Liberia: Unending Violation of Small Business Act Raises Concern among Business Community
Monrovia – Liberia’s Small Business Act of 2015 and the Liberianization Policy is supposed to be a yardstick for Liberian-own businesses to improve in the business arena.
However, unending violation of the Small Business Act and the Liberianization policy, which gives Liberians exclusive rights to operate certain businesses, is becoming a factor that needs serious attention, says Dominic Nimely, an executive of the Patriotic Entrepreneurs of Liberia (PATEL).
Section 4.3 (c) of the Small Business Empowerment Act (SBA) ensures that Liberian-owned business have adequate access to finance, markets and other resources.
The Investment Act of 2010 exclusively gives ownership right to Liberians in several business activities, including the supply of sand, block making, peddling, travel agencies, retail sale of rice and cement, ice making and sale of ice, tire repair shops, auto repair shops with investments of less than US$50,000 and shoe repair shops.
Other businesses reserved for only Liberians include the retail sale of timber and planks, operation of gas stations, video clubs, operation of Taxis, importation or sale of second-hand or used clothing, distribution of locally manufactured products and importation and sales of used cars (except authorized dealerships which may deal in certified used of their make).
But there are frequent violations of these policies and Mr. Nimely has expressed disenchantment while blaming the situation on “foreigners’ infiltration”.
The Ministry of Commerce through its inspection team has already begun taking steps to deter violators.
In an interview with reporters at the Economic Dialogue in Congo Town, Nimely called for harsh punishment for violators.
“We have people coming into Liberia as investors and they are to invest hugely into our sectors, but in Liberia, it’s the opposite. We have foreigners coming into the country and running after our construction loans. This loan supposed to be given to Liberians and not foreigners,” he said.
“In fact, all the profits they make are being taken back to their countries, and in most cases, they steal the bank loan. They don’t pay back and you don’t see their names on radio because Managing Directors get huge cuts from every loan given to Lebanese or Indians, so they don’t go after these people.”
Nimely, who operates the Perfect American Used Cars Center, noted that foreign businessmen have created a cartel to “punish Liberians businesses” that should be the bedrock for keeping the economy stable.
However, he said Liberian businesses are being marginalized at the expense of foreign businessmen are not doing well for the economy.
Nimely asserted that these foreigners are given loan at various banks ahead of Liberians even though “they are not committed to repaying their debts.”
He added: “I know a Lebanese guy right at the entrance of IB Bank on Broad Street, he took loan three times and ran away and we didn’t see his name in newspaper. I know an Indian man that has American Electronics, I used to supply him, he took loan from here and gambled it at the casino in Congo Town and we didn’t see his name in newspaper. The MDs in those banks used Liberians as case study to hide behind and give us little amount to say that Liberians cannot pay back loans.”
He added that the interest rate requested from Liberians on loan at various banks is high and up to now it has not been restructure as being promised by President Weah during a meeting with Liberian businessmen.
He emphasized the need for banks to empower Liberians through reduction of interest rates on loans.
At the same time, Nimely frowned at foreigners for bringing in their kinsmen and providing them jobs that supposed to be given to Liberians exclusively.
“I hold the policy makers [responsible] because we have the good laws here but the implementation is weak,” Nimely said.