Welcoming President Weah’s Special Economic Zone Initiative, But…!

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The Daily Observer welcomes President Weah’s appointment of  a Steering Committee to ensure the establishment, with immediate effect, of a Special Economic Zone (SEZ) in Buchanan, Grand Bassa County. The Daily Observer however notes that this is not the first time that an SEZ has been established in Liberia.

History recalls that the Liberia Industrial Free Zone Authority was first established by an Act of Legislature in 1975 with the objectives of attracting foreign investment promoting exports, increasing employment, and improving industrial technology through the establishment and operation of an Industrial Free Zone.

The Act establishing the Free Zone Authority provided for the Zone to be customs free, and specifically stated that customs control will be withdrawn to the fenced-around boundaries of the entire area of the Industrial Free Zone and it was established with a substantial degree of autonomy.

For example, the Act empowered the Free Zone Authority “to identify, investigate and promote export-oriented industries; to build, and rent sites or buildings for manufacturing or assembling semi-finished or finished products basically for export; to provide the utilities required; to organize common services; to manage the Zone, both in terms of finance and in administration, to achieve these ends”.

The Zone was established on 113 acres of land, in close proximity to the Free Port. Some 40 acres were allocated to industrial use, with another 15 acres for administrative, security and safety service, and approximately 20 acres for roads and parking.

The targets established for the Zone, at its inception were; investment of $12 million export sales of $24 million; construction and use of 40 factory buildings, each on 1 acre plots; the creation of 6,000 jobs. These targets, according to reports, were never met primarily because of the lack of consistent government support for the maintenance of a satisfactory investment climate in the country, although the national government had continued to support the Zone Authority itself by meeting annual deficits.

The Daily Observer recalls that the onset of the civil war in 1990 led to the closure of the Free Zone and, since then, it has not been resuscitated although there were attempts during the 1990s to revive the institution.

It is perhaps in recognition of the critical role that a Special Economic Free Zone could play in the country’s economic development that President Weah has commissioned the establishment of a Special Economic Free Zone(SEZ). According to SPARK which, since 2013, has been engaged with the Liberian government, civil society organizations, and entrepreneurs to support the creation of an SEZ in Monrovia, the objective is to create a world class business environment that is predictable, productive and profitable.

Further, according to SPARK, SEZ policies allow countries “to designate industries and or physical areas in which business and trade laws differ from the rest of the country in order to stimulate increased trade, increased investment, job creation and effective administration. The overall objective is to create a world class business environment that is predictable, productive, and profitable”.

Thanks to their persistent efforts, the Liberian Government under President Weah’s leadership has agreed to the establishment of a SEZ. The Daily Observer however notes that rather than Monrovia, the SEZ is proposed to be established in Buchanan instead. The question is whether Buchanan has the requisite infrastructure to accommodate or support such an undertaking.

Moreover, this newspaper notes that, like now, a shortcoming of the past was the failure of government to maintain a satisfactory investment climate in the country. For example, despite repeated calls from the business community for government to reconsider the application of the compulsory tariff associated with the Cargo Tracking Note (CTN) introduced by the National Port Authority (NPA), the Government has remained unmoved.

And the government has remained unmoved, never mind the fact that it has been warned that prices of commodities may rise sharply and shortages may ensue as a result of the imposition of the CTN. Needless to say, such a development tends to undermine the effective creation of a favorable investment climate in Liberia.

The Daily Observer notes further that if the intent of creating an SEZ is informed by the desire to promote, encourage and promote social change in a financially sustainable way, then we must, as always, warn President Weah that the attainment of objectives highlighted under his Pro-Poor Agenda may, more likely than not, be undermined by the continuous imposition of the CTN.

Already the pinch is beginning to be felt everywhere with the continuous fall of the Liberian dollar, the emergence of creeping shortages accompanied by price hikes and stirrings of the public. Little wonder, therefore, that there are latent but visible signs of support for anti-establishment public protests against the rising but unbearable costs of living. President Weah must therefore listen to the cries of the Liberian people and the business community and cancel the imposition of the CTN without further delay.

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