The Overseas Private Industry Corporation (OPIC), the United States government’s development financial institution, last Monday signed a US$20 million commitment to the International Bank Liberia Limited (IBLL).
It is intended to support lending in such sectors as agribusiness construction, services, hospitality, manufacturing and transportation.
Our Business Correspondent David Yates reported that the agreement seeks to foster job and opportunities by supporting investments in key economic areas and by increasing long term lending to Liberia’s private sector.
OPIC President and CEO, Elizabeth Littlefield, who co-signed the agreement along with IBLL CEO Henry Saamoi,
said the loan agreement will allow IBLL to address a gap in the marketplace by providing clients in the above mentioned sectors and other industries with long term credit facilities which will enable those clients to contribute significantly to Liberia’s economic recovery.
The US$20 million facility seems small for a country just emerging from the health crisis created by the deadly Ebola virus, and even more specifically from the terrible downturn in the country’s principal foreign exchange earners, rubber and iron ore.
Mrs. Littlefield, in her address at Monday’s signing, admitted that even OPIC’s US$6 billion invested in Sub-Saharan Africa in recent years is too small, and smaller still is the US$20 million invested in Liberia. She, however, gave this assurance: “We are here to listen and learn, as those who live within an economy invariably have the greatest insight into its needs and potential, and into what needs to be done to attract and keep the private investment that is so essential to job creation.”
Pan African Capital Group founder Stephen Cashin said IBLL is excited to be working with OPIC on the loan facility and appreciates the confidence OPIC has in IBLL. “With its young, energetic and committed Liberian management team, IBLL will continue to grow as one of the leading financial institutions in the country,” he said.
IBLL CEO Henry Saamoi assured Mrs. Littlefield, US Ambassador Christine Elder and other partners that health security is at the core of the fund.
“The Ebola crisis,” he explained, “proved that the definition of public health needs to be broader than hospitals. It needs to be expanded to investments in jobs, manufacturing skills building and economic sustainability.
Mr. Samoi referred to what he described as the “twin shocks of the Ebola crisis and the sharp decline in commodity prices, which has led to business closures, including mining concessions, loss of jobs and reduction in the revenue envelope of the country.”
IBLL, he continued, will use the loan to support strategic operating partners to build companies to capitalize on opportunities that have maximum impact on the Liberian market.
It remains to be seen what “strategic partners” Mr. Samoi is referring to in the disbursement of this loan. How many of these “partners” will be Liberian-owned? We consider this a very serious challenge to Liberian businesspeople. Those in business and manufacturing, in road construction and other infrastructural engagements need to redouble their efforts to improve, expand and make more credible their services, in order to place themselves in the position to benefit from this OPIC-IBLL loan facility.
It further behooves other Liberians with business acumen and vision to create enterprises that can benefit from this loan and future interventions that OPIC may offer.
As we indicated earlier, this loan facility, US$20 million, is small for such an economy as ours with so many challenges and needs.
Since agribusiness is among the sectors the loan is targeting, Liberians involved in poultry and eggs need to take serious initiatives toward expansion, in order to take advantage of the OPIC-IBLL loan facility. Should Liberian poultry producers prove that they can adequately provide the market with chickens and eggs, the Ministry of Agriculture would be encouraged to seek government’s intervention to limit the import of these commodities, as an incentive to Liberian producers.
The few Liberians in the hospitality business need to find creative ways to capitalize on this opportunity.
We urge IBLL to make a special effort to reach out to Liberian-owned businesses in order to ensure that they, too, benefit from this facility.
IBLL needs also to expose further to the public, and businesses in particular, what is required to take full advantage of this facility. What are the benefits and what are the interest rates to be charged? Will there be long-term payment plans?
We urge all participants in this laudable venture to be faithful to the repayment terms by doing everything possible to make effective, profitable and sustainable use of the loans accrued from this facility.
This would encourage OPIC to expand the facility to US$40, US$50 or even US$100 million. It would go a long way in redressing the job losses resulting from Ebola and the decline in commodity prices.