The new Managing Director of ECOBANK – Liberia, Mr. Gilles Guerard, has hailed Liberia for doing so well in its economic recovery in 2015, compared to the challenges faced in 2014 and 2013.
In these past two years, he said, the Liberian nation faced two very serious challenges: the fall in commodity prices, notably iron ore and natural rubber, and, of course, the Ebola crisis that within a short period killed over 4,000 people in Liberia alone. It made this country the worst country hit, compared to the other two affected nations in the Mano River basin, Guinea and Sierra Leone.
In an exclusive interview with the Daily Observer newspaper on Tuesday, Managing Director Guerard recalled that those two challenges—the fall in commodity prices and Ebola—slowed the Liberian economy and investments in all sectors.
“But,” he added, “in 2015, with the help of the international community and the stimulus package they put into place, Liberia is experiencing a positive economic growth of 0.5%.”
The international partners he referred to, he said, are the World Bank, European Union, International Monetary Fund, the United States of America, the African Development Bank and the People’s Republic of China.
Critical to this economic recovery, said Mr. Guerard, have been the macroeconomic policies of the government of Liberia (GOL) and the crucial role of the Central Bank of Liberia (CBL), which did much to assist in the successful fight against the Ebola epidemic.
“Both the GOL and the CBL, helped by the international community, did much to relieve the pressure on business and industrial enterprises,” Mr. Guerard pointed out.
As a result, he quickly added, “We expect Liberia, in 2016, to experience 5% to 6% economic growth.” This would be very similar to what was the case in the year immediately prior to the Ebola epidemic.
Therefore, investments made this year are bound to reap benefits in 2016, Guerard projected optimistically.
The ECOBANK boss told the Daily Observer that “one of the clear indications of the recovery is the 2014-2015 performance of the Liberia Revenue Authority (LRA), which surpassed its own projections.”
Indeed, in the Daily Observer’s story of Wednesday, October 28, 2015 entitled, “LRA Exceeds Revenue Target,” this publication quoted LRA’s Commissioner General, Madam Elfrieda Stewart Tamba, who applauded her staff for “diligently working to surpass the 2014/2015 fiscal revenue targets mandated by the National Legislature.”
In the 2014/2015 Fiscal Budget, she said, the LRA was mandated to raise US$635.23 million. The entity, however, she happily reported, “exceeded that amount by US$8.22 million, netting a total of US$643.46 million.
Asked by the Observer Reporter how ECOBANK is doing, Mr. Guerard replied that his bank “remains one of the major players in the market.”
“Our focus in 2015 is to restructure and modernize our platform and system to serve our customers better. We have increased our ATM network and the POS (the point of sales). We now print our own ATM cards right here in Liberia. To do that, we have printing machines in all our branches.”
ECOBANK, he continued, has re-launched its Internet Banking Platform and the OMNI – an internet bank for corporate customers.
“This is to enable our customers to transmit on line more securely, faster and cheaper,” he explained.
The bank has also reformed its trade finance to improve its capacity.
“We have increased our trade finance line in order to give more credit for trade financing. We have also increased our corresponding network, which means our partnership with other banks, generally.”
ECOBANK’s cash management “has also been improved,” he said. “We have been supporting government and international institutions to meet their payment obligations throughout the country. We were the bank that facilitated all the payments in connection with Ebola all over the country, with the aim of enhancing poverty reduction,” said Mr. Guerard.
The payments came from such institutions as the Ministry of Health, Education, Agriculture and other sectors.
Now with the reinvigorated economic recovery, said Mr. Guerard, “we are focusing on the construction and energy sectors. We expect a lot to take place in these sectors and we expect to be a major player in them.”
“We work with the companies doing the job—the Liberia Electricity Corporation (LEC) and foreign companies, including those from Germany, Canada, Britain, and we provide banking services to facilitate the operations.”
The Observer asked how Mr. Guerard himself was doing as Liberia’s new ECOBANK MD. “We are very busy,” replied the Benin-born 51 year-old international banker.
Mr. Guerard has been in ECOBANK’s employ since 1991, starting at the bank’s Group Office in his native Benin. There he served as Treasurer and Marketing Risk Officer. He came to Liberia from Rwanda, where he served as MD. Before then, he was MD in Guinea Bissau.
“We realize that we are working in an entirely new environment—Liberia—and we are aware of the new economic and business challenges. We have to define our own strategies in dealing with the market.
“We have had to learn from past mistakes so as not to repeat them. Viewing the bank’s staff in 2015, we see the need for more training and supervision in order to keep the staff focused and enable them to understand the banking policies and procedures. We have sensed the need to enforce the rules and respect the procedures. We have also endeavored to define the importance of customers and customer service, as well as to secure the bank.”
“Are you making a profit?” was the Observer’s next question.
“Our profit in 2014 was 3.6%–and that is profit before tax (PBT),” Mr. Guerard stated. “We expect it to be higher in 2015. Revenue is growing and liquidity is good,” he added.
“The challenge,” he continued, “is with the quality of credit, and we are dealing with it. We are very prudent and will continue to be in our loan policy.
“We also have problems with fraud, and we are dealing with these, too. You know we have zero tolerance for fraud.”
As for ECOBANK’s relationship with the Central Bank, Mr. Guerard said the CBL has been “very supportive. They are listening to us. The CBL played a key role during the Ebola crisis to support the banks.”
“We are working closely as partners to implement reforms in the payment system. First there is the RTGS—the Retreatment Gross System—which means payment between the banks. We are moving from manual to electronic. This is key because it will speed up interbank payments for customers, and facilitate more funds between banks.”
Guerard also divulged the coming online of the National Switch. Presently, visa cards used in Liberia have to be reconciled at the VISA headquarters outside the country. But soon all switching will be settled here, instead of abroad.
There is also the issue of financial reporting to the Central Bank.
“We are currently doing this manually; but we are working on the project right now to report electronically to the CBL.
“Finally, there is the issue of Delinquency (Bank Debtor). The list is synchronized at the Central Bank. The purpose here is to keep the bad debtor out of the market.”
For example, a bad debtor will be known to all the banks through the Central Bank. So such a debtor cannot leave the bank he is still owing and seek a loan from another bank. The red flag will be automatically raised, and such a debtor will be stuck—unable to seek a loan at any other bank.