The Liberian economy showed mixed industrial output in the 2nd quarter of 2013, the Central Bank of Liberia (CBL) has disclosed. According to the CBL, rubber, the traditional driver of the economy, showed growth during the 2nd quarter.
In its quarterly Financial & Economic Bulletin covering April-June, 2013, the CBL reports that rubber production (output) was 15,612 metric tons, from 10,139 metric tons produced at the end of the first quarter.
This growth, according to the Bank, represents an increase of 54.0 percent. The Bank explained that the rise in output was largely due to an increase in the mid quarter world market price of the commodity. Compared with the corresponding quarter of 2012, rubber production in the review quarter rose by 2,225 metric tons or 16.6 percent.
Output from other industrial commodities such as cocoa & coffee, diamond, and iron ore also rose. Cocoa production stood at 2,485 metric tons during the reporting quarter, from 1,670 metric tons produced during the preceding quarter, representing 48.8 percent increase.
The CBL attributed this growth mainly to expectation of world market increase. The year-on-year comparison records an increase of 45.1 percent, when matched against the corresponding quarter of 2012, the Bulletin said.
Coffee production, however, declined from 96 metric tons during the preceding quarter to 92 metric tons in the reporting quarter. The reduction in coffee output accounts for 4.2 percent, which the Bank attributed the continuous decline in the price of the commodity.
Year-on-year comparison of the commodity reveals that current output declined by 43.0 metric tons when compared with the same period in 2012. In the enclave mining sector, diamond production increased by 3,359 carats or 29.0 percent to 14,765 carats, from 11,406 carats reported in the first quarter.
According to the Bank, the rise in diamond production was a result of expansion in the number of diamond fields. The Bank reported that on annualized basis, output in the reporting quarter exceeded the second quarter of 2012 by 7,438 carats.
Iron ore production also rose by 2.4 percent to 1,205,375 metric tons, from 1,177,500 metric tons recorded in the previous quarter. In the midst of the fluctuations in the world market price of iron ore, the Bank observed, there was an increase in the output of the commodity mainly due to better weather condition during the quarter for iron ore transshipment and improved domestic production facilities.
In its year-on-year comparison, the CBL noted that iron ore production during the quarter exceeded total output recorded during the same quarter a year ago by 620,375 metric tons. Gold production, however, nose-dived (fell) during the reporting quarter.
According to the CBL, gold production tumbled by 22.2 percent to 4,235 ounces at the end of the quarter, from 5,442 ounces recorded in the previous quarter. The fall, the CBL Bulletin notes, was largely a result of consistent declines in the world market price of the commodity.
The CBL noted that current output of gold for the reporting quarter fell by 1,269 ounces or 23.1 percent to 4,235 ounces when matched against the corresponding period of 2012. Economists have suggested that value be added to raw materials produced from the country’s enclave mining sector to ensure sustainable economic growth and development.
All of the outputs from the sector are usually exported to foreign countries for value addition, leaving the country only tax revenues and royalties. In the manufacturing sector, the CBL reports that current output for the review quarter totaled 53,876 metric tons, from 20,401 metric tons produced in the preceding quarter.
“This,” according to the CBL, “accounts for 162.9 percent rise in production.” The CBL explained that the rise in cement production was largely on account of expansion in the local cement production plant resulting in increased production capacity of the firm.
Compared with the quarter ended-June, 2012, cement production at end-June, 2013 was 20,127 metric tons more. Analysts also attributed the growth in cement production to the huge demand of the commodity as a result of increase in construction activities across the country.
The production of beverages, soup and other household commodities, also soared during the reporting quarter. The outputs of paint (water and oil), however, plummeted due to what the CBL cited as the shortage of materials for production.
Howbeit, the economy needs strong production of goods and services for the exported market in order to add value to our currency and improve the country’s balance of trade. Liberia’s balance of trade is one of the worst in the world.
The country imports nearly everything that it people consumed. The Executive Governor of the CBL Dr. Joseph Mills Jones has repeatedly warned that the economy will continue to suffer setbacks if its citizens, particularly the private sector failed to “think outside the box.”