According to the U.S Government, a transparent investment climate for Liberia will increase investors’ confidence in the post-conflict economy.
Speaking to our reporter exclusively in Monrovia on Friday, May 11, 2012 U.S Deputy Treasury Secretary Neal S. Wolin observed that a business environment that allows contract enforcement is critical for Liberia. He praised the Liberian government for creating the necessary environment for private sector to play its role, but said the sector needs more support.
“The private drives the economy. One must ensure that the sector plays an active role in the economy to spur needed growth for the country,” he said.
“That means making sure that the economy is transparent, fair, and it is based on the rule of law that people can have confidence in -- that they can undertake transactions and sign contracts that they can rely on,” Wolin stated.
The U.S statement comes amidst plans by some Liberian politicians on Capitol Hill to review all oil exploration contracts including a number of concession agreements.
The politicians say their plan to review some of the contracts is intended to protect public interest.
The decision has sparked controversy among stakeholders in the country’s oil sector, with some parties accusing others of attempting to undo legitimate contracts.
They expressed fear that any rush to review contracts recently ratified by the Legislature has the propensity to scare away potential investors.
Although Deputy Treasury Secretary Wolin did not mention the oil sector during the interview, he noted that it is important for the government to allow foreign governments and foreign companies to fairly invest in Liberia.
“They must be allowed to play their roles to not only provide their capital, but also to provide their expertise to unleash their entrepreneurial energy.
“It is important for the country to effectively harness the capacity that the international financial institutions, other governments, and the private sector from foreign economies has to help Liberia achieve it objectives of seeking to [ensure] that this is an economy that has sufficient power, electricity, good roads, and strong educational system that enables a kind of growth, but not a constrained type of growth.”
Wolin pointed out, however, that a strong and transparent judicial system is needed in Liberia to drive such collaboration and achieve needed growth.
The Liberian government has repeatedly said that it recognizes and considers the private sector as the engine of growth.
The government, as part of its investment climate reform drives, has established a Commercial Court and Commercial Code that fast tracks disputes arising from contracts.
According to the Code, complaints brought before the court must be adjudicated by the Commercial Court within 30 days at most.
Such cases or complaints must not, however, take more than 60 days to be adjudicated from the first day of hearing in the Commercial Court to appeal to the Supreme Court.
Many businesses say the law is good, but most of those businesses are yet to take advantage of the court as expected.
Mr. Wolin pointed out that making Liberia’s investment climate conducive, fair, and transparent will help create the needed growth.
“The private sector is the nerve of the economy. It is the private sector that creates employment for the people,” he explained.
The U.S Deputy Treasury arrived in Liberia last week Thursday as part of a West Africa tour that took him to Togo and Ivory Coast, where he met senior government officials and visited sites.
While in Liberia, Wolin held closed-door discussions with senior Liberian government officials, including President Ellen Johnson Sirleaf, Finance Minister Amara Konneh, and some private sector actors.
Their discussions were centered on U.S support towards food security in Liberia to include infrastructure and agriculture.
Minister Konneh and other Liberian government officials told our reporter over the weekend that their discussions with Mr. Wolin were fruitful.
Mr. Wolin welcomed steps being taken by the Liberian government to promote public private dialogue, but pointed out that more Liberian-owned small and medium-sized businesses needed to be given opportunity to play the critical role of creating jobs.
“I think those are areas that the Liberian government is focused on; we understand that there are areas that need more improvements and the U.S is prepared to support the Liberian government achieve its ambitious objectives,” Wolin added. Meanwhile, Secretary Wolin has called on the public and private sectors to make their contributions to the Liberian power sector.