Demands 25 percent shares for Liberians in foreign investments
Since the solemn promise of President George Weah during his Inaugural Address that “Liberian-owned businesses will not be marginalized and Liberians would not remain spectators in the economy,” members of the House of Representatives are reviewing a law to ‘strengthen and toughen’ the law protecting 26 Liberian-owned businesses.
The proposed law is intended to create a more restrictive environment and a stronger enforcement mechanism so that Liberianization, as envisaged by the government and people of Liberia, becomes full-fledged reality.
It is styled “Liberian Business and Economic Empowerment Act of 2018” and was submitted and sponsored by Grand Kru County District # 2 Representative Cllr. Jonathan Fonati Koffa – who is also chairman on the House Judiciary Committee.
On Tuesday, January 30, the draft law was forwarded to a joint committee, comprising the Labor, Judiciary, Commerce and the Ways, Means, Finance & Development Planning, and to report to plenary on or by Tuesday, February 13, 2018.
The law, if approved by the House of Representatives and the Liberian Senate including the President and printed into handbills, will further protect the 26 businesses already reserved exclusively for individuals who are citizens of Liberia.
26 Liberian-owned businesses
The 26 Liberian businesses which have been identified since the 1973 Investment Act include:
Supply of sand; block making; itinerant merchant (peddling); real estate agencies and real estate management services; travel agencies or travel agency contract for airlines; distribution and retail sale of flour, cement and rice; retail of stationery and office supplies; ice making and sale of ice; tire repair shop; independent auto repair shop; shoe repair shop; retail of timber and planks and operation of gas stations.
The others are: Video clubs; operation of taxis, importation and sale of second hand or used clothing; distribution in Liberia of locally manufactured products; importation and sale of used cars (except for certified used cars imported by authorized dealership of the same make); customs brokerage services; stevedoring; ship chandler services; commercial printing services; trucking services (all forms); ; newspaper publishing and printing and also payment processing systems and services including sales on behalf of government.
Joint Venture and Foreign Investment
If the law is also approved, foreign investors wishing to invest or engage in certain businesses may do so provided that the investment capital of said investor is more than US$1 million and at least 25% of the common stock or shares of the company are owned by natural Liberian persons or businesses wholly owned by natural Liberian persons.
The joint venture includes: production and supply of stone and granite; ice cream manufacturing; advertising agencies, graphics and commercial artists; production of poultry and poultry products; production of pork and beef and pork and beef products; and entertainment centers not connected with hotel establishment.
Other joint ventures are sale of animal and poultry feed; bakeries; sale of pharmaceuticals; repairs and maintenance of transformer and generators (unless those under manufacturer warranty); fishing and fish processing (especially activities within the territorial waters); and light manufacturing, processing or packaging services of any kind.
The law further mandates foreign companies to provide proof of funding by the display of local bank confirmation; and foreign investors who enjoy free services or other tax incentives will require sourcing all supplies and services that are available on the local market.
“The Government of Liberia is hereby authorized to establish a Liberia Business Development and Investment Fund at the Liberia Bank for Development and Investment (LBDI) of not less than US$25m for purpose of guaranteeing or subsidizing loans or providing incentives,” the proposed bill said.
It added: “Any foreign national, be he resident or not of Liberia, who violates any provision of this act and any Liberian, for purposes of evading the aims and objectives of this act, who fronts for a foreign national, be he resident or not of Liberia, shall be subjected to punishment of not less than three years in prison and not less than US$100,000 or its Liberian dollar equivalent. In addition to the penalties herein described, all materials, equipment and proceeds associated with the violation shall be confiscated and auctioned for the benefit of the public treasury.”