The challenges to investing in a country that has been all but destroyed by decades of civil war are many … Yet Liberia’s government is urging international businesspeople to help rebuild one of the poorest countries in the world, where infrastructure is virtually non-existent, and where unemployment and illiteracy remain stubborn. But authorities argue that it’s within these parameters that opportunities for massive profits are to be found. In the fourth of a five-part series on Liberia, VOA’s Darren Taylor looks at the challenges of investing in the country.
Olubanke King-Akerele, Liberia’s Minister of Trade and Commerce, was unequivocal when asked to name the biggest negative to investing in the small but mineral-endowed West African country at the moment.
“Electricity!” she immediately exclaimed.
“Our power system, the national grid, has deteriorated in the wake of the war. Basic infrastructure that support development - lights and water - (are) practically non-existent! But there is heavy investment underway to respond and react to those. The government has a major electricity program (on track). But that is costly,” the Minister said.
She said the lack of adequate roads in the country was also a “great disincentive” to investment. And Liberia’s Finance Minister, Antoinette Sayeh, admitted that the problem of graft remained “huge”, despite President Ellen Johnson Sirleaf’s pledge to address the “cancer of corruption which undermines and distorts valid business transactions” with a series of reforms.
King-Akerele added: “We have, of course, very high energy costs in Liberia, (and) that poses a significant cost on the private sector … There are huge issues around land reform that we need to tackle to make investments in agriculture, in particular, possible.”
Alexander Cummings, the President of Coca Cola Africa, a company that is investigating large-scale investment in Liberia, said that a “lack of skilled talent” in the country was the “major discouragement” to foreign investors at present.
And Liberian officials were at pains to downplay reports of rampant crime, especially in the capital, Monrovia.
“We are strengthening our security systems; reforms are happening. The United Nations is keeping the peace,” Sayeh insisted.
However, a travel warning issued by the United States Department of State urges potential visitors to the West African country to ‘consider carefully the risks of travel to Liberia. Notwithstanding the UN’s deployment of 15 000 peacekeepers and 1 100 police advisors nationwide, the overall security situation remains unpredictable’.
The advisory continued: ‘There remains an undercurrent of political and social tension and economic hardship that could result in sporadic violence and instability … Foreigners … are high-profile targets for robbery.’
The chief of Liberia’s National Investment Commission, Richard Tolbert, admitted a “problem” with crime, but stressed that security had “largely been established and former combatants have been disarmed. We are training the police and a new defense force, in conjunction with an American security firm. Things are rapidly improving, but don’t take my word for it: come and see for yourself.”
He acknowledged that the “high level of unemployment in Liberia has exacerbated the problems of petty crime”.
Adelaide Gardiner, a spokesperson for Liberia’s Diaspora Community in the US, blamed a “hangover from the mysterious war” for the crime.
“(Liberians) are not warlike; we are not people that fight and we are not people that shoot people; we knew nothing much about crime (before the war). Violent crime in Liberia was unheard of, until now. Where it (the crime) came from, I don’t know! Desperation? People influencing you, telling you that you deserve more than you are getting?” she asked.
But Earl Young, the Director of Canadian firm, Diamond Fields International, said he did not believe that crime was a primary discouragement to investing in Liberia … Rather, the big disadvantage to doing business in the country at the moment was “lack of basic logistics,” Young commented.
“It’s a matter of setting up the proper banking institutions - being able to handle funds correctly; things as simple as: Can you wire money from Monrovia to New York? (That) sounds easy for those of us in the free world, but it’s a difficult process to put together; very basic fundamentals that are (only now) coming together for them (Liberians).”
Thierry Tanoh, the Africa Director of the World Bank’s private arm, the International Finance Corporation, said the main disadvantages to investing in Liberia currently were common to many post-conflict countries.
“… You have a lack of administration and the private sector is mostly in the informal sector - you need to bring them back into the formal sector. There’s also a lack of capital,” Tanoh explained.
“We have people that have been at war for years and the only thing they have known is basically war. The building of capital to start a business is not there, so we need to find a way to provide some seed capital, for entrepreneurs, which is not present today.”