Liberia: If This Is Governance, The Civil War Was Totally Unnecessary
THE SECRET IS FINALLY OUT. The signed Memorandum of Understanding of the controversial Singapore loan agreement that the George Weah-led government did not want Liberians to see is finally in the public domain.
JUST AS WE HAVE BEEN reporting and others have voiced their concerns, scrutiny of the document is raising more questions and creating more complications for Liberia’s immediate political and economic future.
THROUGHOUT LIBERIA’S history bad governance has paved the way for much of the country’s problems.
AS FAR BACK AS the 1800s during the reign of Edward James Roye, Africa’s oldest republic has been dogged by questionable and shady contracts and unfair deals that have brought nothing but hardships and pain to those languishing at the bottom of the economic ladder.
ROYE WAS LIBERIA’S fifth president. He took over a country in 1870 that was in the midst of an escalating economic crisis which had weakened state’s dominance over the coastal indigenous tribal peoples.
THE CRISIS was compounded by the fact that it cost the country more to import goods than it could produce or ship out to generate income. The income generated by exports of key commodities like coffee, rice, palm oil, sugarcane, and timber was not enough to make the country break even despite numerous efforts to modernize the agricultural economy.
IN A BID TO improve the conditions of the day, President Roye instructed William Spencer, the Speaker of the House of Representatives to negotiate a new loan from British financiers. Anderson secured $500,000 under strict terms from the British consul-general, David Chinery, and drew strong criticisms and was eventually arrested. Anderson was apparently tried the following year for his part in securing the loan. He was found not guilty but was shot to death while leaving the courthouse.
PRESIDENT ROYE was removed from the presidency on October 26, 1871. The circumstances surrounding his ouster remain imprecise, although historians believe that he was deposed in a coup d’etat although it is not known who carried out the coup d’état. He was jailed for a few months afterward. His unpopular loans with Britain may have given his enemies the reasons to depose him.
IN THE END IT was clear that the questionable British loan was a major contributor to Roye’s demise.
TODAY, 147 YEARS LATER, Liberia finds itself in yet another debacle over another controversial loan.
THE NEW GOVERNMENT of George Manneh Weah has been working to secure a US$536 million loan to undertake “Pro Poor roads to the Southeast and Western Liberia to include Cape Mount and Bopolu counties.
FOR WEEKS, WE HAVE BEEN pressing the government to make the loan agreement public so that Liberians can dissect and weigh in before obligating Liberia to such a massive amount of money.
THE GOVERNMENT has been adamant in ensuring that the process to securing the loan is transparent and guarded under best international practice.
THE RED FLAGS ARE JUST too many to ignore and like Roye, President Weah is toying with what could be a major casualty of his presidency.
IRONICALLY, THE AGREEMENT was signed on May 4, 2018 in Hong Kong but the actual place of signing is not specified on the document.
FRONTPAGEAFRICA HAS PREVIOUSLY REPORTED that Eton reapplied to be re-instated as a Singaporean Corporation on May 7, 2018, 3 days after signing the Agreement with Liberia. Thus, ETON was not duly constituted, registered and existing under the laws of Singapore when it signed the Agreement with GOL as stated in the Agreement. No wonder the parties chose Hong Kong to sign this Agreement and not Singapore.
FURTHERMORE, the Agreement states that MAEIL Liberia Construction Co., LTD., one of the company named as a contractor to the project, is a branch company of Eton. Does this mean that MAEIL is a subsidiary of ETON? If so, the Liberian Registry should have this information in the Liberia Business Registry for MAEIL. If not, then ETON and MAEIL may have committed perjury in violation of the Agreement they signed.
ADDITIONALLY, MR. SHIGESATO Kono, who signed for Eton as Chairman and CEO issues a passport number TR3940146 which is different from the one listed on the Singaporean Registry for the “Struck Off” Eton Private Finance Limited.
THE MINISTERS OF FINANCE and Public Works signed for GOL without Justice Ministry Attestation or Accompanied Legal Opinion. The Justice Ministry should have provided its legal opinion prior to the Ministers of Finance and Public Works affixing their signatures to this Agreement.
SENATOR SANDO JOHNSON(BOMI) has already raised issues as to why the Minister of Justice did not sign off on the MOU.
THE LOAN AMOUNT OF US$536,400.00 seems to be pegged to the annual national budget as the ceiling. No Loan Repayment Schedule has been prepared as part of the Agreement.
THE DISBURSEMENT’S ARE IN 2 TRANCHES. The Agreement uses the wrong word “trench”. The 1st Tranche of at least 50% to be disbursed 50 banking days or 10 weeks after ratification and issuance of SG. 2nd disbursement, 60 banking days or 12 weeks after the 1st disbursement. The SOVEREIGN GUARANTEE to be issued by CBL is conditional to the following: SG to be prepared “in the FORM and SUBSTANCE SATISFACTORY to ETON.”
THE TRANSACTION CODE is the name ETON and the date of the Agreement.
MORE IMPORTANTLY, detail feasibility studies, cost projections and bill of quantities of the various components of the projects should have been the determining factors along with the cost of borrowing and servicing the loan in the total amount of the borrowing. No such project documents accompanied this Agreement. Instead, it appears that the threshold amount of the loan was set based on the average national budget.
THERE IS ALSO A REFERENCE to a major Chinese Engineering, Procurement and Construction Company that is not named in the Agreement. How can this company be vetted for such a major national Agreement? Further, this company’s role is vital to the terms of the Agreement since it is required by the AGREEMENT for this company “to provide performance guarantee satisfactory to the government of Liberia, prior to the disbursement of funds by ETON.” (Article 4).
The SOVEREIGN GUARANTEE is the collateral as specified in this Agreement and thus exposes all assets of the state in the event of default.
ETON LISTS DBS HONG KONG (Development Bank of Singapore in HK) as its Bank and not DBS Singapore. It would have to be duly registered in Singapore as a business to operate a business account.
THE BORROWER’S BANK IS not listed in the Agreement when in fact, CBL could serve this purpose as the issuer of the Guarantee.
SIMPLY PUT, the agreement is such a basic contract for such huge amounts of money and suggests that both parties could have benefited immensely from experienced attorneys drafting and reviewing the Agreement.
EVEN MORE TROUBLING, the length of time allotted before disbursement would suggest the ETON intends to trade the SG (or discounted SG) to raise the funds.
WE FIND THESE observations to be troubling for Liberia. What is unclear is whether the government intends to make public the origination fees and points behind the real interest rates of the loan.
IF EACH POINT IS EQUAL to one percent of the loan; if origination fees and points are as high as say ten percent for example, what is the actual amount in dollars? Will the loan proceeds be reduced at closing? And by how much?
ALSO, THE ASSUMPTION based on the payback is that if Liberia does not begin paying until year eight, could mean that we may have only seven years to payback 530 million which is more than 70+ million a year impossible as concessionary loans are not only about low interest rate but also number of years for payback.
SADLY, IN THE PAST FEW MONTHS we have been witnessing a total disregard for transparency and accountability. All the instruments that the international community had put in place to address the deficit in government are now being ignored and placed on the back burner for this one questionable loan from Singapore.
MANY HAVE DIED in a senseless war, many more have lost their identities and nationalities after fleeing into exile.
WHEN HE AND HIS BAND of low-ranked army officers toppled the William R. Tolbert government on April 12, 1980, Samuel Kanyon Doe and his People’s Redemption Council denounced “rampant corruption” and the “continued failure of [Tolbert’s] government to handle effectively the affairs of the Liberian people.”
FOR THE NEXT DECADE, Doe ruled with an iron fist, inheriting much of the habits of the man he and his men killed in the cold hours of that April 12, 1980 morning.
LIBERIANS EXPRESSED their unhappiness and a civil war brought on by Charles Taylor triggered a period many would prefer to forget.
IT IS A LESSON IN LIBERIA’S ugly past that keeps coming back to haunt each and every Liberian.
MANY HAVE DIED in a senseless war. But how many alive today are taking cue from the lapses of yesterday and prevailing on President Weah to do what is right for Liberia, for once?
WE MUST end this recurring chapter of bad governance if we truly mean well for our people and those languishing at the bottom of the pit; we must be wise to learn from our failed past and encroach on our current leadership the essence of good governance.
IF WE SIT BY AND see repetitions of our ugly past unfolding and do nothing, we dishonor the memory of those we lost to this senseless war.
PRAISE SINGING, NEPOTISM AND sycophancy will get us no where. We must demand more from our current leadership, beginning with this questionable loan from a very shady investment firm with no track record of doing anything like this anywhere in the world. If this is not a red flag, we really don’t know what is.
A HINT TO THE WISE.!!!