An ‘Enabling Environment’Will Draw Investors To Liberia

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IN A CONVERSATION with Gulf New last November, Liberian President George Manneh Weah proclaimed that Liberia was opened for business. “Liberia is open for business and we are creating the right environment that makes it seamless for investors to get a head-start,” the President declared.

ACCORDING TO THE PRESIDENT, his administration has in recent reduced some of what have been described as hurdles in the way of starting a business in Liberia. “Large-scale corporations too have also been offered incentives for choosing to invest in Liberia. The arable land is vast and untapped. Young people, who make up the bulk of the population, are eager to work.

THE PRESIDENT SAID the potential exists in various areas, including agriculture, mining, infrastructure and tourism, among others. “We have barely scratched the surface with each of these sectors. But like I said earlier, our tourism sector is beginning to gain international attention. It’s an area where investment can yield enormous return. The agriculture sector too remains largely intact.”

THIS WAS NOT the first time that the President had made the assertions. Following his inauguration in January 2018, the President declared the country open to investment and pledged to tackle entrenched corruption.

IRONICALLY, President Weah’s assertions appear to be only on paper and in words – and stakeholders are taking notice.

THIS WEEK, the U.S. Embassy in Monrovia noted that an enabling environment is necessary to attract the kind of reputable businesses that will move Liberia’s economy forward and create jobs. The embassy  said that Liberia’s productive soil, iron ore, diamonds, gold, and its ideal climate for growing rubber and palm oil cannot make up for an uncertain business environment.

THE EMBASSY observed with concern new challenges in Liberia’s extractives and agriculture sectors in the last few years, leading concessions here to either pause, streamline, or halt operations.

CHARGES D’AFFAIRES ALYSON GRUNDER, speaking a policy dialogue on Promoting Transparency and Accountability in the Management of Extractive Industries to Enhance National Development in Liberia, said: “From the perspective of the U.S. Embassy, we have experienced a number of instances in which U.S. businesses have expressed interest in doing business in Liberia. But they invest their money and other resources elsewhere when they hear about perceived difficulties in negotiating contracts and retaining respect for them, obtaining permits, and maintaining good relationships with the public”

MOVING FORWARD, President Weah and his team must work toward ensuring that the environment is safe, in terms of security for Liberians to reside; that investors are comfortable doing business in Liberia and that local as well as foreign businesses are able to operate in a relax business climate void of extreme bottlenecks and unnecessary demands.

ACCORDING TO MADAM GRUNDER Liberia’s extractive industries are key to its economic development and to the livelihoods of many, adding that transparent and open discussions of the necessary policy environment for businesses in the country to thrive will be advanced through dialogue that is inclusive of all stakeholders.

THE US DIPLOMAT AVERRED that while the COVID-19 pandemic and its impact on global prices may be partly to blame for some of the recent economic downturn, a difficult local business environment also disproportionately affects investment, like is the case right now in Liberia. “Obstacles to doing business in Liberia as evidenced by the 2020 World Bank Doing Business report are a dissuading factor for individuals and corporations deciding on countries in which to set up shop”, Madam Grunder said.

THE SAD REALITY is that since the end of the civil war and the ushering of democratic governance, Liberia has always been trumpeted as being opened for business.

FOLLOWING HER ELECTION in 2005, former President Ellen Johnson-Sirleaf declared the country opened for business and launched an international effort to lure investors to the post-war nation.

EYEING THE US business community because of its economic power and historical bond with Liberia, the Sirleaf administration

LIBERIA WAS founded by freed American slaves and the US dollar remains legal tender in the country. The Sirleaf administration, during its two-term in office also spread its nets as wide as possible for sources of investment, including those from Africa itself, such as South Africa and Nigeria, and with the world’s rising economic power, China. 

THE PROBLEM though has always been Liberia’s inconsistency regarding governance and accountability issues.

IN MAY 2013, for example, an audit of lucrative resource deals in Liberia found that almost all the concessions awarded by the government since 2009 were not compliant with the law.

IN A DAMNING report commissioned by the Liberian government, international auditors found that only two out of 68 resource contracts worth $8bn (£5.1bn) were conducted properly. Concessions granted in agriculture, forestry, mining and oil – including a lucrative deal with oil company Chevron – were either wholly or partially flawed.

TODAY, THE COUNTRY remains entrenched in familiarities of the very problems that persisted then, and those which kept investors at bay.

LAST YEAR, Forbes magazine conducted a study of countries business climate and ranked Liberia as the first on the list of the top 10 worst destinations for doing business. In simple terms, the magazine is cautioning foreign investors not to venture into pouring their moneys into the country. The ranking is tallied after evaluation of the level of innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape and investor protection of a particular country.

LIBERIA, WHICH HAS A GDP OF US$2 BILLION, is below DR Congo, Mauritania, Togo, Zimbabwe, Burundi, Guinea, Libya, Gambia, and Chad on the index. South Africa, Morocco and Rwanda are three African countries that scored impressively on the list of countries suitable for investment.

WHILE IT IS A GOOD thing to trumpet a country as being opened for business, it is even better to strive to maintain an enabling environment that would lure investors and encourage investments in Liberia.

WE AGREE WITH the US diplomat that strong oversight regime is necessary to ensure that Liberia receives the most revenue for its natural resources and ultimately its development.

THE FACT OF THE MATTER is that the Weah administration got off on the wrong foot in the way it handled the illegal removal of Mr. Konah Karmo, Head of Secretariat of the Liberia Extractive Industries Transparency Initiative (LEITI).

THE ADMINISTRATION rejected criticisms and condemnation at the time and lost a lot of points in the eyes of the donor community, dealing even more setbacks for the investment climate. But that is in the past.

MOVING FORWARD, President Weah and his team must work toward ensuring that the environment is safe, in terms of security for Liberians to reside; that investors are comfortable doing business in Liberia and that local as well as foreign businesses are able to operate in a relax business climate void of extreme bottlenecks and unnecessary demands.

A NATION that is truly opened for business will leave no stone unturned in making sure that the climate is conducive for both investors and consumers.

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