector. However, the coup of 1980 reversed the premium that Tolbert placed, not only on Liberian entrepreneurialism, but self-sufficiency, as well.
Fast forward to 2016, there are advances being made by some Liberian businesses in the formal and informal sectors of the economy, but these home-grown entrepreneurs, i.e. carpenters, furniture makers, etcetera who are playing by the rules with their 100 percent owned Liberian businesses, may discover that the most pressing challenge to winning a bid will be a business fronted by their countrymen with full financing and ownership by a foreigner.
That’s why it’s mission critical that the Ministry of Commerce and Industry design a robust monitoring mechanism to ensure that this program is not abused; a collaboration with the Liberian Anti-Corruption Commission (LACC) to prosecute violators… is an idea whose time has come.
JM Cassell,
[email protected]