The National Investment Commission (NIC) has launched a local content policy initiative, which it says is to create strong links between small domestic and medium size enterprises (SMEs), including foreign companies, in Liberia. The Commission says the local content policy is intended to address the market-pull for Liberian products and services, which are reputed to be the missing element in the country’s national policy for domestic businesses.
Launched recently, the local content policy initiative is expected also to facilitate the creation of new links, deepening and expanding existing programs between foreign and domestic enterprises in the country, thus making the SMEs more sustainable.
The NIC has named five priority sectors — oil and gas, mining, agriculture, forestry and infrastructure — and says the new policy will concentrate on these.
Many domestic SMEs operating in these sectors are faced with enormous challenges, including lack of technical-know-how and inadequate funds, among others. But NIC authorities have guaranteed that with the local content policy soon to be put in place, some of the solutions to those issues affecting small businesses in the country will be given priority and addressed subsequently.
The Commission has announced the formation of a technical working group, consisting of the public and private sectors, including a number of development partners, to provide leadership and guidance in shaping and planning the process of the policy.
NIC Executive Director and Acting Chairman Mr. George Wisner said “the aspiration of the local content policy is the enactment of a local content law, which will require concessionaires and foreign companies, to utilize domestic production and local human capital and to promote inclusive growth,” adding that the NIC is seeking to adequately deal with the market-pull for Liberian services and products, which he says is the ‘the missing element’ which will be addressed once the policy is finalized.
The Acting NIC Chair said that the Commission’s focus is to ensure that the local content policy provides a pull for Liberian services and products, while building human capital and business capacity for the long-term.
“The policy will be progressive and will consider companies’ capacities, operational stages and their respective opportunities for local content development,” said Mr. Wisner. “It should be a market driven with mechanisms for increasing absorptive capacities and monitoring data collection for effective programming.”
A statement issued over the weekend by the Commission notes that the policy will seek to define local content and Liberian business; coordinate with and be complimentary to relevant legislations; acknowledge sector-specific requirements and opportunities for local content development; and ensure percentage target for local content by sectors and operations, among others, whilst acknowledging the many steps required to rectify the current policy paradigm that has been done.
The NIC statement makes specific reference to existing Micro Small Medium Enterprise (MSME) policy, which it says has already not only targeted many challenges to business development but has also created business linkages, study report and related MSME action plan which provides sector development strategy; consolidation of related documents and the condition for a clear direction for Liberia’s private sector development.
“A missing element, which has been requested in several policy documents, is market-pull for Liberian services and products and will be addressed once the local content policy is finalized,” the statement said.
The NIC says that the infusion of local content, specifically local recruitment, technical and vocational training, purchases of local goods and services; and infrastructure development designed to develop the industrial capacity and skills of Liberians, are important incentives in economic development.
When put in place the statement adds that the local content will increase domestically, providing goods and services at international standards and at lower prices. “More importantly, local content can introduce structures and networks, including skills that can be applied across various sectors, expanding the economic viability of Liberia and its people.”
All concession agreements encourage use of local content and support valued connections between local businesses and concessionaires. These include references in the supply of goods and services produced and owned by Liberians, as well as requirements on content provided by “preferred” services. But many people say that the biggest challenge faced by domestic businesses is their inability to merge their resources and skills, so as to provide a feasible atmosphere for the production of goods and services.