Rep Grant Landmark Bill For Liberian Entrepreneurs: Would He Walk This Path Alone?

When Amara Konneh came up with his Konnehnomics for the creation of a middle class through Public-Private Partnership and the proposal to establish the Liberian Reconstruction and Development Alliance (LRDA), Representative Alex Chersia Grant of District Number 3, of Grand Gedeh County, came up with a counter proposal for the establishment of the Liberian Entrepreneurs Development Center (LEDEC) while Senator Abel Massalay, Senior Senator for Grand Cape Mount County expressed his doubts considering the pressure which the economy bears on consumers, most notably, in faraway counties.

In an effort to concretize his counter proposal, Representative Grant has wasted no time in submitting a bill that is now in committee room to support the Liberianization Policy and indigenous Liberian business enterprises.

After its first reading in Plenary, some legislative observers expressed their conviction that the bill is timely and necessary and that Honorable Grant wants the persistent reliance of the Liberian economy on foreign investors and its domination by them to be gradually replaced by Liberians in years to come.

According to a Liberian business woman, the much publicized Public-Private Partnership is beneficial to foreign entities then Liberians. She believes if government is committed to a transformed economy, Liberians should be encouraged into the mainstream economic sector-not through empty policies-but through practical steps as proposed in the Grant’s Bill.

She expressed belief that the intent of the Bill is not to exclude foreign businesses from the Liberian investment climate or within the partnership, but to set the stage for Government to focus on economic independence at a greater level.

“What strikes me most is that Hon. Grant’s differences with Minister Konneh is not just one of those normal intellectual displays of counter arguments, especially to the creation of the LRDA and its funding by the Liberia Development Fund (LDF), or a captivation of media attention for publicity stunts as a new legislator, but his action oriented act of actually submitting an alternative to the LRDA before the Plenary of the House of Representatives manifestly indicate that Grant is out for serious business”, says an anonymous member of the fourth estate.

The Grant’s bill seeks to create an institution that would focus on the systematic takeover of the Liberian economy by Liberians or make Liberian entrepreneurs competitive partners in the private sector so that the benefits of public-private sector engagements would flow down to Liberians.

In my view, the Grand Gedeh Representative sees the bill as a key element to pillarize the Liberianization Policy that has been less productive to Liberian entrepreneurs since its establishment due to lack of structural facilitation.

If the Grant’s vision is captured by his colleagues, Liberian entrepreneurs would begin to give a sigh of relief as some major fundamental funding constraints within the Liberian business community would give way to collateral and  loan accessibilities as well as structural supervision that would help Liberian businesses toward sustained growth and expansion.

The Grant’s Bill proposes that the LEDEC serves as the implementing institution of the Liberianization Policy and developer of professional business standards among Liberian entrepreneurs.

The functions of LEDEC would therefore include, among others, organizing workshops, seminars, training programs and the professional monitoring of Liberian businesses to ensure growth and the attainment of high and professional business standards; serving as the collateral institution between Liberian businesses and banking institutions for loan accessibility and to ensure repayments of loans on time as well as the stability of Liberian businesses.

The Bill contents further seek the empowerment of traders through institutional loans directly financed by GOL annual allotment to LEDEC and external financial assistance to the Center.

According to Capital Building Legislative sources, If the bill is given consideration by the Plenary of both Houses, LEDEC would conduct investment surveys and review the investment laws of Liberia and would be expected to present draft legislations to the Legislature on Liberian/Foreign Partnerships in the industrial and manufacture sectors, especially, concession agreements with the Republic.

An authoritative source at the Government’s Ministry of Planning and Economic Affairs says comparative studies released on July 5, 2011 in a documentation of the Liberian Government titled: Leveraging Concessions and Private Sector Development (Financial and Private Sector Development, AFCW1) reveals that only 1% of Liberian business firms are engaged in export activities.

This represents the lowest in what the document termed “comparator countries”. Moreover, it impresses that an infrastructural policy in Liberia’s investment world has never had a competing structural guide thus placing an overloaded expenditure burden on the Public Sector.

The document reveals further, for example, that research estimates on infrastructural funding shows “a gap of between US$250M and US$500M per annum”. It diagnosed that “the important avenue of addressing this gap is through innovative mechanisms such as the Public-Private Partnership”.

It further says the “magnitude of private sector infrastructure might reduce public sector spending on infrastructure”. Thus, research emphasizes a sustained effort to build the capacity of Liberia’s Small and Medium Enterprises (SME) to engage effectively in “concessionaire value chain and to create conditions for competencies to SMEs to access finance from the informal financial system”.

Analysts says the Grant’s Bill seems to have captured this vision from an angle not postulated by research experts; but yet sails through the corridors of a comprehensive plan to cause a leap in the performance of Liberian entrepreneurs and the acceleration and expansion of their businesses. The capacities of small and medium size businesses could be built if the LEDEC is enacted and brought into existence.

They agree with the studies that Liberian Banks are highly constrained by difficulties in accessing clients’ credit risks, lack of accessible collateral and generally poor corporate governance standards among small and medium enterprises that meditate against the development of marketable proposals.

With these revelations, practical and achievable mechanisms must be put in place and LEDEC appears to be the most logical corporate body to perform that task if given concurrence and signed into law.

Miss Rachel Tugbeh, an Accounting Student of the A. M. E. Zion University says to achieve a middle class and high level participation of Liberians in the economy, the Liberian Government has to depart from sophistication and theoretical applications to that of practical and simple methods that effectively deals with the problems of perennial foreign domination of economic activities.

I am also persuaded that with only 1% of Liberian firms involve in exports, this suggests in simple terms that the benefits of public-private partnership and the national economy are at the behest of foreign businesses.

Regrettably, the gap of infrastructural funding may widen if Liberian business institutions continue to be swallowed up by foreign businesses or if there continues to be the absence of a well defined investment infrastructural policy within the Liberian investment codes.

To address these vexing national problems, Mr. Anthony Howard, a Liberian businessman, in a social interaction over the weekend said LEDEC could be a mainstream entity that inspires indigenous business development and growth that could significantly close the infrastructural gap and move Liberia towards economic independence at an appreciable level.

A review of our incentive profile for foreign enterprises shows that 100% profit repatriation rights and leasing policies are direct licenses for capital flights and slow infrastructural developments in Liberia.

With Liberian businesses not given inspirational touch to secure the Liberian economy like Nigeria and Ghana did, I may just sign in with those who believe public-private partnerships could be another elaborate economic program with fewer results to remember.

An Eric Wecker 2010 research document available to Government diversifies players of the Liberian economy. He categorized them as Rentiers, Power Brokers, Magicians, and Workhouses. Each of these players’ role is significant. The extractors of minerals and other natural resources for sale on the international market are placed under the first category. In this rentier group, Liberian businesses are virtually absent.

This is the group upon which the economy largely rest. In the powerbrokers’ category, Liberian businesses are dominated; and these are businessmen in charge of the domestic market with large scale government protection.

While this article is not intended to deal with the Wecker’s research document which details are said to be restrictive, there are suggested interventions contained therein that would create more bureaucracies such as, think tankers being attached to government ministries for the collection of information and to provide coordinated services and sector development efforts in Liberia.

It is of interest to note that the Workhouses are the least of Liberian businesses which constitute subsistence farmers, live stock raisers, palm oil sellers, restaurants owners, hairdressers and etc. This is the category most Liberians are found. Economic pundits say LEDEC could constitute a motivating entity that could spring these Liberian businesses and those desiring to be in the manufacturing and export sectors from their humble status and into the mainstream of the Liberian economy.

It is this columnist’s presumptive conclusion that with the development of a nationalistic spirit, Liberian entrepreneurs would have no basis for profit repatriation or spent their duration of business activities on leasing; but on the contrary, they would contribute more to the infrastructural development of Liberia like Nigeria and Ghana to bridge the gap.

The Grant’s Bill is therefore a test case for the Liberian Legislature and the Sirleaf’s Government, says a Nigerian developer who believes in nationalism.