Liberia: Min. Tweah Cries to African Development Bank for US$10 Million to Save Rubber Sector

The Minister of Finance, Samuel Tweah, has apparently shocked the visiting Vice President of the African Development Bank, Solomon Quaynor and his delegation with the revelation that Liberia's out-grower rubber sector could be on the verge of collapse unless US$10 million is raised to save the sector.

Tweah, during a meeting with the AfDB delegation at the Ministry, noted that Liberian rubber farmers need 'just US$10 million for value addition since Firestone, the largest rubber company in the country, is no longer buying rubber from out-growers.

According to the minister, Firestone had been planting trees over the years and can now produce enough to not have to buy rubber from elsewhere.

This, according to him, means that rubber out-growers (farmers) are now under pressure to sustain the sector, and have therefore identified value addition, such as processing, as the surest way to create jobs, sustain employment, and boost revenue.

“Access to finance is a broader private sector challenge, and the rubber sector, which employs a lot of people, is no exception,” the Minister said.

The minister's statement came as a shock to Quaynor, who wondered why the government would allow  such a critical sector of the economy to face the threat of collapse.

Meanwhile, the Minister also commended the AfDB and welcomed the proposal to establish the Youth Entrepreneurship Investment Bank (YEIB) in Liberia to build the entrepreneurial skills of young Liberians and increase access to finance.

He noted that this project would also ease pressure on the public sector amid the negative economic impact of COVID-19, the Russia-Ukraine war, as well as the growing numbers of young people entering the job market.

Speaking earlier, Quaynor said his institution is committed to creating credit guarantees for young entrepreneurs, and the establishment of the YEIB was one of the best ways to achieve that.

The meeting with Finance Ministry authorities was part of  Quaynor and his delegation's three-day official visit to Liberia, from April 3rd to 5th, during which they held high-level strategic discussions with Liberian authorities and other development partners, including the private sector.

The meetings, which are focused on the design of the proposed YEIB project, will inform the YEIB's appraisal mission that is scheduled in the same week, to ensure that all critical issues are addressed for a successful project appraisal, subsequent Board approval.

The YEIB will be funded by the AfDB and Mastercard Foundation on a gender balanced basis in support of the Pro-Poor Agenda for Prosperity and Development (PAPD). When approved, launched, and operationalized, Liberia will be the third African country to benefit from a YEIB after Nigeria and Ethiopia.

Meanwhile, before Quaynor's departure, he will engage with the chief executives of major private companies and commercial banks, as well as development partners, to understand existing and potential private sector development opportunities and explore areas of collaboration and partnership.

According to the delegation, financial services will focus on the provision of loans with zero interest rates and a longer tenure for repayment, while non-financial services will provide capacity building, mentorship, and financial skills to help entrepreneurs and encourage youth entrepreneurship. The proposed project will cover three core components namely an Angel Investment Fund, a Credit Guarantee Fund and a Technical Assistance Fund.

The AfDB delegation further revealed that the Angel Investment Fund will support youth entrepreneurs who have ongoing businesses to expand at commercial levels to meet market demands, while the Credit Guarantee Fund will address the issue of collateral for financial support, thereby facilitating access by youth entrepreneurs to funds for their businesses,  while the Technical Assistance Fund will support business development services and capacity building for entrepreneurs to develop and sustain their businesses.