Recouping the Losses from LAMCO

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It has been well over three decades since Sweden, one of Europe’s most industrialized nations, closed its embassy in Monrovia.  

What led to this painful, unfortunate diplomatic departure from Africa’s oldest independent capital?  During a visit to Sweden in 1982, officials of the Daily Observer  learned that the closure of the Swedish embassy was due in part to Sweden’s disappointment with the hitherto highly appreciated relations between the two nations, thanks primarily to the establishment of the  LAMCO iron ore mining conglomerate, at the time one of Africa’s biggest industrial complexes, based in Yekepa, Nimba County.  But that company had been hailed for many years as a cornerstone to President Tubman’s Open Door Policy and to the relations between the Western world and Africa.  What had gone wrong that filled the Swedish people and nation with so much anger and disenchantment, leading to the closure of their embassy with Liberia?

We were told that sometime prior to the embassy’s closure, a team of Swedish journalists visited Liberia and did a series of incisive stories on the country, focusing particularly on the naked, rabid exploitation of Liberia by American, Canadian and Swedish industrialists. 

It has been approximately nearly 50 years since LAMCO commenced its exploitation of the richest iron ore, over 70 pure iron, ever discovered in Africa.  During tours of LAMCO in the mid-1960s, visitors could see the raw iron on the naked ground, making it unnecessary to dig too far below the earth’s surface to mine the iron. 

It was once revealed that Prime Minister Kwame Nkrumah of Ghana, during a tour of LAMCO in the early 1960s, cried when he saw what was happening there.  It was said that he sensed, with remarkable accuracy, that while the foreign investors were reaping billions of dollars out of the concession, Liberia was getting nothing, except the great salaries that some Liberian professionals and technicians were paid. 

What had gone wrong?  One Political Science graduate of Cuttington College and Divinity School (now Cuttington University) attempted a study of LAMCO for his doctoral dissertation, but this study, which could have flashed a glaring spotlight on nefarious example of the rape of a country, never saw the light of day.  But what was behind this “rape of a country?”

John Togbakollie Woods, Liberia’s first and probably only Natural Resource economist so far, was quoted by Kenneth Y. Best, in his book on Albert Porte, as saying that by the late 1960s, when Woods returned with his Master’s from Canada’s University of British Columbia, “Liberia’s natural resources were in a state of fait accompli.”  This meant that “concessions agreements had already been signed between government and various enterprises and were in full operation. These arrangements [had been made] when the government was ignorant about the nature of the resource, its commercial value on the world market and similar arrangements with other countries.”  By the time agreements were signed with the Liberia Mining Company (LMC-1946), LAMCO (late 1950s) and the Bong Mining Company (BMC – early 1960s), it was too late.  “Liberia,” said John Woods, could have benefitted from the experience of Brazil and Canada, but we had not . . . One of the weaker points in our agreements with these companies,” Woods explained, was that “the concessionaires placed Liberia as an equity owner of the enterprise exploiting the resource, not as a taxing agent. In other words, they told us, ‘You own the company jointly with us and we will give you 50% of the profits . . .’

“But,” said Woods, “these companies always told the government at the end of each year that there was no profit,” in which case they had nothing to pay the GOL.  “However, they argued that “we employ your people, who pay taxes to the government; and we build roads, railways, hospitals and schools and improve the infrastructure of your country.’

“Accepting this arrangement,” said John Woods, “the government lost its sovereign power to tax.  This tax revenue would have enabled the government to build infrastructural and development assets according to its own standards and needs.”

That is how Liberia lost out in its deals with these iron ore mining companies.  That is how Sanniquellie, Nimba County’s capital city, remained till this day a shanty town, Bomi remained a hole following LMC’s departure, and the Fauma Chiefdom in  Lower Bong County remained totally undeveloped after the departure of BMC.

It is this state of affairs that made the Swedish people disenchanted with Liberia, leading to the closure of their embassy.  On the other hand, Sweden poured hundreds of millions of development dollars into socialist Tanzania.

In wholeheartedly welcoming Ambassador Sofia Strand and the reopening of the Swedish Embassy in Monrovia, we hope that this will mark a truly new beginning in Liberia-Swedish relations leading, at least in part, to the recouping of what was lost during the LAMCO years.

We also pray that the Swedish Embassy will become the first European embassy to grant the Shegan visas, and eliminate the over US$3000 and over a week of time which each Liberian visitor has to pay in Abidjan, Dakar, Lagos or Accra to enter Europe.

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