Liberia’s government plans to implement a series of reforms to reconstruct the country, which in 2004 emerged from a civil war that had ravaged it for more than two decades. Liberia is an impoverished country with a population of over 3.5 million people. The authorities have pledged to improve financial management, strengthen the judiciary, combat corruption, and provide technical assistance to Liberians to help them effectively manage their economy. President Ellen Johnson Sirleaf’s chief economic advisor, Richard Tolbert, is convinced that Liberia is “on the cusp of a golden age.” In the third of a five-part series, VOA’s Darren Taylor looks at the incentives afforded to investors in Liberia.
Observers of recent steps taken by the Liberian authorities to improve fiscal discipline are impressed with the government’s apparent eagerness to fight graft.
“I’d say the primary advantage to investing in Liberia right now is the vigor with which the government is tackling corruption. It bodes well for the future,” said Thierry Tanoh, the president of the International Finance Corporation – the World Bank’s private arm – in an interview with VOA.
The Liberian authorities are currently reviewing all concessions and contracts awarded by previous administrations. It was in this light that a $1 billion dollar contract that had been signed in 2005 with the largest steel company in the world, Mittal, was recently renegotiated to create terms that Tolbert said were “more agreeable to all parties.” The non-governmental organization Global Witness had criticized the deal, which the group said had allowed Mittal to flout human rights and environmental laws.
“I believe that the fundamental reason why Liberia is once again becoming an attractive destination for serious investors is because we have a government with a clear vision for turning around our country and a strategy for achieving that vision,” Tolbert said.
“The cancer of corruption is public enemy number one” in Liberia, said Finance Minister Antoinette Sayeh.
As a first step, Tolbert explained, Liberia’s “high-level officials” are now required to “publicly declare their assets upon assuming office.” Sirleaf had established a mandatory code of conduct for public servants, and a special commission to monitor the reform agenda. The president had also enacted a public procurement law and established a public procurement commission to ensure that all government purchases were “transparent, competitive and comply with international best practices.”
In addition, Sirleaf had introduced legislation to limit the powers of the executive branch of government. Salaries for civil servants have been increased and the minimum wage boosted to what Tolbert acknowledged was “still a dismally low level of a dollar a day.”
Alexander Cummings, the president of Coca Cola Africa, is investigating the possibility of using Liberia as a regional hub to export to other markets.
“I think the Liberian people are now very confident of their future; they’re very optimistic, and I think Liberia is beginning to attract talent from the Diaspora. Secondly, the government of Liberia, through its anti-corruption policies (and reform) policies around the justice system, again makes Liberia a very attractive destination,” said Cummings.
A further advantage to investing in Liberia that is constantly mentioned by the country’s senior officials is its qualification for two preferential trade regimes – the European Union’s ‘Everything But Arms’ (EBA) initiative and the United States-sponsored African Growth and Opportunity Act (AGOA). The regimes allow Liberia access to the lucrative markets of the European Union and the United States. Liberia is also a member of the Economic Community of West African States (ECOWAS) – giving it access to a market of 240 million people.
Tolbert told VOA: “We are working on a formal code of incentives – including tax concessions – to attract foreign direct investment.” He said foreign investors would qualify for the incentives if they conformed to various conditions – such as making an investment of a minimum of $100 000, employing and training a workforce consisting mainly of Liberians, and using Liberian raw materials. The incentives, Tolbert explained, included exemptions from trade taxes and income tax, and various tariff protections.
He was of the opinion that, even in the absence of the code of incentives, Liberia held a “special attraction” for foreign investors.
“We have a friendly, English-speaking population. We occupy a strategic position on the West coast of Africa, with four deepwater ports; (we have) one of the largest airfields in West Africa, with easy access to markets in Europe, North America, South America, as well as to the entire West African sub-region,” Tolbert pointed out.
For Adelaide Gardiner, who represents Liberia’s Diaspora Business Community in the United States, the great advantage of investing in Liberia at present is the “freedom of choice” of opportunities available.
“You (the investor) can go in and write your own ticket. Anything you want to do there, it’s possible. And we’re going to cooperate with serious businesspeople that have something to contribute to the country and the people, and we are now going to develop this country. So the advantage is that you can go in, invest some money, and make a healthy profit - without corruption - and you can actually go in there and do what you want to do. We have a lot of virgin areas,” she said.
One of the many international investors who are exploring possibilities of investment in Liberia is Earl Young, the director of Canada’s Diamond Fields International.
“It is really a country going through reform - and positive reform, that it makes it much more appetizing to go in there and explore, and know that if you do find something, you can produce it correctly, you can handle it correctly, be taxed fairly, and also have a good work environment and good workers; they’re great workers over there,” Young added.
Johnston McGill, an official of Liberia’s International Business Organization, which was facilitating contacts between Liberian enterprises and their international counterparts, advised investors not to “underestimate the friendliness of Liberians and their openness to foreign investment” as an incentive to doing business in the country.
“I can assure them that our people will not consider the foreigners as colonizers, but we will welcome them as partners in reconstruction,” he said.