Electricity Is not LEC

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When President Sirleaf took office in January 2016, we were promised electricity within 6 months. I don't know who's bright idea that was but at the time I thought the promise a little over ambitious. But it's been 9 years now, and we still have not reached Nirvana.

Electricity is the mother's milk of development. Without it, the economy cannot grow at the pace it should. And with the slow down brought about by the Ebola epidemic, the need for solving the electricity problem has become even more urgent. If we can bring plenty of cheap, reliable, stable electricity into Liberia, we stand a fighting chance of pulling in investment, and investment means jobs and a reduction in the high levels of unemployment that has taken hold of this country. It's that simple.

So, why, then, has it proven so difficulty to slay the electricity dragon? I suggest the principal obstacle has been our mindset. When the transitional government came to town in October 2003, I was member of a small delegation that visited US ambassador John Blaney, whom I considered to be a true friend of Liberia. We requested, amongst other things, for US assistance to bring electricity into Monrovia. His response took us completely by surprise. He said that the US government would not spend one cent of its taxpayers' money on electricity in Liberia. They would spend money on education, healthcare, security, DDRR, agriculture and other social services but they would not spend one brass cent on electricity. I went into shock.

"Why?" we asked. "Because we believe that there are private companies that can get the job done. Governments don't do electricity these days. Even in the United States, electricity is provided by private companies. In fact, not only are we not going to spend any of our taxpayers' money on electricity, we don't think you should spend any of your taxpayers' money on electricity either. For starters, you don't have enough money to get the job done". He was right about that. At the time, the entire Liberian government budget was only US$80 million.

 Well, he got me thinking. Up to that point, I had equated electricity with LEC. I assumed, like most Liberians, that solving the electricity problem required government pumping oodles and oodles of money into LEC. But John Blaney gave me cause to re-examine my assumptions. So, when Chairman Bryant appointed a small group of us to a committee headed by Professor Willie Belleh to deal with the telephone problem (conflicting signals, many companies and individuals claiming to have telecom licenses, lack of competition, etc.), we decided to go the private sector route.

We asked the World Bank for assistance but issued two warnings: we did not want to borrow any money and we did not want to revive LTC, the public corporation known colloquially as "Telecom" that had a monopoly on telecom services in the country. Telecom was flat on its back. As a result of the war, its infrastructure had been virtually destroyed. It had no equipment, no money and a limited pool of skilled manpower. Instead, we asked for help to bring competition to the telecommunications market. The Bank obliged. They sent a young Ghanaian electronic engineer who advised us on how to issue GSM licenses (it was his opinion that our market could only sustain 3 companies but that we should license the 4 that had invested in facilities and leave it to the market to determine who would survive and who would die. Judging by what happened to Libercell, he was right on the money).

Today, 10 years later, we see the results of that fateful decision we made a decade ago. At its height, LTC had only 5,000 telephone lines in the whole country. Now, we have close to 2 million GSM subscribers. Every man and his dog has a cell phone. And the cost of telephony keeps decreasing as the GSM companies throw kpeetee on the airwaves. Sim cards used to cost $65; international calls, $1.00/minute. The network that carries all this traffic has cost hundreds of millions of dollars. And how much has the Government of Liberia invested? Zip, nada, zilch. But more than that, the GSM companies are amongst the biggest taxpayers to GOL today. Sounds like a great susu club to me. You invest nothing and reap millions and millions of dollars from the club every year.

Next week I will explore how our telecom model might be applied to electricity.

The writer is a businessman. He can be reached at <[email protected]>.


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