Says Liberian Entrepreneur
Liberian businessman Amin Modad says the limited amount of revenue sources in the economy is responsible for the government’s inability to implement its own development plan.
Modad, a hotel and beverage entrepreneur, made the assertion on Friday, January 26 in Monrovia at a program marking the 66th International Customs Day, adding that the Liberian economy lacks insignificant investments in manufacturing or production for export; which negatively affects the trade in the country.
The additional consequences of such an economy, he said, are a limited flow of foreign exchange, capital flight, a hindrance to economic expansion, inefficiencies in the budget process, politicizing of government’s functionaries, corruption, among others.
Citing Central Bank of Liberia (CBL) statistics regarding the performance of the Liberian economy, Modad noted that between 2008 and 2016, Liberia recorded only two positive budgetary years: “a meager 1.2% of GDP in 2008 and 0.6% in 2010. Between those years we fluctuated with an average of -0.88% and a record low of -8.40% in 2015,” he noted.
Furthermore, Modad said during the same period, Liberia experienced an average trade deficit of -78% of Gross Domestic Product (GDP), noting that the best performance was -56.34% of GDP while the worst was -110.34%. Consequently, he disclosed that Liberia’s trade deficit translated to over US$1.1 billion in 2016.
Modad highlighted the World Customs Organization’s (WCO) objectives as providing leadership, guidance and support to customs administrations to secure and facilitate legitimate trade, realize revenues, protect society, and build capacity.
Under these objectives, Modad said Liberia has made progress in acceding to the World Trade Organization (WTO), regularized memberships to the WCO and other global organizations, and participated in accords such as the ECOWAS Common External Tariff intended to promote trade and ease the flow of goods across borders.
However, Modad said that aspect of WCO’s objective, easing the business environment for entrepreneurs, does not conform to Liberia’s situation especially for Liberian owned businesses as they continue to be in the background of the economy while foreigners reap profits from their businesses.
According to him, Liberian businesses continue to face many constraints that discourage them. Among the constraints, he said, are constant and repetitive inspections by multiple agencies, various fees paid to government agencies without any return or benefits, etc.
“I always like to use one example that never fails to disappoint me; that is, the Ministry of Information. We pay annual fees as operators of hotels, yet for the past 12 years, I’ve not seen any brochure, leaflet, or flyer that emanated from the ministry that promoted or supported the hotels. I’m not talking about annually, I would be grateful to see something every three years,” said Modad.
Meanwhile, Modad said in view of the rationale associated with the formation of the World Customs Organization, Liberia is yet to achieve the creation of an enabling environment for businesses considering the dismal economic performance and the lack of production power for export.
He also said the country’s security depends on self-sufficiency through the local production of healthy foods, health products, and daily consumables.
He urged the government to institute administrative actions to protect and encourage Liberian entrepreneurship and investments in food production.
“An investment of mine is a clear example of where the government has failed to encourage local entrepreneurship. I’ve invested over US$1.2 million in probably the first Liberian owned beverage plant. However, we’ve lost several appeals for protection and support as the government has succumbed to pressure from importers of beverages to totally eliminate water and juices from the administrative regulation that imposed surcharges on imported products that are manufactured locally,” he added.
Modad recalled that in the past Liberia produced rice, coffee, sugar, yam, cotton, cocoa, and indigo, which placed the economy on par with other progressive countries in the 1960’s and 70’s, but Liberia’s reliance on export of raw resources for the past decades, has not fostered sustained economic growth to support Liberians to take charge of their economy.