....Says Liberia Extractive Industries Transparency Initiative (LEITI in a report which disclosed that revenue generated from the extractive industries reveals a US$13.1 million surge in revenue during the current reporting period over the previous.
Government revenue from the extractive industries in 2021 stood at US$84.6 million, a report from the Liberia Extractive Industries Transparency Initiative (LEITI) has revealed.
The report by LEITI’s Multi-stakeholder Steering Group (MSG) finds that the government of Liberia between July 1, 2020 to June 30, 2021, experienced a surge in revenue raised from the country’s extractive industries — covering oil and gas, mining, forestry, and agriculture sectors.
The MSG’s 14th report, which is currently the most comprehensive publicly available data on revenue generated from the extractive industries, revealed a US$13.1 million surge in revenue during the reporting period — totaling US$84.6 million from the US$71.4 million between the year 2019-2020.
The US$84.6 million revenue represents an increment of 18.5 percent. Liberia’s extractive sector — comprising mining, oil and gas, forestry, and agriculture — is the mainstay of the country’s economy.
In 2019, the extractive industries contributed to the country's GDP at 52%, and have been growing since and playing a key role in helping the government achieve an economic growth rate of 3.7% for 2022, as well as an anticipated average of 5.2% over 2023-24.
Revenue from the mining sector is primarily driven by the production and export of iron ore, gold, and diamonds. While the exploration of oil and gas is ongoing, production has not yet commenced.
According to the LEITI’s 14th report, the mining sector injects the highest revenue in the domestic economy. It accounts for US$64.3 million which is 76 percent of the total extractive sector revenue— unlike US$45.2 million in the 2019/2020 fiscal year out of US$70.9 million in total revenue.
Second to mining is Agriculture which raised US$12.7 million in government revenue (15 percent), and was mostly from concession-related operations in the rubber and oil palm subsectors — a decrease from US$17.4 million in 2019/2020.
Iron ore production, according to the LEITI report, increased from 4.4 million metric tons in 2019/2020 to 4.9 million metric tons in 2020/2021, while, Covid-19 affected the production of rubber, crude palm oil, and round logs -- leading to a drop in production.
However, diamond production saw an increase of 68 percent between 2019/2020 and 2020/2021, and gold also increased by 83 percent during the same period, the report finds. However, revenue from diamond production was not disclosed during the presentation of the report by the LEITI Secretariat.
Overall revenue from the extractive industries is still dominated by the mining, agriculture, and forestry sectors as the three highest performers during the 2020/2021 reporting period.
The LEITI 14 report was prepared by SRG Consulting LLC-USA in collaboration with Baker Tilly Liberia, two reputable firms using the Flexible Reporting Framework (FRF). Unlike the conventional Reporting Framework, which requires reconciliation between government receipts and companies’ payments, the flexible reporting framework requires unilateral disclosure by government ministries, agencies, and commissions.
The report also revealed that 85 percent of employment in the extractive sector is male while 15 percent is female, with the agriculture sector accounting for the largest employment — as was also highlighted in the LEITI’s 13th report.
That report indicated that the agriculture sector was the largest employer in the sector with a workforce of 14,845 at the time — second only to the mining sector with Firestone remaining the largest contributor to employment in the agriculture sector. The sector is also the largest benefactor of social and environmental expenditure.
“With today’s approval and launch, the report is now set to be disseminated across the country to discuss the findings with the citizens and solicit feedback on how to improve the governance of the extractive sector,” said Mike Doryen, Managing Director of the Forestry Development Authority and chair of the LEITI Board.
He said, “LEITI will continue to play its role in ensuring that Liberians benefit from their resources, while also warning reporting institutions — both governmental and private, who are putting off a non-cooperative posture — that the law will go after them.”
LEITI reports are mandated by the act that created the anti-graft institution in 2009, which assigned the responsibility that includes providing information on the governance of extractive resources while encouraging openness and sound management of the country’s natural resources as well as revenues generated by the government.