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Liberians look to Foreign Investment for Reconstruction

Liberia’s authorities recently launched a massive international drive aimed at reconstructing the country. The tiny West African state of 3.5 million people was largely destroyed by civil conflict that began with a coup in 1980, and lasted until 2004. President Ellen Johnson Sirleaf – Africa’s first elected female head of state – has appealed to international investors to help rebuild Liberia. The country is rich in minerals, including gold and oil, but remains one of the poorest nations in the world. In the second of a five-part series, VOA’s Darren Taylor reports on the potential for investment in Liberia.

It is the contention of Sirleaf – an internationally respected economist who once worked for the World Bank and was Liberia’s Finance Minister for a period in the 1990’s - that the private sector must be the driving force for growth in the West African nation.

Liberia is seeking the support of the US business community – because of its economic power, and also because of the country's historical bond to the USA; freed American slaves founded the Republic of Liberia in 1847, and the US dollar remains legal tender in the country. Senior Liberian officials say they are casting their 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.

Richard Tolbert, Sirleaf’s chief economic advisor and the Chairman of Liberia’s National Finance Commission, said he has in recent months received more than 200 delegations of foreign businesspeople looking into investing in the country.

“We’ve always been open to business in general, from all over the world; the open door policy was one of the policies that was enshrined in our pillars of reconstruction. But we are particularly receptive to south-south investors, as it were – particularly people from the African continent,” Tolbert explained.

In comments to US-based businesspeople in Washington D.C. recently, Sirleaf said that Liberia was “relying on foreign direct investment to rebuild” the country, and that “FDI will not only bring new capital into the country, but also new technology and access to foreign markets”.

Tolbert said opportunities were available in “virtually all sectors of Liberia”, given the fact that the war had largely devastated the country. Before the conflict, Liberia was one of Africa’s largest exporters of rubber, timber and iron ore, but the fighting had resulted in rubber plantations and mines being abandoned, and tree plantations being occupied by squatters.

Exports have declined significantly to a comparative trickle in recent years, and Liberia’s national debt now stands at more than $4 billion - although the US has pledged to cancel the country’s $391 million debt to America.

Olubanke King-Akerele, Liberia’s Minister of Commerce and Industry said the country was especially seeking investment in its agriculture sector - Liberia enjoys one of the highest rainfalls in Africa, making its land ideal for the production of rice, rubber, palm oil, pineapples, cassava, citrus, timber, coffee and cocoa.

She said Liberia also remained open to offers for oil and gas extraction, and investments in mining (especially iron ore, diamonds and gold), timber, transportation, roads construction, building of hotels and houses, power and electricity, financing, fisheries and tourism - Liberia possesses some of the last-remaining virgin rainforests in Africa, and an unspoiled coastline containing beautiful beaches.

Key to Liberia’s reform, said Tolbert, would be a “massive push” to improve conditions for the country’s private sector, and to “get international firms and individuals on board” to develop Liberia.

The world’s largest steel company, Mittal, has indicated its confidence in Liberia with an investment of $1 billion. Reforms were ongoing, Tolbert insisted: “The government is set to re-license forestry concessions, and that should begin later this year. It has put into place safeguards for sustainable forest management, which has led to the lifting of sanctions on the forestry sector by the international community.”

“Transformation” was also occurring in the diamond sector, Tolbert said.

“The government has put into place procedures that will, we believe, lead to the lifting of sanctions on the diamond industry in the very near future,” he predicted.

Tolbert disclosed that” foreign investment proposals in quarrying, saw-milling and nail and zinc manufacturing had been accepted.

Robert Mossbacher, the President of the US Overseas Private Investment Corporation – OPIC - a major arm of the US government that finances private investment abroad, said Liberia could also expect injections of American money.

“Once investments are made, and host governments and host populations see visible proof of the benefits of those investments, it actually accelerates the momentum for reforms that then lead to more investment … Our plan is to help support investment in Liberia and to facilitate as much investment as possible,” Mossbacher said.

Thierry Tanoh, the Africa Director of the World Bank’s private division, the International Finance Corporation, said the IFC had a “particular interest” in Liberia. The Corporation had recently launched a “post-conflict initiative – supporting governments coming out of conflict, to provide support to their private sectors”, said Tanoh, and was “working hand in hand with the Liberian government to ensure that laws are passed to provide incentives to the private sector to invest in Liberia”.

As a former banker herself, Sirleaf said, she knew what it took to enable the private sector in Liberia to thrive.

“We know there will be risks as people try to invest in Liberia,” the President admitted, “but we also know that there will be great opportunity. And opportunity translates into profits.”