Monrovia – The development of the private sector is significant to the development of Liberia and the government has to play a “key role” so that there are less uncertainties for investors, says Sergio Pimenta, vice president for Middle East-Africa of the International Financial Corporation.
Report by Alpha Daffae Senkpeni, [email protected]
Pimenta ended a week-long visit to Monrovia recently where he held strategic discussions with actors of the private sector and the government to help improve the country’s business environment.
“In Liberia, you do need to have a very vibrant private sector. Liberia has many resources, so there are opportunities for investments,” he said of the West African nation’s investment potentials during an exclusive interview with reporters at the World Bank office in Monrovia, adding that a thriving private sector would help alleviate the constraints on the government’s budget.
Primenta was recently appointed to his current post at the multilateral development bank, which is also a member of the World Bank Group.
The IFC is the largest global development institution that focuses on private sector development in emerging economies. It is working with over 2,000 private investors across the world, and spent over US$19.3 billion in long term financing to private sector investment in 2017.
Unlike the World Bank that finances government’s development projects, the IFC provides financing for the private sector development so as to reduce development challenges on the government, including creating jobs.
The IFC vice president’s visit to Liberia is at time when the government is seeking more support to fund its “Pro-poor agenda” amid significant declined in the prices of the country’s two major exports – iron ore and rubber.
And, during the interview, he outlined the integral role the private sector can play in complementing the government’s development plan once the necessary policy reforms are initiated.
He likened the role of the Liberian government in developing the private sector to that of the mandate of the IFC, which focus is on enhancing private sector growth.
Liberia needs a business environment that is conducive for private sector and the IFC is very engaged with the government to help institute reforms simplifications so that the business environment is more stable and affordable, Pimenta said.
“So, I think efforts on all these dimensions will help develop the private sector – both the domestic private sector and also bring in the right investors that can come and support the economy …and also when you have foreign investors coming in creating links with the domestic investors so that you have a wide distribution of the economic activity,” he added.
Primenta’s exchanges with Liberia’s Finance Minister Samuel Tweah weeks ago when the pair discussed Liberia’s challenges and opportunities and how the country could benefit from the IFC, also helped inspire his visit.
“I thought it’s be important for me to come here (Liberia) to meet with the development partners, the private sector, government officials and our team here to get a sense of how IFC can further help Liberia and help the development of the country,”
He described his few days visit as “productive” which basically involved holding meetings with actors of international development organizations, the private sector and the government.
Those discussions allowed him to get a sense of Liberia’s challenges and how the IFC “can do more” to strengthen the private sector, he said.
The IFC vice president, who oversees a US$20 billion portfolio, is also confident that the six-month-old George Weah-led administration is showing commitment to enhancing private sector improvements.
Referencing President Weah’s statement at a recent IFC’s event at Monrovia City Hall intended to promote dialogue between private sector actors and government officials, Primenta inferred that the Liberian leader is aware of the significant role the private sector can play to develop the country.
“So, I’m confident with those words [from President Weah] and with that vision, that we would have a private sector that will contribute to creating jobs for all the population,” he said.
However, he stressed that limiting uncertainties will allow foreign investors see potential opportunities to invest in the country, stressing that both domestic and foreign private investors must complement each other to succeed.
“You need both [foreign and domestic] and to be active, to invest and to believe in the country and to be present here,” he suggested.
“There are challenges and difficulties but at the same time, you have companies that see the opportunities, see the resources, that this country has … there are many advantages that you can leverage to further develop this country.”
Since the IFC focuses on private sector development, from a domestic perspective, contributing to reforms of investment regulations in a country like Liberia is vital.
It reckons that initiating reforms around facilitating trade – including export and value addition, as well as simplification of regulations would further enhance private sector growth.
In Liberia, many small companies are struggling to explore foreign markets, and Primenta says these are constraints that are requiring mitigation in order to bring benefits to domestic private investors.
Primenta disclosed that the IFC is working with the government to ensure that relevant public entities can help simplify regulations in order to facilitate trade, investment permits to improve the business environment.
The government is keen on seeing reforms, so the IFC will continue the partnership to ensure the delivery of concrete results, he said, adding that the bank already has “a huge presence in Liberia with a portfolio of about US$50 million”.
“And we are keen on investing more; financing more projects and just giving advice. We give advice but also give financing.”
He assured that IFC is looking to finance Liberian entrepreneurs with “good ideas,” which include manufacturing or value addition of “certain types of products based on some of the resources” that the country has.
But the bank only looks at projects that are “sustainable and environmental friendly with very good social impact,” he added.
He also stressed the importance for Liberia to diversify its economy because “relying only on the exports of few natural resources puts the country in a more difficult situation if the prices [of these exports] go down.”