-Lauds GOL for prioritizing Liberian businesses in its PADP
The Liberia Business Association (LIBA) has called for the robust and uncompromising implementation of the Liberianization law, an instrument that gives explicit rights for local entrepreneurs to have exclusive operational rights in certain businesses.
Enshrined in Liberia’s Investment Act of 2010, the policy of setting specific businesses aside to be done by Liberians has never yielded the anticipated outcomes as local businesses continue to strive in the shadows of their foreign counterparts since the inception of the law.
But with the official launch of the Coalition for Democratic Change (CDC) flagship development program, the Pro-poor Agenda for Development and Prosperity (PADP), LIBA says there is no better time for local businesses to boom or become more vibrant than under a leadership that was propelled to power by the ordinary masses.
At a press conference in Paynesville, LIBA president James M. Strother lauded the government for the launching of the development agenda and for specifically highlighting local businesses. He, however, proffered series of recommendations to the government, which according to him, would lead to the creation of more jobs through micro, small and medium-sized Liberian enterprises.
The Investment Act of 2010 exclusively gives ownership right to Liberians in several business activities, including the supply of sand, block making, peddling, travel agencies, retail sale of rice and cement, ice making and sale of ice, tire repair shops, auto repair shops with investments of less than US$50,000 and shoe repair shops.
Other businesses reserved for only Liberians in the Act include the retail sale of timber and planks, operation of gas stations, video clubs, operation of Taxis, importation or sale of second-hand or used clothing, distribution in Liberia of locally manufactured products and importation and sales of used cars (except authorized dealerships which may deal in certified used of their make).
The law also provides for at least 25 percent of all Public Procurement Contracts entered into by all government institutions including State – owned enterprises to be allocated and provided to Liberian – owned MSMEs, at least five percent of which are allocated and provided to women – owned MSMEs.
Speaking at the Association’s office in Paynesville, LIBA president called for a comprehensive enforcement of the Investment Act of 2010.
“As prime partners to the developmental goals of government, we welcome the launch of the agenda. We affirm our commitment and fullest support for the implementation of the PAPD in the interest of the wholesome improvement of the people of Liberia,” he said.
“We are particularly inspired by President Weah’s desire to restructure and revisit the programs around Liberian businesses in terms of having access to finance and human capacity development,” Mr. Strother said.
Mr. Strother said that these are intended to enhance Liberia’s participation in the creation of wealth in the Liberian economy. “We at LIBA see this as government’s willingness to conform to the President’s explicit statement that Liberians should not be spectators in their own economy,” he said.
Improving local businesses falls under Pillar II of the PAPD which, among others things, calls for transforming the business regulatory environment and climate: (doing business and cross-border trade improvement).
Mr. Strother also called for the provision of dedicated and well-targeted stimulus plan to address emergency capital needs of Micro, Small and Medium Enterprises (MSME) owned and operated by Liberians.
“LIBA will provide its expertise to ensure that the stimulus plan is well designed and implemented to minimize risks abuse and repayment,” Mr. Strother added. He urged strong enforcement of Section 4.1(c) of the small business empowerment law.
However, adhering or enforcing the Liberianization law has been very difficult over the years, as the policy is frequently manipulated by some higher-ups in government who undermine the law with their personal interests. Also, foreign business people have somehow been engaged in some of these reserved businesses.
An investigation conducted by the House Standing Committee on Commerce, Trade, and Industry a few years ago revealed that the Ministry of Foreign Affairs (MFA) made several changes to the Investment Act of 2010 in favor of foreign businesses.
In its report entitled, “Stakeholders Engagement for A Better Legislative Oversight,” the Committee noted that during its consultation with stakeholders of the business sector, it found out that there is an addendum to the act which was passed into law on May 15, 2010, that gives right to foreigners to invest in businesses that were set aside only for Liberians.
The controversial portion of the law denounced by the lawmakers points out that, “Foreign investors may invest in the following business activities provided that where such enterprises are owned exclusively by non-Liberians, the total capital invested shall not be less than US$500,000; and, where such a listed enterprise is owned by non-Liberian in partnership with Liberian and the aggregate shareholding of the Liberian is at least 25 percent, the total capital invested shall not be less than US$300,000.”
Businesses concerned are the production and supply of stone and granite, ice cream manufacturing, commercial printing, advertising agencies, graphics, and commercial artists, cinemas, production of poultry and poultry products and the operation of water purification or bottling plant.
The LIBA president hopes that all of these will be addressed by the new government.