LCC’s Acting President Address At The National Economic Dialogue Conference – “De-Risking the Private Sector to Ensure Sustained Economic Growth and Development for Liberia”
The acting President of the Liberia Chamber of Commerce (LCC), Mr. Charles Collins, Sr. addressing the ongoing National Economic Dialogue Conference taking place at the newly constructed Ministerial Complex spoke on a number of national issues, speaking on theme: “De-Risking the Private Sector to Ensure Sustained Economic Growth and Development for Liberia”.
Below is the full text of Mr. Collins’ statement:
Ladies and gentlemen, fellow Liberians, I would first like to express my personal thanks and appreciation to the organizers of this very important Dialogue for their foresightedness, and to the Government of Liberia for giving its approval to have this all important Dialogue held at this point in time.
I would also like to express my personal thanks and appreciation to the President of the Liberia Chamber of Commerce, Mr. Wendell Addy, who is currently undergoing medical treatment in the United States of America, for the enthusiasm shown, and for his immense contribution to the development of this paper.
Ladies and gentlemen and the organizers of this Dialogue, the theme of this Paper is: De-Risking the Private Sector to Ensure Sustained Economic Growth and Development for Liberia.
The State of Security of a Country depends on the active participation of its people in an enabling, vibrant, and predictable economic environment. Also the quality of its economic and investment policies helps to attract the attention of investors, both local and foreign. In essence, policy predictability by investors determines the quality and level of investment in a country.
Chambers of Commerce around the world work with their various governments to help create wealth, jobs, training, and various opportunities for their people. Those activities help to foster economic growth and development in the various countries. In Liberia, the Chamber of Commerce represents the interest of all businesses, regardless of size, formal or informal status, nationality, ownership or religious affiliations. The Liberia Chamber of Commerce serves as the Representative of employers at the International Labor Organization and at the World Trade Organization. It serves as the “Go to” consultative private sector institution for business information and for helping to determine the health of the Liberian economy.
The Liberia Chamber of Commerce was established to represent the interest of the private sector. The Chamber works with the government to ensure that the country has a healthy, conductive, and functional business climate that is attractive to all investors – foreigners and nationals alike. The Chamber works with line entities of the Government of Liberia to dialogue, raise issues relating to suitable growth and development, and helps to promote favorable policies for a better business climate conducive for investors. The Chamber calls government attention to outdated or new policy issues that may negatively distort or impact the market and investment climate. The Liberia Chamber of Commerce, like other Chambers around the world, works with the government to help create wealth, job opportunities for its citizenry, and to foster economic growth and development for Liberia.
The Chamber realizes that inorder to achieve wealth creation, jobs, growth and prosperity, the private sector and the government must collaborate in a way feasible to obtain utmost advantage for its people and the country in pursing the country’s development agenda. This amounts to a ‘State of security’. The people across all spheres of the economy must be empowered to own a piece of the economic pie, and that piece must be rooted in ensuring the provision of appropriate education for the people in the villages, towns, and cities. Also, Liberian entrepreneurs and investors must be recognized and treated as serious investors, due to the fact that the economic transformation of the Nation depends on the collective participation of all Liberians.
National Economic Dialogue
The Chamber has taken note of the prevailing economic situation in Liberia as documented by the organizers and consultants of the National Economic Dialogue as spelled out in its Aide Memoire that was developed to address critical economic issues and challenges facing this Nation; and to determine the Way Forward in conformity with the findings of the International Monetary Fund (IMF) and understanding reached with the Government of Liberia “to formulate a ‘New Program’ that seeks to restore economic growth and prosperity in Liberia. The Chamber identifies itself with the Government of Liberia in its commitment to derive a number of workable strategies for implementation.
However we are constrained to call our attention to the fact that over the years several economic papers have been developed by highly experienced professionals and technicians that were presented at different symposium and forums, along with pertinent recommendations for implementation, but nothing has happened. We can only hope that this dialogue will not be another fruitless exercise. For me, I personally feel that this current administration is inclined to do whatever it takes to speedily improve the Liberian economy inorder to ensure that its citizens are meaningfully employed and placed in the right positions to enable them to contribute to the growth and development of their country, especially those classified as the “Pro-poor”.
To accomplish the above, we must first address the scarcity of quality labor skills in the economy, bearing in mind that the decision of domestic and foreign investors to substantially invest in the economy for attractive returns is always based on the availability of well-trained Liberians for employment. We should remember that investors are not concerned about you being a Liberian or not. They are normally concerned about people who are capable of helping them maximize their profit. So, noticeable improvements must be made in building up-of-skills for job readiness, high performance, and productivity in the job market.
An Overview of the Current Economic Situation
Rumors of Pending Business Downsizing or Closures: The country is rumored to be facing possible downsizing and/or closure of major foreign corporations like Firestone, Sime Darby, Mittal Steel, etc. Whether downsizing or closure, both have adverse macro and micro economic implications for the country. Losing reputable companies makes marketing the business climate in Liberia extremely difficult, because real investors always want to know why certain reputable companies have departed the country or intend to depart. Therefore, the government has to decide on the revision of some of its policies and actions to ensure that existing companies, both small and large, remain in Liberia. Is the problem based on the fact that the government has not delivered on the terms of the various contracts, or is the performance of the contracts being impacted by external economic conditions? Should the terms and conditions of the contracts be temporary or permanently adjusted? Is labor dispute the issue? Do we let go known companies and settle for mediocrity companies? What does it say about us as Liberians when we are out there canvasing for investors?
Liberia, A Party to International Trade Treaties: The Chamber recognizes that Liberia is a signatory to several trade treaties: the Mano River Union (MRU), Economic Community of West African States (ECOWAS), Africa Continental Free Trade Agreement (AfCFTA), World Trade Organization (WTO), EU/ACP, AGOA, that are in effect or near implementation. In the absence of defined strategic agriculture and manufacturing programs that emphasize import substitutions and ‘Made in Liberia’ products with export potential to generate foreign exchange, Liberia is gravely exposed to positioning itself as a ‘NET IMPORTER’ of goods and services. We should understand that such position continues to adversely affect our balance of trade index and further impairs the purchasing power of the Liberian Dollar.
Balance of Trade: The Chamber is fully aware of imbalances in Liberia’s trading with other nations, more importantly, that about 95% of what we export are exported by foreign investors. The problem for Liberia is that the retention of 100 percent of earnings abroad or a required 25 percent exchange surrender to CBL for LD certainly does not equate to a solution capable of meeting Liberia’ import needs and to positively impact the performance of the Liberian Dollar. The question is, what are the priority options? Studies show that to get handle on stabilizing one’s local currency, one must have a minimum of 30 percent foreign exchange inflow from export. Do we?
Banking System Pressure: The banking system is in near collapse if not in collapse. The triggers are clearly visible! Depositors’ funds on-demand are not readily available when needed, hence the reluctance of people to use the banks. Commercial Banks are not lending because Non-Performing Loans (NPLs) are high on the banks’ books. The Government’s debt obligation to banks is high. External private lenders are hard to come by, and intergovernmental financial institutions are conditionalizing lending assistance or pulling the plug. Studies show that any one of these conditions can cause bank failure. The question is what combination of Fiscal and Monetary policies should be utilized to bring relief and restore confidence in the banking sector? What are the overall implications in a categorized analysis for Debt Restructuring Vs Litigation, or Re-financing Vs Litigation? When considering litigation, we know and must be cognizant of the challenges in the court system! How do we meet up with those challenges inorder to help restore the type of integrity needed in the legal system?
Foreign Investors/FDIs: The Chamber understands the value system, and appreciates the fact that foreign investment is an integral part of our national development efforts. Investors, like nationals, want to understand and acquire a ‘lovefest’ appreciation for a predictable business climate based on suitable infrastructures, a reliable banking system, rule of law being in place and being followed, attractive/transparent and competitive investment laws and policies to help determine the level and quality of Foreign Direct Investments (FDIs). Those in the field of Political Economics know that government policies, political stability or instability, bureaucracy, corruption, competition, regulations, labor-skills/environment/copyright/consumer protection laws, funding, and initiatives are in the mix of the required ingredients that must be in-place to help promote the investment climate of a country. It is against this backdrop that serious and risks calculating investors always employ social, political, and economic factors in their decision-making process. The political factor takes into consideration how the government intervenes in the economy. The economic factors include economic growth, exchange rates, inflation rate, and interest rate. These factors, amongst others like the rule of law, affect how businesses operate and how they make pertinent investment decisions.
The Chamber’s Initiatives
To help the Government address the economic situation in Liberia, the Liberia Chamber of Commerce has adopted a Program referred to as “De-Risking the Private Sector to Ensure Sustained Economic Growth and Development for Liberia”. During its campaign for leadership, the present administrative of the Chamber decided to first meet with the various business associations her in Liberia (Liberia Business Association, PATEL, Liberia Marketing Association, the World Lebanese Cultural Union, FULA Business Association, Association of Indian Community, line ministries and agencies of government, the business sector leaders including – oil importers/rubber producers/farmers/manufacturers/food processors/ wholesalers, retailers, etc.) to get their views on the economy and suggestions on how to help improve it. The Chamber also met with oil importers and thereafter immediately communicated its findings and suggestions to the Commerce and Finance Ministries. Those findings helped to resolve some long outstanding issues between oil importers and the government.
De-Risking of the Private Sector has to do with offering of a predictable business climate that is supported by the required infrastructures, along with workable internal policies that are investors friendly. The offer has to be logical, and competitively advantageous to investors.
The Chamber is gravely concerned about trade disadvantages from signed treaties, trade imbalances, and the required foreign exchange needed to support imports. To avoid Liberia continuing to be a net importer, the Chamber embarked on a ‘Made in Liberia’ strategy to have its members begin looking into substitutes and local manufacturing and processing to ensure the inclusion of Liberian owned businesses in the market. The Executive Council voted to support the first Made in Liberia competition campaign held at the Royal Hotel to enable the Liberian business people to participate in the 2108 AGOA Trade Fair in New York. With sponsorship mainly from our foreign members, the Chamber invested about $100k USD in sending participants deemed to have been successful, to show-case their products in NY. We are very proud and pleased to report that several participants received orders thereafter. Two Liberians recently shipped a container of packed Liberian made products under the AGOA program. The Company called FABRAR, Inc. will be shipping four (4) more containers of its packaged products to the United States prior to the close of 2019. The products can also be purchased on Amazon.
We salute the FABRAR family, represented by Jeanine Cooper, and all of our “Made in Liberia” participants and exporters, including Rugie Barry, Martha Henries, J-Palm. Also, with the support from the Government of Liberia through the Ministry of Finance, the Chamber took a trade delegation to Egypt and participated in the AfriExim Bank Trade Fair. The Liberian booth was visited by the President of the Africa Export/Import Bank as well as the African Union Commissioner on Trade.
To support the “Made in Liberia Export Trade Program”, businesses need access to Medium Term Credit for equipment and raw materials to grow and flourish. The Chamber, along with the President of the Liberia Business Association (LIBA), advanced an idea to the Minister of Commerce and the President of LBDI, about leveraging the funds made available by President George Weah for Liberian owned businesses. Subsequently, the Chamber followed up with the Minister of Finance to explore the possibility of re-structuring loan obligations of companies and individuals in the export business that find it difficult to get additional loans due to their outstanding obligations to financial institutions. The Minister has thus far met with four exporters, and discussions are ongoing.
Further to the Chamber’s effort to secure Medium Term Export Credit, the Chamber wrote foreign missions accredited near Monrovia to facilitate the setting up of meetings with Export Banks in their various Countries for the purpose of exploring credit facilities for business in Liberia. Since the communications went out, the President of the Chamber has met with officials of the Egyptian Export Bank as well as the U.S. Export Bank. Both meetings were reported to have been successful, but require the government’s full participation and commitment to “turn the economy around”.
The quality of the internal economic policy of a Nation is what attracts investment! The Chamber is prepared to engage in competing dialogues with the Government inorder to help lead the private sector to secure investment opportunities throughout Liberia. We believe that such should be done in close consultation and collaboration with the Government of Liberia, in particularly, the National Investment Commission.
Therefore the Chamber, in readiness, proffers the below recommendations for consideration and action. That the Government of Liberia:
- Should fully recognize the Liberia Chamber of Commerce as a valuable economic partner capable of helping it address its macro and micro economic challenges; and an “implementing partner in pursuit of its Pro-Poor Agenda”.
- Being cognizance of its declining economy that is battered by business closures, high market prices, inflation, and unemployment, the government should realized that the imposition of higher or new taxes and fees on businesses and individuals would definitely accelerate the pace towards total collapse of the economy; therefore, the Government must carefully re-think making such a decision.
- Should strategize and target import substitute manufacturing and processing companies for medium-term credit support.
- Should decide to send out delegations to key export banks to negotiate Medium Term Export Credit arrangements for targeted import substitute projects.
- Should work with the Chamber to develop policies and programs that are attractive to investors to encourage them to readily invest.
- Should act and treat business officials with courtesy and respect; and not act as if they are doing favors to those officials. Marketing a country to attract investors is a serious business, and should therefore be done from a business perspective and measured quarterly for re-assessment and acted upon. The National Investment Commission must be recognized and treated as a key economic arm of government, and must therefore be provided the tools and authority needed to carry out its work.
- Should empower the National Labor Congress and the Liberia Chamber of Commerce to immediately engage Sime Darby, Firestone, and all other companies on the verge of closing down to stop immediately; and to closely work with those companies in finding workable solutions to ensure that they remain opened in Liberia.
- Should collaborate in developing artisanal mining and fishery under tripartite arrangements, because artisanal mining alone has the potential to generate upward of 50,000 jobs a year, which helps to spur up commerce and other economic activities in the rural areas, and capable of generating the kind of foreign exchange needed in the economy.
- That the Liberian Educational System as well as TVET should be aligned with the manufacturing, processing and service sectors for meaningful investment opportunities.
- Should embark on strong work ethics policies to help build up investors’ confidence in the labor force inorder to guarantee employment for Liberians.
- Should work with the Chamber in structuring investment programs that include paid-in shareholdings by members of the Liberia Marketing Association, the Teachers Association, the National Labor Congress and others. Such programs should be allowed for broad-base economic participation to enhance the state of security of the country.
Finally Ladies and gentlemen, we would like to again remind the Ministers of Finance, Labor, Commerce, Justice, Education as well as the Legislative and the Judiciary Branches of government that the Economy is falling apart on our watch, and therefore, something must be done as speedily as possible to address the problem. So, let us seriously think about it and do something speedily!
I thank you.