Despite the past challenges facing the war-torn country, the impact of lower commodity prices and the loss of development gains by the deadly Ebola outbreak, President Ellen Johnson Sirleaf describes Liberia as a well-endowed country.
Speaking at the Johannesburg Chamber of Commerce and Industry on 11 June, Sirleaf, who became the first female democratically elected head of state on the continent in 2006, promoted Liberia’s natural resources as investment opportunities. The mining, agriculture, forestry and marine sectors all have potential for growth, she says. “We’ve been trying to build on the strength of our natural resources… and that endowment is still there.”
Liberia’s geography supports its attractiveness for investment. The flow of goods across international markets is made easy via seaports along its 579km shoreline, explains George Wisner, executive director of the National Investment Commission (NIC). Opportunities to develop infrastructure of airport facilities gives Liberia a comparative advantage over neighbouring countries as it is in close proximity to Latin and North America, and Europe and the Middle East, says Wisner.
The long-term Vision 2030 plan for transformation will see Liberia become a middle-income country. This would include addressing its long-standing infrastructural problems, says Sirleaf. In the past, the country did not have the diversity to withstand economic shocks and the largest constraint to achieving diversity has been the lack of infrastructural development, she says. One of the issues that will be addressed within the next 18 to 22 months is the need for energy and sources including renewable energy such as solar and hydro-electricity.
We believe that we are now on the road to recovery and we can use the experience of the past to achieve the diversity and transformation goals.
“We believe that we are now on the road to recovery and we can use the experience of the past to achieve the diversity and transformation goals,” says Sirleaf. Through the proper use of resources and partnerships for financing, the country can address poverty and ensure sustainable economic growth, she adds.
If investors take advantage of the “huge potential” that exists in Liberia, it will benefit job creation, says finance minister Amara Konneh.
Liberia has incentivised investors by making the environment conducive for business, he says. The efficiency of the environment ensures that it takes 10 days to register a business, he explains. “We also have an attractive percentage in our revenue growth for investors,” he adds. The NIC allows easy repatriation of profit, making it easy for investment to grow, says Wisner. “Investors find it easy to invest and find it easy to get profits,” he says.
“The biggest guarantee we have is the stability in the country, which we have demonstrated in the past two election cycles. Our country is on an irreversible path to sustain growth and development,” says Konneh.
It will be ideal if investors “set up shop” in Liberia, says Konneh. “We want to make our economy a three-ship economy. Right now we are only one ship,” he says.
Liberia’s major trade partners are Europe and China. There is a trade deficit between Liberia and South Africa. Past efforts to establish trade partnerships between the two countries failed, but there are still hopes to establish business partnerships with South African entities, says Sirleaf. MTN is the best-known local company with operations in Liberia.
The impact of Ebola
Liberia, which was declared Ebola-free in May, is still counting the economic cost of the outbreak, which slowed investment and cut economic growth. The outbreak, the largest in history, killed more than 11 000 people in West Africa since it started in February last year. New cases continue to be reported in neighbouring Sierra Leone and Guinea.
“The children were not in school, we almost lost an entire year because of Ebola,” says Konneh. Economic growth for 2014 is estimated at 0.7%, down from 8.9% in 2013, according to the International Monetary Fund (IMF). Estimated GDP losses in 2015 are $240m (R3bn) for Liberia, a major impact if considered that GDP in 2013 was estimated at just under $2bn.
In addition, the steep decline in iron ore prices curtailed planned investment in the mining sector, the IMF said. Other industries, such as the services and agricultural sectors, also declined. “Restaurants were virtually empty,” says Konneh.
However, the disease brought together members of parliament, the private sector and civil society to work on a solution, says Konneh. The economy is expected to grow 3% this year, according to the latest World Bank estimates. Besides relying on external support, such as debt relief and trade facilitation from the World Bank, the rebuilding of Liberia starts from within, he says.
I met a ravished country and we kept it peaceful and had it develop and we left it better than we found it.
The Ebola outbreak served as a reminder for the continuous investment in institutions for human development such as education, health and social protection, says Konneh.
Since its eradication, the country has started to re-engage the investor community and investors’ confidence is picking up again, says Wisner.
“When there is a common threat, a nation puts aside all of its differences – political, religion, ideological – and can come and confront that threat and win,” says Sirleaf. The silver lining in the situation is that the international community recognises the importance of forming partnerships to prevent any global catastrophe, she says.
Of her legacy, Sirleaf says: “I met a ravished country and we kept it peaceful and had it develop and we left it better than we found it.”