Quite frankly, for the past 18 months, the investment climate in Liberia has not been progressively and productively favorable, let alone responsively praiseworthy as many indicators have vividly portrayed; bleak reflection currently suffocating vast spectrum of the ailing economy of rendering it (enemy) with ‘cold feet’ and incapacitated to function positively.
At the same time, the most needed energy to power the viability of the functionality of the saddled economy, mainly exports of essential materials profoundly attractive to global market and propelled by foreign capital investments, are at the lowest ebb on one hand, while grimly overwhelmed by ‘venture fatigue’ mates famine posture.
Clearly, Liberia has been seeking ways for foreign investment in all sectors of the economy. Some investors are sitting on the fence waiting to observe the level of stability in the country.
”Every investor, is always concern about the level of stability and how they can get returns from their investments. When the environment is stable and see a friendly business climate, coupled with effective judiciary system and adequate dispensation of rule of law, it can bring confidence,” Anthony S. Massaquoi a student of economy at the University of Liberia said.
Sam Jackson, a Liberian economist once told a business forum in 2017.
” As these sad situations are in no hurry of subsiding rapidly rather continue to fuel more simmering signals of rough, tough and stiff challenges to the resuscitation of the badly hit economy, the government in its quest to turn things around in order to realize and sustain growth and development in the pinned-down economy pathetically backfired on the pro-poor administration, thereby sending a wave of questionable revelations that marred genuine sincerity, honesty, interest and seriousness to accommodate foreign investments with guaranteed protection in a court of competent jurisdiction.”
For example, amidst sporadic international and public condemnations of a half-baked loan scheme entered into by government and so-called Eton, despite the huge criticism and cry that Eton was not a reputable and credible financial entity and that the pro-poor regime was cutting a bad deal; it did not listen. Rather, it went ahead following robust defense in favor of Eon’s ability and integrity to do business with, that led to the passing of an an act to legitimize the ‘toxic loan’ that was never ever see the light of day.
Moreover, as the pro-poor regime wants divorce ill-fate, it speedily hooked up with eton another shadow-loan agreement with EBOMAH Company from Bokina-Faso-while this agreement was quizzically punctuated with “conflict of interest” reportedly involving President George M. Weah featuring controversial private jet connection with the president of the company to Dr. Weah is his best friend who has provided him a private jet as a morale-boosting posture during his numerous travels; also agreed to loan the government over three hundred million United States dollars with long payment duration to financially enhance Weah’s most cherished road connectivity scheme.
Again, that was worked out by the Legislature, passed and signed into law by President Weah- in fact the Eton and EBOMAH Acts are legalized in the same period; and although Eton came in first, like Eton, like EBOMAH, they all died before arrival.
Investment open but have ‘some hurdles’
The Liberian government has said repeatedly that its doors are open for business. This is evident by president Weah’s inaugural speech in 2018.
”As officials of Government, It is time to put the interest of our people above our own selfish interests. It is time to be honest with our people. Though corruption is a habit amongst our people, we must end it. We must pay civil servants a living wage, so that corruption is not an excuse for taking what is not theirs. Those who do not refrain from enriching themselves at the expense of the people – the law will take its course. I say today that you will be prosecuted to the full extent of the law,” he said.
Not only that, but he continued; “To the private sector, I say to you that Liberia is open for business. We want to be known as a business-friendly government. We will do all that is within our power to provide an environment that will be conducive for the conduct of honest and transparent business. We will remove unnecessary regulatory constraints that tend to impede the establishment and operation of business in a profitable and predictable manner.”
“I do not think that this government is going by what it has said. Look, today, the level of corruption and red tape at the Free Port of Monrovia is one case. You also have BIVAC, an international inspectorate company which is virtually imposing suffering on the people. They refuse to accept our currency. They just charge without a set procedure. Then, you have APM Terminal which is also suffocating the economy and stealing from the Liberian people,” Alexnder D. Tugbeh, a former custom worker said.
From the government’s end, the friendly posture which president Weah announced, may not be the case today as in most of the ministries and sectors are ignoring the rule. “Look, we have heard in the past that the government asked many international companies like, Arcelor Mittal, Golden Veroleum , MNG(a delegation of government officials was taken to Turkey to secure an extra deal), Firestone, to effect advance tax payment to help support its budget,” he added.
To make it worse, the current investments are said to be facing serious challenges. For instance, regular harassment of companies by some government officials. Most instances, they request companies to give rice, petrol, cash, employ relatives who in many instances are unqualified. But this has been denied by government.
”We are not even talking about oil palm. They are facing serious problems here. Government promised land for them to expand, but noting. All the oil palm sectors. What will make other people come in,” Sylvester R. Keadi, a farmer said.
Just last week, during its recent results announcement, Sime Darby confirmed the plan to sell its business and exit the country.
Sime Darby Group Managing Director told the news conference that the decision was made due to various challenges of developing its oil palm operations in the country, and the continuing losses the Company has made in trying to do this for so many years.’
”When we leave, not if, we want to ensure the party that takes over will act responsibly,” Mohamad Helmy Othman Basha, the company’s group managing director said. Prior to reaching at the decision, sources at the presidency said senior managers held meetings with the president of Liberia informing him of the challenges and wanted them to intervene. But not much was done.
In recent times, many entities have started embarking on redundancy. They think is a means to help reduce operational cost. Some economist equate this to what they describe as ‘unfriendly’ business climate. That has prompted such redundancy spree affecting many companies, both local and international companies. Some of the companies are; Firestone(put off about 800), Sime Darby(About 700 )Golden Veroleum(Over 200) Equatorial palm(About 150 or more), banks, Arcelor Mittal(Over 300), MNG Gold(200), Salala Rubber company (Over 300)among others.
“I think any responsible government would not be happy to see some of the major international companies scaling down. As soon as they see one moving, they will act swiftly so as to prevent any would be,” Keadi said.
The government is not happy about this exercise. At one point in time, president Weah appealed to some of the companies not to effect it, as such exercise would send a bad picture of his government.
Frankly, one senior business executive from the private said, “these problems were inherited by this government and it would take some time to fix it. This is serious. This government needs to step in the hard way to ensure that things work well.”
Even with that, some sectors of the government seem to be making the situation worse by their actions.
For instance, at the ministry of Labor, which ensures that all legal procedures relating to redundancy and other work-related issues are carried out in the interest of all parties, is not happy. But some employees who have agreed to be laid off at some of these companies are blaming some officials at that ministry of stalling the process.
“They tell some of the companies to pay money before their labor commissioners can verify the list. This is wrong. Some of what to go on redundancy so we can get different jobs with other companies. If these companies do not pay money to them, they will not fast track the process,” Samuel R. Wleh, from the South East said.
“I think the ministry of labor is not helping this government. Many of the officials are corrupt. We submitted a list to them for redundancy. One official at the ministry told us to give money. We ended up giving money to carry on the process faster. We have no option but to give them money. These are some of the things that can scare investors away. Instead of encouraging them, they are rather discouraging them,” a top manager an international bank said.
Even some new investment that are seeking ways to come in, their representatives are not happy. One international business man said recently how some top government officials are taking kick back from potential investors with the assurance of giving them contracts.
Electoral violence & Currency depreciating
As Jackson stated earlier, no investor would love to go into a place that violent is common. The recent waves of violence coupled with attempted arrest of representative Yekeh Korluba, alleged beating of a senior police commander is nothing to take for granted.
The worse of it was a physical attack on the director general of the National Bureau of Investment, Gregory Coleman by his deputies. As a result of that, the president suspended the two officials and recommended their investigation.
These activities send negative signals to the outside world; which potentially scares away investors. The most recent one is the incident between Ms. Telia Urey and Mr. Abu Kamara (both representative candidates in the Montserrado county district number 15 by election.
The vacancy was created following the death of Adolf Lawrence in a car accident early this year in Liberia. Their supporters clashed recently which led to the smashing of Urey’s land cruiser Jeep. The National Elections Commission has called for a re-run in the district. The police ahs started an investigation.
Besides that, there have been pockets of protest in the country. The largest one was on June seven. After that, at least, every week or so, there are various groups either protesting in front of the presidential palace, Capital building, the University of Liberia or other nearby areas.
”My brother, do you think investors want to be identify their cash with protests, violence, etc? No way. So, if these things do not stop, trust me, we will not get any new investment and even those that are here, will only reduce staff and start to look,” Timothy Brown, a real estate developer said.
”There is a business man from Latin America who has spent over two millions United States dollars to secure a contract for twenty five years. The deal is not coming through at all. The man is frustrated and has threatened to expose them if such contract does not come. Not only expose them, but will ensure that some people are ‘taken care of,” a top businessman who declined to be name said.
These are certainly not good signs for this government which needs investment desperately. At present, the Liberian dollars is gradually depreciatory. The rate which used to 150L$ to 1US$, is gradually moving towards the 300 exchange rate level. Liberia has its own currency-Liberian dollars and uses the United States. Both currencies are accepted as legal tenders. The country’s national budget hovers around five hundred thousand United States dollars.
Thereafter, the parade of misfortune got in constant motion as would-be and potential investors stand afar and continue to read, hear and listen to the songs and amazing stories filtering from the country’s (Liberia’s) business and investment climate coupled with the doubtful judicial system.
Then came another big promise bordered on skepticism and disgust dubbed US$2.5 billion resource swap deal between government and Chinese Company-According to the deal, the company will provide the money and government settles for a resource swap deal- Following massive publicity, the deal never left the ground-again another charade.
In the interim, startling revelations began to unfold against the government’s trust, confidence and policies. It started with the United Nations expressing dismay over the long, manner and form its sponsored projects are being executed with emphasis on how the money is being utilized and declared that all of its funded project will be self-managed with implementers chosen- Then came the bombshell.
When close to ten foreign missions’ representatives issued a statement demanding the government to immediately return their projects’ money deposited that it (government) used without their acquiescence, something that painted the image of the government and country negatively with international dimension of disdainfulness.
Indeed, such omen including the mysterious disappearance of the L$16bn.
Coupled with the unprofessional and reckless unorthodox application of the still looming US$25million mop-up saga also peaks volume, let alone to allow justice to be honored and upheld without fear or favor rather then the writing on the wall clearly shows ‘battered justice’ to cover-up for cronies into total defense of appeasement which to a larger extent, raises more questions than answers.
Regarding government shooting itself in the leg and driving investors away despite wailing that Liberia is ready for business and the accommodation and protection of foreign investors and their assets will remain a high priority for the pro-poor government, the existing reality on the grounds reflect a far too different game plan; while the piercing question remains what works well in Weah’s Liberia prevailing pictures from the country is not encouraging to attract the quest and appetites of would-be investors as well as potential business entities.
If this government must move on to bring in good investments, it should look at its investment package, the rule of law, lower down on corruption, ensure realistic and professional business posture that would encourage more investments into the country.
But as it stands, the current system and some officials go about ‘encouraging’ people, is not healthy and has a great potential to drive away investors.
Perhaps knowing the downward trend the economy is taking, coupled with the level of redundancy, the UNDP, ECOWAS and EU organized a three day economic forum aimed at finding ways to resolve some Liberia’s problems. More importantly, to attract investment.
So, Liberian president, George Weah in his remark said these: “This Conference is organized and convened as an important initiative of my Administration, in order to stimulate a broad-based conversation among stakeholders within the Liberian economy, concerning the best and most feasible way forward to sustainable growth and development.”
The Finance minister, Samuel Tweah explained it all on the challenges. “The cost and reliability of electricity is also a challenge to the business environment. Per kilowatt hour cost of power in Liberia is 35 US cents, while for most countries in West Africa it is less than 15 US cents. The completion of the CLSG transmission lines early next year will enable Liberia to import cheaper power from neighboring countries, helping to improve the business climate.”
“Contract enforcement and the litigation of business cases in Liberian courts remain areas of concern. The Business Climate Group is working closely with the Chief Justice and leaders of the judiciary as well as key private sector groups such as banks, which are often affected in these types of cases, to situate contract enforcement on a more transformative path,” he went on.
All these are brilliant talks but the execution remains a major challenge for the country.
Remember president Weah, you made a commitment to Liberians that your government would help change the ordinary people lives and encourage businesses to invest.
I am afraid that if you do not go back on the drawing table to chart a new course or redirect your policies, your government could be the worse in the history of Liberia. Do not drive investors as government alone can employ everyone.