Liberia’s economy is facing several challenges. Falling iron ore and rubber prices globally and a decline in foreign direct investment are not helping. Ellen Johnson Sirleaf, the current President of Liberia, inherited a struggling economy with high debt levels and has acknowledged that Liberia’s economy is under threat.
Bringing the private sector into the fold
President Sirleaf has recognised the role that public private partnerships can play in revitalising an economy and will submit enabling legislation for PPPs to allow Liberia to compete more effectively with other countries in international capital markets. She will also take steps to provide potential investors with incentives to invest in the country.
A two-year action plan to revitalise the agricultural sector and cut debt
In conjunction with the African Development Bank, Liberia is finalising a detailed two-year action plan to improve agriculture. The targeted commodities are: rice, cassava, cocoa, palm oil, rubber, poultry and marine and aquaculture fisheries.
Production of the key commodities: iron and rubber is being revived. All non-compliant forestry agreements have been cancelled and the concession agreements with Firestone (rubber) and ArcelorMittal (iron) have been renegotiated.
The cancellation of an external debt of 4.9 billion under the Heavily Indebted Poor Countries Initiative (HIPC) was an important undertaking which will return Liberia to the path of economic recovery.
President Sirleaf has recognised that the government must fight corruption and tighten its belt. “We will be unable to meet the targeted level of public sector investment that is required to meet our obligation to ongoing infrastructure projects and new priorities that are essential for our economic diversification goals,” she said.
The above steps are all important steps towards economic recovery, but a great deal of work and creative thinking is required to meet all Liberia’s development needs. New revenue streams must be identified to implement or scale up already existing programmes to address the chronic government revenue shortage.
A comprehensive Innovative Financing for Development (IFD) programme for Liberia represents huge opportunity which could assist the Liberia in its mammoth task of economic recovery. The concept of Innovative Financing for Development incorporates all the financial funding mechanisms that originate from sources other than Official Development Aid (ODA). They empower governments to use their own resources to achieve economic self-sufficiency and avoid incurring more foreign debt. IFD is fast becoming an indispensable resource for developing countries. Liberia has already deployed a system that allows the country to benefit from micro-surcharges on international calls but there are other areas that could bring in revenue for the government.
A proactive approach towards regulation based on ICT tools and real-time data collection also has the power to generate significant additional revenue for the State. President Sirleaf’s public-private partnership strategy, through its drive for more private participation alongside the government, will reap additional benefits for the State.
Broadband and ICTs drive development
The importance of broadband in achieving sustainable development needs to be emphasised as access to knowledge, information and technology plays an important role in the more efficient delivery of services. Given its transformational impact on people’s lives and global economies, the roll-out of and investment in high-speed information and communication technology should be an urgent priority for Liberia given the cross-cutting nature of the sector. Investment in ICTs means indirect investment in other sectors too.
Catching tax delinquents in the net
A plan to transition to a cashless economy should be a key element in growing the economy. By promoting cost-effective, efficient and transparent electronic payment methods, financial inclusion can be achieved and Liberians who are not paying their taxes will be caught in the tax net.
Mobile money powers mobile penetration
Mobile money is an electronic payment method widely used in other African countries. However electronic payment methods (mobile money platforms or electronic sales-recording devices must be subjected to strict regulations and supervision through cutting edge solutions—they are particularly vulnerable to money laundering and fraud. These will enable the telecoms networks to be audited and monitored for a number of purposes: accurate billing, traffic measurement, quality of service assessment, market surveillance and interconnection dispute resolution and fraud management.
Innovative Financing for Development—a game-changer in sustainable development
Several developing or emerging countries are already capitalising on innovative financing for development. For instance, in Haiti, free, quality education for 1.4 million needy Haitian children is being funded through micro-surcharges on international telephone calls. Liberia, too, could benefit from an innovative financing for development programme, which has been described as a “game-changer” in sustainable development.
Many positive steps have already been taken to revive Liberia’s economy. What may be required, now, however, is an overall innovative financing for development programme and strategy to encapsulate all the disparate initiatives so that initiatives reinforce one another and the economy of Liberia powers ahead in a streamlined and effective manner.