Executive Order No. 151: Liberia’s Rubber Sector – Intention, Reality & Predicted Outcomes

Historical & Socioeconomic Background

Liberia’s entanglement with the rubber industry began formally in 1926, when the government of President Charles D.B. King signed a 99-year lease agreement with Firestone Tire and Rubber Company of the United States. The deal granted Firestone over one million acres of land at a nominal rent of 6 cents per acre per year, effectively placing Liberia’s most fertile land into the hands of a foreign corporation for almost a century.

---

By Dr. Clarence R. Pearson, Sr., PhD, contributing writer

---

For more than nine decades, Firestone operated a vertically integrated model, controlling rubber farming, processing, and export through the Firestone Natural Rubber Company, a wholly owned subsidiary. This model excluded local farmers from the processing value chain and entrenched extractive economics: raw latex and cup lumps were harvested with low pay and exported with minimal domestic transformation.

In response to these inequalities, former President Ellen Johnson Sirleaf issued Executive Order No. 16 in 2008, banning the export of unprocessed rubber. It was later extended by Executive Order No. 60 in 2014, which acknowledged limited compliance and sought to encourage more rigorous local value addition. However, both orders lacked enforcement teeth and enabling support for smallholders.

In November 2022, President George M. Weah issued Executive Order No. 124, reinstating a ban on the export of unprocessed natural rubber and mandating all exporters to process rubber locally before shipment. This was part of his broader push for domestic industrialization. However, inadequate consultation and infrastructure made compliance difficult for small farmers and informal traders, many of whom operate without access to processing facilities.

Executive Order 151 – Intention vs. Reality vs. Predicted Results

Intentions

Issued by President Joseph N. Boakai on June 6, 2024, Executive Order No. 151 continues the prohibition on the export of unprocessed natural rubber. It aims to:

• Promote domestic processing and value addition,

• Support industrial job creation,

• Increase tax revenue, and

• Reduce Liberia’s historical dependence on raw material exports.

It reflects a broader vision of transforming Liberia’s economy from extractive to productive, a goal widely echoed in economic policy across Africa.

Current Reality

While EO 151 presents a transformative vision, the structural environment remains largely unchanged:

• Firestone Liberia (a division of Bridgestone Corporation) and Liberia Agricultural Company (LAC) dominate rubber processing through well-established TSR plants (Technically Specified Rubber).

• Jetty Rubber LLC, one of the newest entrants, has emerged as a Liberian-owned processor but still struggles against logistical and financial barriers.

• Over 45,000 smallholder rubber farmers, many organized through cooperatives such as the Rubber Planters Association of Liberia (RPAL), lack access to mini-processing equipment or affordable storage.

• Liberia still faces significant infrastructure challenges, including erratic electricity, poor farm-to-market roads, and lack of subsidized equipment financing.

Predicted Results

Unless implementation is matched by support mechanisms, EO 151 is likely to result in:

• Stranded inventory and loss of income for smallholder farmers who cannot process or store rubber.

• Consolidation of market control by existing processors like Firestone and LAC, marginalizing smaller brokers and cooperatives.

• Price suppression at the farmgate level due to restricted market access.

• No significant short-term increase in domestic value addition or industrial employment, given the absence of complementary investment incentives.

Understanding Value Addition in Rubber

Value addition involves converting raw rubber (latex or cup lumps) into higher-value products such as:

• TSR (Technically Specified Rubber) for tire and industrial component manufacturing,

• RSS (Ribbed Smoked Sheets) for general rubber goods,

• Final products such as tires, surgical gloves, mats, hoses, and rubberized consumer goods.

The economic logic is that value-added products retain more wealth within Liberia, spur technology transfer, and create better-paying jobs. However, value addition is not simply processing rubber into TSR or RSS. True transformation involves enabling a rubber-based industrial ecosystem that spur local manufacturing of final products prior to export, and EO 151, in its current form, does not articulate this complete chain.

RSS and TSR: Balancing Human and Machine Capacity

RSS (Ribbed Smoked Sheet) Rubber

• Best suited for small and medium farmers, RSS production uses manual latex tapping, coagulation, pressing, drying, and smoking—requiring minimal mechanization.

• The process is labor-intensive, low-cost, and adaptable to village-level cooperatives.

• Challenges: Consistency and quality control without modern instrumentation remain concerns, though AI and visual assessment systems are being piloted globally.

TSR (Technically Specified Rubber)

• Requires advanced machinery: slab cutters, crepers, hammer mills, dryers, and hydraulic presses.

• Processing is highly energy- and capital-intensive, suited to industrial plants with automated control systems, IoT monitoring, and robotics.

• Requires skilled labor for machine operations, quality control, and plant maintenance.

• Challenge: High initial capital investment makes entry prohibitive for small producers without government intervention.

Balancing the Two

A dual-tiered system is recommended:

1. Promote RSS processing cooperatives at the community level with subsidized equipment, training, and storage support.

2. Support scaling of existing TSR plants while encouraging local ownership and technology upgrading to match international standards.

Economic and Social Predictions if EO 151 Proceeds Unamended

For Smallholder Farmers:

• Prediction: Income instability, weakened bargaining power, and exclusion from formal markets.

• Reality: Many operate without access to processing tools and depend on brokers now legally restricted.

For Rubber Brokers/Exporters:

• Prediction: Reduced income due to restricted trade in cup lumps and raw latex.

• Concern: Loss of livelihoods unless transitional support is provided.

For Established Processors:

• Prediction: Profit stabilization or increase due to reduced competition in sourcing rubber.

• Concern: Risk of market monopoly and limited incentive to support upstream value chains.

For the Economy:

• Prediction: In the short term, limited impact on industrial output or jobs unless EO is paired with fiscal incentives, investment attraction, and cooperative financing.

• In the long term, without structural support, the EO may fail to create the envisioned transformation.

Best Model for Liberia: Côte d’Ivoire’s Rubber Reform

Côte d’Ivoire offers a model worth replicating:

• Established a Rubber Regulatory Authority and Rubber Development Fund.

• Legally banned raw exports while offering subsidies and grants for processors.

• Promoted cooperative RSS processing at scale with local ownership incentives.

• Achieved over 60% processing of raw rubber locally by 2020, with increased exports of semi-finished goods.

Liberia must not just mimic a ban—but design a system to uplift every actor in the value chain.

Final Recommendations

To make EO 151 transformative rather than extractive, the following steps are crucial:

1. Enact enabling legislation: Formalize EO 151 through an act of the legislature that includes quotas, ownership provisions, and incentive schemes.

2. Establish a national rubber transformation program, supported by RDFI and the Ministry of Agriculture.

3. Incentivize RSS cooperatives with low-interest loans, shared infrastructure, and quality control training.

4. Create a 3-tiered tax incentive system for small, medium, and large manufacturers of finished rubber goods.

5. Build processing infrastructure near farming zones to reduce transportation losses.

6. Ensure transitional grace periods so that small actors can gradually comply without economic shock.

Conclusion

President Boakai’s Executive Order No. 151 is a bold declaration of intent. But intention without capacity is wishful thinking. Liberia stands at a crossroads: either perpetuate the past where the few benefit from the labors of the many, or chart a new path of inclusive industrialization. The rubber sector holds the potential to empower tens of thousands of Liberians—if, and only if, EO 151 is followed by bold, equitable, and inclusive implementation strategies.