Stakeholders from every sector of the Liberian economy have begun to brainstorm on how to confront economic challenges that arise as ripple effects of the Ebola crisis.
These stakeholders from the private, governmental and non-governmental sectors met at a two-day conference recently to develop solutions for post Ebola economic recovery.
The two-day gathering was organized by Amin Modad, proprietor of the Bella Cassa Hotel in Sinkor and the Consortium of Concerned Businesses in Liberia, in collaboration with the United Nations Development Program (UNDP), World Bank, National Investment Commission (NIC) and the Ministry of Commerce and Industry.
Mr. Henrique Caine, Executive Director of Fortress Liberia Ltd., who spoke at the event, said that the outbreak of the Ebola virus has led to increase in the cost of shipping to the Mano River Union countries, which three of its four members are the hardest hit of the disease. The three countries are Liberia, Guinea and Sierra Leone.
Fortress Liberia Ltd. is a major importer and distributor of cement in Liberia with headquarters in Hong Kong, and operations in Liberia, Ghana, Cameroon, D. R. Congo, UAE, and New York, USA.
Fortress was instrumental as the supplier to a local importer that broke a cement monopoly in Liberia that existed for over four decades.
According to him, one of the major problems importers are facing, as a result of this crisis, is the astronomical increment in insurance premiums and costs due to restrictions impacting shipping routes and other normal shipping logistics.
To offset this increase relating to insurance premiums, according to Mr. Caine, the International Finance Corporation (IFC) in partnership with the insurance sector (the 18 local insurance companies actually approved by the Central Bank of Liberia (CBL) under its new capital reserve standards) should jointly establish a 50-50 gap insurance fund to provide additional coverage at a lower cost to importers.
He said that the existing regulation, (although not currently enforced by GOL) requires that a percentage of marine insurance on imported cargo be provided by the local insurance industry. “Imagine what this would mean for this sector if this was enforced!
“More important,” Caine continued, “the local insurance underwriters have clearer understanding of the situation on the ground and are better able to assess the true risks from Ebola as opposed to some insurance company sitting in London.”
He, however, maintained that the IFC working with the insurance industry can make this happen and help lower costs on imports.
“I was asked to sit on a panel and advance my own ideas for post-Ebola economic recovery. Other presenters were asked to advance their own ideas in other key sectors and they did. I suggested the following regarding the trade sector — one short term, medium term solution.”
Speaking further on the medium term, Caine said in order to enhance an enabling environment for trade, both import and export, the private sector through established reputable institutions and in full equity partnership with the International Finance Corporation (IFC) should explore financing of two industrial parks equipped with warehousing logistics, trucking, lift equipment, to foster trade and economic growth in Liberia.
These are well established joint venture (JV) models to consider in making this happen with the IFC, he said.
According to him, one industrial park should be in the vicinity of the Bushrod Island near the Freeport and the other in Buchannan, near the port.
“The IFC has already co-drafted legislation in support of economic/empowerment trade zones, so this idea is very much in tune with their own strategic outlook for broad economic growth,” Mr. Caine disclosed.
“Note, I am not suggesting a reliance on the GOL which is already cash strapped due to decreased revenues, but advocating for public and private partnerships with the IFC, since they actually have the money to make this happen,” he concluded.