An Introspective Analysis
Like most countries around the world, Coronavirus is having its toll on Liberia, which was only recently wrecked by another dangerous disease: Ebola. At the time of that crisis in 2014, not only did more than five thousand people lose their lives, it decimated the country’s economy.
By T. Moses. Saywah, Contributing Writer
The near double-digit growth Liberia experienced prior to the start of that epidemic backpedaled. The uptick in economic activities following the years of civil war came to a grinding halt. The disease brought untold suffering on the Liberian population, the majority of whom, according to World Bank estimates, are already below the poverty line.
Fast forward to 2020, a more infectious virus is threatening a global recession. Some experts have warned that the regional West African economy, which was beginning to experience growth of more than 3% after the challenges of the previous years, could shrink by more than a percentage point; but that’s assuming the pandemic ends in june of 2020.
All indications however have not pointed in that direction. We seem to be in this for the long haul. In which event the initial projection will have to be revised further downward. In Liberia’s case, a country that only recently instituted measures to avert a recession (measures which have yielded some positive results), this could not have come at a worst time.
For the 2019/20 fiscal year the country drew up a very conservative budget that is as close as possible to expected revenue. The over 500 million dollar budget (for a population of 4.8 million people) has very little room to wiggle. Although a big chunk of it is assigned to paying the salaries of more than 70 thousand civil servants on the government’s payroll and hundreds of appointed senior officials, the Weah administration lately made it a priority to use some of that resources to fix hundreds of kilometers of roads and rebuild the country’s damaged infrastructure.
It’s no surprise, therefore, that the COVID-19 crisis presents quite a significant challenge for the Liberian government. With revenue from taxes expected to dwindle, because of the fall in income for small businesses and other drivers of the economy, such as those in the service and tourism sectors, it wouldn’t be too long before the government finds it difficult to effectively fund the fight against Coronavirus and at the same time cater to the welfare of its citizenry.
At a press conference in March, Finance and Development Planning Minister Samuel Tweah announced that the government had already disbursed half million dollars of its own money to health authorities in order to fight the disease. Although this is in addition to the other resources promised by international organizations such as the World Bank and the World Health Organization, most of the money is expected to go towards the purchasing of more personal protective equipment, drugs and other materials, such as ventilators. But it will also be used to pay the bills of several hotels where people were quarantined.
Realizing these are challenging times for all Liberians, many organjzations, including banks, NGOs and other businesses lined up to help. Two of the country’s leading banks for instance, United Bank for Africa and Ecobank, made cash donations to the government of Liberia. Others, such as the National Youth Movement for Transparent Elections and the Clar Hope Foundation, have complimented the government’s efforts by catering to the needs of the most vulnerable.
The list of people and institutions who have volunteered to help keeps growing. Many more have been seen giving ti neighbors in need or volunteering in other ways in their communities. But amid all this, very little has been heard from the country’s two leading GSM companies: Lonstar MTN and Orange.
It’s no surprise, therefore, that the COVID-19 crisis presents quite a significant challenge for the Liberian government. With revenue from taxes expected to dwindle, because of the fall in income for small businesses and other drivers of the economy, such as those in the service and tourism sectors, it wouldn’t be too long before the government finds it difficult to effectively fund the fight against Coronavirus and at the same time cater to the welfare of its citizenry.
The telecommunication sector has NOT been impacted by the COVID-19 crisis. If anything, the profit of the sector is steeply rising. With people being told to social distance in order to avoid contracting the disease, they have kept in touch with friends and families either via voice calls or using the internet.
It is reported that the networking app WhatsApp, for instance, has experienced a 40 percent rise in the number of people using the platform to either keep in touch socially or telecommute. And this number is higher in places where there are more cases of the disease.
But even before the onset of transmission in Liberia, the government took steps to improve the profitability of the two telecommunications companies. On September 1, 2019, it announced a prohibition of the predatory pricing regime that was being carried out by both networks competing for higher market shares. This led to a duopoly as other smaller companies were forced out of business.
The sector which was worth some 150 million doctors more than five years ago experienced a decline in its market value during the competition. With each GSM network in a constant battle to outdo the other, new promotions forced the companies to sell below the cost of poduction.
The Weah-led government took Immediate steps after assuming the presidency to end the practice – despite the enormous political risk (a large percentage of those who benefited from the low prices of data/voice calls are said to belong to the President’s constituency). The government instituted a price flow, below which the companies could not sell. But it also increased the cost per minute of data and on-net calls.
This, in addition to other regulatory measures, greatly stabilized the telecommunication sector in the country. By late last year, data showed the sector was beginning to grow by leaps and bounds, which was pleasing news for telecom gurus in the country, as It obviously meant the Liberian people were not only bankrolling their cost, but also piling money in their pockets.
By February of this year, just when the virus was starting to take hold in Africa and social distancing became a common practice, there was further rise in the use of data and voice calls. This time, the rise was steep. More and more Liberians are now using varying social media platforms in order to connect with others.
When business is good, that means tens of millions of dollars for both GSM companies. This is why their deafening silence is so loud at a time when Liberians need them the most. And according to multiple sources, the once competitive rivals have begun to act in synergy in a sadistic attempt to withhold legitimate revenue from the government of Liberia. Every responsible business entity is required to pay their fair share of taxes. That’s just the golden principle.
At a time when the potential for the government to be cash-strapped – during an unprecedented global crisis – for any business entity to be in connivance to deprive the suffering majority of the people their just taxes, when it is making millions of dollars off their backs is utterly callous. So rather than devising devious machinations to fight against the payment of their legitimate bills, it’s high time these companies own up to their responsibilities.
The government, in fact, recently unveiled a socio-economic package which would bring some relief to millions of vulnerable people who are afflicted in ways we can only begin to imagine. But that will have to be funded by money that’s not sitting in the bank. Even if the budget is recast by the legislature to make up for the unexpected cost, the money still has be generated through taxes and other means.
Therefore, if these GSM companies truly “CARE” as their many adverts would have us believe, now is NOT the time for just promoting additional platforms under the guise of fighting the disease – when we all know it only brings them more profit. Instead, they should contribute in hard currency. The people (and the government) helped pulled them out of a woods.
Instead, while many who are already struggling to eke out a living are using resources they barely have in order help their compatriots, Orange and Lonestar MTN are sitting on tens of millions of dollars from the unanticipated windfall. They should pay their fair share for the ‘responsible’ corporate citizens they claim to be, not the other way around.
