-Liberian economist believes proper sector management can do the trick
Liberia faces escalating economic crisis which is severely impacting the ability of most Liberians to make ends meet daily. President Weah, in response to the economic meltdown has announced that his government is crafting policies and strategies to address the current economic malaise which he will announce in the not too distant future. And there has been no shortage of ideas and suggestions proffered by various individuals as recommendations which, if implemented could provide solutions to the problems.
Among those who have proffered solutions is former Deputy Governor of the Central Bank of Liberia, Samuel Wonwi Thompson, who claims the crippling effects of the economic downturn can be mitigated if the government can rigorously regulate and manage the extractive industry, especially the gold industry.
At a press conference in Monrovia yesterday, Mr. Thompson called on President George Weah and his lieutenants to put stringent measures into place to properly regulate the sector, which he believes will help to breach the current balance of payment gaps Liberia faces.
Many, especially economic experts, agree that the Liberian economy, which is heavily import dependent, could fare better if the country can add value to and increase the volume of its exports, mainly processed or semi processed products. This, according to him, will help ensure a favorable and healthy balance of payment regime.
Experts agree the current slump in export value of Liberia’s traditional exports, mainly natural rubber and iron ore, could be reversed if value is added to principal exports. In addition, they believe stronger regulatory measures should be applied particularly to gold which, according to Thompson, is being air-lifted by helicopter out of the country as gold bullions by the Bea Mountain Mining and the Millennium Gold corporation.
Mr. Thompson, who is also a former Managing Director of the National Housing Authority (NHA), however noted that the gold industry could be that magic wand that could help stabilize the economy by bringing in the needed foreign exchange for the time being to strengthen the country’s balance of payment as the government strives to invest in long term solutions such as the agricultural sector and industrialization.
He said that Avesoro or Bea Mountain Mining Corporation (formerly Aureus Mining) and the MNG gold mining companies are producing and flying significant quantities of gold bullion out of Liberia every week by helicopter while our currency continues to depreciate.
Mr. Thompson senses something sinister about the operations of these gold mining companies in the country from which the Liberian people are receiving no significant benefits. “The highly secretive way this was done in Liberia with those mining concessions suggests that we the Liberian people are being shortchanged of significant foreign exchange benefits from our God-given heritage, by a few greedy and corrupt persons,” he said.
“God has blessed us with several large gold deposits, but we learned from the Panama Papers about the alleged use of “bearer shares” by certain government officials and their cronies, to hide their ownership of gold mining company shares plus other illicit payments in offshore tax havens,” he said.
However, from a combined investment of at least US$500 million, the IMF estimates that the value of gold exports will average between US$200 million to US$300 million every year from the Liberian gold mines. This excludes the Hummingbird gold concession in Southeast Liberia that was recently rejected by President Weah.
“These are foreign exchange [opportunities] that could help strengthen our economy. This gold is being exported and we don’t know what is coming back into our economy. This is frustrating for a country and its people who would have benefited immensely from our natural resources if the proper things were done. But our leaders are so selfish and greedy—and want everything for themselves.”
He called on President Weah to thoroughly monitor the sector so that the country can start to benefit from what it is due so that the masses can be relieved from the current deteriorating economic situation. He cited as example, the Hummingbird Resources whose financial statement shows that its Dugbe operations in Southeast Liberia is capable of producing at least 125,000 ounces of gold each year while reserves are put at 4.2 million ounces. Further according to Hummingbird, the gold will generate export revenues of US$163 Million every year while the deposits are worth at least US$ 5.5 billion.
Mr. Thompson commended the President for his astute and timely decision to reject the deal.
He however wants the President to exert efforts to prevail on these major gold mining companies (Avesoro and the MNG Group) to reveal the names of past and present officials holding bearer shares as a condition to continue mining operations.
“Furthermore, all such equity percentages identified by the probe should be attached and transferred from those economic criminals into the name of the Government of Liberia,” he said. The World Bank Group is understood to be a shareholder through the IFC and he wants this global body help any probe that may be commissioned by the President.
“A wise use of our national heritage will go a long way to improve CBL’s foreign exchange reserves and to strengthen our national currency,” he said. Mr. Thompson also noted that the leadership of the country needs to be wiser and more transparent in the way it utilizes valuable resources like gold, to significantly improve the country’s foreign reserves and strengthen its currency, citing the example of Botswana, which derives at least 50 percent of its budget from diamonds.
Weah Must Prosecute Perpetrators of Economic Crimes
Mr. Thompson has also called on President Weah to investigate and prosecute those who might have been found robbing the country. He said this will give prospective investors the required confidence to come and invest their money here.
“To improve the climate for foreign investment as well as the country’s economic situation, there is an urgent need to end the culture of impunity for economic crimes committed against the poor citizens of Liberia by people in positions of authority,” he said.
He called on the President to set up an economic crimes body to speedily investigate and prosecute those Liberians who have betrayed their country and set Liberians up for continued poverty, suffering and social unrest through the bearer shares.
This mandate, he said, should extend to all other major economic crimes and should include concerted efforts to retrieve and repatriate the illicit wealth of all those adjudged guilty.
That as a further measure to end the culture of impunity and corruption in the allocation of extractive and other concessions in Liberia, the government should outlaw the use of bearer shares in the capital structure of all corporate entities operating in Liberia.
Thompson noted that restructuring the Hummingbird Agreement into a transparent PPP to produce gold in the Dugbe region will help to gradually improve and sustain Liberia’s foreign exchange reserves.
He also called on the US government help stamp out the culture of corruption and impunity by prosecuting Liberian economic criminals.