Infrastructure and Inclusive Growth THE GROUP

This report has been prepared by the African Development Bank (AfDB) Group. Designations employed in this publication do not imply the expression of any opinion on the part of the institution concerning the legal status of any country, or the limitation of its frontier. While efforts have been made to present reliable information, the AfDB accepts no responsibility whatsoever for any consequences of its use.

Vice President: Zondo Sakala Regional Director: Franck Perrault Chief Country Economist (at the time): Stefan Muller Senior Country Economist: Patrick Hettinger Resident Representative: Margaret Kilo Consultants: Andy Dijkerman, Emmanuel Akpa

Copyright 2013 - AFRICAN DEVELOPMENT BANK GROUP Photo Credits: AfDB photo files, Graham Prentice, Liberia Office, Map of Liberia courtesy of Nations Online Project.

PUBLISHED BY Temporary Relocation Agency (TRA) B.P. 323-1002 Tunis Belvedere, Tunisia Tel: (216) 7110-2876 Fax: (216) 7110-3779 Website: www.afdb.org Foreword

he African Development Bank views poor and the related infrastructure investment priorities that infrastructure as a critical barrier to reducing can best bring Liberia out of its relative isolation. These T poverty and accelerating growth on the continent. will enable Liberia to play a larger role on an agricultural Concurrently, African leaders increasingly realize the trading stage within the , on a regional advantages of regional cooperation and countries are stage within the ECOWAS energy, communications and placing greater emphasis on accelerating integration transit trade markets and on a globally competitive stage through policies and infrastructure. However, countries as an attractive investment destination for manufacturing, recovering from prolonged periods of conflict or troubled and agro-industry. The ultimate objective of the governance face added challenges and this is especially Report is to offer recommendations for short, medium the case when multiple recovering states share the same and long-term infrastructure planning for Liberia. The geographic neighborhood. Fragility renders countries approach takes its cue from Liberia’s national poverty inherently more vulnerable to threats and more focused reduction strategy, the Agenda for Transformation which upon domestic reconstruction as a consequence. seeks inclusive and it adds a regional perspective on relevant infrastructure development. This fits into the context of the AfDB’s Strategy for 2013 to 2022, which aims to broaden and deepen the The approach to planning seeks to prioritize continent’s process of transformation, mainly by ensuring infrastructure investments that maximize the benefits that growth is shared and not isolated. Moreover, the of internal integration and national stability in the Strategy prioritizes regional integration, which is essential near term, while identifying priority investments that for Africa to realize its full growth potential, to participate will maximize the benefits of regional integration for in the global economy and to share the benefits of an Liberia over the longer term. Together, these outcomes increasingly connected global marketplace. Finally, the will contribute in turn to regional stability. Important Strategy also emphasizes that fragile states require aspects of stability that are addressed include youth support tailored for their unique needs. employment, inclusive approaches to natural resource concessioning and improvements in land tenure for As part of its broader development effort to contribute smallholders, measures to reduce food insecurity and to the integration of Africa, the AfDB Group is leading a improved penetration of services into the hinterland. IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH new initiative to boost regional integration in Many of these challenges can be better tackled i focused on (), Guinea-Bissau, Liberia and mitigated on a more enduring basis if they are and . These fragile and post-conflict states addressed through synchronized national and regional lag behind the rest of ECOWAS in terms of social and initiatives. economic development and require attentive assistance in addressing their collective infrastructure gap. By Studies have shown that increasing the stock of assessing and addressing the infrastructure gap, the infrastructure adds to growth and the gross domestic Bank aims to help these nations transition out of fragility product. In countries with severe infrastructure deficits, and into stability. the economic return from infrastructure investment is even more favorable. Improved infrastructure is The present report focused upon Liberia provides a precondition for accelerated development of the a synopsis of a longer study which is one of a series domestic private sector and is a key requirement for the on fragile West African states. Infrastructure in Liberia expansion of intra-regional trade, the benefit of which will suffered badly from its fourteen years of conflict, and improve regional food security over time and build the the nation’s stock of infrastructure remains inadequate region’s trading capacity and ability to compete in world and poorly maintained. There are, however, a number of markets. In recognition of these facts, the development opportunities to reverse this trend, especially if regional of Africa’s infrastructure and economic integration are options are included. Regional integration is examined key components of the strategic direction pursued by in the context of promising domestic growth strategies the Bank. ii INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA for accelerateddialogueonintegrationbetweenLiberia for the longtermfuture. stability Finally, Liberia’s itcanserveasthecatalyst securing to vital is inclusion This growth opportunitiesatlarge. Liberian population within the domestic and regional nationals inservicedeliveryandincludesthebroader prioritization ofinfrastructure thatinvolvesLiberian outcome thatcanbetterbeachievedthrough strategic challenges ofachievingtransformationalgrowth—an Second, theReportsensitizesreaders totheparticular a wayforward. support ofstakeholdersanddevelopmentpartnerson ofLiberiacanencourageandenlistthe Government It provides an advocacy document with which the of infrastructure investment opportunitiesinLiberia. and the private sector with a detailed assessment provides thedonorcommunity theGovernment, This studyisimportantforthree reasons. First,it progress inLiberia. sustained recovery andacceleration ofdevelopment In thesemanyways,thisReportcancontributetothe River UnionandinthecontextofECOWAS. and neighboringstates,bothinthecontextofMano Country andRegionalPrograms andPolicy African DevelopmentBankGroup Zondo Sakala Vice PresidentVice Preface

iberia’s new poverty reduction strategy, the planning that, together with accompanying measures, will Agenda for Transformation recognizes that help unleash the potential of promising growth sectors in L economic growth and development cannot be the Liberian economy. The full report is available online at achieved without adequate infrastructure. At the same http://www.afdb.org/en/countries/liberia. time, key insights from the nation’s history indicate that the social and economic benefits of growth must be This report was prepared on the basis of broad inclusive and an enclave orientation must be minimized stakeholder participation and consultation. This involved to avoid growth without development. Infrastructure numerous rounds of interview and consultations with investment must therefore be planned to support key Liberian Government officials and key stakeholders growth corridors that connect urban centers with during the course of 2012, culminating in a consultative the rural milieu and foster conditions for economic workshop to forge a consensus on priorities and actions advancement by smallholders and the domestic private held in in December 2012. This report marks the sector as well as foreign direct investors. Infrastructure beginning of a new initiative—one which seeks to engage services must strive to improve quality, availability and the MRU countries in a new era of accelerated regional affordability to citizens throughout the country. integration and associated infrastructure development.

Zondo Sakala This report provides an assessment of the current status The African Development Bank looks forward to Vice President of infrastructure and services in the transport, electric continued dialogue to develop sound new approaches Country and Regional Programs and Policy power, ICT, and sanitation sectors in Liberia, to investing in infrastructure through means that bolster African Development Bank Group together with the context of their participation in regional national stability and improve Liberia’s integration and infrastructure development initiatives in the Mano River prosperity in the region. Union and ECOWAS. The report is divided into three chapters. Chapter one presents a diagnostic of the present situation including an analysis of determinants of past conflict and continuing vulnerabilities, indicators of social and economic performance, the status of infrastructure and the strategic policies guiding the nation. Chapter IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH two takes a look ahead to evaluate growth strategies Franck Perrault iii which could accelerate inclusive and stability-enhancing growth if binding policy and infrastructure constraints are Director, Regional Department addressed. Chapter three presents recommendations for West Africa 2 (ORWB) short, medium and long-term infrastructure investment African Development Bank Group iv INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA following keyofficialsand representatives: Monrovia on December 5, 2012. This list is not exhaustive, but the team is particularly grateful to the valuable inputsandcommentsontheReport,includingduringConsultativeWorkshop heldin society representatives and development partners represented in Liberia also provided extremely civil as well as Liberia of Government and representatives from the officials other of number large A by hisministryandstaff throughout theconductofthisstudy. The AfDBwouldalsoliketorecognize MinisterofFinanceAmaraKonneh,forthesupportprovided administered CanadianTrust Funds,andMs.BelindaChesire, inparticular. Bank’sfromthe Report this preparationof the for needed funds the raising in Unit Cooperation and AfDB’sthe Partnership from support the appreciated also team The possible. Report this make to The AfDBteamexpresses for providing theirgratitude to theCanadianGovernment funding acknowledgement, theircontributionsare recognized andtheteam’s appreciation isregistered. comments, insightsandgenerous supportofotherAfDBstaff toonumerous to mention,butbythis from benefitted also Report the of preparation The 2012. December in Monrovia in held Workshop Consultative the as well as team consulting the of missions visiting the organize to Liberia in Office appreciated the efforts made by Pela Boker and Yattah Christiana Franck J.M.Perrault,Director whoprovidedJames-Tarnah ORWB guidanceandfeedbacktotheteam.Theteam of the Bank’s Country PresidentSpecial thanksgotoZondoSakala,Vice ofCountryandRegionalPrograms andPolicy report. Theywere provided in-countrysupportbyByron Tarr. The teamofconsultantsincludedAndyDijkermanandEmmanuelAkpaasprimeauthorsthe and KoblaBenMili,AssistantsinORWB. Santi, ChiefRegionalEconomist,BasilJones,AssistanttotheandChantalBoya Olayé, NEPAD RegionalIntegrationandTrade, SalouaSehili,PrincipalPolicyEconomist,Emanuele Bassy Aguma,SeniorTransport Economist;Aaron KatambulaMwila,Transport Engineer;RalphA. Mose Mabe-Koofhethile,SeniorProcurement Specialist;EliseAkitani,SeniorPowerEngineer;Jeremy Kilo, Resident Representative in Liberia; Alain-Pierre Mbonampeka, Liberia Country Program Officer; Acknowledgements Robinson, ODIFellowinMinistry ofFinance. Jerry Finance Macro-Fiscal Unit;ShaheedMohammed,CEO ofLiberiaElectricityCorporation;Timothy Taylor, Commission; Investment National Charge in Director ofMinistryFinanceDebtManagementUnit;DavidChieh,SeniorEconomist inMinistryof Officer Carr, B. Z. Othello Agency; of Grand Kru ; Nathaniel T. PresidentDennis, Vice ofLiberiaChamberCommerce; Hon.NumenieBartekwa,Representative Princetta Clinton-Varmah, DeputyDirector AidManagementUnitMinistryofFinance;Mr. Francis Bright, Technical AdvisorsinLiberiaReconstructionandDevelopmentCommitteeofMOPEA;Jr. Mason, DeputyMinisterSector&RegionalPlanningin MOPEA;TheoAddeyandJosephZangar Wonde, AssistantMinisterofRegionalPlanninginMinistryandEconomic Affairs; Lee Energy; SeiW. Gahn,AssistantMinisterofIndustryintheMinistryCommerce; JacksonN. for Operations,MinistryofLands,MinesandEnergy; Beauford O.Weeks, AssistantMinisterfor Assistant MinisterEugeneL.Nagbe,MinistryofPublic Works; SamG.Russo, DeputyMinister of Transport; B.Smith,DeputyMinisterforTechnical Victor ServicesinMinistryofPublicWorks; Dept. ofPlanning&DevelopmentinMinistryAgriculture; S.BabaKaba,Director inMinistry & DevelopmentofMinistryAgriculture; FrancisW. Mwah,AssistantDirector ofCoordination Chenoweth, DirectorMinister of Agriculture; of Coordination, Michael D. Titoe, Dept. of Planning Miata Beysolow, Minister of Commerce; Stephen Marvie, Assistant Minister forTrade; Dr. T Country EconomistforLiberia.AdditionalmembersoftheAfDBteamcomprised:Margaret consultants, ledbyStefanMuller, ChiefCountryEconomist,and PatrickS.Hettinger, Senior his Reportwasprepared byateamofstaff from theAfricanDevelopmentBank(AfDB)and

Blama, Technical Advisor in Liberia Environmental Protection

Flor ence 1.2 1.5 1.4 1.3 1.1 .

The Current StatusofTrade Liberia’ Issues ofFragilityinLiberia Introduction Executive summary Current InitiativesandBenefitsAvailable from RegionalIntegration The Current StatusofInfrastructure andReformsIntroduced toDate 1.1.1 Political 1.5.3 KeyFindingsRegar 1.5.2 WhyLiberiaShouldEngage inMor 1.5.1 Liberia’ 1.4.10 KeyFindingsRegar 1.4.9 SummaryofCurr 1.4.8 PolicyReformsandGover 1.4.7 OverviewofICTSector 1.4.6 OverviewoftheW 1.4.5 OverviewoftheEnergySector 1.4.4 OverviewoftheRailT 1.4.3 OverviewoftheMaritimeandRiverT 1.4.2 OverviewoftheAirT 1.4.1 OverviewoftheRoadT 1.3.4 KeyFindingsandConclusionsRegar 1.3.3 T 1.3.2 Liberia’ 1.3.1 Liberia’ 1.2.11 KeyFindingsRegar 1.2.10 CapacityandReformMeasur 1.2.9 Curr 1.2.8 TheContributionofOtherPr 1.2.7 TheContributionoftheNon-RenewableExtractiveSector 1.2.6 TheContributionofRenewableResour 1.2.5 SectorContributionstoEconomicPerformanceandReformsDate 1.2.4 PoliticalGover 1.2.3 Macr 1.2.2 Liberia’ 1.2.1 Socio-EconomicIndicatorsandBenchmarksforPr 1.1.7 1.1.6 1.1.5 1.1.4 1.1.3 1.1.2 Diagnostic CHAPTER Introduction KeyFindingsandConclusionsRegarding FragilityandStabilityinLiberia Infrastructure Investment andRegionalIntegrationtoBolsterStability ContinuingVulnerability toDeterminantsofConflict TheLiberianConflictandRegionalSpillovers AnEconomicShockandtheUnraveling EconomicBackdrop tothe LiberianConflict s Current Socio-EconomicSituation rade Initiatives ent SituationandReformsinLiberia’s Private,SOEandFinancialSectors oeconomic PerformanceandPolicies . ofthecurrentsituation ...... 1 s ParticipationinRegionalOrganizationsandPolicyFrameworks s PerformanceinRegionalTrade Trades PerformanceinInternational s InterimandFirstPovertyReductionStrategies

Backdrop totheLiberianConflict nance ReformsIntroduced DuringRecovery ...... ent InitiativeswithRespecttoRegionalInfrastructure ater Sector ding RegionalIntegration ding theStateofInfrastructure inLiberiaToday ding Liberia’s Current Socio-EconomicSituation ...... ransport Sector ransport Sector ...... ransport Sector ...... nance StrategiesintheInfrastructure SectortoDate oductive SectorsoftheEconomy ...... es inLiberia’s PublicSectorAdministration ...... e RegionalIntegration ...... ransport Sector ding Liberia’s Trading Profile ...... ces Sectors ...... esent-Day Liberia ...... Table ofContents ......

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16 15 12 12 11 10 60 58 58 58 57 56 53 53 52 50 49 48 48 46 46 44 44 42 40 39 39 38 35 34 31 22 20 18 xii 6 5 4 3 2 1 1 1

v INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA vi INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 2.3 2.2 2.1 3.4 3.5 fordability 3.3 3.2 3.1

Looking ahead:strategiesforinc Prioritizing transformationalinfrastructureinvestments CHAPTER 3 Time-Sequenced Infrastructure PlanningforLiberia Time-Sequenced Introduction Findings andConclusionsonPrioritiesforTransformational Growth Strategies forDeliveryofTransformative Growth Achieving Transformation: TheImperativeforInclusiveGrowth Introduction Summary ConsiderationsforInfrastructur 3.4.4 StrategicChoicestoContemplatefortheLongT 3.4.3 RecommendedPrioritiesfortheMediumT 3.4.2 RecommendedPrioritiesfortheShortT 3.4.1 Whyprioritizeandhow? 3.3.3 LiberianInvolvementinECOW 3.3.2 LiberianInvolvementinPIDA 3.3.1 Pr Regional Infrastructur Af AFT InvestmentPlanningvs.Desir 2.2.6 ApplicationofFilterCriteriatoMSMEdevelopment 2.2.5 ApplicationofFilterCriteriatoConcessioningNaturalResour 2.2.4 ApplicationofFilterCriteriatoCommer 2.2.3 ApplicationofFilterCriteriatoIndustrializationStrategy 2.2.2 Intr 2.2.1 Intr 2.1.1 PRS2—theAgendaforT References CHAPTER ogramme forInfrastructure DevelopmentinAfrica oduction ofFiltercriteria oduction ofKeyGrowth Strategies ...... 2 e InitiativesandImplicationsforLiberia ...... ransformation ...... ed Infrastructure InvestmentProjects ...... AS RegionalInitiatives lusive growthinliberia e PlanninginLiberia ...... cialization ofSmallholders . erm ...... erm ...... erm ...... ces ...... 117 133 133 129 119 114 106 103 102 100 100 135 63 97 98 97 93 88 80 77 73 71 71 66 64 64 63 AG AFL ACS ACE AFDB MDA LWSC LTA LPRC LPMC LNP LISGIS LIBTELCO LEC LCAA LASIP KwH ITU ISMOR ILO IITA ICT HIPC HFO GSM GWh GW GOLR GNP GEMAP GDP FRTUL FSP FBO FAO EZTH EZB EU ESF ERERA EPP EITI ECOWAS ECOMOG DRC CBL CWIQ CPIA CARI CAADP CAAS BRICS AU ASF ARTIN APCI AFT

Armed Forces ofLiberia American ColonizationSociety Africa ConnectingEurope African DevelopmentBank Ministry DevelopmentAgreement Liberian Water andSewerCorporation Liberian Telecommunications Authority Liberian Petroleum RefiningCompany Liberian Produce MarketingCorporation Liberia NationalPolice Liberian InstituteofStatisticsandGeo-InformationServices Liberian Telecommunications Company Liberian ElectricityCorporation Liberia CivilAviation Authority Liberia AgriculturalSectorInvestmentProgramme Kilowatt Hour TelecommunicationsInternational Union ofRice Integrated SustainableModernization LaborOrganization International InstituteofTropicalInternational Agriculture Information andCommunicationTechnologies Highly IndebtedPoorCountries Heavy FuelOil Global SystemofMobileCommunication Gigawatt hour Gigawatt ofLiberia Government Gross NationalProduct EconomicManagementAssistanceProgrammeGovernment Gross DomesticProduct Federation ofRoadTransport UnionofLiberia Fragile StatesPrinciples Farmer BasedOrganizations Food andAgriculture Organization Economic ZonesforTourism andHospitality Economic ZoneforBusiness,Trade andCommerce European Union ECOWAS StandbyForce ECOWAS RegionalEnergyRegulatoryAuthority Emergency PowerProgram Extractive IndustriesTransparency Initiative Economic CommunityofWest AfricanStates ECOWAS MonitoringGroup Domestic Resource Cost Central BankofLiberia Core Welfare IndicatorsQuestionnaire Country PolicyandInstitutionalAssessment Central AgriculturalResearch Institute Comprehensive AfricanAgriculture DevelopmentProgram Comprehensive Assessment oftheAgriculture Sector Brazil, Russia,India,ChinaandSouthAfrica Africa UnionStandbyForce Africa RegionalTransport Infrastructure Network Africa Productive Capacity Initiative Agenda forTransformation Auditor General Abbreviations andacronyms vii INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA viii INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA MRU MPEA MOA MHI MDG WSIS WDR WASH WAPP WAEC UNMIL UNESCO UNEP UNCTAD UN TAH SSS SPD SOE LDAA RIA REC PUP PSIP PSD PRS PIDA PFM PETS PAP OSBP OECD NTPS NRC NPA NIDFO NIC NFRL NEPAD NAA MW MTEF MT

Ministry ofPlanningandEconomicAffairs Ministry ofFoodandAgriculture Manitoba HydoIncorporated Millennium DevelopmentGoals World StrategyonInformationServices World DevelopmentReport Water, SanitationandHygiene West AfricaPowerPool West AfricaEducationCouncil United NationsMissiontoLiberia United NationsEducationalScientificandCulturalOrganization United NationsEnvironment Program United NationsConference onTrade andDevelopment United Nations Trans-African Highway Special SecurityServices Spatial DevelopmentProgramme State-Owned Enterprise Liberia DomesticAirportAuthority Airport Roberts International Regional EconomicCommunity Private UsePermit Public SectorInvestmentPlan Private SectorDevelopment Poverty ReductionStrategy Program ofInfrastructure DevelopmentinAfrica Public FinancialManagement Public Expenditure Tracking System Priority ActionPlan One-Stop Border Post Organization forEconomicCooperationandDevelopment National Transport Policy&Strategy Natural Resource Concessioning National PortAuthority National IndustrialDevelopmentandFinancingOrganization National InvestmentCommission National Forestry ReformLegislation New EconomicPartnershipforAfricanDevelopment National AirportAuthority Megawatt Medium Term Expenditure Framework Metric Ton Mano RiverUnion Box 21 Box 20 Box 19 Box 18 Box 17 Box 16 Box 15 Box 14 Box 13 Box 12 Box 11 Box 10 Box 9 Box 8 Box 7 Box 6 Box 5 Box 4 Box 3 Box 2 Box 1

Hard andSoftTrade andIndustryInfrastructure PlannedduringAgendaforTransformation Hard andSoftWater, SanitationandHygieneInfrastructure PlannedduringAFT Hard andSoftICTInfrastructure PlannedduringAgendaforTransformation Hard andSoftTransport Infrastructure PlannedduringAgendaforTransformation Hard andSoftPowerInfrastructure PlannedduringAgendaforTransformation ICT Broadband Connectivity through ACE ECOWAS Transport Measures Governance CLSG RegionalPowerTransmission Project PIDA ContinentalPrioritiesbyInfrastructure andActions Sector–Visions The Monrovia Challenge Filter CriteriaAppliedtoGrowth Strategies MSME Developmentthrough CorridorDevelopment Natural Resource Concessioning through Foreign Direct Investment Smallholder Commercialization includingthrough EnhancementofTrade Industrialization through Special EconomicZones Pillars ofPRS2AgendaforTransformation Mt. Coffee PowerPlantDestroyed inConflict Continuing ConstraintstoLiberianTrade Liberia’s SmallholderLandTenure Systems—HowSecurityAffects Behavior Lessons aboutFragilityandPost-ConflictRecoveryofRelevancetoLiberia Political MilestonesinLiberia’s Evolution

Boxes 129 128 127 125 122 114 110 108 103 76 71 70 69 68 67 65 51 44 23 12 3 ix INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA x INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA Figure 14 Figure 13 Figure 12 Figure 11 Figure 10 Figure 9 Figure 8 Figure 7 Figure 6 Figure 5 Figure 4 Figure 3 Figure 2 Figure 1 Figures Figure 39 Figure 38 Figure 37 Figure 36 Figure 35 Figure 34 Figure 33 Figure 32 Figure 31 Figure 30 Figure 29 Figure 28 Figure 27 Figure 26 Figure 25 Figure 24 Figure 23 Figure 22 Figure 21 Figure 20 Figure 19 Figure 18 Figure 17 Figure 16 Figure 15

African DevelopmentBankCPIARatingsforLiberia2005-2010 Liberia’s EvolutionagainstHDIIndex Liberia’s ConflictandEconomicDecline Map ofLiberiaDepictingRegionalLocationand15AdministrativeCounties Recommended PlanningforFuture EnergyandElectricityProjects inLiberia Liberian Border RoadsandtheirConnectiontoInteriorLandlockedCenters Liberia-MRU RoadLinks Region Future DomesticCorridorsandtheirPotentialConnectionstotheWider Feeder CorridorsRequiringImprovements inQualityofConnectingTransport Infrastructure Existing EconomicCorridorswithinLiberiaasAssessedin2009 Planned GuineaRailLinetoConakryvsExtensionofLiberianLinesAcross Border Schematic ofExistingECOWAS RailLinesandPossibleExpansion Comparative BehavioronWest AfricanTrade Routes Trans-African HighwayPlan Energy MixforWest Africa,includingVoluntary InclusionofRenewableResources West AfricaPowerPoolImplementationPlan ofTransportPIDA Vision ImpacttoImprove ConnectivityforContinentalandGlobalTrade Diagram ofPresumed “SpatialDevelopmentprogramme” CorridorsonContinentby2040 Comparative SpendingbyStatestoAddress Infrastructure Needs DepictionofLiberiaTradeAlternate andTransport Corridors Economic Growth CorridorsforLiberia Mineral ClustersSpanBorders BetweenMRUCountriesandAllRequire Infrastructure Liberia’s PerformanceAgainstInfrastructure IndexofAfricanCountries Liberia’s forICTDevelopment Vision ECOWAS HDIandElectricity ConsumptionCompared toOtherPartsoftheWorld Liberia’s RailLinesExistingPriortotheConflict Liberia’s RoadNetworkandLinkstoMajorAirSeaports Sub-Regional Trade inPalmOil Market ClusterFormerlyLinkingGuinea,LiberiaandSierraLeone Composition ofImports,2011 Composition ofLiberianCommodityExports Trend inTrade FlowsandNetTrade Balance Depiction ofLiberia’s privatesector Importance ofShippinginLiberianExports Liberia MinistryofLands,Mines&EnergyMapMineralPotential Rice Yields havebeenontheDecline Current andPotentialLand Areas devotedtoConcessionActivity ofLandUseinLiberia,2004 Pattern Percentage Share ofGDPbyEconomicSector

Status andMissingLinksinW

est Africa

132 131 130 116 115 115 112 112 111 110 109 107 106 103 102 xviii 91 90 87 57 56 50 49 47 43 42 41 41 40 36 35 32 26 24 24 21 19 13 5 Table 3.11 Table 3.10 Table 3.9 Table 3.8 Table 3.7 Table 3.6 Table 3.5 Table 3.4 Table 3.3 Table 3.2 Table 3.1 Table 2.10 Table 2.9 Table 2.8 Table 2.7 Table 2.6 Table 2.5 Table 2.4 Table 2.3 Table 2.2 Table 2.1 Table 1.23 Table 1.22 Table 1.21 Table 1.20 Table 1.19 Table 1.18 Table 1.17 Table 1.16 Table 1.15 Table 1.14 Table 1.13 Table 1.12 Table 1.11 Table 1.10 Table 1.9 Table 1.8 Table 1.7 Table 1.6 Table 1.5 Table 1.4 Table 1.3 Table 1.2 Table 1.1

Comparative EconomicsofHydro InvestmentinMRU Desirable MRURegionalLinks Unconstrained BudgetApproach toUpgradingPrimaryRoadNetwork Unit CapitalandMaintenanceCostsunderContrastingChoicesofRoadTechnology Detailed ListofInfrastructure Projects Programmed underAgendaforTransformation Infrastructure Required forSuccessfulExecutionofKeyGrowth Strategies Shipping LinerConnectivityIndex PIDA Projects SlatedforImplementationwithinECOWAS RegionalEconomicCommunity Analysis ofGOLRAffordability ofAFTProgramme andNetFinancingRequirements Summary CompilationofDesired Infrastructure Projects andRoughCostEstimates Total EstimatedCostsofSecondPovertyReductionStrategy–AgendaforTransformation Ranking ofAppraisedGrowth Strategiesvis-à-visFilterCriteria Overall RiskProfile ofAppraisedGrowth Strategies summary SoftandHard Measures toImprove EfficacyofMSMEGrowth Strategy Summary SoftandHard Measures toImprove EfficacyofNRCGrowth Strategy Overview ofkeyinfrastructure provisions inconcessioncontracts Fiscal FlowsReportedfrom ConcessionsinFY2010 Medium Term Growth Outlook Summary SoftandHard Measures toImprove EfficacyofSmallholderCommercialization Summary SoftandHard Measures toImprove EfficacyofIndustrializationGrowth Strategy Liberia’s FirstandSecondPovertyReductionStrategies Regional Infrastructure ProjectsInitiatives andAssociatedGovernance FrameworkApplicabletoLiberianInfrastructureThe Governance Sub-Sectors Liberia’s ElectricityTariff isVery High Road Works AchievedUnderPRS1 Liberia’s RoadNetwork Indicators onLiberia’s StockofInfrastructure withComparativeBenchmarks Liberian Importsfor2011 Pre andPostConflict Trading Partners Comparative Trade RatiosinMRUStates Improving BusinessClimate Contrast inMiningConcessionTerms byEra Major MiningSectorConcessionaires Recent Production Trends from -Based AgriculturalSystems Poultry andLivestockProduction Pre andPost-ConflictFood Production Levels Liberia’s NaturalResource Endowment Annual Percentage Growth byEconomicSectorscontributingtoGDP Liberia’s Rankonthe2011IbrahimIndex Macroeconomic Performance Indicators Costs andFinancingofPRS1 Key Socio-EconomicIndicatorsofLiberiaandNeighboringCountryBenchmarks Liberia’s PovertyProfile, 2007 Liberia –CompositionofGDPbySectors,1971-81(Current prices,Percent)

Tables

133 130 126 125 120 117 113 104 101 99 98 94 93 92 88 86 83 81 80 77 65 56 53 51 47 46 45 41 41 40 36 34 32 27 27 25 23 21 20 17 16 14 13 4 xi INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA xii INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA greater magnitudeifnationalprioritieswere castintoand identifies that capital flows could be easier to tap and of infrastructure thatcanunlocktheirpotential.Ittherefore specific links betweenpromising growth the sectorsandthetypeof identify to seeks report the Instead, gap. a perfectworld,wouldclose thenationalinfrastructure exhaustive inventoryofdesirableinfrastructure which,in by realism. Itavoidsanapproach ofdeterminingan fiscal constraints andthemethodologyisthusinformed substantial faces Liberia that recognizes report growth withinthecountry. At thesametime, along keycorridorstocatalyzebroad-based economic connect countycapitalsplusinfrastructure enrichment Examples wouldbeprimaryroad rehabilitation to from theirisolationandunlockproductivity. penetrate theinteriorwithessentialservices,remove on apurely nationalbasistofurtherunifythenation, perspective, some investments should be undertaken Infrastructure isvitaltothesestrategies.From astability mining andagro-industry. an attractiveinvestmentdestinationformanufacturing, trade marketsandonagloballycompetitivestageas within theECOWAS energy, communicationsandtransit stage withintheManoRiverUnion,onaregional stage Liberia to play alargerrole on anagricultural trading Liberia outofitsrelative isolation.Thesewillenable infrastructure investmentprioritiesthatcanbestbring of promising growth strategies and the related Regional integration is examined in the context growth whichLiberianowrequires. infrastructure investmentthatdeliverstheinclusive the vulnerabilities which remain as a basis for prioritizing and conflict original the of drivers the assesses report an eraofinclusiveandtransformationalgrowth. The informs thechoiceofgrowth strategiesthatwillfoster theme This conflict. years fourteen its during suffered human harmandphysicaldamagewhichthenation thattakesintoaccounttheextentof central concern infrastructure gapsin Liberia. Theissue of stability is a themes: (i)stability, (ii)regional integration,and(iii)the The studyexaminesandisbuiltaround three major which canaccruefrom regional integration. neighbors, thereby enhancing the development benefits Liberia todeepenitslinkswithMRUandECOWAS enabling as well as future, the in conflict of recurrence state soastopromote inclusive growth andavoida fragile Liberia’sa of as cognizant status explicitly is that approach investment an formulating at aims specifically secures peaceandstability forthelongtermfuture. It to nationalandregional integration inamannerthat infrastructure planningstrategy forLiberiathatcontributes The main purpose of thisreport is topropose an Overview andPurposeoftheReport Executive summary be plannedinsynchrony. undertaken totheexclusionofother—theyshould national norregional infrastructure projects shouldbe Neither programs. in regional participation by satisfied • in thecomingyears: future, Liberiawillneedtomitigatethefollowingthreats place. Inorder tosecure thepeaceforlongterm first the in conflict to rise gave that endure conditions vulnerable toapossiblereturnofcivilwaraslong threats. andexternal Liberiawillremainto internal legitimacy, ethnicfragmentationandvulnerability require continuedattention.Theyincludeweakstate a created number oflegacyproblems whichnowendure and have itself conflict civil the and history This non-violent fashion. which grievancescouldbeaddressed ormitigatedin national wealthandfailedtocreate institutionsthrough not create socialmechanismsforwiderdistributionof that did The consequence was a style of governance few while failing to deliver development to the masses. policy generated horizontalinequalityinsociety, enrichinga economic open-door pre-conflict regime’s the phenomenon of“growth withoutdevelopment”whereby the concerns finding third The followed. that conflict full an event which triggered themilitaryuprising,andlaunched opposition, fledgling the from regime the to imposed onthepoor. Thissentimentincitedachallenge made itappearasthoughfurthersuffering wasbeing the 1970s,policyresponses adoptedbytheauthorities sharply reduced pricesforcommodity-basedtradein is thatwithdeterioratingeconomicconditionsand occur to exacerbate the differences. The second finding that was susceptible to get into conflict should an event over acentury. Thismadeforadividedcountry, one the countryandaccesstoeconomicopportunityfor of meaningful participation in the political governance of the exclusion is the indigenousLiberiansbyAmerico-Liberiansfrom these of first The war. civil violent country’s the of causes central three highlights Liberia The analysisofissuesfragilityandstabilityin and ImplicationsforFutureGrowthStrategies Issues ofFragility, ContinuingVulnerability public benefit is derived from private investment in investment private from derived is benefit public and infrastructure planning should seek to ensure that content from thecommunitieswhere theyare situated concessions must contribute jobs for and draw local that thesedonotfunction asenclaves.Instead, concessions sector, Liberia must find a way to ensure for itspeople.Inreviving theFDI-lednaturalresource achieving growth withoutcorresponding development of important thatLiberianotreturntoitspriorpattern Concessions thatfunctionasenclaves: Itis urban-rural divide. Brain drain has compounded these urban-rural divide.Braindrain hascompounded these off andthiscouldfueldestabilizingperceptions aboutan those livinginornearMonrovia tendtoberelatively better are home to large absolute numbers of poor. In contrast, high prevalence ofpeoplelivinginpovertywhileothers Development Index.Certain ruralcountieshaveavery 1970s toarankingof182out187onthe2011Human of fewmiddleincomeSub-Saharancountriesinthe of thenation,causingittodrop from astandingasone impoverishment severe to contributed war civil Liberia’s By disruptingeconomicactivityoveranextendedperiod, Poverty Reduction StrategiestoDeliverGrowth • • • • concession-supportiveinfrastructure. Concurrently,

renewable resources. stewardship ofgreen growth toavoidthedepletionof heritage isgenerous but fragile, requiring conscious Liberia mustrecognize thatitsenvironmental will allcontributetothisobjective. way of transport, power and communications networks connected tomarkets.Improved infrastructure inthe be brought foremost, out oftheirrelative isolationandinhabitantsmustbe and first must, counties rural to ignite growth in the rural economy. To do this, Liberia’s respect tomitigationofthesethreats, itwillbeessential The twinthreat ofpovertywithinequality nationality thatcanunifythecountryinfuture. need tocreate asenseofbelongingandpride racial ancestryservestounifyit.There isacompelling fault-lines dividethecountryfarmore thancommon ancestry. Consequently, religious, language andethnic tribal affiliation remains more powerful than Negro racial the oppressed andformerlyenslavedchildren ofAfrica, was foundedonthepremise ofproviding ahometo Divisions withinNationalIdentity which threaten thenation. steer youthawayfrom criminalactivityanddrugs liketheseareLegitimate alternatives importantto prepare themforproductive engagementinsociety. direct participationinjobs and trainingprograms that benefit from resurgent growth in the economy through to begins generation lost Liberia’s that essential is It Attraction ofcriminalactivitytounemployedyouth: extracted onlytoservethepublicgood. a constantchallengetoensure thatsuchrents are which corruptionmightnaturallythrive.Itwillremain natural resource rents exposes it to conditions in growth strategyinlargemeasure uponcollectionof the sphere of transparency, the basing of the country’s Although thecountryhasmadetremendous stridesin the cultures ofpatronage, impunityandcorruption. and other public services while avoiding a return to capably deliveringontheprovision ofsecurity, justice legitimacy: Liberiamustcontinuetobuildthestateby Patronage andCorruption thatunderminestate : Although Liberia : AlthoughLiberia : With : With

under its Vision 2020. under itsVision Liberia hassetthegoalofregaining middleincomestatus investment asadriverofeconomicgrowth. Moreover, II 2012-2015)withadditionalemphasisoninfrastructure be sustainedundertheAgendaforTransformation (PRS- Reduction Strategy(PRS-I2008-2011).Theseefforts will waslaunchedundertheLiftLiberiaPoverty governance long nation’sterm prosperity. Theprocess ofseekingimprovements the in for imperatives key are development capacity through human capitalandinstitutional conclude thatsustainedefforts at building governance This reasoningofLiberiato hasledthe Government resolution through legitimateinstitutionalmechanisms. meant that the drivers of conflict could not previously find structures inmanyspheres ofeconomicandpoliticallife The absenceofcapableandeffective governance nurture theexpansionof an indigenousprivatesector. build thecapacityofitspublicsectoradministrationand problems andLiberianow hasamajorchallengetore- generating largescaleemployment. industries sector, thereby diversifyingtheeconomyand important prioritytocreate linkageswiththeextractive force. viewsindustrial developmentasan Government nation’slabor the of 0.25% representing people, 2,785 the sectoriscurrently estimatedtoemployabout Many enterpriseswere destroyed duringthewarand plastic and rubber products.paints and varnishes, forthe goods of domestic market.Outputsincludecement,beverages, supply alimited produce that firms characterized is by afewlarge,generallymonopolistic,manufacturing sector industrial miniscule Liberia’s milieu. deliberately seekstodeliverdevelopmenttherural just apovertyreduction strategy, butagrowth planthat sector. Thesetrends makeitclearthatLiberianeedsnot the contributionandpaceofexpansioninsmallholder lumber, rubberandpalmoilwilltakeoff andfarout-pace At thatpoint,growth inminingandcommodityexportsof direct of foreign investment andwillsoonresume exportsonalargescale. inflow amassive from benefited have segments two first The 2011. in growth GDP percent 7 IMF estimatesfrom May2012indicateaboostto6or as wellthatfrom smallholderagriculture. Preliminary mining concessionsandcommercial plantationsectors of traditionalenginesgrowth, includingthatfrom the by anannualaverageof3percentlargelyduetorevival surpluses. Since2005,real GDPpercapitahasrisen fiscal accounts haveremained inbalanceorendedwithsmall overall The environment. macroeconomic stable kept aggregate policy demandconducivetomaintaininga fiscal operate to on thebasisofacashbudgetandthisdisciplinehas made was decision early An more inclusiveandgeneratemore jobsforLiberians. peace butthere isaneedforfuture growth tobecome The economyhasresponded wellsincetheonsetof Prospects inProductiveSectorsandTrade The StateoftheEconomyandGrowth xiii INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA xiv INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA of thatarea. The2010CWIQSurveyindicated country isparticularlylimited, increasing theisolation part of the and access to the isolated south-eastern domestic networkremains largelyunderdeveloped of short The quality. and falls coverage in both needs country’s network the road public Liberia’s Roads: functionality butmuchremains tobedone. war hasrestored partsoftheinfrastructure networkto networks. Rehabilitationworksincetheendof and thisismostsevere intheroads andpowersector infrastructure installationstoceasefunctionaltogether service quality. Destructionduringthewarcausedmany has causedprogressive degradationinassetsand inadequate to begin with, while insufficient maintenance in thepastmeantthatnetworkcoveragewas continent withSeychellesatthetop.Underinvestment established bytheAfDBcomparingallcountrieson quintile ofAfricancountriesonaninfrastructure index the sectors reviewed andthenationranksinbottom of all in state woeful a in is infrastructure Liberia’s The CurrentStatusofInfrastructure passage ofgoodthrough borders. bearing traffic as well as border post facilities to ease the need forpavedinter-regional roads thatcancarrycargo- to sub-region discover complementaritiesthrough trade.There isa the for difficult it made have limitations A third and very important reason is that infrastructure there is little marketable surplus presently produced. is theunder-developed stateofagriculture whereby Another majorconstrainttoexpandedregional trade transportation costs are an important consideration. border communitieswhere localtastesandsavingson re-exports occurs in the form of exchanges between that doestakesplaceinlocalproduce ormanufactured the region. Thelimitedamountofintra-regional trade exports toandsource imports from marketsoutside consumers ofmanufactures. Theytherefore tendtosell are allpredominantly producers ofrawmaterialsand production andconsumption structures. MRUcountries low volumesofintra-regional tradeisthesimilarityin enhanced withbetterinfrastructure. Onereason behind but itisclearthatinformaltradecarriesonandcouldbe than 2percent annuallyfor exportsaswellimports, less averaging statistics, formal of terms in insignificant and .ExchangeswithMRUneighborsappear oil tothewiderregion, including more distantSenegal is clearthatLiberiaservesashubforthesupplyofpalm informal cross-border tradeinfoodcommoditiesandit of regionalthe patterns trade, but there is evidence of security. Current statisticsdonotadequatelycapture high volumesofriceimportstoensure domesticfood greater momentumbutthe countrycontinuestorequire expected todeclinewhentheconcessionssectorgains in resumption of exports. The trade balance can be both ahighdegree ofreliance onimportsandthelag reflects this and negative currently is balance trade The trade,bothinthepastandatpresent.international Liberia hashadahighdegree ofopennessto lines, of which 80 percent was in Monrovia. By the end of network capacityofabout 10,000 telephoneexchange Telecommunications company, (LIBTELCO)hada ICT: Priortothewar, thepredecessor toLiberia by theformalsector. services isgreatest onthepoor, whoare badlyserved impact of inadequate drinking water and sanitation services are majorcausesofillnessandpoverty. The 2003. Pooraccesstosafedrinkingwaterandsanitation respectively, to17percent and7percent respectively in percent and27percent ofthepopulationin1990, water andadequate sanitation facilities fell from 37 water andsanitationservices.Accesstosafedrinking of delivery the undermined significantly conflict and war Water: Fewwaterandsanitationfacilitiessurvivedthe infrastructure project currently onthebooks. to beanationalemergencyandthehighestpriority GOLR nowconsidersthereconstruction ofMt.Coffee the all, Above improvements. efficiency operational and in July 2010isyieldinggoodprogress onrestoration works firm specialist sector power a with signed contract impediment toeconomicgrowth. Amanagement the Africancontinent,presenting Liberiawithasevere cost ofelectricitybothinthesubregion andpossiblyon Consequently, Liberiacurrently suffers withthehighest provided through costlyhighspeeddieselgeneration. customers asatDecember2011.Allofthisiscurrently and 22kVgridswithconnectionslimitedtoabout3100 grid andthedistributionconsistsofboth33kV partners. Transmission isbasedona66kVtransmission with emergencyprograms supportedbydevelopment provided topartsofMonrovia andthishasbeenachieved electricity grid.Approximately 6MWofpowerisnow 2005 stepshaveprogressively beentakentorestore the about 1%oftheMonrovia urbanpopulation.Yet, since zero, withLiberiaElectricityCompanyeffectively serving the populationtopubliclyprovided electricitywasclose electrical power. In mid-2011, Liberia’s rate of access by Saharan Africaandtheworld,especiallyinsphere of Liberia isvastlydisadvantagedrelative totherest ofsub- Power: Energyinfrastructure is one domain where grant financingfrompartners. development incremental of flow substantial a requires and ambitious Agenda forTransformation (thesecondPRS),thismaybe is toachievethisoutcomeduringthetime-frameof all countycapitalswithpavedroads. Whiletheaspiration connect to strives Plan Master TransportGovernment’s likely result inanexpansion ofmulti-userpavedroads. current concessioncontracts withminingcompanieswill lumber companiesandare mostlyun-paved,though TransAfrica Highway. Privateroads are builtbyrubberand the of segments road coastal two road Liberia’s extend effectively across themasisthecasewith disrepair. Someroads reach totheborders, butdonot severe in are they but bordersd’Ivoire Côte and Leone, to theinteriorandafewreach asfarGuinea,Sierra within 5 Km. Important paved roads connect Monrovia rural andurban-haveaccesstoanall-seasonroad that onlyabout45percent ofhouseholds-nationwide, appraises theattributes of fourdifferent growth strategies the domesticprivatesector. Inthis context,thestudy endogenous growth generatedbysmallholdersand transformation whichexpands thepotentialfor that thenationmust engineer aprofound structural Liberian population, the authorities have concluded Seeking afuture economythatismore inclusiveofthe Promising AreasforFutureGrowth The StateofPrivateandPublicSectorCapacity to closethedigitaldivide. priorities are focused on usheringinbroadband internet the sector have ushered in new investment and current of wireless technology. Policyreforms tode-monopolize 7,000 fixed lines and the country is now migrating to use the hostilities,thisexchangehaddeclinedtofewerthan (2016-2020) phasesforbothpublicandprivatesectors. 2011), transformation(2012-2015)andsustainability in thenationalwork-force, includingrecovery (2008- country through three time-boundphasesofexpansion capital developmentplanin2008tohelpmovethe persist. To redress this situation, GOLR adopted a human culture ofpatronage andnepotismwhichcontinuesto the is efficacy plagues which problem final the service, problems contributetoweaknessesinthepubliccivil these of all Whereas conflict. the in killed were others and professionals trained Liberia’s of many of exodus physically disabled.Moreover, “braindrain”causedthe work andinmanycasespsychologicallytraumatizedor opportunity foreducationleavingthemill-equipped The entire generationofwar-affected youthmissedits population Liberia’s of are dramaticallylow, particularlyinthecaseofwomen. majority the among skills and and civilservantshasbeen severely depleted.Literacy professionals educated of stock Liberia’s Meanwhile, more effectively it to allow support developmentoftheprivatesector. to system the in efficiency sector reform strategyfocusesonpromoting competitionand financial government’s The particular. in sector is a shortage of credit for SMEs and for the agricultural of financial intermediation, andlimitedtrustamongthepublic.There level alow instruments, financial limited by sector isnarrow andunderdeveloped, characterized generated by monopolistic state enterprises. The financial Owned Enterprisesectortoreduce thecrowding out Concurrently, furtherreforms are neededintheState facilities to make their outputs competitive with imports. bringing goodstomarketpluslowercostproduction roads andtransportinfrastructure toreduce thecostof businesses needbetter, cheapercommunications,better and educationalongwithbetterinfrastructure. Small segment requires favorablepoliciesandupgradedskills within theindigenoussegmentofsociety. TheMSME and domesticelitespoorlydevelopedcapacity sector, withpowerandprivilegeexertedbyforeign Liberia suffers from horizontalinequityinitsprivate

transformational benefits for the population and population the for economy atlarge. benefits transformational and oversight in ordergovernance to extract genuinely where Liberiashouldupgradetheintensityofpublic and Industrializationrepresent growth strategies It alsoconcludesthatNaturalResource Concessioning smallholder commercialization andSMEdevelopment. capacity inprioritytoinfrastructure projects thatfavor Liberia should allocate its scarce public investment in infrastructure. In summary, the study concludes that strategic choiceswithrespect topriorityinvestments framework and present recommendations about body of analytic work and the country’s forward-looking development strategy, buttotakestockoftheexisting Liberia’s be should what on proposal another yet with with eachgrowth strategy. Theintentisnottocomeup could arise or mitigate the potential risks associated which benefits inclusive the enhance to needed gaps andpolicy the priorityforstateattentiontogovernance the provision ofdirectly supportiveinfrastructure, and(2) sets ofpriorities—(1)thepriorityforstateinterventionin Each ofthesegrowth strategies isrankedagainsttwo development through Corridor DevelopmentStrategies. renewable resource developmentandEnablingSME trade, Concessioningoflandforrenewable andnon- of Smallholders through enhanced engagement in Special EconomicZones(SEZ),Commercialization The strategiesreviewed include Industrializationthrough of themes concern—stability, inclusion,growth andintegration. key the reflect that criteria of set a against achieved by means of a prioritized and clarified corridor corridor clarified and prioritized a of means by achieved with pavedroads butparticularlyencouragesthatthis be also endorsestheaspiration toconnectallcountycapitals rural energyschemesforthe more dispersedpopulation. It extended in an affordable manner, but through renewable centers where transmissionanddistributioncanbe extension forlargescaleconsumersandintourban power toconsumers.Thisshouldbedonethrough grid including thecriticalemphasisonproviding electrical articulated withintheAgendaforTransformation (AFT) substantially endorsestheinfrastructure priorities respect to the short term With time-frame, the study • toward country the take will which term medium • at progress which during period term short • frames: infrastructure actionplanforLiberiaagainstthree time- The study sets forth recommendations on a priority Plan forLiberia A Short, Medium and Long-Term Infrastructure

The longertermbeyond2030. the the its 2030goalpostofreaching middleincomestatus; towards transformation; must be made to set the country on a genuine path investing inpeople,institutionsandinfrastructure xv INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA xvi INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA (in conjunction with MRU neighbors) that would benefit would that neighbors) MRU with conjunction (in actively designing the optimal regional roads network At thesametime,authoritiesare encouragedtobegin embarking upon regional expansion and integration. national unity in order to preserve stability before acknowledges that it is indeed important to consolidate that servesanationalintegrationobjective,thestudy priorities are primarilyfocuseduponinfrastructure While theAFT“economictransformation”investment corridor toshiftamediumtermtimeframe. hinterland, andmayenablepublicinvestmentforthis the into ports these and Monrovia between flows traffic private investment in coastal shipping could increase fast trackduringAFTimplementation,complementary Buchanan, Greenville andHarperportsisplacedona pressing priority. Iftheplannedinvestmenttorefurbish of coastalshippingmaymakethiscorridoraless and Greenville ports,thoughtheemergingpresence The third isthecoastalcorridorbetween Buchanan Kru, River Gee and Grand Gedeh from their isolation. as toremove theremote countiesofMaryland,Grand is important for key roads to be paved in this region so to replace conflict drivers with economic engagement, it and purposes stability For D’Ivoire. Côte neighboring in sporadically beenre-ignited bylocaltensionsortroubles has and past the in conflict significant saw which area Fishtown- corridorintheSouthEast.Thisisan connecting Monrovia. The second is the Harper- and thus intothecentraltriangle corridor of Foya, and Zorzor better connectivity to an interventionwouldaimtogivetheup-countrytowns Leone andGuineaborder withinLofacountywhereby is thehighlypopulatedborder zonehuggingtheSierra first The attention. priority merit that corridors domestic the mainstream economy, there are atleastthree other further unitethecountryandbringisolatedareas into Bridge inanEast-West fashion alongthecoastline.To plus Buchanan-Monrovia-Tubmanburg-Mano River Monrovia-Ganta-Buchanan in anorth-south triangle the core roads gettingattention,notablythoselinking development schememusteventuallyexpandbeyond overall supervisionandabsorptivecapacity. Thecorridor in limitations be to likely is other the while financing of them allsimultaneously. Onekeyimpedimentisscarcity are tackledsinceitisunlikely thatLiberiacanachieve the sequencingbywhichcore andfeedercorridors Growth Strategy, there remains aneed to prioritize SME of review the in identified strategy.was growth As in itslongtermpathofendogenoustransformation. infrastructure strategy, Liberiacan prolong andsucceed industry servinglandlockedcountries.Bymeansofthis in robust regional tradeaswellthecargotransit a transformationalpathinvolvingthenationalpopulation transport corridors.ThesewillenableLiberiatosustain that favor physical integration within ECOWAS through would makeitpossibleforLiberiatofavorinvestments generation developmentforthemuchlongerterm.This energy market makes it possible to defer electricity reminds LiberiathatitsparticipationintheWest African these twoheavyinvestmentdemands,thestudy where affordability issuesstillforce atradeoff between immense hydro-power potential.Inthecircumstance and investment in power generation to tap the country’s road, airnetworksandtradefacilitationinstallations) investment intransportinfrastructure (includingrail, fact thatLiberiawillfaceastrategicchoicebetween the identifies study the term, long the to respect With the broader MRUandECOWAS tradingcommunities. Liberia toitsneighborsandserveintegrateitwithin that will, indeed, establish paved roads that connect transport networkduringthemediumtermtimeframe to make a second generation of investments in the attention duringAFT. Ifso,itthenbecomesimperative in thecoastalcorridormightdeservehigherpriority toroadshipping solutionsasanalternative transport may needtobeappliedandemphasisuponcoastal applied toroad networkreconstruction andextension reason, sometrade-offs intermsofqualitystandards theambitions of all associated withtheAFTplaninshortterm.Forthis achieve to difficult be may it that The studyalsoassessesaffordability andconcludes SEZ jobsand/orparticipateinmanagement. human capital and Liberian nationals are qualified to get is deferred toatimewhen Liberia hasrebuilt itsdomestic returns from botheconomic andstabilityperspectivesifit entrepreneurial class.SEZinvestmentmightyieldbetter nascent indigenousprivatesectoranddevelopan parks intheshorttermorder togiveaboostthe reoriented toestablishment oflower-intensity business portion ofpublicinvestmentcapitalmightbeproductively to themediumorlongerterm.Instead,equivalent SEZ investmenttojump-startcapital-intensiveindustry forward isthatLiberianauthorities considerdeferring funding becomeavailable.Anadditionalsuggestionput Liberia sothiscanbegivenpriorityshouldincremental eonzs ht iei lcs h cpct t finance to capacity the lacks Liberia that recognizes socio- new prosperous, inclusiveand stableLiberia.Thisplan country’s the economic developmentagenda ofbuildingamore supports that network it takesabroader view, envisioningan infrastructure Rather, conflict. the during destroyed was which that here doesnotmerely envisagethereplacement of argument foraninfrastructure plan,theplanproposed stability. Eventhoughtheneedforrebuilding isastrong essential forprogress onsocialcohesionandpolitical the broad participationofthepopulationwhichis and sustainedeconomicgrowth, characterizedby improved performancewillbecriticalforfuture strong in Chapters1and2,theyare theonesinwhich areas havebeenchosenbecause,asbecomesclear information andcommunicationtechnologies.These infrastructure areas --transport,energy, water, and The planproposed inthepresent report coversfour (ECOWAS). the EconomicCommunityofWest AfricanStates Bank aimstosupportregional integrationefforts within for West Africa,anevolvingstrategyunderwhichthe 2011-2015 (RISP) Strategy AfDB’sIntegration Regional countries are consistentwithandwillcontribute to the term future. ThisLiberiareport andthosefortheother contribute tonationalandregional stabilityforthelong to and encourage the selection of investments which can best state fragile a as status Liberia’s of cognizant infrastructure planning strategy which is explicitly integration. Asecondobjectiveistoformulatean from regional accrue can which benefits development and ECOWAS neighborsand,thereby, enhancethe is toenableLiberiadeepen its linkswithMRU One objectiveoftheinfrastructure planproposed here arenow and rebuilding theirnationsandeconomies. decades, recent over conflict domestic Bissau. Allfourofthesecountriesexperiencedviolent A fourthsimilarreport isunder preparation forGuinea members withLiberiaoftheManoRiverUnion(MRU). Sierra Leonerespectively, bothneighborsandfellow Similar reports have been prepared for Guinea and countries of the ECOWAS region, including Liberia. Bank Group (AfDB)inits program ofassistanceto instruments beingdeployedbytheAfricanDevelopment country’s the of part as reconstruction efforts. Thereport isoneofthe decades few next the over development planforLiberiathatcouldbeimplemented This report proposes anintegratedinfrastructure for thelongtermfuture. integration inamannerthatsecures peaceandstability in Liberiathatcontributestonationalandregional T measures tofosteraninclusive eraofgrowth infrastructure options and complementary he objectiveofthisr eport istopropose paying attentiontothe the authoritiestostudyyetanothertome.Itdoessoby to tradeoff valueaddedagainst theneedonpartof these issues.Againstthatbackground, thereport tries middle- andsenior-level capacityavailable toconfront (ii) theheavyburden already shouldered bythenational with variousaspectsoftheissuesinterest here; and dealing studies of number significant a of existence the today’s(i) of Liberia: realities two recognizes report The to inclusive,transformativegrowth. with thebestpropensity to relieve bindingconstraints infrastructure sectorsand those projects withinsectors The intentionistherefore tohelpGOLRselectthose to encouragedevelopmentpartnersdothesame. best toinvestitsownscarce investmentcapitaland willneedtomaketrade-offssuch, Government inhow As infrastructure. Liberia’s public in deficiencies many million peryear, theleveldesirabletoaddress the infrastructure investment on the scale of $500 to $600 conflict path for socio-economic development, thus pre- development, examining thenature asa andqualityofgovernance chosen socio-economic Liberia’s for path of conflict retrospective the against review ofcurrent social andeconomicperformance the Agenda for Transformation. The report situates a implements itsforthcoming povertyreduction strategy, asLiberia most emphasis bears what on findings out has progress much been madetoovercome that vulnerability and sets how remains, conflict towards It goesontoexaminetheextentwhichvulnerability that thecountrywitnessedoverperiod1989-2003. degenerated intotheextended,all-consumingviolence review ofwhatmadeLiberiavulnerabletodissentthat of thecurrent situation.Thechapterbeginswitha sets thecontextforwholereport through diagnostic The report is presented in three chapters. The first chapter accuracy. of magnitude on sizes and trends, but not pin-point viewed asapproximate, designedtoprovide orders In general, data presented within this report should be todo notpossible the samefortroubled periodfrom 1989to2003. was It data. post-conflict and pre able, inthisfashion,toconstructreasonably consistent together from various sources. Thereport has been for thisreport hasoftenhadtorely ondatapieced are alsoproblematic. Asaresult, theanalysisconducted historical much with statistical andotherinformation.Nationalaccountsdata away doing archives country’s of thereport. Thecivilwarcauseddestructionofthe Data problems havebeenachallengeinthepreparation warranted. completed studies toallow readers torefer to themif studies already completed;andbyidentifyingthe successful of findings the of use maximum making by (infrastructure-regional integration-growth andstability); integrated Introduction treatment ofissues xvii INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA xviii INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA transformative growth. relative potentialtoassistLiberiaachievegenuinely against whicheachisevaluatedtohighlighttheir criteria filter of set a applies strategy, and defines then or contemplated by the authorities. It describes each securing growth, eachof whichisbeingemployed strategiesfor It thenlooksatabasketofalternative Reduction Strategy, theAgendaforTransformation. reason itbeginswithanappraisal ofthesecondPoverty human, physicalandinstitutionalcapital.Forthis ambitious plansforaprofound transformationofits Liberia’s identify to ahead looks chapter second The highlighting thechallengesandpotentialthereof. cooperation existsbetweenLiberiaanditsneighbors, concludes byexaminingtheextenttowhichregional ( strategy reduction poverty first the of review a includes or hinderingtheperformanceofeachone.Thechapter in the policy, legal and regulatory environment enabling cost andavailabilityofservices,reforms orlackthereof It looksattheissues in eachsub-sector including the network. infrastructure country’s the of status current in the agenda, the chapter includes a review of the state goingforward. Inview oftheplaceinfrastructure core requirement forthenationtobecomeaneffective Lift Liberia Poverty ReductionStrategy2008-2011)and Figure 1MapofLiberiaDepictingRegionalLocationand15AdministrativeCounties strands ofgrowth. a meanstoaddress bindingconstraintstoinclusive and softaspectsofinfrastructure developmentas This partofthereview pays particularattentiontohard gains inhumanandinstitutionalacquisitionofcapacity. simply ontheeconomicfront, butwithsimultaneous deliver themosttransformationaltypesofgrowth—not to prioritizeastaterole in those investmentswhichcan short, mediumandlongtermtimehorizons,seeking on astrategicapproach to infrastructure planningfor infrastructure gap.Itthen formulates recommendations the filling in sector private the of contribution identifies likely the it context this Within weighed. be must offs an affordability analysis to set thecontext in whichtrade- under conditions of capital scarcity, the study conducts that Liberiamustrebuild and transformitseconomy under optimalconditions.Atthesametime,recognizing to evaluate the magnitude of Liberia’s infrastructure gap of investmentcapital.Thisisillustrativeinthatithelps infrastructure underasituation notconstrainedbylack ofdesirable roster complete a fairly identifies analysis regional nature aswellnationalconsiderations.The horizons. Thistakesintoaccountdevelopmentsofa spending overtheshort,mediumandlongerterm Liberia should establish priorities for infrastructure The third chaptersetsforth recommendations onhow CHAPTER 1 CHAPTER 1 Diagnostic of the current situation

Introduction

This chapter sets up the context on the issues of concern aspirations for the future, the roles of infrastructure and in the report. It starts with a reflection on what made Liberia enhanced regional cooperation therein and a recommended susceptible to conflict in the first place; ponders how the infrastructure investment plan in light of these objectives. country moved from susceptibility to conflict to experiencing an actual civil war lasting more than a decade; identifies the elements of fragility in the post-war environment 1.1 Issues of Fragility in Liberia and reflects on what might be done to begin curb the fragility. Given the fact that Liberia’s MRU neighbors were State fragility entered the development lexicon only themselves experiencing unsettled times and had actors recently when it became clear that as many as 20 who participated in the events in Liberia, the chapter also percent of nations have experienced at least 10 years of examines the regional dimension of the conflict.1 civil war since 1960 and that such conflicts create unique development challenges even when they are over2. The chapter continues with a review of how Liberia plans With that awareness, thoughts turned to the need to to put itself back together, in terms of bringing back identify those states explicitly to allow the development peace, national reconciliation and security and rekindling community to tailor its assistance to their special strong and broad-based economic growth taking stock of circumstances. Thus the label of fragile state began to lessons from the past. It reviews the social and economic be applied to states “with a weak capacity to carry out condition of the country and examines the performance the basic state functions of governing its population and of key productive sectors of the real economy, taking into territory and that lack the ability or the political will to account applicable governance and policy frameworks. It develop mutually constructive and reinforcing relations examines Liberia’s trade profile and reviews the nation’s with society”. As originator of the label in the context 3 prior and forthcoming poverty reduction strategies. It then of establishing the Fragile States Principles (FSP) , IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH evaluates the current condition of the country’s stock of the Organization for Economic Development (OECD) infrastructure, given the impact of the war on what was clarifies further that the fragile state typically faces 1 already an inadequate asset but which must now play a problems of lack of security, weak (political) governance, vital role in the renewal. limited administrative capacity, persistent humanitarian crises, social tensions, violence or the legacy of war. The chapter also reviews the current state of Liberia’s Moreover, – once there has been conflict, the probability cooperation with its neighbors in confronting common of remaining fragile for an extended duration is extremely problems, and promoting trade and exchange and high, leading some scholars to assert that Africa’s fragile investing in regional infrastructure. Not only are these critical states seem to be caught in a “fragility trap”.4 to the pursuit of economic progress and social cohesion, but regional cooperation and integration can enhance As a country that is putting itself back together after 14 Liberia’s prospects for achieving stability. Enduring peace years of civil war, Liberia faces most of the problems in Liberia depends both on domestic progress and upon characteristic of fragile states. There is nothing regional stability; the quest for enduring stability cannot derogatory associated with the label; instead, the Fourth be achieved in isolation but must consider the impact of High-Level Forum on Aid Effectiveness (held in Busan, neighboring states. Regional infrastructure has a valuable Korea in November 2011) emphasized the importance role to play in mitigating many of the legacies of conflict. for development partners to recognize the special needs The comprehensive review of the status quo in chapter of fragile states, which resulted in adoption of a “New one sets the stage for subsequent chapters, which are Deal for Engagement with Fragile States”.5 Recognizing concerned with an examination of Liberia’s reasonable itself as such a country, Liberia has recently volunteered

1 This report comes after the 1989/2003 conflict. In reality, Liberia has seen many internal/civil wars since 1821. The one immediately prior to that of 1989/2003 occurred in the 1930s. For an account, see Levitt, J. The Evolution of Deadly Conflict in Liberia: From “Paternaltarianism” to State Collapse, Carolina Academic Press, Durham, North Carolina, 2005. 2 Blattman, C. and Edward Miguel, Journal of Economic Literature, Volume 47, No. 1, March 2010, p. 4. 3 An early operational enunciation appears in the OECD’s Principles for Good International Engagement in Fragile States (known as Fragile States Principles) adopted by the Council of Ministers in 2007. 4 “Furthermore, fragility seems to be persistent: the probability that an African fragile state in 2001 remained fragile in 2009 was 0.95.” Stated by Andrimihaja, Cinyabuguma and Devarajan, in Avoiding the Fragility Trap in Africa. Policy Research Paper 5884, The , November 2011, page 1. 5 The HLF Partner Country Position Paper specifies: “Fragile states need to move from fragility to agility. Capacity building here refers to state capacity building to enable the state to carry out essential functions. The challenge is more daunting and requires coordinated global efforts to address peace-building, state-building and humanitarian assistance in addition to various forms of development assistance. The impressive progress and political leadership demonstrated by the g7+ for example call for greater trust in their governments and shared risk management. It also calls for negotiating a package of transparent short and longer term assistance to support initiatives unlikely to be completed in the short run.” to serve as one of five countries responsible for piloting what to replace it with. In the event, they introduced their implementation of the New Deal. The New Deal aims to own style of governance without institutional restraints, put the voice of fragile states and their people at the heart which started Liberia toward decline. But the roots of of their own country-led state building solutions with the conflict were much deeper and some would say that the support of their international partners. Nevertheless, it is journey towards conflict started much earlier and that the perhaps sensible to treat fragility not as an inherent and events of April 1980 merely accentuated the descent. enduring characteristic of particular nations but rather as a state of affairs that is a product of history, which Injustice met with resistance early on. One instance would hopefully disappear once the legacies of the was the opposition to independence—perhaps more conflict recede and vulnerabilities to potential recurrence correctly, the timing of independence —as a rejection of are overcome. In view of this, a thoughtful approach to ’s unhealthy domination of the other observing the FSP in Liberia should start with better counties6. The declaration of independence followed a understanding the country’s particular form of fragility: flawed Constitutional Convention during which violence the backdrop to the violence; the economic final straw; in two of the three component counties comprising the and the legacies of the actual conflict. commonwealth prevented eligible voters from going to the polls. In , widespread violence prevented all eligible voters from voting while in , only some persons voted. Domination of 1.1.1 Political Backdrop to the Liberian the other counties by Montserrado County, which drew Conflict resistance at independence, continues through today and is evident in extreme inequality between relatively Exclusion and Rancor from the Early Days wealthy Montserrado and fourteen other poorer counties which constitute Liberia. More accurately, wealthy, urban Liberia’s conflict has its roots in the exclusion politics and Monrovia still dominates very poor rural Liberia. associated economic policies of unequal opportunity practiced by the repatriated ex-slaves who founded Successive ruling elites of the state were never fully sure the nation. Deposited on the shores of what became of their identity as Africans or non-Africans appointed by Liberia by the American Colonization Society (ACS) in Providence to redeem Africans. The goals of the ACS did 1820-22, the settlers constituted themselves into a self- indeed include “christianizing” and “civilizing” the natives. governing commonwealth of three counties in 1839, One result was that the repatriates, who had been

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH Montserrado, Grand Bassa, and Sinoe, and went on discriminated against in North America and presumed to declare a sovereign, independent republic in 1847. inferior to whites and the illegitimate light-skinned 2 The constitution adopted at independence was clear offspring of slave masters, created in their turn a virtual on the settlers’ identity, declaring in its preamble: “we caste system in the new territory. The culture evolved a the people of the Republic of Liberia were originally the settler democracy in which, up to 1870s, the mulattoes inhabitants of the of North America”. The were the ruling class, the darker-skinned repatriates were label of Americo-Liberians was fitting and the settlers essentially second class citizens and natives were even maintained their separate identity, later converted into a lower. Power shifted from mulattoes to darker skinned rule of caprice and privilege over the original inhabitants. repatriates in 1876 and they continue to figure among the elite until today. The Americo-Liberians expanded their territory by taking land from the inhabitants of the hinterland in With the elite behaving like colonial rulers, they not only various ways. Some 60 years after the declaration of lacked affinity with the territory and with the majority of independence, the country was “unified” by “granting residents, but despised both. This peculiarity influenced citizenship” to the inhabitants of the hinterland, some growth and resource distribution policies, and of service of whose ancestors lived in the area as far back as the delivery. This black colonialism partly explains the “deadly 12th century. The system of political governance was conflicts” fought between the natives and the repatriates modeled on that of America but its essence was more to between 1822 and 20037. Depending on how and who protect the repatriates from undefined fears than to foster is counting and classifying them, there may have been the development of an integrated nation. As a result, the nearly 90 “deadly conflicts” between 1822 and 2003. natives remained essentially excluded from the political Liberia, unstable since the Americans landed, has been process during the first century and a half. When, in April unable to achieve its founding ideals: secure the public 1980, 17 non-commissioned officers with native roots welfare and protect the citizens it serves. Having failed to took political power by force, they were certain they establish justice, domestic peace was not ensured and wanted to destroy an unjust settler regime but unsure so the state could not promote the general welfare.

6 Huberich, Charles H. The Political and Legislative , New York Central Book Co., 1947 7 As elsewhere in Africa at the time, the native inhabitants also fought among themselves. Exclusion was accompanied by repression of those to restrict the political rights and opportunities of the outside the circle ”of privilege. Political rule was highly others. Real and perceived enemies were singled out personalized, and successive “big men” ruled with limited and destroyed. The occasional revolts by groups of the institutional restraint. Over time, rules and regulations indigenous population, such as the Kru rebellion of 1915 were evolved, endowing the State with the appearance against the hut tax, were put down harshly. of a Western-style democracy. A client-patron system persisted behind this façade, with privileged but “smaller Given the fact that politics is also about the distribution men” serving the interests of the “big men”. The lot of scarce resources, an economic system developed wielded the law and coercive elements of the State that served the interest of the privileged few.

Box 1 Political Milestones in Liberia’s Evolution

• 1820-1822: Liberated slaves deposited on Liberian soil by American Colonization Society. • 1839: Self-governing Commonwealth established in 3 counties. • 1847: Declaration of sovereign independence of Liberia & adoption of a National Constitution. • 1907: “Unification” announced through granting of citizenship to native inhabitants of hinterland. • 1915: Kru Rebellion against hut tax. • 1944-1971: president till death. • 1971-80: Regime of President . • 1979: Rice Riots put down with violence. • 1980: seizes power in military coup after 133 years of Americo-Liberian domination. Tolbert & 26 supporters murdered followed by public execution of 13 True Whig leaders. Doe forms People’s Redemption Council to govern. • 1985: new constitution adopted, fraudulent elections install Doe as president, series of 5 counter-coup attempts begins; internal repression and executions begin along native ethnic lines. • 1989: Period recognized as bona fide civil war begins with Charles Taylor assembling National Patriotic Front & leading rebel insurrection. • 1990: Doe assassinated by splinter rebel group. • 1991-1997 rebels split into factions, bloody civil war rages with interim gov’ts controlling only Monrovia. ECOWAS mounts military task force followed by UNMIL. Peace deal reached, 1995. • 1997: Charles Taylor elected President, starts using ‘blood diamonds’ & timber exports to aid & abet RUF INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH rebel movement in Sierra Leone. • 1999: Armed insurrection re-commences by Liberians for Reconciliation & Democracy in NW & later by 3 Movement for Democracy in SE. • June 2003: Women of Liberia Mass Action for Peace persuade Taylor to join Ghana peace talks. • 2003: Peace Deal, Resignation of Charles Taylor. • 2005: Election of Ellen Johnson-Sirleaf, Africa’s first woman president. Re-election in 2011.

It was linked in part with the need to maintain the development strategy deployed in the pre-conflict era identity of the repatriates as an aristocracy entitled to helps to further understand the drivers of conflict. the lifestyle and other social habits of the aristocracy they knew in the Old South of the USA. The ideal of such a lifestyle included the view of the privileged ones as a leisurely class of landowners living off the toil of the 1.1.2 Economic Backdrop to the Liberian less privileged. The economic policies and governance Conflict structures favored the exploitation of natural resources using foreign capital, and the misuse of public funds. In its purest form, Liberia’s 20th century path for socio- Thus was created a divided nation, with political and economic development was a matter of pragmatism. economic abuse by the ruling class sowing the seeds of At the bottom of it was the sensible decision to create instability at its core from the earliest days. economic growth through use of the country’s abundant natural resources of mineral deposits, forestry, and Many of the characteristics of a fragile state were present. agricultural items favored by geography. The approach was There was horizontal inequality alongside generalized equally pragmatic: the use of foreign private capital and poverty for the many. The politics of exclusion created technology to produce output, with sales made through the severe identity fragmentation, with Americo-Liberians on producers’ networks to assured markets for raw materials one side and the indigenous people on the other. The latter that appeared in the decades following the Second World were further keenly aware of their sub-identities as tribes War. Liberia’s approach followed the liberalism and belief in or ethnic groups. There was a crisis of state legitimacy private capital that continued to be championed in Western and authority, with frequent recourse to repression. State capitalist democracies after WWII. This was in contrast to predation was widespread. A review of Liberia’s economic the activism of the developmental state favored by the majority of the newly-independent low-income countries. There was limited human development with education To the latter group, the Great Depression showed the and health services remaining below sub-Saharan failure of extreme laissez-faire policies, and the choice averages. The same applied to institutional development, of State-led development had the extra appeal of being as the neo-patrimonial practices preferred to run public a complement to the political self-determination recently policy with large room for personal discretion by those won. Liberia, without such a transition, must have found in authority rather than by established and transparent persuasion in the strong support for private international processes. One result was that income distribution capital as a vehicle for development of natural resources became highly skewed (reflected in a Gini coefficient of around the world and under a liberal-access policy, as 0.60 in the 1970s) as the enclave approach of resource- proposed by US political leadership. These considerations led economic development made its full impact. Another led to the decision to use multinational private capital (and was the high vulnerability of the nation to movements technology in the case of iron ore) to exploit the country’s in the prices of a handful of industrial raw materials, natural resources for export markets. exhibited in performance of the economy in the 1970s as a result of its tie to iron ore. When iron ore prices fell, the Under the label of an Open Door Policy, foreign weight of iron ore in GDP fell from about an average of a companies were granted concessions for the production third in 1971-74 to one-sixth in 1979-81, as portrayed in of iron ore, rubber, forest products, and oil palm, for Table 1.1 below. export. Investments were made by these concessions and capital formation ran as high as 25 percent on Table 1.1 average during the period 1950-60. Here too, there was Liberia – Composition of GDP by Sectors, 1971-81 pragmatism – that of using economic policy to court (Current prices, Percent) needed political support. The generous concession granted to Firestone in 1926 is thought to have resulted GDP at factor cost 1971-74 1975-78 1979-81 in part from the view that “the presence of an important 100.0 100.0 100.0 American investor would guarantee American protection Externally Oriented 49.3 43.8 36.2 of Liberia’s sovereignty and territory from British and Iron Ore 31.6 27.9 15.7 French encroachments”. These concession enterprises Rubber 8.5 6.4 7.1 flourished in the commodity boom conditions following Forest Products 2.6 3.7 4.9 the Second World War, and Liberia’s GDP growth rose Other 7.5 5.7 8.5 rapidly. From 1960 through 1974, nominal GDP rose Domestically Oriented 50.8 56.2 63.8 Manufacturing 5.8 7.6 10.2

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH 270% in nominal terms, achieving 5.4% average annual growth over the 1963-72 decade.8 Even with large factor Construction 4.4 6.6 5.9 4 incomes paid to reward foreign capital and management, Government Services 7.8 10.1 13.9 Other Services 32.7 31.9 33.1 the Gross National Product (GNP) rose sufficiently to take the country into the ranks of the middle- income countries Source: World Bank, Liberia Sources, and Author’s Computation by the mid-1970s. Meanwhile, some employment was offered to the local population, but it was for low-skilled labor and remunerated with low wages. 1.1.3 An Economic Shock and the Unraveling This style of economic governance left largely untouched the twin concerns of distributing benefits from resource- Deteriorating economic conditions in the early 1970s based growth and transformation of the economy and unsuccessful political action began the process of to introduce a broader base of activity. Infrastructure violent change. The new president, William Tolbert, who development was limited, particularly with respect to acceded to power in 1971, was less resolute in the use penetrating the country with networks and services, as the of repression against dissent than his predecessors. He enterprises developed road and single-use rail networks did actually introduce some “managed” opening of the especially to serve their own operations. Accompanying political space, by controlled opening of the ruling True public investment by government remained modest and Whig Party to younger members and the granting of the rural milieu remained in isolation, segregated and permission for the equally controlled emergence of an with poor connections to the capital. The enclave nature additional political party. These steps were being taken at of concession operations meant that linkages with the a time when global economic shocks reached Liberia in local economy were limited. the form of high service costs on costly variable-interest debt and a slump in commodity prices. Together with As a result, output growth fueled by natural resources the effect of expenditures on a lavish 1979 Organization did not engender domestic economic transformation of African States (OAU) Heads of State Summit, these or Liberia’s capacity for endogenous growth. Natural circumstances produced sharp fiscal pressures that resource exploitation under the Open Door strategy required austerity measures. One such measure, a did not pull other sectors along, not even food crop decision in April 1979 to reduce the subsidy on rice and agriculture, which occupies the majority of the population. allow its price to rise started the violence.

8 Liberia GDP Growth (Annual %), Africa Economic Indicators 2010. The World Bank, Washington D.C. Figure 2 Liberia’s Conflict and Economic Decline

Per Capita GDP over 5 Decades $900,00 $800,00 Doe-­‐led Coup Taylor $700,00 elected $600,00 Tubman President $500,00 era Phase 1 civil war by Begin $400,00 Tolbert Taylor peace & era $300,00 Phase 2 recovery Constant US$, 2000 US$, Constant civil $200,00 war $100,00 $0,00 1965 1967 1969 1971 1975 1977 1979 1981 1985 1987 1989 1991 1995 1997 1999 2001 2005 2007 2009 2011 Year 1963 1973 1983 1993 2003

Source: African Development Indicators, AfDB Enhancement

Source: African Development Indicators, AfDB Enhancement

The indigenously-led movement challenging the performing the functions of the state and fighting poverty established order found two pieces of ammunition in had completely disappeared. During the Doe era and the turn of events with which they could push harder throughout the period of struggle between Taylor and for change. First, they could point at the injustice of a the other warlords, identity politics reached new heights. higher burden on poor households as a result of the Doe started favoring people of his Krahn ethnic group, price increase. Second, they could underscore the who took extreme violence to members of other Gio and point that, with price equality between imported and Mandingo ethnic groups for their respective support of

locally-produced rice, ordinary households were going Taylor and Alhaji Kromah. These reinforced divisions IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH to make an income transfer to the largest local rice among a nation’s people and constitute a major burden farmer, the President of the Republic. Leaders of the on Liberia’s future. 5 dissent movement, who hitherto had acted in scattered ways, now rallied around a cause of political exclusion By the time a democratically elected government took and growing poverty for the many, and called for mass power in 2006, some 250,000 people had died and protest against the rice price increase9. The protests a million were displaced internally and as refugees; turned to riots, and the President ordered that it be infrastructure had been destroyed. Figure 2 reveals that quelled by force. A number of the protesters were shot livelihoods had been deeply disrupted, bringing gross dead. Tension grew further when the leaders of the domestic product down from some US$800 per head in movement were taken into custody, with a promise 1971 to about US$150 in 2003 when the comprehensive to the nation that they would be tried on charges of peace agreement was reached in .10 The new treason, an offence punishable by death. To head this government has been engaged in vigorous efforts to put off, a group of 17 enlisted men with indigenous roots the nation and economy back together from the abyss seized power on April 12, 1980, two days before the into which it had fallen. trials were to begin. Led by Master Sargent Samuel Doe, the men sang about the natives’ eyes being finally opened and promised redemption and progress. In the end, they proved unable to improve political governance 1.1.4 The Liberian Conflict and Regional or change economic fortunes. Conditions rather Spillovers deteriorated rapidly, setting Liberia on its downhill path. The events in Liberia fed into, and also received impetus The decline accelerated when in 1989 Charles Taylor from events in the Ivory Coast, Sierra Leone and Guinea. started a rebellion and eventually fought his way to The failure to evolve political processes capable of dominance by 1996. There was death and destruction arbitrating political contests was a common feature to all as warlords fought the control of the state and resources four countries. So was the use of political repression to of the nation. By the time Charles Taylor was eased stultify political competition. The countries are also richly out, any hope of a responsible government capable of endowed with natural resources, including deposits of

9 For a good account on the progression, see Press, Robert M., “Candles in the Wind: Resisting Repression in Liberia (1979-2003), Africa Today, Vol. 55, No.3, Spring 2009, pp. 3-22. 10 Gross Development Product per capita in The World Bank, African Development Indicators, 2010 alluvial diamonds and gold both of which are winnable rebel army in the northeastern border area of Nimba under unorganized conditions. Once dissent broke out County through which Charles Taylor entered Liberia. into conflict, these resources attracted external actors Charles Taylor considered President Conte’s move as a interested in trading in products and equipment that hostile act. To pay Conte back, Taylor allowed political fueled the war. Finally, with porous borders, cutting opponents of the Guinea regime room to organize through the same ethnic groups that used to be together, themselves on Liberian territory. Taylor’s opponents disorder was shared fluidly across the boundaries of the were allowed to do the same on Guinean territory. four neighbors. From attacks on border villages, both sides managed to extend the fighting deep into the territory of the The Ivory Coast became embroiled in the events in other, firming up thereby the regional dimension of the Liberia when it took sides early on, for its own reasons. conflict. The country’s long-serving President, Felix Houphouet- Boigny, had a familial relationship with President Tolbert: the Ivorian President’s step daughter was married to Adolphus, President Tolbert’s oldest son. Following 1.1.5 Vulnerability to Determinants the 1980 coup, soldiers of the Doe regime forcibly of Conflict entered the French Embassy in Monrovia to remove the junior Tolbert and had him killed. This episode Like any country that has experienced violent conflict, was a factor in the Ivorian support for Charles Taylor, Liberia will remain vulnerable to a possible return of civil including assistance that gave Taylor’s Libyan-trained war as long as the conditions remain that gave rise to soldiers access to Liberia from Ivorian territory. Other conflict in the first place. Generally, dissent builds up assistance to Taylor included diplomatic backing, such when government is unable to meet its population’s as Ivory Coast’s support for the regime in the early expectations about the critical functions of the state, stages of the 1989/2003 conflict from its position on manage changes in those expectations through the the United Nations’ Security Council. political process, or generally keep societal expectations and state capacity in equilibrium11 . Various think-tanks Sierra Leone had a beginning like that of Liberia. and research organizations (as footnoted in the following From the establishment of a colony to resettle ex- paragraphs) have identified some of the factors that slaves, it went on to become a nation governed cause or are associated with these failures. Among by ‘big men” under the neo-patrimonial logic and those, the following are most likely to threaten Liberia’s

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH incapable of meeting the basic obligations of state stability: growth without development, weak state towards the broad citizenry. The state weakened legitimacy, trouble in the region, unemployed youth, 6 further when the economic crisis of the 1970s and gun and drug culture and severe identity fragmentation. the unsuccessful policy reform efforts of the 1980s Two additional flashpoints are food/rice insecurity and worsened matters. Dissenters found a reason to uncertainties about land titles. Some of these factors challenge the government, and the Revolutionary were present in Liberia prior to the 1989/2003 conflict, United Front (RUF) took up arms against the while others have been added or exacerbated as a regime in March 1991. consequence of the conflict.

The RUF entered Sierra Leone from Liberia that month, Growth without Development going through territory controlled by Charles Taylor, signaling clearly that the conflict in Liberia would have The concept of growth without development was coined an active regional spillover. Over time, Taylor’s influence by Robert Clower and a team of economists from in Sierra Leone grew to the point of making it attractive Northwestern University when they conducted a survey for the RUF to establish a base in Monrovia for their and wrote a seminal book on the state of the Liberian operations, including for the trading of diamonds and economy in 1966.12 The authors found that Liberia’s transshipment of arms destined for Sierra Leone. These economy offered private foreign capital “one of the most factors kept the war supplied on both sides with financial attractive investment climates to be found in the under- resources and military materiel. developed world” with a high rate of growth derived largely from concession-based production of rubber and For its part, Guinea became embroiled in the Liberian iron-ore, surpassing that of almost every other country conflict when its then head of state, President Lansana in the world and yielding a per capita income of $123 by Conte, joined other heads of state to chair a regional 196013. Despite this, the authors concluded that “Liberia intervention force that was designed to try to stop the is growing but not developing”. While the country was violence from engulfing the region. He was impelled achieving sustained increases in the output of goods to action because of the influx into Guinea of some and services, this ‘progress’ was not accompanied 500,000 refugees fleeing the initial action of Taylor’s by technological advancement, institutional evolution,

11 OECD, op cit. 12 CLower, Dalton, Harwitz & Walters, Growth without Development: An Economic Survey of Liberia, Northwestern University Press, 1966, pages 23 and 118. 13 This is equal to $644 in constant (2000) dollars. expansion of human capital and a wider distribution growth during recovery, it will remain a constant challenge of income. In short, massive FDI-led growth was not to ensure that rents from the natural resource economy significantly improving welfare within the rural economy. are extracted for public good instead of private greed. One hard-won lesson brought home by the civil war On the other hand, violence has been a more common is that households engaged in subsistence livelihoods form of societal behavior than dialogue so political leaders gained little benefit from Open-Door growth, leading must nurture confidence in democratic institutions and to the conclusion that broader linkages between procedures among the population. A start has been the concession enclaves and rural economy are essential made with the launching of a “Palava hut” campaign to for reducing poverty. encourage the airing of grievances in settings throughout the country in the first 150 days of the second Johnson- Recognition of the risks inherent in a development strategy Sirleaf regime. based solely on natural resources, especially when developed through FDI in an enclave-oriented manner, Concurrently, there is a need to continue rooting out the should help authorities avoid mishaps while formulating dominant political culture of patronage whereby the state policies for a reconstructed Liberia. The case of Nigeria bureaucracy became laced over time with loyal partisans, is a case in point. Oil was discovered in the 1950s. family members and friends of the elite, thereby weakening Throughout the 1950s-60s, the economy had a strong its capacity and efficiency. Building state legitimacy agricultural base, offering employment to a large share will entail deep-seated reform of the inequitable socio- of the population. Inequality was therefore low, the top political and economic system that brought the country 2 percent of the income scale earning about 17 percent to its knees and will require that the state be seen to be of the total income. The productive base of the economy capably delivering on standard state functions of providing narrowed subsequently, with oil being the main product security, justice and other public services. According to as the vitality of other sectors dried up. Three decades the “Liberia Retrospective Analysis” prepared by national later, in 2000, the top 2 percent of the scale had about scholars for the High-Level National Economic Forum 55 percent of the income. Other cases, good and bad, held in September 2011, national reconciliation is yet to lend credence to the emerging generalization that “… come, and “with recommendations of the country’s Truth countries with a large share of (narrowly-based) primary and Reconciliation Commission still a matter of national exports in their GNP have bad growth records and high debate, many victims of the war are yet to find closure. inequality, especially if quality of institutions, rule of law, In addition, vestiges of old rebel command structures are and corruption are bad”. Compared with Nigeria, Liberia still in place in many parts of the country. Given that many

had a higher product and income concentration and for former combatants are unemployed and dependent on IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH much longer. In low-income economies that produce former commanders for basic livelihoods and mentoring, traditional goods, it is the ability to discover and engage these structures could become fertile and recruiting 7 in non-traditional activities that provoke transformation. ground for crime and violence.” This is how left behind rice and sugar in the 1950s and went on to become industrialized. The same was New relationships must be established between the the case with , which exported practically executive, legislative and judicial branches, and the no manufactures even in the early 1960s. More recently, court system needs reform from top to bottom. These it was the process through which Chile went from are issues requiring legislative action, and the fledgling being principally a producer of copper to becoming an democracy, which deserves to be protected for its own economy producing and exporting an array of goods, sake, thus leaves room for actors from the past to retard including manufactures. The job of engineering such a progress. Movement has been slow on important law and transformation remains a key priority as Liberia re-creates order issues that would begin to repair Liberia’s tattered its future. state legitimacy and, while there may be disagreements about how to proceed on these planks of justice, there is Weak State Legitimacy and problems also a dilemma which goes to the heart of the conditions of enduring fragility. The challenge is to maintain a balance of Patronage and Corruption between the imperative of peace building against the desire to avoid appearing to condone impunity. In the This feature of the state has been described as “institutional face of inaction, there is a risk that parties favoring either instability undermining the predictability, transparency side of this delicate balance would consider the state and accountability of public decision-making processes feeble and its legitimacy contestable. and the provision of security and social services to the population”14. At first glance, it would seem that the current Unemployed Urbanized Youth and Criminal government and others to follow have the opportunity to endow the new Liberia with state legitimacy since they are Distractions starting on a clean slate, the conflict supposedly having swept away the old structures. Yet, old habits die hard. Virtually all children and youth in Liberia above the age On one hand, given an emphasis on resourced-based of 10 were traumatized in some way by the 14 year

14 Andersen and Engberg-Pedersen, 2008. civil war. Many are ex-combatants who have yet to serving as a corridor for the trade in guns and drugs reintegrate fully into society. Only about 3% express an Liberia could itself develop an internal market in these interest in engaging in agriculture and they are reluctant items, along with their socially destabilizing effects. In to return to the rural milieu which was originally their addition, unemployment and poverty can lead Liberian home.15 Consequently, the number of the unemployed nationals to participate as hired guns in disputes in youth has risen in Monrovia and the smaller urban areas, neighboring countries17. The recent experience of conflict representing a further element of potential instability. The in the Ivory Coast lends credence to this point. Given youth could become dissatisfied with their lot, blame the their past experience with fighting a war in their own government for their failure to find jobs, and be tempted country, a number of Liberians were ready to fight outside to resort to violence and crime. The urban areas of their country as mercenaries. They were duly hired to Liberia, especially Monrovia, are home to an estimated participate in the fighting, and several hundred lost their one-third of the national population. Portions of the lives in the process. urban population gravitated to their current location in the war years to escape what they saw as the relatively Conflicts over Land greater insecurity of the rural areas. Others followed when peace was on the way. Their motive was the search for a Land and property disputes are a key threat to peace livelihood in the modern sector of the economy. and stability in Liberia. This was verified through a conflict mapping survey conducted by the Truth and Reconciliation Children 14 and younger constitute slightly more than Commission in October 2008. Violent land confrontations 47% of the population and “youth”-- officially defined have been occurring since the signing of the comprehensive as those between ages 15 and 35, comprise about peace agreement and these have resulted in several burned 28% of the population, meaning that about 75% of villages and intensified social cleavages. In the absence Liberia’s population is under the age of 35. Official data of clear systems of land tenure and arbitration systems fails meaningfully to capture the size of the unemployed to handle disputes, conflicts in this arena remain a tinder from this sub-population. Estimates put the number of box for future problem. The Eighteenth Report of the UN unemployed at 4.7 percent of the active population but Secretary-General states: “If not resolved, such tensions this fails to capture the true situation. 16 Our estimate is and conflicts could be manipulated for political and other that around 340,000 members of the youth population motives, particularly in the period leading up to the 2011 live in urban areas in precarious conditions. This leaves elections.” The International Crisis Group calls it “the most out the population sub-group made up of domestic explosive issue in Liberia today. Land tenure issues are

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH servants, and those working in low-capital enterprises further examined in Section 1.2.6 on Liberia’s renewable and often depending for financing on informal credit resources. However, ownership and usage rights are not 8 and family income transfers. All told, these are material the only simmering threat. Also looming is the threat of segments of the population that can be restive and quick environmental degradation brought on by mono-cropping, to question the legitimacy of a government that cannot slash and burn practices that deplete soil fertility and over- find them jobs and a livelihood. Some of these members extraction of timber stands. These environmental threats may have belonged to the militia, with experience of deserve equal attention by policy makers in the coming using violence, or the threat of it, to extract what they years or current practices combined with climate change want from others. For this reason idle youth are a could seriously contribute to resource and economic worrisome source of continued vulnerability. impoverishment in Liberia.

In an environment of deep poverty coupled with high Troubled Neighborhood income concentration and few jobs for youth, criminal activity looks tempting to many who lived outside the Liberia is located in a neighborhood that is extremely law during an era of conflict. The one criminal activity poor materially and suffers from very low government uppermost on most people’s minds is the narcotic drug effectiveness. The four fragile states of Liberia, Guinea, trade. The accumulating evidence from arrests of drug Guinea-Bissau, and Sierra Leone had an average per couriers offshore in West Africa suggest that Liberia can capita income of US$280 in 2008, compared with be an attractive corridor for those seeking to transship US$796 for sub-Saharan Africa (with drugs to Europe. As happens in other places, beyond excluded). It is also a neighborhood with failures of

15 Wood, Walker and Allemano, “USAID Liberia Youth Fragility Assessment,” April 2009. 16 This apparent underestimate of the real level arises from the definition used by the International Labor Organization (ILO) for the unemployed -- anyone who is actively looking for a job and has not found one. In reality, there are a large number of Liberians in the active-age group who would not show in the numbers of the unemployed because they are among the so-called “discouraged workers” who are no longer actively seeking work. Other may not have been counted among the unemployed although they are underemployed, working in casual service sector employment without regular remuneration. To attempt such an estimate, we rely on the literature on employment in urban populations. These studies have gone some distance and do provide some guideposts on thinking through how unemployment affects various classes, especially in less than boom conditions. In those circumstances, the lowest slab of the urban labor force, some 5-15 percent of the total, experiences open unemployment. They are usually people between illiteracy and primary school education. Next to these is a section of the labor force, usually numbering about 20-25 percent of the total. They are also illiterate or with primary school education, and are engaged in handicrafts, street trade and service, casual construction work, or in “underground” occupations. These two slabs of the labor force have been referred to as the survival sector; they receive income intermittently or not at all. Together, these two groups constitute some 25-40 percent of the urban labor force. If we follow LISGIS and assume that about half the active population of 1.7 million now lives in the urban areas, and our reasoning holds, that means 25-40 percent of 0.85 million members of the urban labor force are in the hustling or survival sector. That means around 340,000 members of the active population live in urban areas in precarious conditions. 17 Reuters Africa reported on January 1, 2011 that “Ouattara’s camp has accused Gbagbo of employing hundreds of Liberian mercenaries in deadly raids on pro- Ouattara neighourhoods. Gbagbo’s camp denies the charge, but diplomats and security sources say there may be up 1,000 on his payroll.” political governance that place the countries in the State proclamation of equal respect for all religions in middle of the 12 nations with the worst government the country, serious atrocities were committed during effectiveness on the continent. The conditions of extreme the conflict, leading many Muslims to depart as refugees poverty and state incapability have stirred up the conflict during the conflict. Upon returning to Liberia, many have which each of them experienced. developed a heightened sense of persecution when, for instance, their ownership of land in Lofa and Nimba The Ivory Coast, a neighbor that joined the MRU much counties is challenged as a result of their perceived later, is much wealthier in per capita terms (US$980 in “foreign” identity. Ethnic tensions thus persist between 2008) than the rest. Yet, it had its own political failures that returning Mandingo, Dan and Mano in , simmered over the years and boiled over in 2011 in violent as well as between Mandingo and Lorma in Lofa and conflict with a ferocity that surprised both the Ivoirians and Bong counties. Conflict between the Krahn and Dan foreign partners alike. Under these circumstances and communities also persists in the north. 19 given the porosity of borders, Liberia remains vulnerable to being infected by future strife spilling over from any of The intensified fragmentation of identity and the move these neighbors.18 away from the concept of nationality as a unifying force that generates pride and a sense of belonging Severe Identity Fragmentation make the struggle towards national cohesion an even more arduous task. Writing for ThePerspective.org Racial identity has been always been construed as a in 2006, Brahima Kaba characterized the debilitating requirement for Liberian citizenship and both the 1847 atmosphere of distrust and dishonesty among various and 1986 constitutions were categorical in emphasizing social and ethnic groups of the country as “forms of that “only Negros or persons of Negro descent” shall be social illness” which are far more difficult to evaluate permitted citizenship and property rights. Although this than the loss of physical assets. He concluded that was justified on the basis of providing a home for the “the healing and/or rehabilitation of these wounds oppressed (formerly enslaved) children of Africa, it serves constitute, perhaps, the greatest challenges for to convey to this day the state-sanctioned legitimacy of Liberians and their new leaders.”20 discrimination. The problems which accompany this legacy are as acute as ever because religious, language Food Security and Rice Sufficiency and ethnic fault-lines divide the country far more than common racial ancestry serves to unify it. This has been Approximately half of Liberia’s population is either food

further strained by the fact that several Liberians left insecure or highly vulnerable to food insecurity. Food IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH during the conflict and there is some animosity towards security is a sensitive issue in most developing nations them when they return. and a factor in political stability. In Liberia, the importance 9 of rice in the national diet makes the availability of rice One legacy of war which is waged significantly in desirable quantities, at affordable prices, the food along ethnic lines is that fragmentation of the society security issue. As proof, it was a rice price increase in intensifies and people identify themselves first as April 1979 that lit the match to spark the conflict. Several belonging to a given ethnic group before considering Rice Commissions set up over time have not found a themselves as citizens of the country. Liberia epitomizes durable solution to “the rice sufficiency issue”. The this phenomenon and sharp cleavages within Liberian economics of rice is complicated, but it is the mixture society have expanded. Like elsewhere in Africa, with politics that makes it a tinder box. The current surge linguistic diversity is a characteristic of the country, with in commodity prices --especially grains-- could turn up 16 indigenous ethnic groups speaking more than twenty the heat on the food security dimension of the poverty- languages in addition to English, the official language. inequality issue. Yet, with national identity holding little sway, tribe and language affiliate with identity feeding the tendency of As with the politics of food everywhere, it is the urban different linguistic groups in the country to regard others or non-farming population that rebels when there is as “foreign”. insufficiency or prices are judged too high. At the same time, it is in rural areas that imports have the potential The same is true for religious persuasion. Religious to depress prices and play havoc with livelihoods of diversity had prevailed within Liberia whereby 85% “voiceless” farmers. Consequently, Liberian authorities or more of the population followed Christian and are faced with a delicate chore of formulating rice traditional beliefs and 12% followed the Islamic faith. and general food security policy which achieves a fair Islamic Mandingo communities co-existed peacefully balance between the interests of rural area producers with Christian and non-Christian members of Liberian and urban area consumers. This study delves further society before 1980 but religious identities were into the current state of rice production when appraising manipulated for political gain during the war, leading current performance of the agriculture sector and it to the notion that Islam is “foreign” to Liberia. Despite looks at the future potential for expanded production in

18 Table 1.3 in Section 1.2.1 provides further data portraying the comparative socio-economic status of all countries in the “troubled neighborhood”. 19 Bertelsman Liberia Country Report 2010, pdf. 20 Kaba, Brahima D.,“On Some Aspects Of The Current State Of The Liberian Economy: A Tentative Diagnostic And Assessment,” April 28, 2006, page 5. examining alternative growth strategies in chapter two. gap between financial and economic viability. Both The point here, however, is that a sufficient supply of domestic and regional paradigms should be brought to rice at affordable prices is a vital ingredient for Liberia’s bear in determining public sector investment plans. In national stability, especially for the urban population now some cases, rural populations may find cross-border dis-engaged from the agricultural economy. In short, rice markets for their produce to be more remunerative sufficiency is a barometer of well-being across Liberian than domestic markets but a lack of cross-border society and disruptions to supply or price levels are both roads could present a binding constraint. Planners are potential triggers for instability. encouraged to take such considerations into account and this is a key feature of the infrastructure plan developed in Chapter 3 of this study.

1.1.6 Infrastructure Investment and Regional Meanwhile, Liberia’s participation in regional institutions Integration to Bolster Stability such as the Economic Community for West African States (ECOWAS) can help to tackle the problem of The Ministry of Finance makes clear in its FY 2012/13 weak state legitimacy, both to aid in securing economic Budget framework paper that the country must benefits from cross-border infrastructure and also when move away from the experience of “growth without membership is applied to help mitigate conflict flares development” towards one of “prosperity with fairness.” arising in its troubled neighborhood. Given Liberia’s This is indeed essential and these priorities are in vulnerability to strife in neighboring countries, it becomes evidence in the review of budget planning and poverty evident that Liberia and all of the surrounding states in reduction strategies examined later in this chapter. At West Africa are co-dependent upon making consistent the same time, a central premise of the current study is progress towards establishment and maintenance of that Liberia’s stability can be enhanced by improvements peace and stability. This is an outcome that cannot be in infrastructure, by increased participation in regional achieved by a single nation-state alone, and yet it is vital integration or by both aspects in combination. This to each and every one. section therefore revisits Liberia’s vulnerabilities to elucidate how infrastructure investments and increased At the same time, by becoming a more active regional integration can mitigate Liberia’s exposure to proponent of regional trade through the Mano River threats. Union (MRU) for instance, Liberian authorities can begin to demonstrate the gains to citizens from economic

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH With respect to mitigating poverty and reducing engagement with “foreigners.” It is likely only by building inequality, it will be essential to ignite growth in the positive economic bridges involving domestic cross- 10 rural economy in order to avoid a recurrence of ethnic trade and integration on the one hand and cross- ‘growth without development’ in the future. To do this, border economic engagement on the other that one can Liberia’s rural counties must, first and foremost, be expect the severe prejudices standing behind identity brought out of their relative isolation and inhabitants fragmentation to break down. Initial steps taken to must be connected to markets. Transport, power and counter continuing ethnic fractionalization need to be communications networks will all contribute to this reinforced. A promising initiative is the public education objective. Liberia’s large and reviving concessions campaign currently under way that emphasizes the sector, including mining companies and agro-industrial common destiny of all Liberians, and this ought to be operations, can be expected to contribute material sustained. Another is a plan that envisages undertaking levels of infrastructure investment in these spheres. a tribal/ethnic conflict diagnostic assessment, aimed In fact, the World Bank has estimated that mining at identifying specific areas of ethnic tension. The concessionaires could be expected to invest as much assessment will be used to design targeted programs as $5 billion on infrastructure in the coming years.21 In promoting tribal and ethnic reconciliation and this is an this context, the important role of government will be initiative that must go all the way. to encourage installation of multi-use infrastructure and to ensure that financial considerations alone do not Regional institutions can also advance progress in determine the dimension, standards and multi-modal specific sectors of the Liberian economy. Agricultural potential of privately financed infrastructure. Economic research is a costly endeavor but it is one which yields considerations should also be brought to bear when great rewards. To the extent that it can be undertaken making such decisions as whether a road or a railroad on a regional basis, the cost to each country is reduced should be designed with domestic connections alone and the potential rewards are improved. A good case or with regional linkages in their design or not. The in point is Liberia’s cooperation with the International strategic opportunity for government and development Institute for Tropical Agriculture (IITA) and the Africa partners in this context is to prioritize and allocate Rice Centre with whose help GOLR aims to increase complementary investment in ways that bridge the rice production and improve food security.

21 World Bank, “Infrastructure Policy Notes: Leveraging Investment by Natural Resource Concessionaires,” background paper prepared for High-Level National Economic Forum, June 2011. Infrastructure projects and regional integration can both development, strong institutions and technological help mitigate threats to and by unemployed youth. advancement. With deteriorating conditions for One avenue is the true-and-tested offer of employment international commodities trade in the 1970s, policy on labor-intensive infrastructure programs. Such an responses adopted by the authorities made it appear approach is being used on the Harper-Fishtown road as though further suffering was being imposed on the rehabilitation. The Liberia Youth, Employment and poor. This sentiment incited a challenge to the regime Skills Project approved in June 2010, approaches the from the fledgling opposition, an event which triggered problem in the same way. Lessons learnt from there the military uprising, and launched the full scale conflict can be used to scale-up the approach. The battle that followed. These observations lead to a third central against illicit drugs and guns will be a tougher one finding that, in effect, governance has been the weakest to fight than in the other cases, as the gun tradeis part of Liberia’s journey as a nation. The absence of usually mixed with other illegal activities like money capable and effective governance structures across laundering and human trafficking. A first area to attack spheres of economic and political life meant that the is the culture of wishing to possess and use drugs fruits of FDI-led growth were not reinvested for the and guns. The various programs aimed at finding public good and the drivers of conflict could not find jobs and training for youth would go a long way to mitigation or resolution through legitimate institutional weakening the economic impulsion to resort to these mechanisms. Despite abundant natural resources, activities. A second area to tackle is the reinforcement poor governance engendered Liberia with poverty, civil of the collaboration with neighbors in the fight against war and low human development. The fourth finding the trafficking in these items. Conventions adopted is that past history combined with consequences of by the Economic Community of West African States conflict have created legacy problems which persist into (ECOWAS) and the African Union (AU) against the the present. These render Liberia a fragile state, one trafficking of small arms and light weapons provide that is highly vulnerable to a return of conflict. Threats the legal and institutional context for strong action. include a large population of under-employed youth These Conventions are backed up by a similar one who may be more likely to encounter opportunity from at the UN, in recognition of the international nature of illegitimate enterprise than from legitimate employment. the problem. Strict adherence to the prescriptions of Social, ethnic and identity fragmentation are still rife these Conventions should make it possible to access and there is a vital need to enhance national integration expertise that is available under the auspices of the UN as a matter of priority. Factors which give rise to land and the European Union (EU) for the fight against the disputes still exist and mechanisms for resolving them

traffickers. Meanwhile, better broadband infrastructure are still required. Food security, especially in terms of IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH will improve connectivity between Liberia and MRU rice sufficiency, is another potential flashpoint of future neighbors through participation in ECOWAN, the instability. Government has had to manage policies of 11 ECOWAS Wide Area Network and this will allow for import supply, pricing, and subsidization with the goal better cross-border cooperation in the tracking, data of stability in mind. It has been difficult to set price policy sharing, preventions and prosecution of gun running, in a way that reconciles the interests of the urban area drug trafficking and money laundering. consumer in seeing low prices with those of the local rice farmer in seeing prices rise. Authorities will need to formulate food policy in a manner that reconciles the 1.1.7 Key Findings and Conclusions respective interests of rural and urban populations. Regarding Fragility andStability The resulting weaknesses oblige Liberia to stay the course on the long, slow process of recovering as in Liberia a nation-state, begun with the signing of the Accra The analysis of fragility in Liberia brings out four Comprehensive Peace Accord in 2003. Recent research central findings regarding causes and consequences suggests that fragile states face especially difficult of conflict. The first of these pertains to the exclusion challenges to recover from the legacies of conflict and over the years of indigenous Liberians by the Americo- prevent their recurrence.22 Not only do Africa’s fragile Liberians from meaningful participation in the political states grow more slowly, they can get caught in a governance of the country and access to economic fragility “trap” leading some researchers to conclude opportunities. This made for a divided country, one the probability that a state which was fragile in 2001 that was susceptible to get into conflict should an was still fragile in 2009 was 95 percent.23 Four lessons event occur to exacerbate the differences. The second are therefore worth emphasizing in the context of the central finding is that the enclave orientation of the present study, highlighted in Box 2. Open Door economic development strategy failed to deliver the ingredients needed for transformative The challenge now is to harness the drivers of economic growth. In delivering ‘growth without development’ growth and steer them in a manner that avoids a Liberia failed to achieve progress in human capital repetition of past mistakes. This topic is explored further

22 Paul Collier, “Breaking the Conflict Trap” and Douglass North, John Wallis and Barry Weingast in “Violence and Social Orders”. 23 Noro Andrimihaja, Matthias Cinyabuguma, Shantayanan Devarajan, “Avoiding the Fragility Trap in Africa,” World Bank Policy Research Working Paper, November 2011. in the next sections which take a deeper look at the stability are then taken into Chapter two for a discussion structure and status of the economy today. Insights from about the most promising strategies for generating analysis of the current situation and concerns about future prosperity in Liberia.

Box 2 Lessons About Fragility and Post-Conflict Recovery of Relevance to Liberia

• The most important task of leadership is to restore the confidence of citizens in societal capacity to change and to cultivate trust in the public capacity to govern. This requires moving beyond declarations and onwards to the delivery of “proof” whereby ordinary citizens can see the benefits of stability. • It takes time to introduce institutional reforms that underpin a profound transformation of society and Liberia should be ready to exercise patience. Establishment of the rule of law and effective government can take one or two generations. The fastest twenty reforming countries in the 20th century took 36 to 41 years to reach thresholds of competency in these areas.* • There is merit in appraising development investments with a stability perspective in mind in post- conflict situations to take the counter-factual threat of a return to conflict into account when evaluating the economic analysis of investment projects. * • Lastly, countries should not be expected to recover without help. Not only can the development community provide valuable assistance to fragile states, but countries should look to their political and geographic neighborhood to draw support, develop programs and implement joint solutions to common problems.

* World Bank, World Development Report 2011: Conflict, Security and Development, Washington D.C., 2011.

1.2 Liberia’s Current Socio-Economic achievement of their full potential. In this context it also looks at reform measures and implementation strategies Situation introduced to date or those which are planned or

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH The previous section served to briefly narrate Liberia’s still required. It examines the status of the public genesis as a nation-state and its recurrent experience administration as well as that of the financial sector and 12 with conflict. This established important context for the the private sector as key actors called upon to contribute present report, a central thesis of which is that regional to Liberia’s future prosperity. infrastructure has a valuable role to play in mitigating the legacies of conflict.

This section profiles the socio-economic situation of 1.2.1 Socio-Economic Indicators and Liberia today. It begins with an appraisal of Liberia’s Benchmarks for Present-Day Liberia condition after fourteen years of civil war in terms of social and economic indicators including the country’s By disrupting economic activity over an extended period, poverty profile and its ranking against the global Human Liberia’s civil war contributed to severe impoverishment Development Index. It summarizes the country’s initial of the nation. According to the 2007 Liberian Institute of poverty reduction strategies, its recent macroeconomic Statistics and Geo-Information Services (LISGIS) Core performance and policy reforms including changes in Welfare Indicator Questionnaire (CWIQ) survey, 64% of the public financial management that are underway. The population was estimated to be living below the national report then examines reforms introduced in the sphere poverty line measured on a purchasing power basis. The of political governance in order to get recovery underway severity is higher when measured by headcount at the and steer the country down a more stable path. It then international benchmark of US$1.25 per day -- as high turns to an examination of the productive economy and as 84 percent. At US$2 per day, the proportion rises to sectoral composition of GDP. Within the sectoral reviews, 95 percent24. Not surprisingly, poverty in the rural area the study presents the current performance of each key exceeds that in urban zones and Table 1.2 portrays the economic sector to understand both their contribution to relative geographic distribution of poverty based upon a the economy and the binding constraints which prevent monetary measurement of poverty.

24 Monetary measures may not adequately capture all dimensions of poverty by omitting a perspective on asset ownership or depletion as well as access to mitigating services such as education, health services, clean water and the like. Nonetheless, it serves as a proxy for poverty measurement. Figure 3 Liberia’s Evolution Against HDI Index

Source : UNDP

Table 1.2 Liberia’s Poverty Profile, 2007 In effect, Liberia went from being a middle income country in the 1960s and 70s to the bottom rung of Area Number of Poverty Share of countries on the , ranking Poor Headcount Population (2007) 182 out of 187 in UNDP’s 2011 rating. Figure 3 identifies that the world as a whole achieved upward Greater Monrovia 288 695 49% 22% progress against human development indicators Bong, Nimba, Lofa 660 129 68% 36% during the past three decades with the HDI of Sub- Gbarpolu, Bomi, Saharan Africa as a region increasing from 0.365 in Grand Cape 206 547 76% 10%

1980 to 0.463 in 2011. Liberia’s decline contrasts with IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH Montserrado, Outside this trend; starting above the average achieved in Low Monrovia, Margibi 262 678 59% 17% Human Development countries in 1980 but on par with 13 Grand Gedeh, Sinoe, Africa, after which it declined steadily till 2006. With a River Cess 181 713 77% 9% rating of 0.329 in 2011, Liberia is situated well below Grand Kru, Maryland, the regional average but the uptick that begins from River Gee 126 044 68% 7% 2005 is in evidence. National 1 725 806 64% 100%

Source: 2007 CWIQ, LISGIS Table 1.3 presents key socio-economic data on Liberia as compared to the other fragile states being studied Table 1.2 reveals two levels of concern: the fact that as well as broader Sub-Saharan African benchmarks. certain rural counties have a very high prevalence of All four fragile states are ranked among the bottom 11 people living in poverty while others are home to large countries against the 2011 Human Development Index absolute numbers of poor. In contrast, those living in or as compared to Nigeria and Ghana which are ranked 20 near Monrovia tend to be relatively better off and this and 40 places higher respectively. Adult illiteracy at could fuel destabilizing perceptions about an urban- 59% in Liberia is the highest among the four fragile rural divide. To mitigate this threat, it is clear that Liberia states and the 2008 primary school completion rate needs not just a poverty reduction strategy, but a growth was on a par with that in Guinea at about 62% about plan that deliberately seeks to deliver development 15 percentage points lower than the rate reported from to the rural milieu.25 While there is a need to address neighboring Sierra Leone. inequality, there is an equally important need to address “polarity” in the country whereby the re-introduction What these data starkly reflect is not only the of concessions risks reviving and exacerbating a dual impoverished status of Liberia, but the fact that it is economy in Liberia. geographically situated within a troubled neighborhood.

25 This level of poverty exists alongside significant horizontal inequality. Income distribution in the pre-conflict days was skewed because the underlying wealth in private hands had a highly skewed distribution. The effect of conflict on wealth was to destroy some assets and bring down the prospective income stream of their owners. To the extent that productive activities were disrupted, the other effect was to reduce incomes of those who depend mainly on labor income. Thus, ironically, income inequality improved in relative terms as a result of the conflict, but the potential for resurgence and for polarization between sub-groupings remains a significant concern. The Gini coefficient, computed with data over the period 2000-07, stands at 53 percent, confirming this view. Under the “Gini Coefficient”, 0 and 1 represent ends of the spectrum with 0 representing perfect equality among citizens and 1 reflecting the extreme situation where all income is vested in one person. Ivory Coast, also an MRU member state, has over five What these data don’t adequately reveal is the status of times the Liberian population, but over fifteen times their women in Liberia. Women played a significant role in Liberia GDP, and this even after a period of turmoil. It must be by uniting around the cause of peace and urging an end to recognized, therefore, that Liberia and its sub-regional the civil war. The election and re-election of President Ellen neighbors have all lost substantial ground relative to Johnson Sirleaf as Africa’s first female president has added other ECOWAS states that have avoided or mitigated credence to the fact that woman have a vital contribution conflict. Consequently, as other states such as Ghana to make to the welfare of nations. Despite these facts, have begun to shift their comparative advantage into women remain economically disadvantaged in Liberian competitive advantage, and are approaching the point society. They face greater barriers to the ownership of of economic “take-off”, Liberia, Sierra Leone and Guinea land, particularly in polygamous and inheritance situations. are starting over and Guinea Bissau is, once again, This is problematic insofar as women comprise over half experiencing turmoil. Collectively, the Southwestern of the agriculture labor force and about two-thirds of the coastal fringe countries are way behind and they have trade and commerce labor force. They are particularly much to gain from regional cooperation in regaining engaged in the cultivation and trade of food crops ground. and, as such, their productivity is vital to food security.

Table 1.3 Key Socio-Economic Indicators of Liberia and Neighboring Country Benchmarks

Socio-Economic Data Fragile Countries of Study Comparisons & Benchmarks

Sierra Guinea- Ivory Liberia Guinea Nigeria Africa Leone Bissau Coast Population 2010 3 994 5 696 10 069 1 611 21 075 154 729 1 008 354 % Female Pop 2010 50.3% 51.3% 49.5% 50.5% 49.1% 49.9% 50.1% Economically Active 2008 37.5% 37.7% 48.0% 37.2% 37.3% 30.9% 39.3% % of which Female 40.2% 51.1% 47.1% 38.2% 30.4% 36.5% 41.2% HDI Rank out of 177 2007 Not ranked 177 160 175 166 158 Ghana = 135 HDI Rank out of 187 2011 182 180 178 176 170 156 Ghana = 135 Infant mortality per 1000 2009 78 123 88 118 89 97 82

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH Life Expectancy, Female 2008 59.85 48.99 60.13 49.61 59.09 47.33 55.98 Life Expectancy, Male 2008 57.19 46.42 56.09 46.50 56.01 46.36 53.71 14 Poverty % below Nat’l Line 2007 63.8% 65.9% 53.0% 65.7% N/A 54.7% N/A Primary Completion Rate 2008 62.3% 87.7% 61.7% N/A Adult Illiteracy, Total 2010 59.1% 40.9% 39.5% 52.2% N/A 35.9% N/A Literacy rate, females 15-24 2010 80.9% 43.9% 71.0% N/A N/A N/A 61.1% Literacy rate, males 15-24 2010 70.3% 64.4% N/A N/A N/A N/A GDP Million, Current US $ 2011 1.545 2.915 5.170 969 24096 244050 GDP Growth Rate 2011 8.2% 6.0% 3.9% 5.3% -4.7% 7.4% GDP Per Capita (2000) $ 2010 342 435 477 508 1.043 1.465

Source : African Development Indicators and The Little Data Book on Africa, World Bank 2011, IMF World Economic Outlook, 2012

The prevalence of high illiteracy rates makes it harder in access and enrollment pre-existed but deteriorated to target women farmers through traditional means26. further during the war. A whole generation of youth Extension efforts prior to the civil conflict focused on missed out on a normal education and it was only food and nutrition, neglecting the commercial potential of in 2009 that children born after 2003 began to enter agriculture. Until recently, girls have been disadvantaged classrooms for the first time. As the democratically- relative to boys in the sphere of education. However, elected government took power in 2006, a framework measures are being taken to redress these imbalances entitled the Liberia Primary Education Recovery through gender development strategies spearheaded Program (LPERP) was launched to allow for by the Ministry of Gender Development. implementation of the 2002 Education Law calling for free and compulsory primary education. With Liberia’s educational system was weak before the war, development partner support, this program achieved but the conflict made it worse. The problem is serious an immediate increase of enrolment in the primary at all levels, including tertiary education. Poorly trained sector, from 260,499 during the 2005/2006 academic teachers and high urban-rural and gender differentials year to 308,748 in 2007/2008.

26 Ministry of Gender Development and World Bank, “Gender Aware Programs and Women’s Roles in Agricultural Value Chains: A Policy Memorandum,” May 2010. The primary completion rate increased from 21% in maternal health) and Goal 8 (environmental sustainability) 2002 to 62% in 2008. Between 2007 and 2010, female are not likely to be achieved.28 primary gross enrollment rate and female youth literacy rose by five and six percentage points respectively. While these statistics reflect an improvement, other data indicate that most primary school-aged children 1.2.2 Liberia’s Interim and First Poverty are still not in school and net enrollment rates actually Reduction Strategies declined for both boys and girls between 2007 and 2010. Schools have been refurbished or constructed The Government of Liberia used the opportunity of and teacher training institutions are once again certifying preparing its 2007 Interim Poverty Reduction Strategy educational professionals for Liberian classrooms.27 The and then its full Lift Liberia Poverty Reduction Strategy new secondary school curriculum was aligned with that (PRS-I 2008-2011) to set a new course for the nation. tested by the West African Education Council and, three Consultations carried out with a cross-section of the decades after joining that institution, Liberia will submit citizenry helped to verify the aspirations of the people. its high school students to WAEC examinations for the This process revealed that the population placed first time in 2012. At the highest levels, the country does great importance on the return of peace and security, produce international-grade scholars in given areas growth of incomes and jobs in a revived economy and but the point is that many more are needed. Inward- the availability of public services. On the basis of these looking tendencies can rob students at lower levels of inputs from society, government defined a four-pillar the chance to stretch themselves. The debate about strategy to: whether WAEC’s standards may be too high reflects the current weakness. The change to make is one of 1. Consolidate peace and security, culture -- a durable change in the way the nation looks 2. Revitalize the economy, at education and the development of human capital. 3. Strengthen governance and the rule of law, 4. Rehabilitate infrastructure and resume delivery of Liberia’s health systems are slowly improving from a basic services. desperate state of disrepair in the after math of conflict. Out of the 325 health facilities available before the war, It also aimed to address cross-cutting concerns such over 90% were partially or wholly destroyed and, in 2007, as improvements in gender balance and opportunity for only 51 physicians and 297 nurse midwives of Liberian children and youth, paying attention to the threat of HIV/

nationality remained. Consequently, lack of access to AIDS and threats to the environment. IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH quality healthcare delivery was a major concern and received substantial attention by government and Essential priorities under Pillar 1 were to establish 15 development partners in the first generation of post- and maintain national security which has so far conflict recovery priorities. Not surprising, healthcare is been accomplished with significant help from the more accessible and of better quality in urban areas than presence of UNMIL. Improvements introduced under is the case in rural areas. Nonetheless, except for progress PRS 1 have served to strengthen peace and improve in combating HIV/AIDS, Liberia is far from reaching the security remarkably. This was and remains an essential MDG health targets. Infant mortality is declining (dropping requirement for success in the next phase. GOLR from 78 to 73 per 1,000 live births between 2009 and approached the objective of expanding peace and 2010), but is still far from the target level of 39. Mortality security in two ways. It began with assisting refugees and of children under five remains high at 114 per 1,000 internally displaced persons (IDPs) to return and resettle versus a target of 64, as does maternal mortality which in their original communities, and moved on to launching stands at 994 per 100,000 births against a target of 145. a program of rationalizing the forces of law and order. Approximately 60% of 1 year olds have been immunized The efforts to resettle citizens facilitated the early return against measles and further improvements will be needed to original communities of about 108,000 exiled refugees in facilities, drugs, logistics and personnel before Liberia and 325,000 registered IDPs. Several thousands more can meet the target of 100% coverage. returned subsequently to their communities outside of formal programs. It also rationalized the forces of law Given the many challenges it faces, Liberia’s overall and order, including the Liberia National Police (LNP), progress towards achievement of Millennium Development the National Bureau of Immigration (NBI), and the Armed Goals has been mixed. Successes include combating Forces of Liberia (AFL) into which it has introduced a HIV/AIDS (with a current prevalence rate of 1.5%), greater degree of female participation. In this process, promoting gender equality and empowering women (as government demobilized and reintegrated into civilian a result of which Liberia won the prestigious MDG Three life over 90,000 ex-combatants (about 12 percent of Award in 2010), and in developing a global partnership whom were children) and deactivated or retired over for development. However, Goal 1 (eradication of extreme 17,000 members of the AFL, the LNP, and the Special poverty and hunger), Goal 2 (universal primary education), Security Service (SSS). At the same time, it began to Goal 5 (reduction in child mortality), Goal 7 (improvement in recruit and train staff for the new AFL and LNP.

27 “Education Sector Plan for Liberia: Commitment to Make a Difference.” Liberia Ministry of Education. 28 Government of Liberia and United Nations Development Programme, Progress, Prospects and Challenges towards Achieving the Millennium Development Goals, 2010 The continuing return of Liberians to their normal walks of Pillar 3 focused upon initiatives to re-introduce the rule of life attests to the improvement as does the attraction of law by creating institutions and a culture of participatory Liberia to returning diaspora and foreign visitors. democracy. Progress against this pillar is reviewed under Section 1.2.3 on political governance reform. At the same time there was a vital and urgent need to revive the engine of economic growth under Pillar 2 and Under Pillar 4, extensive measures were taken to begin the fastest, most expedient way to achieve this objective the rehabilitation of infrastructure and to tackle poverty was to re-open the economy to foreign direct investment. reduction through social programs delivering essential Therefore, under the second pillar of the strategy, Liberia services. Measures pertaining to infrastructure—both invited back, or invited anew, private investment capable of physical and governance improvements—are detailed tapping the nation’s rich endowment in natural resources. in section 1.2.4. The speed and volume of re-entry into Liberia has been impressive, resulting in inward investment on the order of Budgeting for PRS 1 envisaged a cost breakdown that $16 billion and resumption of a vibrant concession segment emphasized the overall importance of infrastructure and of the economy. While impressive, this has engendered basic services. Table 1.4 presents data on the original concern by many, including the African Development costs estimated for PRS 1 updated by actual financing Bank (AfDB) that “recent efforts to renegotiate agricultural raised and the percentage of completion achieved by concession agreements and negotiate new ones risk pillar. The program carried a high cost relative to the returning to old patterns of ‘growth without development’ fiscal wherewithal of the Government and GOLR aimed or horizontal compartmentalization – the dual economy.” to close the hefty financing gap through development Writing about the importance of helping Liberia move from partner financing as well as public private partnerships fragility to stability through measures to hasten recovery (PPPs). Grant financing from development partners was of the agriculture sector, the AfDB concludes that, “It is estimated at a baseline of $230 million in 2007 so the urgent that such an approach is balanced by promoting ex-post data suggest that Liberia succeeded in gaining rapid growth in vertical value chains in which all participants an aggregate 13% increase in Official Development Aid make money, right to the smallest-scale farmers.”29 This during implementation of the plan. In addition, recognizing kind of concern has thus informed Liberia’s preparation of its strategy to close the financing gap, GOLR intentionally its second poverty reduction strategy. This will carry the left out the cost of rehabilitating Mt. Coffee hydroelectric nation forward through 2017 and is covered in Chapter facility on the aspiration that a PPP would take up this 2. Further analysis of Liberia’s economic recovery under responsibility. As private financing did not materialize

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH PRS 1 is contributed in the review of productive sectors during the interim, and the urgency of restoring power as in sections 1.2.5 through 1.2.8 below. an essential ingredient to support growth, this project has 16 become a priority under PRS 2.

Table 1.4 Costs and Financing of PRS 1

Lift Liberia PRS 1 Deliverable Costing & Financing by Pillar Ex-Ante Ex-Ante Original Pillar Cost Est’d Cost, Estimate Estimate Estimate of Donor Pillar as % of US $ Mn of Gov’t of Gov’t Financing Financing4 Total PRS Revenue2 Financing3 Gap 1 Peace and Security1 $252 15.7% $11 2 Economic Revitalization $141 8.8% $121 3 Governance and Rule of Law $224 13.9% $499 4 Infrastructure and Basic Services $995 61.7% $150 TOTAL 1.6 Billion $842.7 Mn $ 510 Mn $1 102.10 $781.57 1 Cost of UNMIL not included in PRS, nor the cost of Dyncorp security services provided by US Government 2 Assumed robust economic growth and an increase in revenue to 27% of GDP 3 Approximately 60.5 % of government revenue 4 Source: PRS 1 Final Report

1.2.3 Macroeconomic Performance an annual average of 3 percent and preliminary IMF estimates from November 2012 indicate a boost to and Policies over 8 percent in 2011. An early decision was made to operate fiscal policy on the basis of a cash budget and The economy has responded well since the onset of this discipline has kept aggregate demand conducive to peace. Since 2005, real GDP per capita has risen by maintaining a stable macroeconomic environment.

29 African Development Bank, Agriculture and Agro-Industrial Development in a Post-Crisis Era: Case Study of Liberia, December 2011 page 60. Table 1.5 Macroeconomic Performance Indicators

Indicators 2006 2007 2008 2009 2010 2011 2012 Prelim Real GDP Growth, % 7.8 9.4 7.1 4.9 5 6.4 8.8 Nominal GDP Market Prices (US $ Mil) 611.6 732.2 818.2 844.7 941.4 1155.3 1545.4 , Average Annual % 9 13.9 18 8 10 Broad money (M2) % change 34.4 33.3 38 16.1 33.5 15.5 17.8 Velocity (GDP to M2) 4.3 3.9 3.2 2.9 15.5 2.3 2.3 Domestic Revenue as % of GDP 14.8 21.6 25.2 24.4 30.8 32.7 37.4 Fiscal Balance incl grants (% of GDP) 2.1 3.7 1.2 -1.7 0.7 -0.7 -1.4 Fiscal Balance w/out grants (% of GDP) 3.5 0.5 -4.5 -0.8 -4.7 -6.1 Imports (% of GDP) -65.6 -83.4 -77.9 -68 -71.6 -80.4 -96 Exports (% of GDP) 27.9 29.9 13.2 18.2 22.9 29.2 45.2 Import coverage excl UNMIL (months) 1 1.5 1 3.2 3.4 2.1 2.1

Public (% of GDP) 822.8 645.3 576 198.9 12.2 11.5 12

Sources: Liberian authorities and IMF Nov 2012 Article IV

The overall fiscal accounts have remained in balance exports and the restart of iron ore production after a two or ended with small surpluses. However, since Liberia’s decade hiatus, but imports will continue to rise at an economy is highly dollarized, with approximately 75% of equal or higher pace given high current levels of capital the money supply sourced by US Dollars, budget-induced investment by concessionaires and government to pressures tend not to affect the monetary system. Instead, realize their large scale infrastructure projects. a key function of monetary policy is aimed at reducing inflationary pressures since these are harmful to the poor With regard to the external sector, the prudent demand and a damper to investment. Inflationary pressures in management policies have kept the exchange rate of

recent years are more the result of global increases in the with respect to the US dollar broadly IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH the price of fuel and food. Liberia’s intent with respect to stable. The current account deficit has averaged higher future monetary policy is to converge towards a single than 30 percent of GDP, but this largely reflects the 17 currency with Ghana, Sierra Leone, Guinea, absorption of significant amounts of post-conflict security and Nigeria under the West Africa Monetary Zone. Liberia and humanitarian assistance as well as of inputs required has met all four primary convergence criteria of the for the early construction program. The corresponding single currency program, including single digit inflation, inflows on capital account to close the gaps were all a compliant fiscal deficit/GDP ratio, compliant CBL grants and there have not been any major pressures on financing of fiscal deficit and gross external reserves to either the exchange rate or reserves. The Central Bank cover an adequate duration of imports.30 of Liberia maintains foreign exchange reserves to provide foreign currency liquidity to banks but, looking forward, Sound fiscal policies of the new government have received IMF has encouraged a gradual expansion of reserve levels support from the international community, including to counter external uncertainty.32 Table 1.5 summarizes assistance in debt relief, with Liberia reaching the HIPC key macroeconomic indicators over recent years. completion point in 2010. Initially, a new cap for external debt was set at an annual target of 3% of GDP (on a net On macroeconomic policy and institutional fronts, Liberia present value basis) but because progress has been good is making impressive strides. Beginning in 2006, the new in terms of revenue generation plus there is urgent need government mapped out several initiatives to upgrade to front-load investment in infrastructure to drive further public accountability and ensure transparent public growth, Government recently agreed with IMF to increase financial management anchored on a new PFM law. its borrowing target to 4 percent of GDP in net present This was passed in September 2009 and implementing value terms, translating into a larger borrowing envelope regulations were issued in December of that year. The of about $300–400 million (depending on sustained GDP administration then embarked on the introduction of an growth and the level of concessionality to accommodate Integrated Financial Management Information System higher capital expenditure in the near term.31 and gained development partner support through a

The country is now benefiting from strong exports Public Financial Management Reform Project in 2011 to growth supported by a resumption of commodity enhance budget planning systems, strengthen the legal

30 Newsletter, June 2011 31 IMF Article 4 Report, November 2012. 32 International Monetary Fund, Eighth Review under the Three-Year Arrangement Under the Extended Credit Facility, May 2012 framework for project-based financial management, nations or the one to pin hopes on when suggesting focus on revenue mobilization and administration and what to do to alter their fates. Given Liberia’s past improve governance and transparency. weaknesses in this realm and its vital connection to peace building, there is merit in taking stock of the early On the tax administration front, amendments to the reform measures introduced by government to build Liberian Revenue Code were enacted in September, a fairer, more inclusive society. As such, this section is 2009 to reduce the scope for discretion in the granting concerned with political governance which was the of investment incentives. The administration’s legislative pillar 3 priority under PRS1 and it covers initiatives agenda includes proposals to create an autonomous undertaken at both national and sub-national level. National Revenue Authority and replace the general sales tax with a value-added tax (VAT). Regarding customs Political governance is used to cover the ways through functions, the ASYCUDA system has been implemented in which political authority in a country is exercised, including Monrovia Free Port as well as Roberts International Airport the processes through which governments are selected, and Liberia is pursuing further modernization of customs in monitored and replaced as well as the processes through consultation with the World Customs Organization. which the governors manage the political system, civil liberties and political rights. Changes in this area are Government has further empowered its Debt Management imperative in order build more inclusive processes giving Unit to conduct regular analysis of debt sustainability, voice to all Liberian citizens. now placing all SOE debt under their jurisdiction before new enterprise debt is approved though further progress The re-building of Liberia began in earnest with the is needed to effectively bring SOEs into compliance under installation of the new government, with a promising the new Public Financial Management Act. A decision was start on policies and programs to heal the societal taken to merge the finance and planning ministries during divisions, restore the functions of state, and re-launch the the course of 2012 and a single economic analysis unit economy. On the overarching objective of cohesion, the is being established to undertake more robust economic Executive has struck a tone that emphasizes unity, peace analysis, providing GOLR more complete capacity to and harmony, and a mass education effort was begun to monitor economic evolution, both rural and urban. This sustain that message. To restore the functions of state, the merger will make it possible to house the oversight of organs of public governance were reactivated, especially both planning and performance in the same institution with regard to functions of security, law and order, and and that will assist with the vital task of monitoring the administration of justice. Essential priorities were to

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH performance under the second generation poverty establish and maintain national security, (accomplished reduction strategy (PRS). A central part of fiscal strategy with substantial reliance on the presence of UNMIL), to 18 is to contain discretionary current spending and growth of re-introduce the rule of law, to create institutions and a the public payroll and efforts and underway to strengthen culture of participatory democracy and to tackle poverty public financial management through the introduction of a reduction through social programs. Public Expenditure Tracking System (PETS). GOLR actions to strengthen governance and the rule Other fundamental changes underway in 2012/13 of law began with laying down new codes of conduct include the introduction of the Medium Term Expenditure for those at the top. It introduced a requirement that the Framework (MTEF) into the budget process whereby President, all Cabinet Ministers, and all commissioned a three year rolling budget will be introduced including officers publicly declare their assets soon after assuming both operational and “strategic” or capital expenditure office, as part of a new Code of Conduct for all public components under a legislatively-approved Public Sector officials. Also, recognizing that the concentration of power Investment Plan (PSIP). Formulation of the budget will be in the executive arm and within Monrovia was inimical to re-framed around eleven budget “sectors” corresponding good governance, the authorities set about softening that to priorities established within the forthcoming PRS. concentration. Steps are under way to strengthen the In this context, development partners are also being Legislature by, among other things, giving it more power encouraged to make their aid pledges more transparent over budgetary issues, increasing its administrative and predictable and the intention is for the budget to budget to make it function better, and establishing a include and incorporate information about donor sourced Women’s Legislative Caucus with membership from flows within the budget framework. In addition, Treasury both Upper and Lower Houses. To begin the process of bills are expected to be launched in mid-2012 to help decentralization, County Support Teams were established with liquidity management. to support County Superintendents and Assistant Superintendents in all 15 counties. Children’s Assemblies and a National Children’s Parliament were also formed to 1.2.4 Political Governance Reforms ensure children’s participation in governance issues.

Introduced During Recovery The Governance Reform Commission was set up as an oversight body charged with setting up a national Governance has become an important variable to cite in framework for legal and political reform and it has made explaining failures in the development journey of many far-reaching progress regarding the decentralization of power, regional participation and maintenance of national stance against impunity by initiating court proceedings and regional balance.33 These have been complemented against a number of former senior government officials with a donor-supported Governance and Economic who had committed certain offences. Where allegations Management Assistance Program (GEMAP), which of corruption against government officials and civil provides international experts to support several key servants have been proven, government has reacted agencies of the government. by suspending or dismissing the culprits, including high-level officials from the Central Bank of Liberia or The restructuring of Liberia’s political institutions began County Superintendents. For example, all non-statutory in 2006 with personnel audits to determine technical members of Liberia’s public corporation boards were competency as a result of which the number of civil removed in January 2009 amid public debate over levels servants in ministries was drastically reduced. Over- of corruption and accusations of poor governance. staffing remains a severe problem however and efforts The president also sacked the managing director of have been renewed to reduce thousands of ghost the Liberian Petroleum Refinery Company in 2010 for workers from the GOL payroll. Liberia’s judiciary still meddling with a tendering process. These examples faces serious shortcomings, operating under outdated help to convey the determination by leadership to root laws and legal frameworks and continuing to rely heavily out corruption. However, the culture is deeply embedded on donor funding. Reform has been on the agenda for and concerns have risen that officials sacked for corrupt several years given but judiciary effectiveness continues practices have not actually faced prosecution. to be hampered by a lack of qualified personnel, poor case-flow management and corruption. Progress is slow Improvements have been made in the right of citizens but evident in the launching of a Judicial Training Institute to information with the passage of a Freedom in June 2008, from which a first batch of 21 judges, of Information Bill in September 2010 but media magistrates and lawyers was graduated in March 2009. rights are not yet guaranteed through legislation This will be supplemented by graduates of a Professional that would provide journalists with legal protection. Magistrate Training Program (PMTP) begun in 2010 with Consequently, press freedom is still variable with a class of 64 incoming college graduates. The Johnson- cases of suppression and journalist harassment Sirleaf administration continues to face difficulties in leading Freedom House to rank Liberia’s press as “not increasing the capacity of its justice and security sectors free” in 2008, at 141 out of a total of 195 countries in to arrest, detain and adjudicate criminals and relies its Press Freedom Ranking index. heavily upon UNMIL for maintaining national security

and preventing residual armed combatant groups from All told, several sources monitor Liberia’s progress vis- IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH resuming covert activity. à-vis political governance, including the AfDB and World Bank’s CPIA ratings, the Bertelsman Transformation 19 The President declared corruption to be “public enemy Index and the Mo Ibrahim Leadership Index. Each is number one” early in her tenure putting in place an anti- composed of different detail, but they all tend to reflect corruption strategy, which included the establishment performance in areas of Voice and Accountability, of an Anti-Corruption Commission with prosecutorial Corruption Perception, Political Stability and Rule of powers. She has tried to enforce a zero tolerance policy Law, Government Effectiveness, Economic and Press to the extent of her political leverage, taking a strong Freedom as well as Environmental performance.

Figure 4 AFDB Country Policy and Institutional Assessment Ratings

Liberia CPIA Ra-ngs 2004 -­‐ 2011 5 4,5 4 Economic Mgm't 3,5 3 Structural Policies 2,5 Social Inclusion 2 Governance 1,5 1 0,5 0 2004 2005 2006 2007 2008 2009 2010 2011

Source: AFDB http:cpia.afdb.org

33 Material in this section has largely been sourced from “Bertelsman Transformation Index, Liberia Country Report” 2012. All sources indicates that political governance is on an Sub-national-level governance relates to the improving trajectory in Liberia, as portrayed by AfDB processes through which the functions of the state ratings presented in Figure 4 for example, but that are performed at the local, sector or activity level. the achievement levels are still very low relative to a Progress in the sphere of local level governance is maximum score of six. essential if the social rifts within society are to be healed. As identified in the discussion on identity On a world-wide scale, the World Bank ranks Liberia’s fragmentation, “perennial tension and unresolved government effectiveness and regulatory quality in conflicts continue to exist between the Lormas the bottom 10% of nations in 2009, political stability and Mandingos in ; between Gios, and rule of law in the decile above that and control Manos and Mandingos in Nimba County; between of corruption and voice and accountability in the 30- Kru and Sarpo in Sinoe County, and between Kru, 40% decile.34 All of these rankings are vastly improved Sarpo and Americo-Liberian descendants in Sinoe from their low base in 2006. Applied in an African County.”35 Efforts by the current administration have context, Table 1.6 presents Liberia’s ranking on the been made to enhance the visibility of public officials Mo Ibrahim index of African Governance, revealing and strengthen coordination structures throughout the country’s relatively good performance with the country, particularly at the county level though respect to democratic participation and human rights. the efficacy of the state’s authority remains limited Thus, while the country has most definitely improved in rural or remote areas. Obstacles include poorly against its own baseline, it continues to lag behind the trained officials, low incentives and low levels of performance of other countries in Africa and around infrastructure. the globe. Nonetheless, Liberia has committed to advancing Table 1.6 Liberia’s Rank on the 2011 Mo Ibrahim Index a profound shift in its approach to governance by approving a National Policy on Decentralization Rank/53 Regional Score/100 and Local Governance in 2011 that will recognize rank/16 increased authority and decision-making responsibility OVERALL SCORE 36 11 45.4 outside of central government bodies. This will naturally require significant capacity building and, SAFETY AND RULE OF 33 11 46.9 to that end, the Ministry of Internal Affairs has been LAW implementing a multi-year capacity building strategy - RULE OF LAW 47 15 28.6 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH to improve capability at county-level. Initial measures - ACCOUNTABILITY 18 5 47.5 towards local level decentralization were undertaken 20 with the establishment of County Development Funds - PERSONAL SAFETY 24 10 47.5 to finance local development initiatives. Regrettably, - NATIONAL SECURITY 43 15 64.1 serious mismanagement of these funds has already PARTICIPATION AND 18 8 54.0 occurred and while central government has been able HUMAN RIGHTS to react, the imperative of demonstrating commitment at the local level remains of paramount concern. - PARTICIPATION 3 2 78.5 A traditional gap still exists between central government - RIGHTS 21 10 45.8 and the constituencies spread throughout the interior. Yet, - GENDER 44 12 37.7 recognizing the importance of local level engagement, GOLR has taken extra pains with its second poverty SUSTAINABLE 45 14 34.0 ECONOMIC reduction strategy to conduct consultations across all OPPORTUNITY counties to gain input and buy-in to the planned way forward. This is quite important given the slow pace at - PUBLIC MANAGEMENT 40 13 51.2 which a “peace dividend” is being felt at sub-national levels. - BUSINESS 43 14 34.0 ENVIRONMENT - INFRASTRUCTURE 44 11 16.3 1.2.5 Sector Contributions to Economic - RURAL SECTOR 50 16 34.6 Performance and Reforms to Date HUMAN DEVELOPMENT 39 9 46.7

- WELFARE 43 14 39.2 Liberia’s national accounts data are recognized by GOLR and its partners as having a number of weaknesses. - EDUCATION 21 5 54.1 Because comprehensive accounts data are not - HEALTH 46 13 46.9 available, the IMF computes estimates of GDP by sector

34 World Bank Institute, Worldwide Governance Indicators, Country Data Report for Liberia, 2006-2010. 35 “Liberia Retrospective Analysis,” Background paper to PRS II, August 4, 2011, page 22. using the production approach, relying upon primary the agricultural sector does not distinguish between the source data provided by LISGIS. MOF and the Fund contributions of crops, livestock and fisheries sub-sectors. acknowledge that “there is a high degree of uncertainty Nonetheless, as evidenced in Table 1.7, sector growth regarding estimates of the level and growth rate of real GDP, rates have gone through significant fluctuations beginning sectoral components, and all ratios to nominal GDP….” with severe contractions in 2003 and only now settling While collaboration is underway to profoundly improve the back to the steadier growth patterns. Greater fluctuations collection of such data, current limitations make detailed and quantum leap growth is evident initially in forestry and analysis of performance by economic sector problematic. continuing mining where there had been a complete halt Recognizing these limitations, the GDP share data in this and the sectors are now experiencing recovery. These section should be viewed as approximate but the trends of strong fluctuations are typical of an economy which has change over time should be reliable. The report does not gone through severe contraction and are consistent with try to disaggregate sectors too finely and thus, for example, Liberia’s status as a fragile state.36

Table 1.7 Annual Percentage Growth by Economic Sectors contributing to GDP

GDP Growth % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Real GDP Growth Rates by Sectors, Percentage change year on year Prel

Real GDP Growth -31.0 2.6 5.3 7.8 9.4 7.1 4.9 6.1 6.4 8.8

Agriculture & fisheries -38.5 7.5 6.0 4.4 8.9 6.0 6.4 2.7 3.9 1.8

Forestry -36.8 -40.3 -6.2 2.9 1.0 29.4 1.4 6.7 5.6 1.9

Mining & Panning 56.7 49.5 -15.0 0.0 289.8 109.4 6.8 46.4 93.1 153.9

Manufacturing -11.8 97.7 8.2 16.0 12.9 -16.7 -3.8 3.1 3.1 3.1

Services -7.9 19.2 9.9 12.0 10.4 7.6 6.9 5.7 5.3 5.2

Source: Compiled from GOL Sources, and updated with IMF 8th Review data

All sectors recorded some recovery in the first five years for 2007 through 2011 together with forward projections of the new administration in response to the program formulated by the GOLR and IMF.

of economic renewal and Figure 5 portrays actual data IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH

Figure 5 % Share of GDP by Sectors 21

Agriculture & Fisheries Forestry Mining & Panning Manufacturing Services

100 90 80 70 60 50 40 30 20 10 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Sources: GOLR, LISGIS & IMF

36 Recent GOLR and IMF publications suggest that services may even have expanded to the point of over-taking agriculture in absolute terms but as all data sources do not confirm this finding, the report makes use of sector growth data from IMF 8th review and makes note of the fact that better National Accounts data will be forthcoming once a bona fide Household Economic Survey can be completed. These reflect the expectation that the mining sector 1.2.6 The Contribution of Renewable will grow at a faster rate than other sectors. While agriculture will also continue to grow, it will lose Resources Sectors ground on a percentage basis to the mining sector as it begins to resume importance. To place this This section looks at the status of Liberia’s renewable outlook into context, it is interesting to note that over resources sectors, including cash and food crops, the conflict years, agriculture (including fisheries) forestry, livestock and fishing to contrast it with mining went from contributing about one-third of GDP in which is an extractive and non-renewable resource. 1988-89 to almost two-thirds a decade later in 1998- “Green growth” provided by the renewable resources 99. Hence, as the total economy was experiencing sector is considered by the AfDB to be an important significant contraction, agriculture grew as a share of objective for the continent, and is important to overall the economy insofar because it offered the principal recovery given Liberia’s strategy to encourage plantation means of subsistence even though the effect of the agriculture. Smallholder agriculture provided the mainstay conflict was to also reduce total agricultural output of the economy throughout the Liberian conflict, in absolute terms. Over this same period, mining providing ordinary citizens with refuge and subsistence (principally iron ore) went from one-tenth to almost and revealing the resilience of the rural sector. It also nothing. The contribution of manufacturing suffered raises the worrisome question of whether public policy during the conflict and recovery is still experiencing might look away when other, more exciting things begin delay. In the post-conflict era, services have expanded to happen. Before looking at performance by sub-sector, to where they are a prominent contributor to GDP this section begins with a review of the nation’s natural reflecting the major impact of UNMIL presence in the resource endowment and appraises the reform measures country. The volume and composition of services in still needed in land use and land tenure policy. economy can be expected to change substantially in coming years with UNMIL withdrawal causing a Natural Resource Endowment for Agriculture decline, but hopefully offset by new growth being generated by the concessions sector and demand in and Forestry the domestic economy. Liberia’s farmers are blessed with a favorable environment The following sections present a deeper look at for agricultural production37. Liberia occupies a land area the current productivity in each of Liberia’s primary of approximately 111,370 km², of which 86% is dry land

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH production sectors, including renewable and and the remaining 14% is covered by water. Land types extractive resource sectors, tourism, manufacturing present in Liberia include tidal swamps, coastal beach 22 industry and small business sectors. This analysis plains, flood plains, valley swamps, low and high hills, all permits identification of the binding constraints which of which have different land use capabilities. must be addressed to unlock greater potential as well as the key growth strategies that government is Liberia is a tropical country situated in the narrow employing or formulating to drive respective areas of band of latitudes particularly suited to the cultivation growth. Where key growth strategies by GOLR are of cocoa. Annual rainfall is approximately 1,700 mm revealed in this analysis, they are brought to light. in the north and above 4,500 mm in the south, one Briefly stated, these include: of the rainiest regions in the world. Most areas have a water surplus for five to eight months each year. • Conversion of subsistence-oriented fisher-folk and Average temperatures vary between 24°C and 28°C, agriculturalists to commercial orientation through with relative humidity ranging from 65–80%. stronger value chains and greater engagement in domestic and regional trade; Absolute shortage of land is not presently deemed by • Increased productivity and returns from plantation the GOLR to be a binding constraint to smallholder agriculture and mining resources through award of production given that the percentage of land area concessions; actually devoted to agricultural cultivation is low. • Development of small and medium enterprises However, this masks two underlying problems, one through spatial development of strategic trade and pertaining to “green growth” and the other pertaining infrastructure corridors, and to smallholder incentives. With respect to green • Industrialization through establishment of special growth, Liberia presently permits patterns of land use economic zones. whereby the “renewable” potential of land productivity and forestry resources could be put at risk. In While the genesis of these strategies is explored particular, large areas are being devoted to mono- below, deeper analysis of how they can best be culture plantations under rubber, and other implemented to drive future growth is the focus of concession contracts. These have the potential to Chapter 2. reduce the bio-diversity of forest cover and introduce

37 Source material for this section is largely drawn from MOA documents, including the “Liberia Agricultural Sector Investment Program” finalized in May, 2010 in fulfillment of requirements under CAADP. environmental degradation over time. Government Table 1.8 Liberia’s Natural Resource Endowment currently considers forestry, agriculture and fisheries resources to be included within its Extractive Industries Natural Resource Endowment Liberia Transparency Initiative and, going forward, may want to consider introducing pro-green growth measures Absolute % within that program. Total Land Area 111 370 100,0%

With respect to smallholder incentives, land tenure Dry Land Area (sq. km) 2010 96 320 86,5% systems are mired in a complex web of inconsistent Wet Land Area (sq. Km) 2010 15 050 13,5% statutory and customary laws resulting in several types Agricultural Land (sq.km) 2010 26 100 27,1% of land holding arrangements with different degrees of security. These range from deed holders with Arable hectares 2010 400 000 4,1% comparatively high security of tenure to squatters with Est’d hectares of irrigable 600 000 10% tapped no security. Customary occupation, renting, leasing land and borrowing of land fall between these extremes. Insecurity of tenure, rather than shortage of land, thus Forest Area (sq. km) 2010 43 290 44,9% emerges as a major impediment to modernization of Average Annual Precipitation mm 2391 the smallholder sector since the incentives for adopting modern production methods are low. Insight into this Source: African Development Indicators, World Bank Source for Irrigation Land: Liberia National Rice Dev’t Strategy problem is portrayed in Text Box 3.

Box 3 Liberia’s Smallholder Land Tenure Systems—How Security Affects Behavior

Type of Holding Problems Incentives Deed holders Lack of a registry creates confusion and insecurity Deed holders involved in a dispute, or who think of claims; Destruction of archives and confusion others might have a counter-claim, will be more over legal adjudications means that value of a deed ware about adopting long-term technologies such as a piece of evidence is lower than other forms of as tree planting or investments associated with evidence to support a claim longer term strategies Customary Tenure Lack of confidence among smallholders regarding Where community has been stable with few INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH customary courts and their ability to fairly adjudi- resettled into area, relative security can encourage cate land issues. Poor management of relationship adoption and investment. History of taking of land 23 between formal and customary law. for concessions renders resettled areas more apt to adopt ST strategies Tenants Tenants rent land; often for only one cropping sea- Tree crops or other perennial type crops are prohib- son in order to ensure that permanent claims will ited. Tenants are thus limited to annual crops only. not be pursued. Acute fear not to appear too successful as a farmer to avoid land and standing crop to be taken back by owner prior to the agreed upon time. Borrowed Holdings A highly insecure form of tenancy and the smallest Not only are crops limited to annual varieties, a infraction can see the borrower evicted portion of yield must be provided to owner as acknowledgement borrower is not owner. Same as for tenants Squatted Holdings Squatting without eviction for 20 years can lead to Tend to be most aggressive in pursuing forms of ownership through the doctrine of “adverse posses- land claim involving tree planting or other improve- sion” so this encourages an aggressive squatting ments to prove adverse possession

Adding to domestic complexities, the appropriation currently dedicated to concessions (including agriculture, and allocation of land for foreign invested concession timber and mining) and possibly rising to 38% of total contracts by government is an emotionally sensitive land area found to generate win-win economic benefits issue. This is one which has long been associated between concessionaires and local communities. A Land with conflict and continues through to the present.38 Commission has therefore been established to propose and coordinate the long overdue reform of land policy, As mentioned in the review of fragility, land remains a laws and tenure systems. This is the kind of governance highly emotional issue in the country. Resentment is often institution that was absent in the past and that now needs directed towards foreign investors granted long term to apply substantial wisdom and maturity in navigating an leases. Presently, with an estimated 21% of land area appropriate balance for the future.

38 After granting Firestone one million acres of land in 1926, Government used the Liberian Frontier Force to evict people off their traditional land and those who refused to move were forced to work for Firestone as wage laborers. Although this degree of subjugation no longer continues, the imbalance in power and control over land use between rural citizens versus agricultural and mining companies awarded concession rights persists up to today. Figure 6 presents the pattern of Liberian land spatial footprint claimed by Liberia’s concessions cover in 200439 and Figure 7 shows the large sector.40

Figure 6 Pattern of Land Use in Liberia, 2004

Source: Bayol and Chevalier (2004), cited in CAAS, Volume 1, Page 38.

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH Land Cover Key: 1 = Urban Areas; 2.1 = Predominant Rural agricultural Domain; 2.2 = Agricultural Areas with small forest presence; 2.3 = Mixed agricultural & forest area; 3.1 = Agriculture degraded forest; 3.2 24 Open dense ; 3.3 = closed dense forest; 5 = free water; 6 = Savannah or bare soil; 7 = Coastal ecosystem complex; 8 = agro-industrial complex.

Figure 7 Current and Potential Land Areas devoted to Concession Activity

39 Cited in “Comprehensive Assessment of the Agriculture Sector, Volume 1” August 13, 2007 40 Barra 2011 GIS analysis cited in World Bank, “Infrastructure Policy Notes: Leveraging Investment by Natural Resource Concessionaires,” June 2011, page 65. Structural Aspects of Liberian Agriculture increased and some diversified into fruit, vegetable, coffee, oil palm, poultry, pig and other types of Traditionally, was divided between production. Estimates are that in 1971 approximately three distinct production patterns, notably concessions, 5,000 Liberian commercial farmers cultivated nearly commercial farms and smallholder farming. These 200,000 acres (81,000 hectares) on 10 to 500 acre farms. varied considerably in terms of organization, efficiency and output. They also varied by investor profile, with These suffered substantial destruction during the conflict, concessions being largely FDI-driven, commercial farms reflecting the anger at domestic social cleavage. This farm owned either by foreigners or by Americo-Liberian elites sector is only slowly beginning to revive. and smallholdings consecrated to indigenous peoples depending upon traditional geographic origins. Smallholders have traditionally engaged in subsistence farming to produce food principally for home consumption Concessions exist where foreign firms have obtained but they have also produced export-oriented tree crops rights of use on large land areas (between 2,000 as a source of household cash41. The remainder of this and 100,000 acres) to operate rubber and oil palm section addresses all sub-sectors with particular focus on plantations. In its quest to revive the agricultural sector, the performance and constraints impacting smallholder GOLR has concluded several concession agreements agriculture. At present, “forest-based farming systems” with commercial investors in recent years for re- dominate smallholder agriculture. These include tree development of targeted sub-sectors in the agriculture crop-based systems in which vegetables and other and forestry sectors. Investor focus is now changing food crops are produced mostly in the central belt of from rubber only to other sub-sectors such as rice, palm the country; root crop based systems including cereals oil, cocoa, coffee, and bananas. Private commercial production concentrated in the northern region plus sector investment is estimated by MOA to have created fishing and mixed cropping along the coast. 40,000 to 60,000 formal jobs in this sector, or 6% of the job market. Food Crops, Livestock and Poultry

Commercial farms initially grew up in pre-conflict Rice and cassava are the key food crops, with rice produced settings where rubber concessionaires were able at a level about 40% of self-sufficiency for domestic to supply seedlings to out-growers and guarantee a consumption in contrast to cassava where production far market for their output, inducing the entry of Liberian exceeds domestic requirements. As revealed in Table 1.9,

entrepreneurs into the establishment of commercial some 280,000 metric tons of paddy rice was produced IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH farms. The number of Liberian commercial farms in the 2008/2009 crop season. Though higher than the 25

Table 1.9 Pre and Post-Conflict Food Production Levels

Crop/Area Unit Percent Change Production 1988 2001 2008 2009 Since ‘88 Since ‘01 Paddy Rice MT 298 040 219 040 279 000 293 000 -1,7% 33,8% Fresh Cassava MT 409 840 373 390 496 290 495 300 20,9% 32,6% Area Harvested Paddy Rice Hectares 235 760 170 480 222 670 247 580 5,0% 45,2% Fresh Cassava Hectares 52 160 47 930 57 360 63 210 21,2% 31,9% Yield per Ha Rice KG 1 270 1 285 1 253 1 183 -6,9% -7,9% Cassava KG 7 860 7 790 8 652 7 835 -0,3% 0,6%

Source: Ministry of Agriculture Statistics Unit, Crop Production Survey 2009

41 ITTAS Consultancy Ltd., Post-Harvest Crop Assessment—Liberia Rice and Cassava, 2008. level at the end of the conflict in 2003, the output in subsistence by farming households, with little surplus 2008/09 was still about 7% lower than the pre-war produced for sale in the market. Meanwhile, due to level of some 300,000 MT and Figure 8 identifies that internal displacement and exodus of youth from farming yields, evaluated at four points in time, have actually livelihoods as a result of the conflict, a majority of the been in decline. Many factors complicate this situation. population actually relies upon purchases to meet their At present, food crops are produced primarily for food security requirements.

Figure 8 Rice Yields have been on the Decline Rice Yield - Pre & Post Conflict Rice Yield 4 points -­‐-­‐ in time Pre & Post Conflict 4 points in :me

1 300 1 280 1 285 1 270 1 260 1 253 1 240 1 220

Kg/Ha 1 200 1 180 1 183 1 160 1 140 1 120 Years 1988 2001 2008 2009

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH In these circumstances, because rice represents such a Cassava has progressed much better than rice, with its large share of household food consumption, an increase output reaching about 500,000 metric tons during the 26 in the price of rice will tend to increase poverty levels 2008/2009 crop season and exceeding both the pre-war in the country as a whole, while a decrease in rice output (by about 21 percent), and the level at end of the price will decrease poverty levels42 . These conditions conflict (by 30 percent). Interestingly, these trends show work against the use of price signals to encourage that Liberia is on course to recover its food supply levels, smallholders to increase output, so approaches focused in the domain of the starches, such as existed before the upon use of improved technologies are required to upheavals began. The situation with respect to nutritional stimulate increases in output instead. Constraints to balance is, however, another story. rice production have included the lack of availability of higher-yielding improved seed varieties (such as The production of livestock and poultry has recovered NERICA, the “New Rice for Africa”) as well as prevailing less well than the starches. Produced for the most part use of traditional low-input farming systems. During the informally and in backyards of households, and therefore recovery period, GOLR distributed 20.5 million tons available to marauders, livestock and poultry suffered of seed rice to farmers as well as 41,500 tools. In the significantly during the conflict. The informality ofthe medium term, higher supply of NERICA seeds or other breeding, and the consequent reliance on own stocks improved rice varieties will be essential to increase yields for regeneration, has meant a slow recovery. Surveys and output, along with a change in land use patterns. conducted in 2008 put the estimate of cattle at 44 At present, 86% of rice is grown in upland farming percent lower than pre-war levels, goats at 50 percent systems, with 12% in lowland rain-fed and 2% in lower, and sheep at about 29 percent fewer, although pigs irrigated conditions. The yield potential of the latter two were judged to have recorded a large increase over the systems is 75% and 300% higher than upland systems pre-war level (see Table 1.10). The surveys established respectively, so investment in irrigation infrastructure that poultry is doing much better, with an increase of just could do much to increase national output. under10 percent in 2008 over the pre-war levels.

42 Clarence Tsimpo and Quentin Wodon estimate that an increase or decrease of 20% in the price of rice could lead to an increase or decrease of 3 to 4 percentage points in the share of population in poverty. “Rice Prices and Poverty in Liberia,” included in Poverty and the Policy Response to the Economic Crisis in Liberia, The World Bank 2012. Low productivity of smallholder agriculture in Liberia a key impetus for GOLR’s strategy to improve networks, is caused by many factors. Prolonged conflict caused strengthen the density of value chains and connect the displacement of farming communities who virtually smallholders to commercial markets. On the production retreated into the forest for security during the war and side, there is a shortage of improved seeds and reversion to a subsistence orientation to a greater degree planting material, rudimentary production techniques just for survival. Now that households are returning are the norm and underdeveloped supply chains exist to work their land, major challenges include the lack of to provide inputs and purchase outputs and connect supporting infrastructure including rural and inter-regional producers with traders. Added to this are a severe road networks providing access to markets, along with a lack of agricultural credit whereby, in 2011, agriculture lack of drying, storage and processing infrastructure. On accounted for only 3.3% of all commercial bank credit. the policy side, incentives to transition from subsistence to Although a recent entrant into the banking sector has surplus-oriented commercial production are constrained an interest in agricultural lending, they will take a greater by poor market access and think markets. It is therefore interest in the commercial farming sub-sector.

Table 1.10 Poultry and Livestock Production

Livestock, 1988 2008 2009 Percent Change Heads

Since ‘88 Since ‘08

Cattle 14 830 8 370 8 370 -43,6% 0,0%

Goats 128 670 63 460 75 330 -41,5% 18,7%

Sheep 60 560 43 270 43 470 -28,2% 0,5%

Pigs 52 440 77 720 68 000 29,7% -12,5%

Chickens 723 390 785 010 774 960 7,1% -1,3%

Ducks 39 190 43 670 39 210 0,1% -10,2%

Source: Ministry of Agriculture Statistics Unit, Crop Production Survey 2009 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH

Tree Crops production. The paragraphs below touch separately 27 upon each of the contributors to overall tree crop As identified above, forest-based farming systems production, but Table 1.11 provides contextual overview occupy a predominant place in Liberia’s agricultural on physical output trends across the various product sector. As with food crops and other segments of the categories with the exception of palm oil for which data economy, output is just now beginning to recover from is not available. As a general observation, output is the conflict period as farmers return to their plots and recovering slowly due to the many constraints hindering commercial farmers and concessionaires re-engage in smallholder productivity.

Table 1.11 Recent Production Trends from Forest-Based Agricultural Systems

Commodity Unit 2007 2008 2009 2010 2011 Est’d Rubber MT 135 200 87 901 62 880 62 577 88 026

Cocoa Beans MT 2 126 3 285 5 075 7 117 26 770 Coffee Beans MT N/A 124 130 379 215 Sawn Timber PCS 610 864 1 036 879 826 095 543 793 382 334 Round Logs M³ N/A N/A N/A 7 251 74 208

Sources: MOCI, LPMC, FDA and Estimates by Central Bank of Liberia Smallholder-dominated Tree Crops: products are meeting appropriate international industry Cocoa, Coffee grading, sanitary and phytosanitary standards. A way should be found to ensure the timely provision of market Cocoa and coffee remain the key smallholder cash information and to agree on mechanism for the licensing crops. Liberian cocoa and coffee farms are usually small, and monitoring of buyers and exporters. averaging just about one acre. A majority of the farms were established in the 1970s and were abandoned Oil Palm during the civil unrest. Most trees are averaging 35 years old and now approaching the end of their productive Prior to the war, acreage under oil palm cultivation may lives. They are thus plagued by diseases and pests so have been as high as 27,000 hectares although total yields and output have fallen further. Export trade in land allocated to the various operators was around cocoa and coffee was quite devastated by the conflict; twice that. Production was estimated at between consequently tree-crops are taking a long time to 135,000 and 170,000 metric tons of crude palm oil recover. In the immediate pre-war period, Liberia was and, at that time, generating enough palm oil to meet producing about 4,000 metric tons of coffee and 3,000 domestic household needs and may have made metric tons of cocoa (for 1988, official statistics recorded unrecorded exports to neighboring countries. Oil palm 4,116 metric tons of coffee and 2,946 metric tons of grows naturally, and rural households harvest and cocoa). Output in the 2006/2007 and 2007/2008 crop process the palm fruits. years was no more than 3,000 tons for cocoa and 100 tons for coffee and Table 1.11 makes clear that cocoa Production has been situated in small-scale farms since is recovering much more quickly than coffee. Even the conflict, the large producers having shut down with this, some of the production sold in Liberia comes operations during the unrest and new concessionaires occasionally from elsewhere. The impact on GDP has having recently entered. Production is essentially for been negligible, under 1 percent each year. domestic consumption, and currently runs at around 40,000 tons of crude palm oil. Suitable land is available Clearly, cocoa and coffee have the same land, and today’s output is, in each case, well below the infrastructure and extension issues as do food crops. potential. Though it occupies an estimated 40,000 Improvements in these domains for the latter should families and fills an important part of dietary needs, oil benefit the former as well. Other issues at the farm level palm currently makes a limited impact on GDP and include land tenure disputes, which limit incentives to exports. Net imports of about 11,000 tons have been

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH invest in improvements; limited extension service, and needed to supplement local production in recent years therefore knowledge of new techniques; low access to to satisfy domestic demand. There is regional demand 28 rural finance and, therefore, to tools. Yields are extremely (within ECOWAS) for palm oil that is unsatisfied and there low, about 145 kg/hectare, compared with some 800kg/ are openings in international markets, as well. Growing hectare in Ghana and the Ivory Coast. Additional issues demand for biofuel creates significant additional demand are poor quality and marketing obstacles. Low use of for palm oil, especially abroad, and may account for fermentation, insufficient drying, harvesting of diseased the recent entry by East Asian industrial concerns. A pods, use of plastic bags for transport, and limited storage number of new concessions have been granted for capacity, all result in poor quality, with presence of mold the development of plantations, most importantly to and foreign matter. Low quality became institutionalized subsidiaries of Malaysian and Indonesian giants. The when the Liberia Produce Marketing Corporation (LPMC) conclusion of large scale concession agreements with created a market for “fair average quality” cocoa that bears the latter bodes well for higher production on the one no resemblance to industry or international standards. hand, but environmental degradation likely to result from Marketing arrangements also limit the development of the replacement of biodiversity in the natural forest cover cocoa and coffee, as the inefficiencies reduce returns to with monoculture. the farmer. Roads to producing areas are poor, and price information is rare at farmer level, tilting market power Here, as in other tree crop subsectors, high among the excessively in the direction of the few buyers. These constraints holding back progress are the absence over factors result in the Liberian farmer getting the lowest time of new plantings, problems with input markets, use share of the fob price in the sub-region. of poor husbandry techniques resulting in poor quality of the product. The majority of the palm trees are old One immediate priority is to explore the institutional and of outdated varieties. Small holders have great options for regulating the marketing of tree crops difficulty accessing inputs. There is little downstream generally, as a key way to ensure farmers get the activity beyond limited processing for consumption. return needed to sustain their incentives. To deal Still, the authorities believe in the potential of palm oil with the problem of low quality, it will be essential for as a contributor to growth, a generator of inclusive regulators to work with the private sector on the supply employment opportunities, and a source of foreign of improved plant- stocks and mandatory certification of earnings. There are about 27,000 hectares of plantations instruments used for quality and quantity assessment owned by Liberian parastatal companies which can be in the field (scales, hygrometers, etc.) to ensure that the revived. Greater smallholder participation in the future of palm oil will surely add to making its growth contribution implementation of specific actions to deal with the become a more inclusive phenomenon. problems of ageing farms, low productivity and the absence of forward linkages. First, they would like to Rubber institute a way of providing to the industry essential inputs that lead to the cultivation of more high-yielding, In the pre-war years of 1987-88, rubber accounted early-maturing rubber trees. The second goal is to for 6-7 percent of GDP. This proportion rose to 11- strengthen the training of farmers in best practices in 12 percent in the post-war years. The contribution of planting, maintenance and application of chemicals rubber to export earnings went from 20-24% in the pre- (fungicides, insecticides, fertilizers, and herbicides). war years of 1987-88 to about 70% of all commodity The third goal is the promotion of value addition exports by 2010, explained largely by the cessation of over the long term by the production of a range of iron exports during war years and its delayed recovery. downstream rubber products. These are sensible Even so, rubber output has actually been declining as goals, but the public sector role needs to be carefully demonstrated in Table 1.10, due to low international designed. For instance, while the idea of a facilitating rubber prices and declining sap levels due to the access to finance to farmers is a good one, creating advanced age of trees. This will begin to change and a Fund in the public sector for that purpose warrants rubber certainly has further potential, with policies reconsideration. As already experienced in the 1960s and strategies being set in motion to strengthen its and 1970s, borrowers with political connections often contribution to national development. Liberia’s rubber fail to repay. The planned new strategy should be used covers about 400,000 acres, of which concession to study better approaches, including those that induce rubber accounts for 40-45 percent with the remainder greater private lending into the sector. being small holders’ rubber, a good deal produced in out-grower schemes where output is sold back to the Forest Products concession owners. Because of its high cash generating potential, rubber is currently the preferred tree crop for During Liberia’s 14-year civil conflict, logging and small farmers. The Ministry of Agriculture estimates that timber exports accounted for 50-60% of the country’s in 2008, foreign-owned concessionaires and Liberian foreign exchange earnings and contributed to 26% of commercial farmers employed over 14,000 people GDP in 2002, up from a 15% share in the mid-1990s. through and contributed $40 million in wages to the There were high-value and mature timber stands economy. available and ready to be harvested. Leaders of warring

factions found ready partners who eagerly facilitated IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH Constraints to further development of rubber tree crop the harvest and marketing of the products. However, potential apply more to the smallholder farms than mismanagement of these resources and their use to 29 to concessions. There is an issue of age and quality fuel the conflict led the UN Security Council to impose of the tree stocks, and linkages with the rest of the sanctions on timber exports beginning in 2003. These economy are limited. Most rubber trees, on private as induced GOLR to develop policies recognizing forestry well as concession farms, have reached the end of their as an “extractive industry” leading to compliance active lives, and need to be replanted. While the large with the Extractive Industries Transparency Initiative concessions have been able to maintain production and enabling the lifting of sanctions in 2006. Despite from their old stocks, the felling of trees for charcoal this progress, deforestation during the conflict and “slaughter tapping” in the war years have reduced has contributed to the severe destruction of forest production in small farms. In addition, the stocks on resources and African Development Bank considers most of the small farms that have seen new planting Liberia’s forestry sector to be seriously threatened by consist of unimproved germ plasm in contrast to the unsustainable exploitation.42 Estimates suggest that improved varieties planted on industrial estates. Finally, less than one third of the remaining forest area within local processing is still limited to the production of latex Liberia is “undisturbed” and intact. This represents and coagulum. severe threat to the largest remaining segment of the Upper Guinea Forest ecosystem and unless In their latest Agriculture Sector Strategy, the contained could accentuate the negative effects of authorities plan responses that emphasize a rethink climate change in the sub-region and continued loss of of strategies towards the sector and the creation of biodiversity. Drivers contributing to the continuing high institutions to assist operators. The key steps planned deforestation rate include: include production of a strategy document, a Development Strategy. The establishment • Encroachment by communities of a Rubber Development Fund is projected. It will • Unregulated logging, mining in forests and pit- have responsibility of providing financial assistance sawing to smallholders. The existing Rubber Development • Unsustainable shifting slash and burn agriculture Authority will be transformed into a Rubber Advisory • Poor sector supervision and uncontrolled cutting for Service. In addition, the authorities envisage the use as fuel.

43 African Development Bank, Forestry and Natural Resources Management Support Study for Liberia, June 2011 Liberia’s forests have great value to the population as a conflict, if not used properly. They are also aware of the source of fuel wood, food and other household needs if fact that country experiences vary and that avoiding they can be managed sustainably. At its peak in 1989, the so-called “natural resource curse” requires “open” the industry employed around 25,000 full-time workers. governance and sound economic policies. The major constraints to expansion is the lack of basic infrastructure such as paved roads, interconnected rail On this basis, the government has adopted an approach network, electricity and modernized seaport to handle to natural resource development that consists of putting exports. With the refurbishment of the port at Greenville, in place institutions whose purpose is to promote good the export of logs will soon resume at substantial levels. governance (transparency, rule of law) and overall good conduct among actors within the sectors. The country Fisheries went further in this direction by acceding to the Extractive Industries Transparency Initiative (EITI), becoming Liberia’s fisheries sectors contribute about 3% of GDP designated as compliant in 2009. In so doing, it became and provide employment to an estimated 37,000 fishers the first African country to achieve this status and the first and processors. Before the war, most industrial fishing to include logging within the initiative. companies had adequate processing facilities and were engaged in exporting frozen shrimp and fish to Belgium, The first set of actions promoting good governance Greece, UK, and the USA. Fish distribution and marketing was taken in the forest products sector. In early 2006, from the coastal area to the interior was handled through immediately upon assuming power, the government a system of depots and agents, but this activity ceased cancelled all forestry contracts and also reviewed 95 due to civil strife and deterioration of roads. The marine contracts and concessions granted by the predecessor sub-sector includes capital intensive and artisanal fishing National Transitional Government of Liberia and its in a 20,000 km² ocean domain, with artisanal fishing predecessors. Subsequently, it passed a National Forestry providing livelihoods for about 33,000 full time fishers, Reform Law (NFR) in 2006 to strengthen oversight and of which 61% are Liberian and 60% are female. Liberian regulation of the forestry sector. These steps paved the fishers are mainly of Kru origin while the foreigners are way for the United Nations Security Council to lift the mainly Fanti and Popoe who migrated to Liberia from sanctions that it had placed on Liberian timber exports Benin, Ghana, and Cote d’Ivoire. Recent additions of and also facilitated the signing of a Voluntary Partnership Gambian and Senegalese fishers are operating in the Agreement with the European Union. marine of Cape Mount County whereas Malian

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH and Fulani fishers operate in inland areas. With improved These steps, while promising, have not yet achieved the connectivity to inland markets from better roads, Liberia’s desired level of progress with respect to over-arching land 30 fisher-folk will gain expanded markets for dried and reform, a critical priority which must be addressed in the smoked fish which is in demand in the interior. coming years. For instance, the new NFR law specifies that “All forest resources in Liberia are the property of the Marine fishing grounds hold considerable maritime Republic, except communal and forest resources privately fish resources such as tuna and other pelagic species. owned which have been developed through artificial Crustaceans such as shrimps and lobsters are less regeneration.” Under this legal regime, timber assets and abundant but fetch a higher value. The estimated forestland have effectively become two separate types of maximum sustainable yield (MSY) of the continental property. The legal reality is that communities may hold shelf area was 180,000 MT per year before the war. formal title to their customary properties on which are Liberia also has approximately 1810 km of rivers, plus included substantial forestlands, but they actually have numerous perennial swamps and inland water bodies no rights to exploit or extract the trees present on the with high potential to increase production. The estimated land since the State has been given tenure pertaining to MSY of inland fishery is 40,000 MT per year but itis their prospection, utilization, and export. This dichotomy estimated that illegal fishing costs Liberia about US $12 exemplifies the complex problems associated with land million annually. Aquaculture was developed in the 1970s tenure and overlapping property rights in Liberia. and at its peak in the 1980s had developed about 450 ponds consuming a total area of about 17.5 ha across With respect to agriculture, Liberian authorities aspire 159 communities around the country. However, most of to build a revitalized and modernized sector that these fell into disuse during the civil war and the output contributes to shared, inclusive and sustainable growth was estimated at only 39 MT in 2004. and development. To achieve that goal, they plan to implement a number of policies in the sector generally, Reform Measures Introduced in the Renewable and add to these specific policies for each subsector. In 2006, GOLR issued a Statement of Policy Intent for the Resources Sectors to Date sector and a short term recovery plan. This was followed by a Comprehensive Assessment of the Agriculture The authorities fully recognize that, while natural resources Sector – Liberia project that reviewed the role and provide opportunities for growth and development, they contribution of the sector to recovery and development. can also be a source of economic failure and social The findings were subsequently used to develop the National Food Security and Nutrition Strategy (FNSNS) reliance on improved technology including mechanized and the Food and Agriculture Policy and Strategy cultivation. In the tree crops subsector, the plans are (FAPS). The NFSNS was adopted by government in to increase both production and productivity in rubber, 2008 to ensure that “all Liberians have reliable access oil palm, and cocoa and coffee, with an emphasis on to the food they need and are able to utilise that food raising the competitiveness of small farms. This will be to live active and healthy lives”. The strategy prioritizes approached by creating linkages between out-growers the needs of food insecure and nutritionally vulnerable and processors; improving land utilization and providing and lays out actions Liberia must take to achieve that essential inputs; and strengthening investment end. Liberia also published its FAPS in 2008 with the incentives. The policies and strategies indicted above aim of taking Liberia from “subsistence” to “sufficiency” are likely to be very demanding of the conceptual and by 2015. FAPS identifies specific sector and subsector management capacity in government. In addition, policies and strategies to revitalize agriculture, placing GOLR is having difficulty meeting the CAADP target the accent on policies and strategies that will engage of recurrent 6% annual growth in agriculture. As large number of smallholders in the sector. FAPS regards CAADP’s recommended investment target of envisions “A nation with food and nutritional adequacy 10% of annual budgets devoted to the sector, Liberia and security enabling a nourished population, thus is allocating approximately 3% of its ordinary budget contributing to optimal health, education and training, to this sector and is making large, complementary economic growth and development, and improved and investments in rural feeder roads to fill the gap. sustained quality of life of the people”. All in all, while all these reforms and initiatives are Liberia has also committed to the Africa-wide essential for tapping the latent value from renewable Comprehensive Africa Agriculture Development Program sectors, they all depend upon successful and enduring (CAADP) for which it has developed LASIP, the Liberia reforms in the sphere of land tenure. None of them go Agricultural Sector Investment Program. Under this far enough yet in tackling this issue. program, African states commit to trying to achieve a sustained pace of 6% annual growth until 2015. The investment plan includes four sub-components on: (1) food and nutrition security, (2) competitive value chain and 1.2.7 The Contribution of the Non- market linkage development, (3) institutional development Renewable Extractive Sector and (4) land and water development. Under component 3

the emphasis is to revitalize both research and extension Liberia is a mineral rich country, not just in ores IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH systems beginning with restoration capacity in the Central and precious stones, but recent discoveries of off- Agricultural Research Institute. CARI will be encouraged to shore oil have also been made. Discussion of the 31 develop the supply of breeder seeds so that the private latter is included in the energy sector review under sector can engage in seed multiplication to improve infrastructure. Iron ore, diamonds and gold are the the supply of improved planting materials. Connected principal minerals, although reserves of other metals with this, MOA plans to revitalize extension services by such as copper, zinc, platinum, uranium, columbite- partnering with domestic universities and colleges. A tantalite, bauxite, rutile and phosphate have also been National Agricultural Innovation System is to be established found. Figure 9 depicts the geographic spread of to support these efforts and Farmer-Based Organizations nation-wide mineral potential identified by the Ministry (FBOs) will be promoted. of Lands, Mines and Energy.

In the area of farmer assistance with equipment, inputs In the pre-war years, the mining sector contributed and pest/disease management, the policies will tackle more than 60 percent of export earnings and about the issue of farmer access to tools and planting materials 25 percent of GDP, the large bulk of which pertained through the creation of a unit within the Ministry of to iron ore exports. The war put a halt to practically all Agriculture (MOA) to serve as interface with the farmer on formal mining activities but artisanal diamond mining acquisition and use. As to pest/disease management, the continued during the conflict with as many as 150,000 plans envisage the establishment of a Plant Protection carats per year that may have been produced. Alluvial and Regulatory Bureau within MOA to work with the artisanal gold production has also resumed in the extension services in offering the outreach to farmers. post-war years, albeit at a level lower than that of diamond, with output estimated at not more than 30 In food crops, the focus is on rice. There the key policy kilograms. When iron ore production ceased during under the Liberia National Rice Development Strategy the war period, the installations went idle and part (LNRDS) is to aim at “sustainable” self-sufficiency, with was pillaged, including the infrastructure. Figure 9 Liberia Ministry of Lands, Mines & Energy Map of Mineral Potential

The end of the crisis has seen the influx of many mining Yekepa, and two virgin deposits, all in the mountains companies. Licenses have been awarded to more than of Nimba under a Mineral Development Agreement

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH 120 companies for mineral exploration and, as was (MDA) signed in 2007 with the new concessionaire, depicted in Figure 6, large areas of land are now under Arcelor-Mittal. They made the necessary investment to 32 formal concessions governed by “Mineral Development re-open the mines, are in the process of refurbishing Agreements.” Indeed, the award of land concessions the Yekepa-Buchanan railway line which will transport was a principal strategy deployed by Liberia in its initial the ore to the port, and are making repairs to the post-conflict recovery period in order to regenerate a port of Buchanan in preparation for the shipments. flow of foreign direct investment and get the economy Other concessionaires have signed MDAs with the moving again. The reactivation of activities began government to develop mines at other sites, the main with the reopening of the erstwhile LAMCO works in ones of which are presented in Table 1.12.

Table 1.12 Major Mining Sector Concessionaires

Investor Name Commodity Location Size Contract Termination Mittal Steel Holding A.G. and Mittal Steel Holdings Iron Ore Nimba County 617 Sq. Km 2030 (Liberia) Ltd.

China Union () Mining Co., Ltd. and Iron Ore Bong Reserves in 619 sq. km 2034 Union Investment (Liberia), Bong Mines Co., Ltd.

AmLib United Mineral Inc. Gold, Diamonds River Cess, Grand 1,743 Sq. Km 2034 Gedeh, Monserrado

BHP Billiton Iron Ore Kitoma, Goe Fantro 2,373 Sq. Km 2035 reserves

Putu Iron Ore Mining and Mano River Iron Ore Ltd. Iron Ore Putu Reserves Not known 2035

Source: Ministry of Finance, Bureau of Concessions The first ore shipment from the re-opened mines took executed and authorized MDA will be binding upon the place in July 2011, and exports are expected to grow Government of Liberia and that Government may agree exponentially in the coming five years. The output effect and be bound by terms set forth in the agreement: is estimated to raise the share of mining in GDP from about 3% in 2010 to about 20% during the period 2012 • matters in the discretionary authority of the Minister, - 2015. Being a capital intensive activity, the various including matters that are, or could later be, subject mining projects are expected to create a relatively small to changes in regulation; number of direct jobs, although their investment activities • fixing the fiscal and tax obligations of the other in infrastructure will generate several additional temporary party for a period of 25 years, with 5 year periodic jobs. The new iron ore concessions are planned to be reviews to consider modifications if conditions have the center of a new development strategy based on substantially changed; development corridors. This approach is conceived to • guaranteeing the right of the other party to be free avoid the shortcomings of the enclave nature of past from currency or other exchange controls with concessions, including narrow local direct income respect to proceeds of export sales and repatriation base and low indirect income generation through the of earnings; stimulation of activities in the zones occupied. The idea is • Other terms it considers conducive to investment in to have concession-sponsored infrastructure (roads, rail, the minerals and mining sector, including guarantees ports, power and water) catalyze activity in other sectors that subject itself to international arbitration and within viable logistics proximity. Explicit provisions are guarantees against nationalization or appropriation. being made in concession agreements to that end. The inclusiveness and infrastructure spin-off features of the This law effectively established the principle that detailed concessions sector are further explored in Chapter 2. terms pertaining to mining investments in Liberia are governed by negotiated MDA contracts in the absence Meanwhile, artisanal and small-scale mining, mainly of of a developed regulatory regime. While incorporating gold and diamonds, has also grown but the job creation the reciprocal rights of the contracting parties for and sector size statistics are not well documented. transparency, it makes room for Liberia to protect its Recovery rate from alluvial gravels for gold is minimal economic, social, and environmental interests. The at 30-40%, reflecting inefficient practices; health and renegotiation in 2006 of the iron ore concession with environmental hazards from mercury are deemed to be Arcelor-Mittal foreshadowed the application of these substantial. safeguards. The same applies to the renegotiation of the

concession contract with Firestone Rubber Company, IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH Sector Governance to increase the benefits for the Liberian people. Comparable new agreements have been reached to 33 The future of mining holds good promise if high standards re-start oil palm production. While the use of MDAs is can be maintained in sector governance so as to avoid an attractive tool, they are not a guarantee that local the resource curse and a narrowing of the national communities will benefit from FDI in the resources economic base. Cognizant of these challenges, and the sector. A key problem with them is that each one is a fact that minerals are a finite resource, the administration distinct contract and is thus governed under the terms has been working to update the legal, institutional and of negotiated contract law to the extent that sector regulatory framework for the extractives sector. Sector legislation is still in formulation. This allows for variability policy comes under the jurisdiction of the Ministry of according to the negotiated outcomes. Lands, Mines and Energy. The new administration inherited a New Minerals and Mining Law adopted in Under the new administration, the legislative environment 2000 during the regime of Charles Taylor. Interestingly, was strengthened by adoption of an accompanying this law was promulgated by the Ministry of Foreign Public Procurement and Concessioning Act (PPCA) in Affairs, revealing that its overall orientation was to 2006 to set out a transparent and competitive auction position Liberia as a secure and attractive destination system by which known mineral assets would be for foreign direct investment in mining activities. The law offered for concession. Under this act, a Concessions established that “Minerals on the surface of the ground Commission was created and conferred with supervisory or in the soil or subsoil, rivers, streams, watercourse, authority over all “concession entities” whether they are territorial waters and continental shelf are the property of in the extractive or renewables sector. While this layer of the Republic of Liberia and anything pertaining to their governance has no doubt brought improvement, it still Exploration, Development, Mining, and Export shall be left the principle of statutory MDA contracts intact and, governed by this Law.” It set out terms by which mineral as such, vulnerable to the power of skilled negotiators, reconnaissance, exploration and development would albeit in the context of heightened competition. With be authorized under Class C, B and A mining licenses further experience in the sector, Liberia moved ahead respectively, awarded and overseen by an inter-ministerial in 2010 to adopting a Mineral Policy in 2010 to refine committee. It also established that Class A development and further clarify GOL objectives and governance licenses would need to be accompanied by conclusion of arrangements in the sector. Within the policy, the need to a Mineral Development Agreement negotiated between standardize MDAs is acknowledged in order to cut down the parties. The law provides, for instance, that a duly on negotiated deviations from fiscal, environmental and other provisions. The policy further commits to fleshing about how to bring the expertise of these Liberian out a minerals regulatory regime and states that MLME institutions inside the “ring fence” of entities overseen by will assess the future relevance of MDAs once that is the Concessions Commission. Meanwhile, Table 1.13 completed, acknowledging that this could permit Liberia demonstrates that one can already observe that Liberia to move towards better international practice with a has taken some lessons from its past experience in the system of exploration and mining licenses backed by structuring and award of new mining concessions. comprehensive regulations which could obviate the need for MDAs. Table 1.13 Contrast in Mining Concession Terms by Era

Other governance improvements introduced in the new Attribute Pre-Conflict Concess Post-Conflict policy include explicit articulation of GOL intentions that )ion (LMC Concessions the minerals sector must contribute to broad-based Exploration economic growth. In this respect, the policy aims to Period 3.5 years 3 to 5 promote: Term 80 years 25 years Area 3 million acres 247,000 acres i. the re-investment of the resource rents into Exploration tax, surface Tax code and better sustainable activities; tax and royalties faded negotiations ensure Taxes ii. the use of mineral infrastructure (logistics, power, away to eventual total that GOLR will get water, telecoms, etc.) to underpin growth in other tax exemption higher income Self provided but sectors; Self-provided; self- Infrastructure with more emphasis iii. the maximization of down-stream linkages serving on multi-use (“beneficiation”) through the establishment of mineral-based value addition industries; Education, health, improved water iv. the development of the up-stream linkages by Social for employees establishing mineral supplier (inputs) industries services to Not specified + contribution (services, capital goods, consumables); and employees to community development now v. the optimization of skills & technology linkages required and the facilitation of “lateral migration” into non- resource-based sectors/activities.

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH The policy also acknowledges that mining makes intensive use of land and that conflicts in land use can 1.2.8 The Contribution of Other Productive 34 arise and thus commits to establishing downstream Sectors of the Economy mechanisms and processes for evaluating and arbitrating between alternative land use options, including Liberia’s miniscule industrial sector is characterized recognizing the land use rights of local communities and by a few large, generally monopolistic, manufacturing securing appropriate compensation and resettlement firms that produce a limited supply of goods for the arrangements if required. In addition, the policy obliges all domestic market. Outputs include cement, beverages, mineral operations to conduct environmental and social paints and varnishes, plastic and rubber products. impact assessments and develop management plans Many enterprises were destroyed during the war and for approval by GOL. These must include provisions to the sector is currently estimated to employ about redress physical impacts upon mine closure as well as 2,785 people, representing 0.25% of the nation’s labor measures for sustaining community livelihoods thereafter.43 force. Government views industrial development as an Finally, as noted above, the deliberate intention to develop important priority to create linkages with the extractive spatial corridors off the back of concession-sponsored industries sector, thereby diversifying the economy infrastructure is acknowledged. One possible weakness and generating large scale employment. To that end a in the administration of this objective is the fact that the National Industrial Policy was developed and published Concessions Commission has authority over concession by the Ministry of Commerce and Industry in February entities and the activity they undertake, including 2011. An expressed aspiration of Government is create infrastructure. While this makes life relatively simpler Special Economic Zones to accelerate attraction for foreign investors, it deprives the nation of bringing of domestic and foreign investment into industrial other expertise to bear in the oversight of concession processing and export development. The intention is operations such as the Ministry of Transport responsible to create jobs and also to provide for linkages between for infrastructure standards, Ministry of Public Works the renewable and non-renewable extractive sectors charged with planning, coordination and delivery or and encourage greater value added through industrial Ministry of Commerce and Industry charged with MSME transformation. A forward look at the implications of development. GOL might want to give some thought this strategy is taken up in Chapter 2.

44 One wonders how well the local content provisions are being implemented or supervised in practice and whether there are any complementary measures to incentivize local content other than the statement in the Procurement and Concessions Act that “The development of local small, micro and medium-scale enterprises (SMMEs),especially in the procurement of goods and services, will be encouraged”. The National Investment Commission is reportedly working to upgrade the local content provisions, particularly in the oil and gas sector and this seems an important priority. With respect to tourism, Liberia is endowed with many Liberia also has a unique history of serving as a preferred potential assets which require further development. locale for international ship registry, the materiality of which, These include 380 miles of virgin oceanfront, with sandy relative to other commodity exports is evident in Figure 10. beaches punctuated by clean-flowing rivers and deeper Presently, approximately 3,750 ships sail under the Liberian inland the country has much of West Africa’s surviving flag, second only to on a global scale and carrying virgin forest which could offer potential for eco-tourism. an estimated 33% of US oil imports. The registry contributes However, Liberia is not recognized as having scenic on the order of $20million per year in revenues. However, attractions to draw international tourists, unlike Sierra the reality is that the industry is not presently creating jobs for Leone which had a vibrant influx of beachcombers from Liberians. The Liberian Registry is administered on behalf of Europe in the years before their own conflict. Although the Government of Liberia by the Liberian International Ship the Ministry of Information, Culture and Tourism (MICAT) & Corporate Registry (LISCR, LLC), a U.S. owned company has drafted a list of 80 potential attractions nationwide, headquartered in Vienna, Virginia.44 Whether Liberia can Liberia has essentially no international tourism industry regain participation and maintain competitiveness within this and this absence is likely to persist for the coming years. services domain is not evident.

Figure 10 Importance of Shipping in Liberian Exports

YearYar

$2000 000 $1800 000 All other exports $1600 000 Cocoa and cocoa preparations $1400 000 Gold $1200 000 Iron and steel $1000 000 Mineral fuels, oils etc $800 000 Rubber & articles thereof

$600 000 Shipping services IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH $400 000 35 $200 000 $ 0 2006 2007 2008 2009 2010

Source: Int’l Trade Center

1.2.9 Current Situation and Reforms • Legislative Reform: Ten pieces of legislation have been passed, included a revision of the Investment in Liberia’s Private, SOE Act, the first commercial code and the establishment and Financial Sectors of a commercial court;

• Business Registration: A new “one-stop shop” has Private Sector Development and Reforms to streamlined the processes for business registration, reducing by half the number of steps to register a Improve the Climate for Business business and reducing the time required from 99 to 20 days-- leading more than 7 thousand people to Liberia emerged from its devastating civil war with a register or re-register their business; decimated private sector and the need for an improved business climate. Yet, Liberia knew from its past history • Trade logistics simplification through streamlining of that an attractive business environment is essential import and export procedures, including automation to attract investment. Consequently, the authorities and revision of the customs code; launched into a reform program under PRS 1 designed to improve the conditions for business. By 2010, major • Improved trust between government and the private progress had been achieved on the following fronts : sector achieved through public-private dialogue.

45 “Country remains a Minnow in Marine Sector,” published in Doing Business in Liberia, Financial Times, September, 2012. As a result of these and other measures, Liberia was and education, is better infrastructure. Small businesses named as the “best global and regional reformer” of the need better, cheaper communications, better roads and year in the World Bank’s Doing Business Survey for 2009. transport infrastructure to reduce the cost of bringing This recognizes that Liberia has made enormous effort to goods to market plus lower cost production facilities to create a stronger enabling environment for private sector make their outputs competitive with imports Additionally, growth. Table 1.14 bears testimony to the areas where the bottom left quadrant should be presented with greater progress is being made and the areas which continue to competition from new entry over time and the concession present problems. terms offered to the top left quadrant must extract taxation benefits, employment generation as well as the Table 1.14 Improving Business Climate transfer of skills, networks and technological know-how. Recognizing the importance of developing the Ease of Doing Business 2011 2012 indigenous private sector, the Ministry of Commerce and Industry published its Implementation Framework Ranking out of 183 Countries 155 151 for MSME Development in July 2011, placing major Starting a Business 71 35 emphasis on the need to develop micro, small and Getting Electricity 152 153 medium enterprises, a new generation of entrepreneurs (including youth and women) and spawn a culture of Dealing w/Construction Permits 126 123 entrepreneurship in the economy. Chapter 2 takes Registering Property 176 176 a deeper look at this key strategy in reviewing the approaches which offer best promise in generating Getting Credit 139 98 inclusive, stability-enhancing growth. Trading across Borders 117 116 Figure 11 Depiction of Liberia’s private sector Enforcing Contracts 165 166

High-Rent Market Terms Competitive Market Terms World Bank: Doing Business 2012 Iron ore, gold and Smallholder tree crops, Meanwhile, two contrasting facts bring home the diamond miners, tree crop specialized agricultural dichotomy which characterizes the private sector in concessionaires, forestry product exporters, Est’d concessions; Est’d 12% 8% GDP Liberia. On one hand, Liberia has attracted $16 billion in Export- Oriented FDI since the end of the conflict. On the other, Liberia’s GDP

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH overall ranking on the 2012 DB index stands at 151 out Legislated & natural Importers, traders, of 183 ranked countries and it places the country higher 36 monopolies (eg. petroleum retailers, subsistence than Ivory Coast (167), Guinea Bissau (171) and Guinea distribution/ utilities), farmers and small (179) but lower than Sierra Leone at 141. What these protected sectors tradesmen Est’d 58% Oriented numbers actually show is that Liberia (and its neighbors) Domestic- (cement), Est’d 22% GDP GDP appears attractive to the foreign private companies able to respond to the natural resource potential on offer, but the sub-region as a whole is actually very under- Restructuring the SOE Sector developed with respect to an indigenous private sector. As such, it must be recognized that Liberia’s suffers Reforms in the State Owned Enterprise (SOE) sector from horizontal inequity in its private sector, with power were also initiated during PRS 1 and this is an important and privilege exerted by foreign and domestic elites complement to private sector development in order to and poorly developed capacity within the indigenous reduce the crowding out that is often generated by segment of society. Consequently, the “private sector” in monopolistic state enterprises. Liberia has been characterized as having four segments, categorized according to whether the output is oriented The authorities are aware that much of the towards domestic versus external markets and whether past economic mismanagement and corruption it operates in an environment which presents significant occurred in state-owned enterprises (SOEs) and competitive pressure versus the opportunity to extract other parastatal agencies. Plans to reform the SOE high “rents”.45 This paradigm is captured in Figure 11. sector will not only engender greater efficiency in the The bottom right quadrant includes Liberia’s indigenous public sector but should stop crowding out private fishing, farming and artisanal mining communities on the business and create more room for SME growth. one hand, along with predominantly Lebanese and Indian permanently resident “foreigners” who own and run small The government’s objective for SOEs, parastatals and retail establishments, hotels and restaurants on the other. regulatory agencies is to aim for a more complete What is vital to Liberia’s future is that entrepreneurs from restructuring in two parts. First, it plans to dissolve or this quadrant are helped to develop and move into the privatize SOEs, parastatals and regulatory agencies competitive quadrant in the top right. What this segment that are moribund, unnecessary or more appropriate for requires, aside from favorable policies and upgraded skills private ownership. Second, there are plans to continue

46 Eric Werker, “Private Sector Development in Liberia,” October 20, 2010. improving efficiency and economic governance within Overall, however, more progress is needed on SOE those that remain. For each SOE, parastatal or regulatory compliance with the Public Financial Management Law agency it will consider the full range of options, including and the IMF indicated recently that a strategy is still liquidation, full privatization, privatization with appropriate needed to reduce and manage the fiscal risks posed by regulatory controls, public-private partnership to leverage the SOE sector.46 private sector capital for investments, retaining public ownership with a private sector management contract, Financial Sector Development and Reform or retaining public ownership with mechanisms to ensure improved operational and financial performance. Measures

The first phase has consisted of establishing the criteria An efficient financial sector is essential to realizing the against which the performance and the appropriate private sector development goals articulated above reform for each SOE/parastatal/regulatory agency will as well as to poverty reduction, economic growth be judged. The criteria to be considered include: (i) the and social progress in general. The financial sector is appropriateness of government presence in the activity; dominated by the banking system, comprising the (ii) existence of market failure which may be rectified by Central Bank of Liberia (CBL) and five commercial banks government intervention, bearing in mind the potential with 13 branches, mainly in Monrovia (with branches for government failure to outweigh market failure; (iii) in Margibi, Bong, Nimba and Grand Bassa counties). access of marginalized groups to basic goods or services There are also non-bank financial institutions — 20 under full private ownership; (iv) strategic reasons for insurance companies, 118 licensed foreign exchange government involvement; and (v) opportunity and financial bureaus, three money transfer/remittance entities and cost of government involvement. The second phase will five microfinance institutions. Liberia has a dual currency consist of the following steps: (i) undertake assessments arrangement, with the Liberian and US dollars as legal to determine the appropriate course of action for each tender, and a market-determined exchange rate. While SOE/parastatal/agency, the timing within which any either currency can be used for any transaction, the IMF restructuring should occur, and the process by which reports that most economic activity takes place in U.S. restructuring operations will be implemented; (ii) drAFT dollars, including the payment of taxes and government the necessary legislation to effect the rationalization of expenditures.47 The financial sector is narrow and relevant SOEs for liquidation, privatization, public-private underdeveloped, characterized by limited financial partnership or appropriate regulatory controls, and then instruments, a low level of financial intermediation, and

facilitate its enactment and implementation; (iii) design limited trust among the public. Most transactions are IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH and implement restructuring plans for SOEs, parastatals cash-based, and there is room for modernization that and regulatory agencies that are not to be liquidated, could lead to efficiency gains. 37 privatized, or transformed into public-private partnerships, to strengthen their management and governance, There is a shortage of credit for SMEs and for the enhance their efficiency, and improve their operational agricultural sector in particular. A number of systemic and and financial performance, possibly through the use of institutional constraints have contributed to a low level of performance contracts or regulatory mechanisms; and (iv) financial intermediation for these segments, including a undertake periodic assessments as to whether the existing high volume of non-performing loans, ineffective judicial structures of remaining SOEs, parastatals and regulatory procedures for loan recovery, high intermediation agencies continue to be consistent with the government’s costs (especially in rural areas), inadequate credit objective of dissolving or privatizing those that are risk management systems, few adequately trained moribund, unnecessary or more appropriate for private personnel, and non-transparent corporate governance ownership. practices.

Concrete interim actions have begun to stem further Central Bank efforts to cap interest rates also have the losses. A number of SOEs and autonomous agencies effect of reducing bank profitability, further constraining identified as slated for dissolution now receive only minimal the supply of SME financing. In order to increase the budget allocations while the dissolution is prepared. reach, quality and sustainability of microfinance services to Liberian micro-entrepreneurs, GOLR’s MSME policy These include the Agriculture and Industrial Training statement asserts that, “In line with the National Strategy Bureau, the Bureau of State Enterprises and the for Financial Inclusion and the Micro Finance Regulatory National Food Assistance Agency. In others, the and Supervisory Framework for Liberia, Government will application of the GEMAP framework has been promote further growth of outreach, product offerings engaged, and the initiatives seek to improve financial and sustainability of microfinance institutions in Liberia.” and operational controls and practices. Others, such as the Liberia Petroleum Refining Corporation, have The government’s financial sector reform strategy been internally restructured and have dramatically focuses on promoting competition and efficiency improved their financial and operational performance. in the system to allow it to more effectively support

47 International Monetary Fund, “Program to Support the Agenda for Transformation,” PPT prepared for July, 2012 discussions 48 International Monetary Fund Working Paper, “Dedollarization in Liberia—Lessons from Cross-country Experience,” March 2009 development of the private sector, including in rural the conflict. Whereas all of these problems contribute to areas. This will call for, among other things, intensifying weaknesses in the public civil service, the final problem supervision and regulation of commercial banks and which plagues efficacy is the culture of patronage and non-bank financial institutions, strengthening prudential nepotism discussed earlier. controls and improving the credit risk assessment capacity of commercial banks, rationalizing non- To address these issues, GOLR created a National performing loans, and improving the existing legal Capacity Development Unit (NCDU) in 2007 in the frame-work for enforcement of financial contracts for the Ministry of Planning and Economic Affairs and adopted recovery of loans. The central goal for the reform strategy a National Capacity Development Strategy (NCDS) in is to drive towards a stable, sound and market-based February 2011 to reform, right-size and professionalize financial system that supports efficient mobilization and core institutions of the State48. Civil Service Reform allocation of resources to foster sustainable economic (lead by the Civil Service Administration) and Public growth and poverty reduction. Sector Reform (lead by the Governance Commission) are under way, having started with a “Multi-Functional Specific renovations to the system that would permit Review” to establish the current baseline staffing in all the attainment of this goal are many and demanding. public and civil service entities and contrast this to the Among them, the government plans to focus on the skills and competencies required. Starting from a base following: (i) modernizing the payments system; (ii) of 29,184 civil servants49 in 2008, a sector-specific ensuring that commercial banks are fully capitalized; human capital development plan has been established (iii) exploring ways to address over time the issue of to move Liberia through three time-bound phases the capitalization of the Central Bank of Liberia; (iv) of expansion in the national work-force, including encouraging a sustainable, well-managed microfinance recovery (2008-2011), transformation (2012-2015) sector as a means of broadening and extending financial and sustainability (2016-2020) phases. The task ahead services, especially to rural areas; (v) strengthening the is enormous and the importance of this key human legal framework to facilitate the collection of debt and capital development strategy cannot be overstated. enforcement of financial contracts; (vi) developing the One critical skills gap relates to the engineering, necessary legal and regulatory environment to ensure planning, construction and management skills required that alternative frameworks for access to finance to implement large-scale infrastructure development to (such as leasing and equipment finance) can occur; improve communications, resuscitate the ports system, (vii) laying the groundwork for developing markets repair and construct new power grids and build roads.

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH for short-term securities and other money market These must also be complemented by public-private instruments; (viii) improving transparency and efficiency partnership knowledge and transactional experience 38 in information-sharing among financial institutions on in closing investment deals. While the gap between the creditworthiness of potential borrowers; and (ix) human capital requirements versus domestic supply strengthening depositor protection and improving has been calculated for many sectors including health, confidence in the financial system. agriculture, mining, security and education sectors, the needs of these four principal infrastructure sectors has not been estimated. The exception is the ports sector, where the National Port Authority estimates a need to 1.2.10 Capacity and Reform Measures increase of staff by 57% across all levels to give it the in Liberia’s Public capacity to carry out the revitalization works envisaged under its next generation poverty reduction strategy. Sector Administration This represents a substantial order of magnitude which is, without doubt, a valid proxy of the type of gap As was explained in the analysis of fragility, Liberia’s applicable to the requirements for roads, power and dominant mode of governance for over a century was communications sectors. to overlook the value of human capital and ignore the potential of all members of society. This, followed by While manual labor gaps can be closed in the shorter fourteen years of conflict, means that the country’s stock term, it is evident that the supply of engineers, planners of educated professionals and civil servants has been and managers must come from longer term investments severely depleted. Literacy and skills among the majority in education, both through scholarship programs of Liberia’s population are dramatically low, particularly overseas and the upgrading of Liberia’s own academic in the case of women. The entire generation of war- and Technical/Vocational Educational facilities. affected youth missed its opportunity for education leaving them ill-equipped for work and in many cases Associated with this plan are measures to expand the psychologically traumatized or physically disabled. capacity of Liberian educational and training institutions to orient their programming to produce expertise in the needed Moreover, “brain drain” caused the exodus of many of areas. Target changes for realizing a more efficient civil service Liberia’s trained professionals and others were killed in include, (i) right sizing the structure of the civil service to

49 Ministry of Planning and Economic Affairs and UNDP, “Liberia National Capacity Development Strategy,” Feb, 2011 50 Source: Civil Servants Census, CSA January 2008 extracted from LISGIS survey of civil service institutions in 2005, corroborated with additional analysis conducted with CSA in 2008. Cited in National Capacity Building Strategy. secure more staff members at mid-level with analytical and and not simply the resurrection of old structures.Under supervisory capabilities and fewer staff members at lower the Sirleaf Johnson administration, this process of level; (ii) clearing out unqualified personnel who entered governance improvement is underway in both political through the spoils system; and (iii) re-instituting merit- and economic spheres. based recruitment. To meet urgent requirements during • Third, the extent of poverty, human dislocation and the recovery period, support to the civil service and public diminished activity in the economy presented Liberia sector has been supplied through a variety of innovative with an urgent need to revive the economy. The programs to attract highly qualified Liberians to work in the administration relied upon reviving traditional engines civil service (using competitive salaries and performance- of growth, including that from the mining concessions based recruitment) including the Senior Executive Service and commercial plantation sectors which were better (SES), the Transfer of Knowledge of Expatriate Nationals able to respond to a reopening of the economy. (TOKTEN), and the Liberia Emergency Capacity Building These segments will soon resume exports on a large Service (LECBS). These have supplied emergency, stop- scale, at which point their contribution to growth and gap measures to address human capacity shortfalls and commodities trade will far out-pace, and possibly provide the requisite leadership to drive Liberia’s reform dwarf, the GDP contribution and pace of growth in the agenda, all of which need to be regularized within the smallholder sector. This leads to the conclusion that national budget beginning with the second PRS. While government strategy going forward needs to focus a there is a lot of discussion about the vital importance of civil maximum of investment on those areas that will (a) service reform, it appears that progress has been stymied expand the potential for endogenous growth in the due to the political sensitivity of reducing ghost workers smallholder and domestic private sector, and (b) foster and laying off incompetent personnel. Hence, while the linkages between concession enclaves and domestic NCDS exists on paper, further progress is needed with communities to create employment, encourage the implementation. contribution of local content, transfer knowledge and build the capacity of Liberia’s people. In the sphere of local administration, whereby public services • Finally, the “Lift Liberia” poverty reduction strategy in health, education and social programs are delivered to correctly identified that the country’s severely depleted the populace, institutional capacity is also weak. Hence, infrastructure base represents a key binding constraint Liberia’s Governance Commission has been leading the to resuscitating further growth in the country, with participatory process of defining decentralization policy power and road investments representing the highest to empower local governance mechanisms to manage priority targets for urgent investment. This chapter

their own affairs. County-level governance structures are continues with a deeper look into the current status of IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH being reinforced by support from County Support Teams infrastructure and what more needs to be done before (CSTs) and all counties in Liberia have developed their own proceeding to an examination of promising growth 39 County Development Agendas to complement the PRS. strategies for the future in Chapter 2.

1.2.11 Key Findings Regarding Liberia’s 1.3 The Current Status of Trade Current Socio-Economic Situation This section focuses on the role of trade, both regional and international trade, in the new development agenda. This review of Liberia’s socio-economic situation and The underlying premise is that Liberia stands to gain from initial poverty reduction strategies has brought to light improved trade performance in terms of its stimulus to four key findings: growth and job creation, both of which would contribute to stability. This assertion does not overlook the fact that • First is the observation that civil conflict caused there is still active ongoing research into determining Liberia to drop from a position as one of few middle whether trade causes growth or the reverse. It is income Sub-Saharan countries in the 1970s to its based rather on the recognition that: (i) under the most current level among the bottom rung on the human conditions of most developing economies, the causation development scale. Brain drain has compounded these runs from trade to growth under certain conditions; problems and Liberia now has a major challenge to and (ii) the growth impact of trade depends on the terms re-build the capacity of its public sector administration of exchange between the trading partners, and needs not and also nurture creation and expansion of an always be favorable to each partner. indigenous private sector. • Second, Liberian authorities recognized that their Where growth is concerned, we posit here that expanding pathway out of fragility would need to rely as much on trading opportunities would raise GDP through: (i) higher consolidating security and the rule of law as it would demand raising capacity utilization, and improving upon revitalization of the economy and delivery of resource allocation; and (ii) learning and technology basic services. Given that many of the institutions and transfer raising productivity. In the subsections that follow, mechanisms essential to these functions were lacking we examine Liberia’s current performance with trade or profoundly biased before the war, this has implied a overall as well as within the region, as a basis on which to wholesale effort at creating governance capacity anew, work out proposals for the future. 1.3.1 Liberia’s Performance Table 1.15 Comparative Trade Ratios in MRU States in International Trade Ivory Sierra Data 2007-2008 Liberia Guinea Coast Leone Liberia has generally had a highly open economy, with its Merchandise Trade/GDP 130% 74% 68% 40% exports in particular highly concentrated in composition and by destination. During the 1970-80s, the openness index Export of Goods & Services/ GDP 29% 48% 27% 21% (ratio of merchandise trade, the sum of exports and imports, to GDP) ran close to 100 percent. In the case of exports, this Import of Goods & Services/ GDP 50% 39% 30% 36% was mainly a reflection of the very high share of the natural resource content of the country’s output. The iron ore, rubber Source: African Development Indicators, World Bank and timber were exported by the concessions through their multinational channels to their traditional markets. The While its exports performance is only stronger than Sierra picture changed slightly towards the end of the boom period Leone’s in the MRU, this is expected to increase once in iron ore production, bringing the ratio down some – to more concessions based production comes online. around 70 percent just prior to the beginning of the war. Liberia also leads the MRU in imports of goods and services relative to GDP, at 99 percent—a factor which This high level of openness has also been due to a is exaggerated currently by the high level of UNMIL significant extent to high import levels. In the period of the imports. These numbers suggest that Liberia is building 1960s through the late-80s, the high import levels were back to a level of trade performance which could have partially due to a brisk transit and re-export trade with an element of providing transit and re-export trade to the rest of the West Africa. The Freeport of Monrovia, the other parts of West Africa. The interesting question is use of the US dollar, and liberal trade policies supported whether this phenomenon creates the basis for taking this vocation, which provided incomes and jobs to many steps towards encouraging higher sub-regional trade in Liberians. Another peculiarity of the Liberian trade system is imports passing through Liberia. This will depend in part the role of its open ship registry. Owing to the large number on the competitiveness of Liberia’s multi-modal transport of ships registered in Liberia and flying its flag, the non- infrastructure after refurbishment, including the extent to factor services attributed to these ships add to exaggerating which concessionaires contribute to establishing multi- Liberia’s services portion of trade. user road and rail installations and GOLR persuades MRU neighbors to make use of the same.

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH The high openness of the Liberian economy continues in the post-conflict era and Figure 12 identifies the current trend of As it happens, there seems to be a modest cost 40 a negative trade balance (inclusive of the shipping services advantage to other parts of West Africa procuring segment). some imports through Liberia. In 2010, the average cost of shipping a 20-ft container of imports to Liberia Figure 12 Liberian Trade Flows was US$1,212. The cost was US$2,707 in the case of 2005-11 (US$ million) the Ivory Coast, US$1,391 in the case of Guinea, and US$1,639 in the case of Sierra Leone. This shows that Liberia may be able to rediscover at least part of its past 4,000 vocation of being as an entrepot for regional import trade as long as the costs associated with re-exporting 3,000 Imports do not use up the difference in c.i.f. values. 2,000 Exports

1,000 Trade Figure 13 presents the recent trend in commodity Balance - exports. This shows that, indeed, production is beginning 2005 2006 2007 2008 2009 2010 2011 to expand and exports are beginning to follow. The (1,000) prominence of rubber in the commodity export mix is (2,000) currently very pronounced, but this will recede when round logs, iron ore and cocoa begin recovering and the (3,000) total volume of exports expands. Liberia’s principal trading partners were Europe and the USA before the conflict, but

Source: African Development Indicators, World Bank Table 1.16 identifies that Asian countries are now entering the picture. This diversification will increase when Chinese Liberia’s merchandise trade-GDP ratio averaged 87 and Indian mining interests reach the export phase and percent between 2008 and 2011, the highest in the when Malaysian and Indonesian plantation interests MRU (see Table 1.15). begin exporting palm oil and other agricultural products. Figure 13 Composition of Commodity Exports Recent Trends US $, 1000s

Source: Ministry of Commerce & Industry

Table 1.16 Pre and Post Conflict Trading Partners goods subsides and progress in the agriculture sector reduces the dependence on food imports. Liberia has recently resumed the collection of imports data and Export Partners 1984 2012 Table 1.17 and Figure 14 present import data for 2011. Europe 60,6% 20,8% Table 1.17 Liberian Imports for 2011 N. America 20,2% 41,4%

Other 19,2% 0,7% DESCRIPTION 2011, Calendar Yr % of Total Food and Live Animals $246 642 858 35% Asia No detailed information 36,1% Beverages & Tobacco $19 830 335 3% IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH ECOWAS 1,0% Crude Materials & Inedible $8 651 128 1% 41 except Fuel TOTAL EXPORTS: 100% 100% Mineral, Fuel, Lubricant incl. $60 967 684 9% Comtrade Data for 1984, MOCI for 2012 Petroleum As is evident from the negative trade balance depicted Animals & Vegetable Oil $8 695 003 1% in Figure 12, Liberia relies heavily upon imports both for Chemical & Related Product $36 181 250 5% foodstuffs (especially rice) and petroleum products as Manufactured Goods Material $96 805 497 14% well as for machinery and transport equipment. Machinery & Transport $195 488 116 27% Equipment The net gap will persist for the next three to five years as Miscellaneous & Manufactured $27 813 093 4% investors continue to bring in a high volume of specialized Goods equipment for mining and infrastructure construction, Commodities & All Other $11 922 988 2% but will gradually decline as one-time import of capital TOTAL $712 997 952 100%

Figure 14 Composition of Imports, 2011

Source: Division of Foreign Trade, MOCI 1.3.2 Liberia’s Performance Liberia’s engagement in cross-border trade suffered severe contraction during the conflict. While this is not in Regional Trade revealed in statistical trade data, it is reflected in the devastation of regional markets that used to serve Liberia’s trade with the rest of Africa is quite small Sierra Leone, Guinea and Liberia plus those serving and that with her ECOWAS neighbors is smaller still. Liberia and Ivory Coast. A particular example is the UN COMTRADE statistics suggest that Liberia’s main disruption of the trade which previously took place in a regional trading partners include Burkina Faso, Mali, cluster of markets that connected Western Liberia with Nigeria and Senegal, but the lack of data on trade Eastern Sierra Leone and Guinea. As depicted in Figure with MRU neighbors suggests that the majority goes 15, five regional markets were located in Koindu in the unreported due to the informal nature of cross-border East of Sierra Leone, Guékédou in Eastern Guinea plus exchanges and a lack of capacity to track that which Foya, Kolahun and Voijama in Western Liberia. This is occurring. Official data suggests that trade has been market cluster previously conducted a vibrant trade flowing mostly one-way from other MRU countries into in agricultural produce and livestock, with a rotating Liberia across inland corridors. For example, almost schedule of days in the week during which each one 20% of Liberia’s $673 million import bill in 2009 was with its dominant specialty would be open. Resumption sourced by the Republic of Guinea and this likely of trade and revitalization of this market cluster has reflects their competitive advantage in producing been retarded by security concerns in addition to the livestock. 50 Cocoa and coffee also come into Liberia fact that road infrastructure providing access to these from Eastern Sierra Leone, but this is caused primarily locations in was badly affected in Liberia and Sierra due to the better road connections to the port of Leone during the war. export on the Liberian side. However, anecdotal information suggests that Liberia is an important sub- Nonetheless, there is cause for optimism about the regional supplier of palm oil and this trend is likely to resumption of regional trade. For instance, the town of increase as production of this commodity expands in Ganta (depicted as Ghanta in Figure 15) has emerged the coming years. Another apparently unique Liberian as a strategic location from which sub-regional markets product which is in demand is Liberian pepper, which can be served. As the most populous city in Nimba is exported by air in reasonable quantities to Nigeria. county and lying just south of the Guinea border, Consequently, current levels of regional trade may Ganta is at the crossroads of Grand Gedeh, Bong and be unimpressive, but there is significant potential Montserrado Counties and can become a viable hub

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH remaining to be tapped. and transit point for people, services and goods.

42 Figure 15 Market Cluster Formerly Linking Guinea, Liberia and Sierra Leone

51 Government of Liberia Ministry of Planning and Economic Affairs, “Developing Liberia’s Economic Corridors, Volumes 1 and 2”, August 2011, page 28. Figure 16 Sub-Regional Trade in Palm Oil INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH

43

The Ganta border crossing is about a ten-minute conclude that there is scope for more trade to develop drive from the City of Ganta and, aside from catering within the MRU. Food scarcity in all the MRU countries to Guinea-Liberian trade, also serves as a trans- further supports the conditions for expanded regional shipment point for goods coming from further in the trade. West African interior, bound for the Monrovia National Freeport. To enable further expansion several binding constraints must be addressed. Constraints lie equally on the Furthermore, a 2010 food security survey estimated underdevelopment of agriculture as well as the poor that the wholesale palm oil market in Ganta handles infrastructure in support of regional trade. Liberia’s some 90,000 liters of palm oil every week during the smallholders currently produce limited marketable marketing season, of which 60 percent was exported to surplus and their conversion from subsistence to Guinea.51 If true, those volumes would make Ganta one commercial orientation is a key strategy which must of the largest palm oil markets in the sub-region. Figure accompany trade expansion. An additional impediment 16 shows a pattern of flows in palm oil across borders is the fact that inadequate cross-border roads from Liberia. have made it difficult for the sub-region to discover complementarities and trade opportunities. To address Whereas one might conclude that the similarities this critical gap, Liberia is not only embarking on a between MRU economies limit opportunity for inter- major crusade to expand its road infrastructure, but regional exchange, there is sufficient diversity in food plans to do this in the context of strategic corridor crop varieties (particular bean varieties, cassava development. While the growth potential from corridor derivatives, or cooking oils) among neighbors to the development is explored in chapter 2, it needs to be east (as between Ghana, Togo, Benin and Nigeria) to noted that roads alone are not sufficient to close the

52 “Cross Border Trade and Food Security: Liberia and Sierra Leone,” FEWSNET and USAID, May 2010, page 20. regional infrastructure gap, as markets and one stop administration and facilitation, all of which require border facilities are also required. At the same time, improvement. Government is therefore grappling with Liberian businesses point to a lack of trade support practical issues that have the most immediate impact services and inappropriate government policies as major on the population and its trading capacity. Consequently, obstacles to trade. Slow application of trade protocols a laboratory for testing imports was established in 2011 contribute to this problem. Despite ECOWAS’s free and plans recognize that the country has a long way movement convention, difficulties of passage from one to go to establish quality standards and certification country to another still persist. systems for commodity exports. A key remaining issue includes working out efficient yet socially acceptable policies for determining the price of sensitive imported 1.3.3 Trade Initiatives products such as rice or cement. The regulatory regime for trade needs to be modernized, international best Liberia is currently faced with a large array of trade practices employed and predictability and transparency cooperation initiatives. The Ministry of Commerce and in trade procedures established. These are all works in Industry has governance responsibility for trade. It has progress. developed a Framework for a Trade Policy and Strategy and a Liberia National Industrial Policy and Strategy to guide efforts in these spheres. The aspiration is to 1.3.4 Key Findings and Conclusions strengthen cooperation with neighboring countries in the Mano River Union and with ECOWAS. At the sub-regional Regarding Liberia’s Trading Profile level, there is interest in revitalizing the four-member MRU. Meanwhile, ECOWAS is negotiating an Economic Liberia has had a high degree of openness to international Partnership Agreement with the European Union on trade, both in the past and at present. behalf of its members including Liberia, and the country is proceeding through phased adoption of the Common The trade balance is currently negative and this reflects External Tariff (CET) in favor of regional tariff harmonization. both a high degree of reliance on imports and the lag This initiative faces delay due to concerns from regional in resumption of exports. The trade balance can be partners on compensatory measures to cushion their expected to decline when the concessions sector gains economies from potential revenue losses. Furthermore, greater momentum and agricultural output reco vers. Liberia is developing its trade and investment relations Liberia had a certain degree of cost competitiveness

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH with the United States in the context of the Africa Growth as a hub for re-exports into the sub-region in the past and Opportunities Act (AGOA). At the global level, Liberia and it remains to be seen whether this advantage 44 has applied to the (WTO) to can be regained. Current statistics do not adequately begin the process of accession. capture the patterns of regional trade, but there is evidence of informal cross-border trade in food Ensuring that Liberia is prepared to benefit from other commodities and it is clear that Liberia serves as hub dimensions of the ECOWAS custom union framework, for the supply of palm oil to the wider region. Binding such as the ECOWAS Trade Liberalization Scheme, constraints to expanded regional and international necessitates investing in improved trade policy formulation, trade are portrayed in Box 4. To reverse this situation,

Box 4 Continuing Constraints to Liberian Trade

Global Trade Regional Trade Fragility and vulnerability to threats that could re- Local skirmishes and specific incidents of insecuri- generate instability place Liberia at a disadvantage ty result in temporary or repeated border closings. Security relative to other ECOWAS countries on the global Transporters seeking to keep goods moving face a Constraints trading stage choice between costly delays or the cost of bribes to make progress on “closed” transit routes.

Lack of adequate quality management systems to Lack of a common currency to facilitate trade. make products compliant with EU and other global Differences in payment systems, making cross- General market standards; Lack of export packaging and border payments cumbersome and a lack of Constraints poor market information systems procedural harmonization and phytosanitary standards

Poor state of roads and lack of all-weather access. Lack of common border facilities and hospitable, Infrastructure Poor equipment for crop drying resulting in mold & all-weather markets for trade. Inadequate road Constraints quality problems. links to border locations & weigh stations & scanning equipment. Table 1.18 Indicators on Liberia’s Stock of Infrastructure with Comparative Benchmarks

Infrastructure Mano River Union Countries Comparisons & Benchmarks

Sierra Ivory Guinea- Source YR Liberia Leone Guinea Coast Bissau Nigeria Africa

Roads

Total Network (km) 2 10664 11555 44348 80000 4383 193200

% paved 2 5,38% 8,90% 9,79% 8,12% 32,79% 15% 18,30%

Density: km/1000 ha arable land 3 27,9 21,12 27,71 28,5 11,51 5,85

Railways 3 rail lines, 2600 km.

Under rehabilitation 3 private & Privately mining Active, Rail Lines, total route km. operated by mining Private only lines: 382 693 km 2012 companies km 3528

Ports Monrovia port: container & general cargo concession Principal Port: Container Freetown: Conakry Port of Port of Bis- Operations 2012 Concession port: com- Abidjan sau: Com- Operator; mercial; mercial, Mineral Kamsar: mining, fish- ports under mineral ing, petrol Buchanan & licensed cargo Principal Port: Bulk Cargo Harper for mineral use & Greenville for lumber bulk cargo License Use

Power

23 MW but 5.7MW Total Generation capacity 2012 peak load capacity 50 MW 200 MW 553 MW 13 MW of which hydro production 0,0% 77,2% 53,0% 15%

of which thermal production High Speed Diesel 22,8% 47,0% IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH

Electrification ratio <10% 40,0% <10% 45 LEC Serves about Electric power consumption 1% of Monrovia 17 MW 48MW Low supply from effectively ECOWAS Electricity consumption per cap grid; most private 30,50 available 175 Avg = 88 kWh 2006 generators kWh/year

Communications

Converting to Main Line density wireless 0,52 0,52 1,73 0,29 0,86 2,83

Mobile density 2011 24,0 31,0 38,0 50,7 31,8 41,6 35,5

Internet Users 2011 N/A 16 000 90 000 660 000 37 100 11 000 000 60 901 474

Internet Penetration (density) 2011 1,5% 0,27%

Price basket for internet (US$/ mo) 2011 $1 200,00 $1 500,00 $67,71 $74,95 $50,29 $39,20

Telecoms investment w/PPI 17 000 000 26 300 000 18 000 000 39 500 000

Water & Sanitation

% pop w/Access improved sanitation 2006 32,0% 11,0% 19,0% 24,0% 33,0% 30,0% 38,4%

% Rural Pop w/improved water 2006 N/A 32,0% 59,0% 66,0% 47,0% 30,0% 50,9%

% Urban Pop w/improved water 2006 72,0% 83,0% 91,0% 98,0% 82,0% 65,0%

1/Source: African Development Indicators data uses most recent data available for each country.

2/ Liberian source = MOPW from 2011 Master Plan; Other country data from World Bank ADI

3/ Road km/1000 ha arable land. Presents most recent data available: Guinea = 2003; G-B = 2007; Lib = 2001 ; SL = 2011, Nigeria = 2004

4/ NPA Data from Sierra Leone; ADI Indicators from 2006 for Ivory Coast Liberia needs to orient its infrastructure investments Liberia’s stock of infrastructure in comparison to MRU so that it focuses not only on domestic integration, neighbors and regional benchmarks. but increases connectivity with the region and the rest of the world. It also needs to continue improving its trade policies and capacity for trade facilitation and, of critical 1.4.1 Overview of the Road importance, develop agricultural value chains oriented towards markets rather than only subsistence. This will Transport Sector have to change as a pre-condition for expanded trade within the MRU which is desired by GOLR. Liberia’s public road network falls short of the country’s needs both in coverage and quality. The domestic network remains largely underdeveloped and access to the isolated 1.4 The Current Status of Infrastructure south-eastern part of the country is particularly limited, increasing the isolation of that area. The 2010 CWIQ and Reforms Introduced to Date Survey 2010 indicated that only about 45 percent of households—nationwide, rural and urban— have access The importance accorded to infrastructure in this to an all-season road within 5 Km. Important paved roads exercise lies in the assumption that enhanced connect Monrovia to the interior and a few reach as far as infrastructure facilities would contribute to Liberia’s Guinea, Sierra Leone, and Côte d’Ivoire borders but they future socio-economic progress in at least four ways. are in severe disrepair. Some roads reach to the borders, First, better infrastructure services as end products in but do not extend effectively across them as is the case household consumption (such as water and energy) with the Liberia’s road two coastal road segments. West would raise consumer welfare directly, thus assisting of Monrovia, a segment of the Trans Africa Highway is poverty reduction. Second, enhanced infrastructure passable up to the Sierra Leone border and across the services entering into production (such as energy, water, and Mano River Bridge but the “highway” does not continue transport) would raise output, incomes, and employment on the Sierra Leone side. Coming into Liberia from Côte and help reduce poverty. Third, enhanced infrastructure d’Ivoire to the East there is presently no bridge across services in the regional context would contribute to the Cavally River and traffic must cross by ferry—a major economic progress by creating linkages and scale impediment to regional trade. Private roads are built advantages. Finally, improvements in the infrastructure by rubber and lumber companies and are mostly un- facilities linking communities (such as roads and paved, though current concession contracts with mining

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH telecommunications) would strengthen the sense of companies will likely result in an expansion of multi-user belonging to the same nation and thereby help national paved roads. 46 cohesion. This is important particularly in the case of trade in goods and factors, where the removal of policy barriers Estimates differ by source on the actual extent of between national markets needs to be complemented Liberia’s road network, with one estimate before with physical links. PRS1 putting the total at 9,916 km and the updated Transport Master Plan putting it at 10,664 km in 2011. The report recognizes that the effect of improved Drawing from the latter, the classification and surface infrastructure in the Liberian economy will depend type is presented in Table 1.19 and the network itself is upon which role it plays. Generally, infrastructure depicted in Figure 17. About 60 percent of the classified works as a complement to labor, although it can also network was in good to fair condition in 2010. This operate a substitute for labor when factor proportions compares with 80-86 percent in the broad category of are changed. Where it works as a complement to benchmark countries. In any case, the reconstruction of labor, the quality of labor needs to meet the required the roads network has been a major priority in recent years standards since infrastructure delivers its impact drawing in about $500 million in investment under PRS1. through raising productivity or helping to achieve cost Financial support of the international community has been savings. In the paragraphs below, the report takes instrumental in this effort, and an appreciable degree stock of the present volume, quality, access and cost of progress was achieved to restore a minimum level of attributes of the current state of the infrastructure functionality as indicated in Table 1.20. network and services in Liberia. This will provide the basis for suggesting conclusions on the adequacy of Table 1.19 Liberia’s Road Network the country’s stock of infrastructure both for its own needs and also for sub-regional use. In addition, the Estimated Road Network, Km in Class report recognizes that improved infrastructure requires accompanying measures to improve the governance Primary Secondary Feeder TOTAL institutions and policy framework at sector levels. Gd. These aspects are discussed at the end of Section Paved Gravel Paved Gravel Gravel Paved Gravel Total 1.4 after an overview is provided on the current status of each infrastructure sub-sector. This section begins 574 1 752 0 2 636 5 702 574 10 090 10 664 by presenting Table 1.18 to provide an overview of Source: Ministry of Public Works, with re-estimates by GOPA, GIZ Figure 17 Liberia’s Road Network The following additional observations on network and Links to Major Air and Seaports quality are made about a network that is undergoing active reconstruction. One set of judgments about adequacy can be based on how Liberia compares with its MRU neighbors, on one hand, and with the average country in sub-Saharan Africa, on the other. The volume and quality of Liberia’s road infrastructure do not compare in a straightforward manner with either of these. Compared with the endowments of its neighbors, Liberia’s does marginally less well than either Guinea or Sierra Leone in terms of the proportion of network that is paved roads. If judged by the criterion of the proportion of roads that are paved, Liberia clearly has some catching up to do if it is to at least match standards in its neighbors and the rest of sub-Saharan Africa. The picture looks different from the angle of density, or number of kilometers of road relative to reference measures such as space of national territory. In terms of density, Liberia’s network measures 27.9 kilometers per 1000 square kilometers of arable land. Source: MPEA: Liberia’s Vision for Accelerating Growth, Monrovia, 2010. This is about the same level of density as in Guinea but a little higher than in Sierra Leone. In contrast, the Liberian situation is a little worse when measured as Table 1.20 Road Works Achived Under PRS 1 density in terms of all land space. The relatively smaller land space of the MRU countries makes for a better density than the average for sub-Saharan Africa. On 2006 PRS 1 Type of Road Baseline Targets Achieved the other hand, topology makes their density worse than the average for sub-Saharan Africa, as measured Primary Paved Road 734 100 100% in terms of the ratio of kilometers of road to all land. Primary Laterite Road 1130 1187 100%

A number of qualifiers are appropriate as riders to the IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH Secondary Laterite 2350 300 100% density observations above. First, the network in Liberia 47 Urban Laterite - 150 100% is in worse shape, and needs more rehabilitation, than in most of its comparators. This is the combined Urban Paved - 69 100% result of two phenomena. The first is the insufficient Feeder Roads 5702 400 100% attention paid over time to building a strong network.

Source: MOPEA Deliverables Tracking; MOPW As an example, there has been a history of inadequate engineering of roads. Tertiary roads, in particular, were Transport costs remain high, averaging $.20 per ton often tracks, which later were widened into roads. The kilometer due to areas of poor road conditions and result was limited provision for culverts and this left the inadequate bridges. Unit costs per passenger-kilometer roads disposed to being washed away after a few seasons are even worse in low density rural areas where poverty of heavy rains. The second phenomenon is the neglect and rates are highest. This reflects one of many dilemmas deterioration that the network suffered in the conflict years. faced by GOLR in reconstructing the road network because traditional measures of economic rates of Second, road density relative to traffic loads does not return do not justify investment in low density rural areas.52 favor Liberia. This is illustrated in vehicle counts. In 2010, Yet, from a stability perspective, it is vitally important average annual daily traffic (vehicles per day) on paved to remove such areas from their social and economic roads was about 600 for Liberia, compared with about isolation and include them in the exercise of national 1,400 for resource-rich economies and about 1,300 for recovery and unification. Another major constraint to low-income countries generally. In the same year, the the sector is the high cost of road construction, with average annual daily traffic (vehicles per day) on unpaved the cost of constructing paved roads about 16 times as roads was about 20 in Liberia, compared with about 50 high as for laterite roads. Yet, laterite roads deteriorate in resource-rich economies and about 40 in low-income quickly and have annual maintenance costs estimated countries. Third, as a high rainfall country, Liberia’s at over one-third their initial investment cost. In these many bridges tend to wash out or become impassable. circumstances, short term affordability versus longer It has been estimated that further investment in bridge term sustainability of road sector investments present a construction would yield the highest economic returns difficult trade-off to the authorities. to investment in the roads sector.53 Finally, analysts

53 World Bank, “Liberia Infrastructure Policy Notes Prioritizing Investment for Diversification”, background paper prepared for Liberia’s High Level Economic Forum, October 2011. 54 World Bank, Ibid. Estimates are that each bridge repaired saves delays that valued at US$1.90 per truck attempting to cross each bridge. need to think more broadly when they judge adequacy/ carriers. The Liberia Civil Aviation Authority (LCAA) inadequacy of the network for development as routing regulates the development and management of both is also important, notably which road goes where, what domestic and international air transport infrastructure. cross-border linkages are provided and what institutional governance accompanies the infrastructure to make it The state of infrastructure in the sector is poor. The possible to achieve sustainable economic goals. Clearly, facilities (runways, aprons, and terminal buildings) were despite low traffic levels, there is a need to remove the not very developed to start with, and they sustained Southeast from its current isolation and, in addition, further destruction during the conflict. As a result, there is a need to upgrade the quality of the Trans African the sector’s number one problem is the inadequacy Highway link from Zwedru into Côte D’Ivoire. of facilities. In addition, navigation and firefighting equipment are in sub-standard conditions. Frequent According to the Ministry of Agriculture, there are few power cuts and inadequate storage (warehousing) trucks to transport goods in the country and, given the facilities are other constraints. orientation to subsistence farming rather than production of marketable surplus, there is a weak market for trucking Over the period 2006-07, the government set to work services. The Liberian trucking fleet was decimated during on the installation of a refurbished system of ground and the conflict. Today there are an estimated 20–30 trucking navigational equipment at RIA, acquiring and installing companies in Monrovia with a total trucking capacity of less rescue and firefighting equipment, and renovating than 2000 MT. Truck carrying capacities are generally low, passenger terminals and expanding the runway. A key ranging from 5–20 MT per vehicle and most of the fleet has near-term goal for the government was to upgrade RIA’s been imported as used vehicles into Liberia. These factors capacity to international standards. Other plans include: together with the poor state of roads contribute to Liberia’s (i) construction of a new international terminal building; high transport costs and work to undermine Liberia’s (ii) installation of pipe-borne water, sewage, apron and comparative advantage and reduce the competitiveness taxiways to handle forecast passenger traffic of 350,000 of its agriculture sector vis-à-vis other countries. per year from 2010 to 2020; (iii) construction of a new runway with updated navigational equipment and lights Government formulated four strategic objectives for the (pending determination of commercial feasibility); (iv) roads sector during PRS1, notably: construction of a cargo terminal to service the West African hub; and (v) reacquisition of Liberia Domestic Airport i) Rehabilitate primary roads to assure they are usable Authority (LDAA) property illegally occupied by squatters.

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH year-round, plus open more secondary and feeder roads around the country; 48 ii) Work in partnership with mining, logging and 1.4.3 Overview of the Maritime and River agricultural companies to rehabilitate or construct feeder roads as part of concession agreements; Transport Sector iii) Rehabilitate all primary and secondary roads joining Monrovia to the 15 provincial capitals of Liberia Liberia has a long coastline, which stretches from Grand so as to better integrate the country and reduce Cape Mount County past Monrovia to the South East of the isolation which exacerbates ethnic, sectarian, Liberia and ends at the extremities of , religious and social divisions, and on the border with the Ivory Coast, some 350 miles. In iv) Rebuild the public and private capacity for sustained addition to coastal waters, Liberia has three great lakes, construction and maintenance of roads Piso, Sherman, and Teleh, as well as major rivers such as St. Paul leading into the Mano River, St. John and Cavalla. This strategy and related targets for the road While these endowments would ordinarily be utilized to transport sector remain relevant and will be carried support trade and also provide freight and passenger forward into the next PRS plan. Discussion of PRS transport in areas which are not currently served by other 2 is taken up in Chapter 2 and suggestions for road means of transport, the extensive presence of rocks in infrastructure priorities for the longer term are made the rivers seems to make that unattractive. in Chapter 3. Liberia has four seaports: Monrovia, Harper, Greenville and Buchanan, the location of which is portrayed in 1.4.2 Overview of the Air Transport Sector Figure 15 above. As a result of the civil war, facilities have deteriorated; cargo handling equipment is either Liberia currently has more than 12 airports, including inadequate or unavailable; and there is an inadequacy airstrips, serving domestic and international traffic. The of marine crAFTs. There are navigational hazards owing major ones are Roberts International Airport (RIA) and to wreckages of sunken ship, insufficient navigational James Spriggs Payne Airport. Others are minor airports, aids, and port infrastructure and facilities have not been such as those in Foya, Greenville, Harper, Voinjama and maintained for some time. Monrovia currently handles elsewhere. The Roberts International Airport serves almost all of Liberia’s seaborne trade though the port international traffic and Spriggs Payne serves regional of Buchanan is used for lumber exports and cement imports. Greenville is not presently operational due to relation to those paid under the original NPA leases. a sunken ship constricting the harbor and a need for With support from the GEMAP, progress is being made dredging and Harper is presently being used on a small in the installation of stronger systems of financial control scale to service UNMIL imports and provide services and management in the operations of the port. Once for coastal shipping. Coastal shipping is just beginning reopened, Greenville will likely resume its pre-conflict role to revive and this mode of good transport will compete of serving as the primary timber export port and it could effectively with roads until such time as road connections also develop as a significant export portal for palm oil and to the South East are brought up to a better quality rubber, depending upon negotiations concluded with standard. The private sector is taking the lead to fill this concessionaires. niche in the market.

The rehabilitation and development of the National Port 1.4.4 Overview of the Rail Transport Authority (NPA) capacity is essential for development and overall peace and security in Liberia. Yet nearly all Sector of Liberia’s supply of fuel, food and essential imports are handled by NPA. NPA has been vested with the mandate Prior to the war, Liberia had three operating rail lines, to oversee all seaports in the country, and it is choosing a “Mano River” line running from the river border with to employ the landlord model of management, having Sierra Leone inland to Monrovia, another running from awarded a BOT concession for the port of Monrovia Bong County to Monrovia and a third from Yekepa in and securing investment from concessionaires for Nimba Country to the port of Buchanan. These are upgrades to Harper and Buchanan ports. Government depicted in Figure 18.54 has assessed requirements for rehabilitating ports on an emergency basis, and has completed dredging of These lines were originally built mainly to transport iron the Freeport of Monrovia to a new and more acceptable ore from the mine heads in the Western cluster and level of almost 11 meters. It has also completed a in Bong to the port of Monrovia as well as from the downsizing of NPA staff but, as revealed in the National mines in Nimba (near the Guinea border) to the port of Capacity Development strategy, it requires a new Buchanan. The Mano River line was largely destroyed complement of staff with more sophisticated skills. and dismantled during the conflict and though it would Discussions are underway with respect to legal issues offer the utility of serving the “Western cluster” mining around the warehouses within the Freeport, a number region when that is ultimately re-developed, a large part

of which have been sub-leased at exorbitant prices in of the land pertaining to this line has been turned over IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH

49 Figure 18 Liberia’s Rail Lines Existing Prior to the Conflict

55 Barra, 2011 GIS Analysis cited in World Bank paper entitled “Liberia Infrastructure Policy Notes Leveraging Natural Resource Concessions” prepared for Liberia’s October 2011 High Level Economic Forum. to other uses. Consequently, rehabilitation of this railway refurbishment approach currently being employed and will be complicated due to land acquisition challenges. this matter will be discussed further in chapters 2 and 3. The Nimba railway is due for rehabilitation under the terms of an MDA with Arcelor Mittal, the company which has resumed exploitation of the former LAMCO mines in 1.4.5 Overview of the Energy Sector Nimba. GOLR is requiring that the line be reconstructed to allow for multiple uses, as a result of which the The energy sector of Liberia includes four main sub- investment cost will be considerable. Given this, Arcelor sectors, including: Mittal is exploring the feasibility of doubling the capacity i. The power sub-sector, with Liberia Electricity of the railway and building a new offshore iron ore jetty Corporation (LEC) at center; at Buchanan in conjunction with other mining companies ii. the petroleum sub-sectors, including upstream that many eventually develop a new mine at Kitoma or, petroleum, with National Oil Company of Liberia alternatively, those that will be operating nearby across the (NOCAL) at center and downstream petroleum, with border in Guinea. China Union is rehabilitating the Bong Liberia Petroleum Refining Company (LPRC) at center; mines (formerly operated by German company Thyssen), iii. the rural energy sub-sector, with Rural and Renewable for which it is operating the Bong railway with limitations. Energy Agency (RREA) at center; and The capital expenditure required for the Bong railway and iv. energy sector governance, with Ministry of Lands, connected mineral pier in Monrovia is estimated at around Mines and Energy (MLME) at center. $350 million and China Union will have the obligation to undertake this infrastructure investment. Consideration is Energy infrastructure is one domain where Liberia is being given to construction of a new railway to the Putu vastly disadvantaged relative to the rest of sub-Saharan range in coming years to evacuate the large scale find of Africa and the world, especially in the sphere of electrical iron ore found in the Putu mineral deposit. power. Liberia has possibly the highest cost electricity on the continent and in mid-2011, Liberia’s rate of access by The incompatibility of rail tracks was a problem the population to publicly provided electricity was close which existed before the conflict which made service zero, with Liberia Electricity Company effectively serving interchange difficult. Low availability of locomotive about 1% of the Monrovia urban population. Comparable wagons and spare parts was another, resulting in long rates were 28.5 percent for sub-Saharan Africa, and delivery and turnaround times. Long delivery times were 6% and 43.7% respectively for MRU neighbors Sierra the norm due to reduced speeds from poor gauge and Leone and the Ivory Coast. At present, West Africa’s per

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH track conditions, traffic disruptions due to derailments, capita consumption of electricity is among the lowest inadequate and defective signaling and communication in the world and, within ECOWAS, Liberia figures at 50 facilities and poor locomotive reliability. Planning the bottom. Figure 19 shows that Liberia did not have coordination issues such as these may not sufficient electricity consumption per capita to even be get the degree of attention warranted in the private plotted when this graphic was prepared in 2010, but

Figure 19 ECOWAS HDI and Electricity Consumption Compared to Other Parts of the World it would be situated close to Sierra Leone if included individual capacity of 16.5 MW each, into the existing on this grid. This emphasizes the important relationship pits, and the construction of the powerhouse, intake between low electricity consumption and low human structure, and substation. In addition, plans are on the development.55 The implication is clear: investments in books to have Liberia benefit from imports of electrical Liberia’s power sector are critical to improving national energy from exporting sources in the West Africa sub- welfare, especially if measures are taken to improve rural region, through connecting itself to the West Africa access to power. Liberia’s insufficiency is the result of Power Pool. A first one of these is the regional initiative low public investment in the sector in the past, made to create a West African energy market by building a worse by the destruction of installations during the 14- transmission line linking the Ivory Coast, Liberia, Sierra year civil war. Leone, and Guinea (known as the CLSG), with the objective pooling the power resources of these four Prior to the war, the national power utility Liberia Electricity countries and providing access to least cost (hydro) Corporation (LEC) operated a Monrovia power system power options in the sub-region. It is important that as well as a rural electrification system. The Monrovia Liberia reconstruct Mt. Coffee in order to connect it to the power system functioned with Mount Coffee Hydro CLSG transmission line and regional grid. Other options Power Plant, contributing 64MW of generation capacity are also under study, including expansion of Mt. Coffee’s plus a gas-turbine thermal power plant, contributing capacity and possible installation of new hydro-electric 118MW of total generation. Both were totally destroyed plans on the Mano, St. Paul and Cavally rivers. Above in the conflict. The Monrovia system supplied electricity all, the GOLR now considers the reconstruction of Mt. to Monrovia and some outlying areas, including Coffee to be a national emergency and it is the highest City, Tubmanburg City and Buchanan City. The rural priority infrastructure project currently on the books. electrification System operated eleven individual diesel stations. The conflict resulted in looting and vandalism Table 1.21 Liberia’s Electricity Tariff is Very High of energy infrastructure, including power plants and substations, transmission lines, as well as petrol storage Avg Price Total Cost Historical Cost tanks and depots. The reliance upon private generators Country US cents/ per unit, US Recovery Ratio is widespread. With the worst over by 2005, steps KWh cents/KWh* % were progressively taken to restore the electricity power Benin 13,63 13,73 99,28 sector. Approximately 23 MW of power is now provided Burkina Faso 20,07 23,56 85,19 to parts of Monrovia and this has been achieved with Cape Verde 22,81 23,34 97,73

capacity installed and emergency programs supported IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH Ghana 13,24 13,24 100 by development partners. Transmission is based on a 66kV transmission grid and the distribution grid consists Liberia 54,00 32,80 100 51 of both 33kV and 22kV grids with connections limited to Niger 23,95 43,20 55,44 about 3100 customers as at December 2011. All of this Nigeria 4,41 7,55 58,42 is currently provided through costly high speed diesel Senegal 14,23 23,87 59,6 generation. Consequently, as depicted in Table 1.21, Sierra Leone 42,00 Liberia currently suffers with the highest cost of electricity both in the sub region and possibly on the African * Incl. historical capital & operational costs per unit, but ops only for Liberia continent, presenting Liberia with a severe impediment to economic growth. To introduce management Source: Government of Liberia, LEC and AICD, 2008 efficiencies within the recovery program, MLME signed a management contract with Manitoba Hydro (MHI) in July Box 5 Mt. Coffee Plant Destroyed in Conflict 2010 and this is yielding good progress. An operating profit was produced in the first year of the contract and efforts are underway to upgrade information systems, commercial systems and the technical and management capacity to LEC staff.

Several new projects are now under consideration. The first envisions a reactivation of the previous hydropower system. To get this under way, a contract was awarded in 2008, with the aid of the US Trade and Development Agency (USTA), for a technical feasibility study for the rehabilitation of the Mt. Coffee Hydroelectric Facility. The study looked into the reconstruction of the power plant itself and the construction of a storage reservoir at the confluence of the Vai and St. Paul rivers. It recommended the installation of four turbines, with an

56 Energy and Power Study to Facilitate Interregional Trade and Exports in the ECOWAS Region, Background Working Paper prepared for AFDB RISP, November 2010. In the meantime, the impact of power shortage on and adequate sanitation facilities fell from 37 percent and households and the business sector is severe. By 27 percent of the population in 1990, respectively, to 17 2012, few rural or urban residents had proper access percent and 7 percent respectively in 2003. Poor access to electricity and the bulk of the population depends to safe drinking water and sanitation services are major on firewood, charcoal, candles, kerosene and palm causes of illness and poverty. The impact of inadequate oil, placing substantial pressure on the nation’s supply drinking water and sanitation services is greatest on the of bio-fuel. Businesses are obliged to buy generators, poor, who are badly served by the formal sector. Many maintain them, and pay for expensive fuel. The lack of people, particularly women and children, fetch water reliable energy sources puts great strain on Liberia’s over long distances or pay high prices to vendors. In forest resources, on one hand, and constitutes a severe addition, water- and sanitation-related sicknesses put constraint to the growth of enterprise and the delivery of severe burdens on health services, keep children out social services, on the other. of school, and undermine investment in agriculture and other economic sectors. The downstream petroleum sector is involved in licensing the importation of petroleum products and While significant progress has been made since the end managing publicly owned petroleum storage facilities. of the war, still only 25 percent of Liberians have access This sub-sector is strongly market-driven, with private to safe drinking water on a national basis (60% in the sector importing, distributing and selling petroleum urban areas) and 32 percent have access to human products under the regulatory control of the Ministry waste collection and disposal facilities. Regarding solid of Commerce. The upstream petroleum sector is in a waste management, the government has also begun to phase of exploration phase for oil and gas resources introduce improved management practices in Monrovia which is being achieved through exploration licenses with the establishment of 120 collection points with and production sharing contracts with numerous waste skips and pad in place. Weekly haulage of solid international oil companies. To date, twelve of seventeen waste in Monrovia increased from 980 m3 in March offshore deep-water blocks have been awarded and the 2007 to 2,125 m3 in November 2007. Under this remaining blocks are pending award. A first discovery of arrangement the secondary collection of solid waste from oil was confirmed in February 2012 and tests are now communal dumpsites has been outsourced to private underway to evaluate the quality and quantity of the find. service providers to collect the backlog and current daily generation of 700 m3. To streamline the petroleum sector, GOLR plans to

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH review and determine the most appropriate structures The Monrovia City Corporation (MCC), which previously (public or private) and functions of the National Oil provided this service, has now assumed the role 52 Company of Liberia (NOCAL) as well as that of the of a facilitator responsible for providing guidelines Liberia Petroleum Refining Corporation. It plans further and monitoring adherence to them. In addition to to institute measures to improve product quality and this arrangement, primary collection of waste from profitability of the downstream petroleum sub-sector households and other sources to communal dumpsites and expand and improve the petroleum product delivery is being undertaken by community-based enterprises service to rural Liberia. Debate is now occurring over and other groups. This has provided jobs in solid amendments needed in the energy policy and petroleum waste management, while also reducing environmental sector legislation to address an institutional conflict of and health hazards and enhancing the appearance of interest whereby the NOCAL currently functions both communities. There remains, however, no reliable landfill as an operator and a sector regulator. Measures are site in Monrovia and its environs. being contemplated to remove this conflict and adopt appropriate institutional separation of duties. Liberia is endowed with high rainfall and nine perennial river systems, many of which it shares with its neighboring Work is just getting started for rehabilitation of the rural countries. Indeed, Liberia’s borders with Sierra Leone energy sector, with the RREA operating under Executive and Côte D’Ivoire are both demarcated by river basins. Order No. 23 since January 8, 2010 and a Bill to formally Water is also an essential requirement for agriculture and, legislate its establishment being finalized. The RREA is fortunately, there is no shortage that would constrain preparing a national rural and renewable energy master expansion of this sector. Irrigation infrastructure currently plan and the agency will soon be implementing one micro- estimated at about 1000 developed hectares is very hydropower rehabilitation project in Yandohun, Vahun limited relative to FAO’s estimate of a potential for about District, Lofa County plus various renewable energy pilots 600,000 irrigated hectares. Irrigation investment could in Lofa, Bong and Nimba counties. serve to increase crop yields and food security by enabling multiple harvests in a single year, especially of rice, but a more integrated approach to addressing land tenure 1.4.6 Overview of the Water Sector constraints would be needed in order to tap this potential. Liberia does not currently have any policy document on Few water and sanitation facilities survived the war and comprehensive water resources development except for conflict significantly undermined the delivery of water dislocated pieces of legislation on land, mining, forestry and sanitation services. Access to safe drinking water and water supply that relate to water resources. 1.4.7 Overview of ICT Sector by a few operators has become apparent, bringing to light the importance of ushering in broadband internet in the Prior to the war, the predecessor to Liberia context of an open access policy framework. At present, Telecommunications company, (LIBTELCO) had a access to cell phones is high with estimates that over 50% network capacity of about 10,000 telephone exchange of Liberian households owning a mobile device by 2010. lines, of which 80 percent was in Monrovia. By the end of the hostilities, this exchange had declined to fewer Internet penetration is presently very low, estimated than 7,000 fixed lines and the country is now migrating at about 0.5% due to high cost reliance upon satellite to use of wireless technology. technology. Plans are underway to connect Liberia to the Africa Connect Europe submarine cable through During implementation of PRS-1, Government which the country will finally gain access to high speed took measures to reform the governance of the broadband internet. This offers the promise of greatly communications sector, establishing key institutions reducing the cost of internet services, increasing access with a division of responsibility between policy, regulation and connecting Liberia into the regional ECOWAS Wide and operations functions. The Ministry of Posts and Area Network. Telecommunications was given the mandate to handle policy related matters, the Liberia Telecommunications Authority (LTA) given a mandate as independent regulator 1.4.8 Policy Reforms and Governance and the Liberia Telecommunications Corporation (LITELCO) remained the national operator. Concurrently, Strategies in the Infrastructure licenses were granted to market entrant mobile phone Sector to Date operators such that phone services are currently provided by LIBTELCO plus and four others, notably LoneStar, Tables 1.22 (a) and (b) provide an overall portrait of the Comium, Cellcom and LiberCell. As these were granted legal, policy and institutional endowment applicable to before the advent of sound regulation, market dominance Liberia’s key infrastructure sectors at present.

Table 1.22 (a) The Governance Framework Applicable to Liberian Infrastructure Sub-Sectors

Transport Power Telecommunications Water & Sanitation

Telecommunications sector IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH A national energy policy Intention to set up a Na- policy established preced- National Transport Policy & has been approved but it tional Water Resources and 53 ing adoption of legislation. Strategy (NTPS) published has yet to be implemented. Sanitation Board to oversee Policy Framework for High Policy Nov. 2009 Calls for reorganization of the sector. It seems that Speed Broadband pub- MLME policy is required. lished

New legislation established Parts of the policy need to A Telecommunications Liberia Airport Authority be made into laws to pro- Act was adopted in 2007. to supervise & manage all vide for establishment of Promotes a private sector- No specific information airport facilities. NTPS the Rural and Renewable led, competitive environment available recognizes “need to adopt” Energy Agency and the overseen by a permanent Legislation Open Skies Yamoussoukro Energy Regulatory Board independent regulator decision

No sector regulator until the ERB is established. Discus- Liberia Telecommunications NWRSB is to implement Liberia Civil Aviation Au- sions underway on what Authority was the first regu- sector policy and provide thority: responsible for regulation to be delivered latory entity etablished post technical support to munici- aviation safety & regulation by whom. Thoughts are conflict It is independent of palities and rural water and of air transport that MLME can be techni- Ministry and reports directly Regulation sanitation boards cal regulator and ERB to be to the Pesident economic regulator

Energy Sector Plan devel- Sector objectives are to oped for PRS 2, covering NTPS seeks to change create an environment that grid power, rural energy, Liberia’s objectives are to role of GOLR and promote promotes investment, relies petroleum sector. As most increase access to safe wa- market-based competi- on competition & market power demand will come ter supply and sanitation, to tion in transport sector w/a forces to foster sector from mining concessions, improve solid waste dispos- larger role by private sector growth and encourage strategy encourages them al and to improve national Strategy in financing, and operating wider access to telecoms to invest in generation and standards of hygiene transport infrastructure services by the Liberian sell excess into eventual population regional grids Table 1.22 (b) The Governance Framework Applicable to Liberian Infrastructure Sub-Sectors

Transport Power Telecommunications Water & Sanitation

Ministry of Transport Ministry of Lands, Mines & Ministry of Post and Ministry of Public Works responsible for sector policy Energy is oversight ministry. Telecommunications has responsible for provision development & regulation authority for sector policy & of improved water and legislation sanitation

Ministry of Public Works: Liberia Electric Corporation Liberia Telecomunications Environmentally sound land- Responsible to construct is state-owned operator, with Corporation is incumbent fill established for Monrovia roads mandate to “generate, transmit SOE but no such programs for and distribute electric power other parts of the country, in- throughout the nation” and, as cluding inland urban centers such, the sector is vertically integrated. Focus is on re- installation of capacity before structural reform of the sector.

National Ports Authority-- Four other private mobile Existing participants in the SOE with mandate to own telephony operators are WASH sector include Liberia & manage all seaports in licensed and present in the Water and Sanitation Com- Liberia Liberian market mission (LWSC), MPW and the ministries of Education

Institutions (MOE) and of Land, Mines and Energy (MOLME)

Liberia Airports Authority independent statutory body supervised by LCAA

Other sector players: MOJ responsible for traffic law and enforcement; MOF col- lects vehicle import taxes; MOL issues transport union licenses; MOCI issues Vehhi- cle Import Permits; LISGIS collects data on transport sector & GSA in charge of INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH transport utilities

54 Transport services are high High at 54 per Kwh Market determined with Tariffs cost, making Liberia less monitoring regulated by LTA competitive

Monrovia port currently Liberia Electricity Corporation Four mobile operators are Collection of solid waste Status of under private concession. currently operated under a competing in the market in Monrovia has been out- Private Private companies investing Management Contract w/ place. sourced to private operators Partici- to refurbish Harper & Manitoba Hydro pation Buchanan ports

Transport Transport Policy and Strategy finalized in 2009. The vision of the policy is to provide a framework for an efficient, Liberia’s leaders are well aware of the need to rebuild safe, affordable and people-centered transport system in the country’s infrastructure, especially roads, to re- Liberia through market-based competition in the sector. connect communities and facilitate the movement of The new policy views roads and bridges as pivotal people and goods across the country. Surveys and links to overall development, including the integration consultative meetings throughout the country have of the nation and the empowerment and inclusion of made the point that roads are priority to: (i) create new women in society. To address various issues within the economic opportunities for the rural poor, including road transport sector, the policy identifies the need to unemployed young men and women and persons with create an improved road infrastructure maintenance disabilities; (ii) increase the income they earn from their function including the introduction of road fund financing work; (iii) enhance security, facilitate decentralization of mechanisms, and to introduce axle load controls to cut government services, and open access to health and down on overloading and excess road wear. Emphasis education; and (iv) reduce the costs of the products that to date has been on the domestic road network due to rural communities purchase. affordability issues and the imperative of integrating the country. However, longer term planning which places Consequently, the transport sector received a great emphasis on Liberia’s connectivity with its neighbors will deal of emphasis during implementation of PRS 1 and make an important contribution to meeting stakeholder this was under-pinned by promulgation of a National expectations learned through surveys. Liberia adopted new legislation to establish the Liberia Civil renewable energy supply are given equal consideration in Aviation Authority, vesting it with responsibility for aviation formulating governance arrangements and implementation safety & regulation of air transport. It has also established priorities for the future. It appears that Liberia’s various the Liberia Airport Authority and given it authority to development partners may have taken different sides on supervise & manage all airport facilities, including RIA. this debate and, as a consequence, some partner funding Rail transport in Liberia would improve if a number of steps for energy sector reform has dried up. were taken. First, harmonizing policies with neighboring countries would enhance trade relationships and raise Water, Sanitation and Hygiene the contribution of rail transport to growth. Second, harmonization of technical standards and multi-use Ministry of Public Works currently has responsibility to parameters under MDAs would extract better value from oversee the improvement of water sector infrastructure, private sector investment. Third, enhancing of safety of but its priority during PRS 1 was on roads and transport railway operations and developing common standards for sector improvements. Consequently, for several decades customer services would help capture increased amounts Water, Sanitation and Hygiene (WASH) responsibilities have of transit traffic. been shared amongst several ministries and agencies of government. Urban and Rural WASH responsibilities are Energy split between the Liberia Water and Sewer Corporation (LWSC) and the Ministry of Public Works respectively. The To address the problem of energy supply, the Ministry of Lands, Mines and Energy (MLME) assumes government formulated plans under PRS 1 to work policy, regulatory and sector coordination responsibilities towards several goals. At first, GOLR’s objective was to while the Ministry of Health & Social Welfare focuses on the develop a comprehensive national energy policy (NEP), preventive aspects of WASH. Given this overlap within the a sector strategy and an energy master plan for which sector, it suffers from the lack of a coherent, over-arching it would pass accompanying legislation. The policy was policy and supervising governance authority. For that drAFTed and received stakeholder buy-in and Cabinet reason, GOLR has given thought to establishing a National endorsement in 2009. Policy directions were to include Water Resources and Sanitation Board to oversee the plans for liberalizing the electricity sub-sector, involving sector. A “White Paper” on Water Supply and Sanitation “unbundling” the LEC and setting up conditions for Policy (WS&SP) endorsed by the Cabinet in 2009 suggested privatization of one or more generation, transmission and the creation of a National Water Resource and Sanitation distribution units in the future. The plans also included the Board (NWR&SB) to be supported by a National Water

establishment of an independent regulatory agency to be Supply and Sanitation Commission (NWS&SC). The Policy IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH responsible for approving tariffs, system reliability, quality further proposed that the Division of Environmental and standards, and dispute resolution. Plans also envisaged Occupational Health at the MH&SW be transformed into a 55 the restructuring of the Ministry of Lands, Minerals and Bureau of Community Mobilization and Hygiene Promotion Energy (MLME) and the reinforcement of its capacity to while the Community Services Division at the Ministry of meet the emerging challenges in the energy sector. Public Works is transformed into the Bureau of Rural Water Supply and Sanitation. All three would be jointly supervised Yet, as work advanced on various components affecting by the NWS&SC and these arrangements would eventually implementation of the drAFT NEP, the sequential next lead to the establishment of a new Ministry of Water and steps did not materialize into a finalized sector strategy and the Environment. Debate is still on-going as to whether energy master plan as originally envisaged. Instead, they this is the appropriate institutional governance for WASH gave way to preparation of sub-sector master plans and as there is some argument in favor of avoiding any interim other reform documents, including: arrangements and moving robustly towards spin-off from • a Rural Renewable Energy Agency function and energy MOPW and establishment of a full-fledged Ministry of master plan development Water and Environment. 56 • an LEC electricity master plan (recently done by MHI for the Monrovia system) and ICT • a NOCAL petroleum law reform initiative. Liberian authorities recognize the potential role of ICT As a result, other plans for liberalizing and reforming the in poverty reduction. They began by adopting the sector – including “unbundling” of LEC to allow for eventual Telecommunications ACT of 2007 to redefine the role privatization of power generation, transmission and/ of government agencies including the Ministry of Posts or distribution and the establishment of an independent and Telecommunications as policy-maker, the Liberia energy regulatory board have stalled. In some quarters Telecommunications Authority (LTA) as regulator and this slower pace of sector governance reform is viewed as Liberian Telecommunications Company (LTC) as the a symptom of entrenched fragmentation in the sector, a National Operator. The policy addressed issues of problem which betrays a lack of political will to tackle vested policy, regulation and enforcement, liberalization, fair interests. Others would differ, viewing the more measured competition, security issues and, very importantly, the approach as taking care to ensure that rural interests in principle of universal access. This was followed by the

57 Ministry of Public Works, “Five Year Infrastructure Plan,” 2012 adoption of a national ICT policy, the vision for which is rural communities with a minimum of five thousand presented in Figure 20.57 The policy aims to ensure that (5,000) inhabitants by 2013; services and systems are people-centered, accessible • Creation of a Universal Access Program Governing and cost-effective. Strategic objectives include: Board with oversight responsibility for the program.

Figure 20 Liberia’s Vision for ICT Development 1.4.9 Summary of Current Initiatives with Respect to Regional Infrastructure

The sections above identify Liberia’s current plans and initiatives for revitalizing its numerous infrastructure sectors. Plans for the energy and communications sectors make evident that Liberia is embracing the opportunity offered by regional integration and it is clear that the country’s domestic investments are complementary to and place a high degree of reliance upon important investments of a regional nature. Although the Transport Master Plan for Liberia also endorses the importance of refurbishing regional roads that connect with neighboring countries as part of restoring the “primary roads network” affordability issues come in to play in the timing of investments. At present, it appears that the critical priority is to upgrade roads along domestic corridors as these have greatest capacity to generate near term economic growth by connecting concessionaires to ports and supporting the conversion of agriculture to commercial • Encouraging private sector involvement in the market orientation. On the governance front, it is clear deployment of telecommunications infrastructure and that harmonization of policies and adoption of standards ICT networks in county headquarters and all major reflecting regional norms is essential if Liberia is to gain

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH cities of the fifteen counties with social, economic, maximum benefit out of participation in regional projects. commercial and financial activities by 2013; The investment initiatives and associated governance 56 • Provision of universal access and service access to priorities are identified in Table 1.23 below.

Table 1.23 Regional Infrastructure Projects and Associated Governance Initiatives

Transport Power Telecommunications Water & Sanitation

Liberia’s Transport Master Liberia plans to participate Liberia is participating in Though Liberia shares sev- Plan espouses a priority to in Cote D’Ivoire-Liberia- a West African Regional eral trans-boundary water refurbish the primary road Sierra Leone-Guinea communications grid in- basins and river courses network between present CLSG Transmission line cluding the ECOWAS with neighboring states, no and 2030. Included in the project and the creation Wide Area Network by specific water basin initia- Regional primary road network are of a West African energy establishing a landing sta- tives are underway. Infrastructure road links that connect to market under the West Af- tion to be supplied by the Sierra Leone, Guinea and rican Power Pool Africa Connect Europe Ivory Coast but timing and consortium affordability are not yet clear.

National Transport Policy Institutional arrangements Connection to a submarine Fragmentation of institu- Statement recognizes key for CLSG include the estab- fiber optic cable will provide tions and responsibility in role of improved transport lishment of a Special Pur- more affordable bandwidth the sector. Urgent gover- infrastructure & services for pose Vehicle to be owned to Liberian internet users nance needs relate more to MRU and ECOWAS dev’t. by the partner governments and will enable regional capacity building in munici- Regional National policy encourages but operated by a private connectivity into ECOWAN. palities. Governance Issues measures towards legisla- sector entity. IFIs involved in This will help regional gov- being Addressed tive harmonization for effi- the financing are still -work ernments share information ciency and improved inter- ing out the governance and and coordinate on security state connectivity. Liberia regulatory arrangements and other matters. Impor- has pledged to adopt West between national and re- tant that “open access” Africa axle load regulations. gional interests. policy maintained.

58 Policy Framework for High-Speed Broadband Connectivity for Liberia, Ministry of Posts & Telecommunications The more recent ICT policy statement also expresses Leone. This finding is confirmed by Liberia’s relatively the commitment to put in place a mechanism to divest low ranking on the African Infrastructure Index the LTC SOE in line with the intention to promote private portrayed in Figure 21. This index was established sector led growth in the sector. by the ADB to compare all countries on the continent with the top-ranked country which, for the 2006-2009 1.4.10 Key Findings Regarding the State of period was the Seychelles. Infrastructure in Liberia Today Underinvestment in the past meant that the network coverage was inadequate while insufficient The review above emphasizes that Liberia’s infrastructure maintenance caused progressive degradation in parts is in a woeful state in all of the sectors reviewed with and reduced service quality. Destruction during the conditions only slightly better than neighboring Sierra war caused many infrastructure installations to cease

Figure 21 Liberia’s Performance against Infrastructure Index of other African countries 100 = Max = Seychelles

40

35

30 Liberia

25 Ivory Coast Guinea 20 Guinea-­‐Bissau 13,8 15 13,6 12,6 13,2 Sierra Leone

10 IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH 57 5

0 2006 2007 2008 2009

to function. Rehabilitation work since the end of the rehabilitated; the ports of Greenville and Harper are war has restored parts of the infrastructure network to still to follow. Power infrastructure, which was limited functionality. before the war, was nearly completely wiped out by the time the conflict ended. The LEC is gradually In road transport, conditions are such that some roads, building back its coverage and services and the especially in the southeast, remain impassable and city current demand level estimated to be about three streets are potholed; and portions of the rural network times the level of supply. The review also established get swept away altogether during the rains. In air the inadequacy of infrastructure for the provision of transport, the runways, aprons and terminal buildings water to meet the production and sanitation needs of of airports have suffered decay, and navigational households and businesses. Safe water is available and emergency equipment are in poor condition. to about 60% of urban households. The status of ICT Only Roberts International Airport has seen some infrastructure reflects the effects of the war on older reconstruction of the runways, aprons and terminal fixed-line installations, on one hand, and influence of buildings as well as a renewal of some equipment. new technology, on the other. Mobile devices have Regarding rail transport, prospects are underway for largely replaced the old fixed network and planned the gradual reconstruction of Bong and Nimba lines connection to ACE along with a terrestrial landing through MDA agreements. In the case of maritime station will make it possible for Liberia to build out the transport, the ports are plagued with the problem domestic backbone for internet services distribution. of poor basic structures, navigational hazards from sunken wreckages and inadequacy of cargo handling As the enormity of the reconstruction task becomes and similar equipment. Only the Freeport of Monrovia apparent, GOLR is becoming more aware that the and the Port of Buchanan have been reactivated and FDI and concession participants in the economy will generate most demand for services in the short to over the Mano River Union which unites Liberia around medium term and that, the mining concessions in trade and environmental cooperation issues with its three particular have a valuable role to play in financing the neighbors—Cote D’Ivoire, Guinea and Sierra Leone. cost of road, port, rail and electricity installations in the Many of Liberia’s updated policy statements, including future. The implications of this finding are resumed for those in transport, trade and energy, make reference further discussion in chapters 2 and 3. to Liberia’s aspiration to engage more proactively with the MRU and with the Economic Community of West The framework for infrastructure deals with the association African States (ECOWAS). An example is in the sphere of various stakeholders (private sector, communities) of monetary policy whereby Liberia is actively engaged in its development and maintenance; with its insertion within the West African Monetary Zone convergence in allied development activities; and with sensitivity to initiative to move towards a single currency. Another environmental concerns. The framework provides for example is in the petroleum sector whereby Liberia ensuring that infrastructure development ties in closely and Sierra Leone are coordinating on fiscal and with the broader objectives of growth, employment and policy incentives. If taken to a next level, this kind of the meeting of basic needs. The framework provides for collaboration could extend to gaining joint benefit from the use of participatory approaches to the largest extent the economies of scale required to service the petroleum possible in the development and maintenance of the sector as it grows. assets. It also provides for a close link between designs and the protection of the natural environment. Nonetheless, there are more benefits which Liberia can draw from increased attention to and participation in regional initiatives. The following section serves to illustr 1.5 Current Initiatives and Benefits ate this potential. Available from Regional Integration

1.5.1 Liberia’s Participation in Regional 1.5.2 Why Liberia Should Engage Organizations and Policy in More Regional Integration Frameworks It is becoming generally recognized that regionalism in the 21st century should help achieve many more

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH The belief that Liberia is an outpost of western civilization benefits than just those obtainable from trade in and not an African nation state influenced its original role goods and service. In the case of Liberia, regional 58 in Africa, including its approach to regional and sub- cooperation should perhaps focus more now than regional integration. That belief translated into a self- before on the goals of shared gains from security and imposed isolation from the rest of Sub-Saharan Africa infrastructure development. In particular, the context for an extended period. This, in turn, meant a failure of regional fragility is an important consideration given to benefit from scale advantages by cooperating with the collective fragility of the southern coastal fringe selected development activities with neighbors and the countries in West Africa and the shared threats of illegal broader West Africa region. trade in drugs, arms and gems which plague the region. When a conflict-prone state resides next to a stable One clear example of that failure is in education: state, the attraction of cross-border infrastructure Liberia does not share much in the areas of curricula investment is inherently more compelling if the stable or examination/accreditation systems with educational state sees the benefits of collaboration and is willing institutions in other African countries. In 1972, Liberia to sponsor investment therein. The examples of South joined the West African Examinations Council (WAEC), African investment in Mozambique’s aluminum industry which manages examinations for pre-university and the Maputo-Durban trade corridor bear testimony education in Anglophone West Africa. This was two to the benefits which can arise. One of the poorest decades after the creation of the WAEC. Three decades countries in the world at independence, Mozambique later, Liberia still does not participate in full range of the has emerged from decades of conflict to become one activities of the WAEC. Another is the electrical power of Africa’s best-performing economies thanks in part system: Liberia’s system was the 110 volt/60 Hz cycle to its favorable neighborhood. Liberia does not have variety used in the USA, which foreclosed integration this advantage. In Liberia’s case, situated as it is within with the 220 volt/50 Hz cycle system in the rest of West a less stable regional environment, the stakes are Africa, including the MRU. The change from 110 volt/50 different. Yet, collective action is needed to maintain Hz cycle system to one of 220 volt/60 Hz cycle was stability and to change the investment climate in the finally made in 1992. entire sub-region. It is essential that the States located on the Southwestern coastal fringe develop a shared In the post-conflict era, Liberia has made substantial conviction for achieving future prosperity which can efforts to re-engage with neighboring countries and differ dramatically from the past. Mutual and collective revive its participation in regional institutions. Thus, for interests can be safely explored through the States’ example, President Johnson-Sirleaf presently presides membership in the MRU. Cooperation to Manage Regional Threats • Liberia – Ivory Coast-Eastern Forest-Guinea; • Eastern Sierra Leone-North-Western Liberia- Over the past two decades, the Mano River basin has Western Forest Guinea; been an unstable sub-region. Liberia was at the epicenter • Southeast-Sierra Leone-South West Liberia-Coast line. of this instability, as the Liberian civil war extended to neighboring Sierra Leone. Guinea and Cote d’Ivoire have Underlying the growth triangles is the recognition also suffered instability. In view of this regional context to that, though similar in many respects, the countries its problems, Liberia should perceive its national security can achieve complementarities in aligning the capital, policy in the context of sub-regional stabilities since fragility technology and human resources of more developed of immediate neighbors poses a potentially significant regions with the land, natural resources and labor of less problem. In the absence of regional stability, trade between developed areas, if willing to look beyond borders. The neighboring countries breaks down, national economies selected growth areas exhibit potential for addressing stagnate and poverty is not reduced. Refugees add to key issues for effective cooperation among the MRU national problems of resource allocation and distribution. countries especially in the areas of agriculture, energy, mining, cross-border trade, and fisheries. This strategy Liberia has the essentials covered in this area, opting for requires a de-concentration of political power at the reliance on international collaboration to meet the many center and empowerment of the business nodes along security threats from transnational organized crime. To corridors to encourage a trading orientation in the that end, it plans to work to cement the growing bilateral hinterland. and multilateral security cooperation between member states of the MRU, ECOWAS, and the African Union. Recognizing that governments do not steer FDI The government also plans to have the Armed Forces investment but do have latitude to shape the incentives, of Liberia positioned, in due course, to participate fully in Liberia could take more assertive measures to encourage international peace and security arrangements including investors to formulate their infrastructure investment plans the ECOWAS Standby Force, African Union Standby from a regional, rather than purely national perspective. Force, UN Peacekeeping and others, so as to advance This could make sense in cases where a given investor their professionalism. Finally, the government plans to has interests across borders and is seeking least cost seek the support of countries within ECOWAS and the solutions for transport to seaports, downstream industrial African Union, as well as UNMIL and other international transformation or the like. Whereas a private company partners, to assist the Liberia National Police in becoming is rarely in the position to broker a bilateral cooperation

better integrated into the greater sub-regional security, agreement between neighboring countries, Liberia can IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH intelligence and law enforcement effort. avail itself of the legitimacy of membership in regional institutions to help in such a quest.58 While one could 59 Opportunities Presented by Growth Clusters argue that this might result in Liberia losing out on the direct returns from FDI-supported infrastructure if it is Regional cooperation would enable Liberia to achieve located across a border, our assertion is that the multiplier economic gains by collaborating with its neighbors on benefits of greater economic integration could more than the use of the resource endowments that link it naturally outweigh the opportunity loss and Government should to the neighbors, including the physical environment and remain open to the possibilities. Interest in a sub-regional the wealth in it. The collaboration can take the form of perspective is illustrated by the regional approach being sustainable use of common resources (fisheries), scale taken by an investor such as China Union to iron ore economies in sharing investments needed to exploit mineral extraction in both Guinea and Liberia. and petroleum transformation and complementarity in unlocking forward and backward linkages between primary Rewards of Reputational Recovery from Bad to production and processing sectors. Good Neighborhood In recognition of the scope for growth gains from regional cooperation, the MRU secretariat, GOLR and USAID One legacy of the war that Liberia has to reckon with in the have each been working on strategic plans to promote post-war era is the reputation of being an unstable country. economic activity based on identified growth corridors. In This reputation translates into political and economic the case of the MRU secretariat, this has taken a broader uncertainty, resulting in higher perceived riskiness of sub-regional perspective to identify growth triangles that investments. This perception makes investors incorporate would serve to stimulate economic activity in the shared short horizons and discounted returns into their analyses but neglected interior zone to counteract a traditional of the attractiveness of investment opportunities. As it bias towards emphasis on respective capitals. Its initial happens, several of Liberia’s neighbors (the Ivory Coast, thoughts bear on the following growth triangles areas Sierra Leone, Guinea and Guinea Bissau) also have that covering all four countries: problem, and would be interested in acquiring a more positive investor perception of their neighborhood. This • Ivory Coast, Liberia growth area, covering South- change in reputation is something that can be pursued east Liberia and South-West Ivory Coast; as a regional goal.

59 An example might be the case of cross-border mineral deposits where a mining company has investment interests across both borders. Research on post-war economic conditions has shown achieving the minimum critical sizes required for survival that positive international attitude towards a post-conflict of the activities in question. Industrial plants in other country helps moderate perceptions of its riskiness. The ECOWAS countries can be profitable processing outlets positive attitude of the international financial community for raw products from Liberia’s tree crops. Other relations (development partners, followed by private investors) that strengthen on the heels of increasing economic towards Liberia appears to support that thesis and the exchange could help create the socio-political links that same applies to Sierra Leone. The situation has been less help the cause of stability in Liberia. clear in Guinea Bissau but is evolving in Guinea and the Ivory Coast. In any case, a regional approach to recovering The growing integration of economies would make it the reputation of the sub-region as a good destination for possible for countries to achieve similar scale advantages investment capital would pay handsome dividends. in the sizing and use of infrastructure. A crucial area is the production of human capital. Students trained in an Efficiency Gains from Harmonized Policies accredited educational institution in one country can fill a job opening in another. Similarly, with integration, results and Procedures of research conducted in a regional organization or even one country could find application in other countries. Policies and procedures work efficiently when they do One example is Africa Rice, where Guinea and Sierra not engender costs simply because economic agents Leone are reasonably active but Liberia has been a and goods cross from one jurisdictional authority into relatively late-comer to enjoy the benefits of varietal another. An important area in which this point applies is breakthroughs. Another is the program of cooperation trade costs. Research on trade costs have established on cocoa and coffee, that was agreed between Ghana that policy and non-tariff barriers together in developed and Liberia in March 2011, under which Ghana would countries can raise the price of a traded good by as provide Liberia with improved cocoa planting material much as 170 percent, and that this mark-up is higher and in turn receive help on coffee varieties from Liberia. still in developing countries.59 The non-tariff barriers, in particular, arise from differences in institutional Liberia’s Aspirations for and Expectations from procedures, language, currency and “informal taxes” engendered by bureaucratic excesses as goods cross Regional Integration borders. It is thus in Liberia’s interest to harmonize trade policies and procedures with its neighbors of the MRU Liberia remains committed to regional integration,

INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH in order to avoid needless additions to its trade costs. even if delays have occurred in the implementation of particular protocols as a result of the civil war and 60 Another area in which to seek to harmonize policies (and of limited public administrative capacity. It remains an procedures) is that of re-export trade in politically sensitive active member of the MRU whose main objectives are products. Rice is an important case. Liberia and her to expand trade by elimination of all tariff and non-tariff neighbors face important social and development issues barriers to sub-regional trade. After the near-collapse in relation to the rice sector. The government has a keen of the MRU during the conflict years, new strategic interest in keeping the price down for the urban consumer, thinking emphasizes making the MRU focus on three where much of the rice consumed is imported. At the same goals: (i) maintenance of peace and security in the sub- time, there is a long-standing goal of raising the production region; (ii) supporting growth by the implementation of a of local rice. Yet, low rice prices undermine the incentives to growth triangle/growth areas approach; and (iii) acting produce locally. The situation is further complicated by the as an implementing arm of the ECOWAS. fact that some locally-produced rice (and possibly some imports) is exported across the border into neighboring Liberia remains active within ECOWAS as well. In the countries. The neighbors also have their own dilemmas socio-political domain, the interventions mounted by the of this sort. This is clearly an area where improved policy ECOWAS Monitoring Group during the war years were coordination can help efficiency within Liberia and in the pivotal in helping bring about peace. Liberia recently neighboring countries in their shared quest to graduate benefitted from the support and vigilance of the ECOWAS from import-dependence to self-sufficiency and eventual Elections Monitoring Group, which continued until free capacity to produce surplus and trade. and fair democratic elections were successfully held at the end of 2011 Benefits of Scale for Research, Serving wider Markets, and Infrastructure 1.5.3 Key Findings Regarding Regional Access to regional markets can help Liberian producers Integration achieve larger scales of production than if they focus on the domestic market alone. The integration can Key frameworks have been set in place to guide also offer opportunities for industrial processing of raw Liberia’s future domestic policies both with respect to materials, with the larger scale being the basis of plants sector priorities and for macroeconomic governance.

60 Anderson, J., and E. van Wincoop, (2004), “Trade Costs”, Journal of Economic Literature, Vol. 42, pp. 691-751. The former pay particular attention to private sector reference yielded by the analysis of fragility at the start of development, agriculture, natural resources, and this chapter. That analysis reminds us that it is critically infrastructure while the latter have articulated plans to important for Liberia to improve its domestic integration use sound fiscal, monetary and exchange policies to by re-legitimizing the full ethnic and religious diversity maintain price stability and promote competitiveness. of its population, by including them more effectively in The evolving policy framework also provides evidence political processes and in providing them with expanded that Liberia attaches great value to using regional economic opportunity. On the other hand, a greater cooperation to widen its market space, achieve degree of regional cooperation and physical integration economies through exploitation of scale advantages will indeed provide an important catalyst for expanding and confront security problems with potential for spillover. economic opportunity for all Liberians and if that can However, these plans fall somewhat short of measures accelerate the pace of domestic poverty reduction, that would promote physical integration with the sub- the prospects for stability can be enhanced. The costs region and regional policy aspirations are not yet evident in and benefits from expanded regional collaboration and the investment plans which the country has for the future. regionally dimensioned infrastructure are further explored On one hand, this can be understood from the frame of in Chapters 2 and 3 of this report. INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA INFRASTRUCTURE AND INCLUSIVE GROWTH

61 62 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA CHAPTER 2 61 eooy i bto i te 90, descending 1990s, the in bottom hit economy • • undertaken inchapter1includethefollowing: Key insightsandconclusionsfrom theanalysis it couldstandtogain. engagement inregional initiatives toidentifywhatmore achieved results key under PRS1andaddedanappraisalofLiberia’s levelof identified It date. to introduced trade andinfrastructure sectors includingreforms took stockofthecurrent performanceinproductive, and Liberians of status socio-economic the reviewed to restore stabilityandlauncheconomicrecovery. It taken measures post-conflict the as well as conflict of both the Chapter 1 looked backwards in time and reviewed “Exogenous” means generated by external forces “Exogenous”meansgeneratedbyexternal while“endogenous”meanscreated from within.Endogenousgrowth theoryholdsthateconomicgrowth canbe growth ofaneconomy. term long the for sustained be can which growth economic to contributors significant become to prioritized be must innovation for capacity and knowledge domestic nurtured through appropriate policiesto derive primarily from endogenous sources forces) (incontrastto external and thatinvestmentindomestic human capital plus

ndqae ehooy n ifatutr. These infrastructure. and technology inadequate recovery but is constrained by land tenure problems, agriculture. The smallholder sector is showing signs of of themineralsectoraswellplantationstyle under income PRS1 by kick-started reviving the strategy of FDI-led amiddle development was as growth Recovery country. position pre-conflict a from and corruptionunderminethelegitimacyofstate. concessions functionasenclavesorwhere patronage as such,mustespeciallyavoidasituationwhere indicate areturnofgrowth withoutdevelopmentand, thatmight Liberia isparticularlyvulnerabletopatterns potentially contagious conflicts in the region. In addition, and land over conflicts rice), (especially supply food of urbanized populationofunemployedyouth,insecurity to severalthreats includingthepresence ofalarge, violent fashion. The nation therefore remains vulnerable addressednon- be in could throughgrievances which wider distributionofnationalwealthandinstitutions in societyandfailedtocreate socialmechanismsfor open- regime’s door economic policy generated horizontal inequality the whereby development” without history was accompaniedbythephenomenonof“growth political This conflict. civil full-scale of launch poor, thus inciting a challenge to the regime and the as thoughextrasuffering wasbeingimposedonthe deteriorating economic conditions thatmade it appear opportunity. Grievanceswere furtherfueledby andeconomic participation inpoliticalgovernance exclusion ofindigenousLiberiansfrom meaningful The Contributing Introduction Looking ahead:strategiesforinclusivegrowthinLiberia genesis andconsequencesofLiberia’s history causes of Liberia’s civil war were the the were war civil Liberia’s of causes andother impediments work toinhibit an essential which isvitalforLiberia’s stability. will notonlydelivergrowth butalsoequity, adimension of contracts among them. Good economic governance among partiesinsocietyandensuringtheenforceability deliver publicgoods,theprocessesrelations thatgovern formulates andimplementspoliciesto which government interactions amongthecitizenry, theprocesses through creation economic and social of institutions that govern coversthe Economic governance economic governance. in thisanalysisisareview ofaccompanyingmodes growth strategiestoguidethewayforward. Included on focus a with future the to turns chapter present The ad t nihos r n lne o a level a on longer no are neighbors its and • of rank global the in bottom the at sits • has embarked upon a wide agenda of policy of agenda wide a upon embarked has •

drivers ofgrowth are predominantly exogenous to commercial agriculture. Consequently, thecurrent behavioral conversion from subsistence orientation board. isa infrastructure major constrainttocurrent performanceacross the quality poor and insufficient that productive of review The sectors oftheeconomyreinforces theclearconclusion electricity. and roads to infrastructure recovery apriority, especially with respect with theneedtoredress thissituationandismaking bottom tier therein. is very much seized Government infrastructure bycontinent andLiberiaisinthe endogenous sources. institutional fronts. where measures are neededonbothlegislativeand done, especiallyinthearea oflandtenure reform progress hasbeenmade,more remains tobe significant While millennium. new the for institutions renewal, strivingtoupdateitspolicies,legislationand policies andregional integrationinitiatives. between the States in the implementation of ECOWAS MRU could be helpful for organizing closer cooperation the of power convening The disadvantages. these overcome to help can ECOWAS and MRU in its investment climate in isolation. Active participation coastal the fringe meansthatLiberiacannotsubstantiallyalter along conflict of legacy the Moreover, playing field with leading Sub-Saharan African nations. Liberia Africa with onlyamodestpartofr Liberia 61

ecovery attributableto CHAPTER 2 63 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 64 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA measures that improve over thesectors thegovernance priority for two types of state-sponsored intervention: (1) filter criteria. This permits the strategies to be ranked by the against evaluated is strategy each then and defined are criteria filter the described, first are strategies The and helpsthecountrygraduatebeyondfragilityforever. vulnerability tothreats, supportsprofound transformation inclusive growth ofthetypethatreduces Liberia’s thekey to ofthestudy,concerns notablythecapacitytogenerate inrelation justified and defined is which of each criteria, filter of set a establishing by done is This according tothemostappropriate future timeframe. prioritizing infrastructure investmentandallocatingit transformational impactfrom eachdistinctstrategyby on howLiberianauthoritiescanbringoutthebest reflection encourage to is exercise this of purpose the Therefore, transformation. of task fundamental the on differentgenerates and constraints degrees influence of rewards, suffers from different bindinginfrastructure 62 4. 3. 2. 1. and benefits an “inclusive”growth strategy, indicatingonewhichboth of endogenousgrowth theory, thereport willrefer toitas its citizensinthefuture. While thisascribestotheprinciples all to benefits development growthdelivers achieve that to growth Liberiawantstoachieve. Inparticular, Liberiaaims of type the on reflection substantial for with formulated been Agenda the Strategy, Transformation (AFT) for FY 2013 through Reduction 2017, which has new, Liberia’s Poverty of overview second an with begins chapter The inclusive growth. Theseinclude: of appraisal currently employingorcontemplating inorder todeliver deeper a conducts four keyeconomicgrowth strategieswhichLiberiais then chapter The of citizensintheprocess. citizens inthechangeahead,thereby buildingthecapacity reverse thesituation,new PRSstrivestodirectly involve generated growth without development,soinorder to approach activity. this economic that identified Retrospect objectives. success ofwhichwillhelpLiberiatodeliveritsgrowth trade, industry, services and commerce-- the concurrent the productive economy—mining, forestry, agriculture, of sectors most upon touch Together,strategies these not seekto ushering inFDItogenerateeconomicgrowth butitdid by Liberians to benefit deliver to aimed certainly 60s and 1950s the in applied policies Door Open The important. is Itisclearthatthefourstrategieschosen forscrutinyare notthe onlystrategieswhichGOLRisemployingforrecovery andtransformation.Otherstrategiesinclude, are chosen foranalysis. communications strategyandthenational capacitydevelopmentstrategy. However, theaspirations ofthesestrategiesare in many waysencompassedinthefourwhich for example,anationalrubberdevelopment strategy, anoilpalm plantation jobcreation strategy, atourismdevelopment strategy, aricedevelopment strategy, a

MSME developmenttoexpandtheindigenous Industrialization through specialeconomiczones, private sector. interventions includingenhancedconditionsfortrade, plus plantation agriculture and agro-forestry development, Natural resource concessions(NRC)formineral, Commercialization ofsmallholdersthrough multiple 62 e, ah mle dfeet ik and risks different implies each Yet, involve involves the majority through participation in the majoritythrough participation in all Liberian citizens. The distinction distinction The citizens. Liberian all Liberia’s infrastructure sectors. and developmentpartnerinvestmentspendingacross from FDIandtherelative prioritiesremaining forpublic ofinfrastructure in thesetimeframes,thecontribution to beexpected affordability the on reflection further provided by the ranking of growth strategies will permit AFT.under desired impact transformational Insights the confirm to medium term that will servetodeliverand reinforce to help will It Liberia’s total infrastructure requirements over the short Liberia. for strategy planning investment infrastructure an of 3 Chapter in delineation further permit will 2 Chapter in presented analysis The over future timeframes. unilateral national versus inter-dependent regional action and takesintoconsiderationfactorswhichwouldfavor relieve them. The analysis builds in a regional perspective investment and accompanying measures which could infrastructure of types specific the and strategy growth the constraintsinhibitingoptimalcontributionsfrom each infrastructure. In this regard, the analysis looks closely at financed publicly (2) and strengthening institutional and or actors involved, including through policy reforms 2.1 phase resumption of Liberia’s pre-conflict economic economic emergency- pre-conflict Liberia’sdevelopment strategywere beginningtoemerge. from of ensuing resumption phase challenges certain that by and, time, 2011 December by course its ran PRS-I 2.1.1 based ongrowth to 2030” – term establish a vision to restore the country to prosperity Rising longer “Liberia a entitled exercise launched visioning Liberia 2011, in Beginning a longertime-framethantheAFTperiodalone. to reinforce transformationshouldbeprogrammed over ambitious, thisstudyassertsthatinfrastructure planning primary importanceandbecausethegoalitselfislofty developmental qualityofLiberia’s growth pathisof is asimportantthedestination.Inotherwords, the journey the that emphasizing bears it 2030, by status growth. Hence, in aimingforthegrowth goal ofMIC isasimportanteconomic systems ofgovernance just through benefits of delivery equitable that teaches history Liberia’s time, same the At manner. enhanced ambitious stability- a in especially is achieve, to difficult be may and target growth The distribution. unequal growth inpercapitaincomeandGDPwithoutincreasing such atargetwouldrequire consistently high ratesof ranks of middle-income countries by that date. Attaining includes theambitionoftakingcountrybackinto

Imperative forInclusive Growth Achieving Transformation: The

PRS 2-theAgendaforTransformation and development by 2030. This vision 63 • • • embraces three strategicspending priorities: AFT the core its at such, As term. long the over growth must contributetodeliveringacapacityforsustained institutional andeconomiclevelsthatallthree factors transformation musttakeplaceinaggregate onhuman, drivers oftransformation.Itrecognizes, explicitly, that is intentlyfocusedonthefundamentalchallengesand large by 2030. Hereinafter referred to as AFT, the strategy 1) andafuture thatbroadens prosperity forsocietyat provide thetransitionbetween emergencyrecovery (PRS will strategy new the Toward2030,” Steps Rising Liberia for 2012 to 2017. Entitled the “Agenda for Transformation: Liberia formulateditssecondPovertyReductionStrategy With this experience and in the context of the 2030 vision, first andsecondPRSstrategies. Liberia’sof components the contrasts Table2.1 growth. of itsessentialrole inremoving bindingconstraintsto recognition in Transformation” “Economic 2 Pillar under pillars butrehabilitation ofinfrastructure isnowincluded objectives for AFT. Like PRS 1, the new plan includes four contemplate andprioritizetheappropriate strategiesand National level Economic Forum held high in September 2011 to sift through, 3-day in participate to invited were partners duringthecourseofyear, andallcontributors thoughtful Abundant, future. policy analysisworkwascontributedbydevelopment the in preserved be can from past mistakes so these can be avoided and peace learned lessons on backwards reflect to society civil and substantial effort wasexpended byLiberianpublic,private 2011, of course the over strategy new the preparing In “AgendaforTransformation: StepsTowards LiberiaRising2030”April2012. Table 2.1Liberia’s FirstandSecondPovertyReduction Pil- lar investment in institutions investment ininstitutions investment inpeopleand investment ininfrastructure, 4 3 2 Cross-Cutting Themes 1 Services Delivering Basic Infrastructure & Rehabilitating Law &Ruleof Governance Strengthening Economy Revitalizing the Security Consolidating Peace& • Children andYouth • HIVandAIDS • Environment • Peacebuilding • Genderequity Rising 2008-2011” tion Strategy1“Liberia Liberia PovertyReduc- Strategies Institutions andPublic Governance Human Development Economic Transformation Law Peace, Security&Ruleof • DevelopmentalCapacity • ConflictPrevention • LaborandEmployment • HumanRights • HIVandAIDS • Environment • Youth Empowerment • Disabled • ChildProtection • Genderequity Transformation 2012-2017” Strategy 2“Agendafor Liberia PovertyReduction pillar are formulatedwithin AFT asportrayedinBox6. each of goals The growth. endogenous of drivers the to the conclusionthatitwillnowlendsubstantialattention considered tobevitallyimportant andithasledLiberiato The growth. to thepoor, theyouthandwiderruralpopulation,is inclusive deliver to inclusiveness of the aims journey, in terms of AFT delivering benefits such, As endowments are alltransformed ataconcurrent pace. achieved onlyifitsinfrastructure, humanandinstitutional a with nation the endow to but growth, of spurt five-year a Liberia give to just not is AFT for goal underlying The • • • reconstruction. Fundamentally, Liberiaseeksto: investing inhumancapitalconcurrently withphysical with muchgreater emphasis ontheimportanceof be buttressed bythethree strategicpillarsofinvestment peace-building that efforts will signifies be sustained emphasis as a in central pillar under change AFT, The but will capacity Box 6:Pillarsof‘AFT’--AgendaforTransformation Invest ininfrastructure. Improve itsinstitutions,and Upgrade itshumancapital Peace, SecurityandRuleofLaw country’s population. particular emphasisonthevulnerable segmentofthe for society’s overall productivity and well-being, with well-being, and productivity society’soverall for sectors all across Prevention) Conflict and ployment Em and Labor Rights, Human AIDS, and HIV ment, YouthDisabled, Environof Empowerment, Inclusion (notably GenderEquity, Protection ofChildren and tention to eight key cross cutting areas of concern, Cross-Cutting systems. and participatorygovernance economic andsocialdevelopmentaswellinclusive and responsive publicinstitutionsthatcontributeto partnership withcitizens,transparent, accountable Governance environmentally friendlywaterandsanitationservices. able citizens;andequitableaccesstohealthy sible qualityhealthcare; social protection forvulner investing in: quality education; affordable and acces Human the economyforruralparticipationandfoodsecurity. ity; andimproving agriculture andforestry toexpand fiscal and monetary issues for macroeconomic stabil ing ininfrastructure foreconomic growth; addressing viding employmentforayouthfulpopulation;invest leveraged from theFDIinmining andplantations;pro the domestic private sector, including with resources omy tomeetthedemandsofLiberiansbydeveloping Economic TransformationToecon the : transform access tojustice,andruleoflawall. ciliation and conflict resolution and providing security, recon on based co-existence peaceful of mosphere togrow overthelonger term whichcanbe : To improve quality of life by life of quality Toimprove Development: and T misra at- mainstream To Interventions: Public : Toin create, Institutions: : To create an at Toan : create ------63 65 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 66 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA for thefollowingreasons: longer termtimeframeinthisanalysisisdeemedessential a of inclusion The 2040. to 2030 from thereafter decade the cover to introduced also is frame time term longer A goals. 2030 Liberia of achievement for set year the 2030, at arrival and post-AFT period interim the with coincide to taken is term medium The 17. FY through 13 FY notably term is taken to coincide with the planned duration of AFT, short The planning. future guide to frames on time plausible perspective a contribute chapters Both time-spans. and sequencingofinfrastructure investmentsforfuture examine affordability inorder torecommend prioritization This affordability. will 3 chapter while issues of former the on focuses chapter question the including challenges fiscal the are second the and implementation to relating issues are first AFT:the to pertaining challenges of types theplanningphasenowcomplete,there remainWith two support totheprogramming prioritiesestablishedforAFT. Liberia iscurrently encouraging itspartnerstopledge priorities tothepopulaceanddevelopmentpartners website. Plan Investment transparently Sector publishedand madeavailableontheMOF Public drAFT a includes which Medium a reforms 15 through 13 FY covering fiscal hasFramework Term prepared Expenditure the 1,GOLR with Chapter in line identified In returns. economic and an expansionary adopting fiscal policy deliberately to finance projects is with highsocial government objectives, AFT imperative dimensionsofchange.Inorder todeliveron analysis inthischapterthatincludesattentiontotheother over theshorttolongterm,theseare informedbyholistic Liberia shouldplantoinveststrategicallyininfrastructure how on recommendations Transformation present Economic to will relevant specifically report this of 3 chapter in somerespects,bindingconstraint.While thethorniest at largerepresent thebiggestphilosophicalchangeand, human developmentgoalspertainingtothepopulation the challenges, intellectual and fiscal substantial represent term andwhereas physical andinstitutionalchanges 64 3. 2. 1. from thepast,newcourse change true Toa resultin aspirations these that extent the www.mof.gov.lr-- Nationalbudgetwebsite

regional integration. it can afford to set aggressive goals with respect to achieve agreater degree of domesticintegrationbefore investment andindustrialtransformation. engagement whichopensupexcitingnewvistasfor take can which ingredients key are These leadership. much with greater potential for entrepreneurship, innovation and decade 2030-2040 the greater competitivenessthanitcurrently has,including of start the at positioned be will country the 2030, and now between will succeedintransformingitshumancapitalbase a fullgenerationandthismeansthat,assumingLiberia For its own stability and that ofthe region, Liberia must the nationintoaneweraofgreater regional andglobal Human capitaldevelopmentcanbeexpectedtotake 64 This has the benefit of communicating national national communicating of benefit the has This must take hold in the near take holdinthenear the goalsahead. achieving to apply best might that the time-frames the and sodoing, In analysis focusesespeciallyoneconomictransformation seeks. it benefits transformational accompanying measures that will best extract the intervention the focus of thestateonpriorityinfrastructure investmentsand help to period AFT the during at keygrowth strategiesthat Liberiaintendstopursue In thatvein,therest ofthis chaptertakesadeeperlook capability tomove from policydesigntoimplementation. It istherefore timetofocusonLiberia’s organizational Liberia’s focuswillmovefrom planningtoimplementation. theprioritiessetandroadmap nowmarked, With 2.2 StrategiesforDeliveryofTransformative 4. of thisanalysisandthetopic chapter3. and stagingofinfrastructure investmentwhichisculmination The conclusions have a direct bearing upon the prioritization taps Liberia’s potentialfortransformativegrowth. on howeachcanbeimplementedinamannerthatbest constraints, risks and rewards and to stimulate reflection all willbeemployed,butistoshedlightontheirrelative reason isnottoacceptorreject them,asitisclearthat growth, four are selected here for deeper appraisal. The will employ a multitude of strategies in the pursuit of GOLR Although consumption. and generation income from the strategy in terms of employment, production, and youth, in particular, to either participate in or benefit to safeguards the environment. Suchmeasures wouldpermitwomen and HIV/AIDS with those of treatment youth empowerment,prevention ofchildabuse,fair in AFT, including labor and employment, gender equality, progress in addressing cross-cutting concerns identified Success againstthisobjectivewillrequire concurrent engage a significantly larger portion of Liberia’s populace. important toidentifyhowitsdominantstrategiescanalso notably Natural Resource Concessioning (NRC), soitis recovery-phasegrowthstrategies, its sustain will GOLR time, same the At substantially. grown has investment the contribution generated by domestic labor and to transformtheeconomy into astructure whereby concessions and public sector and, more generally, pillar istogeneratejobsandincomebeyondthatofthe transformation economic the under objective AFT The

2030-40 decade. 2030-40 decade. to become a vibrant contributor to these trends in the to beaware ofthosechanges andpositionitselfnow architecture fortradeandinfrastructure. Liberianeeds fundamental it with changes intheregion’s competitivenessandits bringing ECOWAS, in countries Liberia bothonthecontinentandbyfastestgrowing Yet, substantial change is now underway all around around all underway now is change substantial Yet, Growth output sectorsandopportunities forbusiness. deficient in the skills required by industry and a lack of information and coordination to create linkages between primary latory barriers,the presence of SOEs which could crowd the entry of private enterprisein various sectors, a labor force issuesandotherconstraints Governance to portsandportfacilitiesforexports. zones connecting roads includes infrastructure essential Other conflict. civil during infrastructure of destruction the to due Liberia to attractive particularly is model This nation’snetworks. the utility of problemspublic quality and ruptions inter the to exposed wherepower,being forms without basis dedicated a water,providedon be can services ICT and infrastructure plat specific within base industrial an develop moreeffectiveto and faster is it that found have countries electricity andthe means to move goods from production to consumption centers if they are to be competitive. Many Infrastructure Constraints: investment from whichLiberian citizenswillbebeneficiariesthrough jobcreation. national segment. As such, this strategy basically sees a majority of foreigners as direct participants in industrial sector Liberian society, itislikelythatmostinvestmentintheindustrialsectorwillcomefrom foreign sources orfrom averythin investments bothdomesticandforeign inLiberia.”Giventimingissuesandthecurrent stateofimpoverishmentwithin the country’s serious resource constraint is by attracting investment, domestic and foreign, and it therefore welcomes respectother disadvantagedgroups. toinvestment,however, With thepolicystatesthat“theonlywaytoovercome ing veryfewpeople.Hence,thestrategyemphasizespotentialtocreate jobs,especiallythoseforyouth,womenand than 3,000peopleare currently employedinthemanufacturingsectorandthatmostmanufacturers are small,employ- Target participants and beneficiaries: increase Liberianindustries’ accesstoregionalmarkets. andinternational aim forimportsubstitution,butthesmalldomesticmarketwilleventuallyconstrainexpansion,sostepsbetakento areas. The cause of regional integration will be helped through export trade. To begin with, Liberia’s industrial policy will is adispersionofindustrialplatformsnotjustatcoastallocationsbutalsodeeperinland,closertoprimaryproduction gration with MRU and the wider ECOWAS region. The cause of domestic integration would especially be helped if there Integration potential: are availabledomestically. inputs the because agro-industry of forms other and processing wood and food for favorable especially is sector this household products, mattresses, industrialoxygenandotheritemsindemandthedomesticmarket.Expansionof firms varnishes, smaller and as paints well producing as beverages) (cement, firms large currentlyfew is a tor to limited ization strategy. Manufacturing has contributed about 6 to 7 % of Liberia’s GDP in the post-conflict period and the sec Economic Sectorsengaged: MTEF, withafirsttrancheof$361,460forpreparatory phaseapproved intheFY13budget. the of portion Projects Sector funded GOLR the in purpose this for provision budget million $5.36 a of inclusion from this through direct foreign investment, PPP or other approach. A concrete step towards zone establishment is apparent do to whether and zones production infrastructure-enriched establish to best how on reflecting to commits also policy measures to improve access to credit, streamline regulations and trim the potentially monopolistic shadow of SOEs. The and market failures which private firms cannot overcome. It sets out an action plan for the public sector which includes the stateistolayfoundationsthatcatalyzebusinessentryintoindustrialmanufacturingbyaddressing externalities ofrole the industry,that in articulates investment but led sector private of importance the recognizes policy The zens. transition tomiddleincomelevelsbygeneratingemploymentthatcontributeswealthcreation forLiberia’s ownciti country’sa fuel can sector manufacturing dynamic a that recognition on based is This export. for or market domestic manufacturing and processing industries to the point where Liberia develops a comparative advantage for supplying the ing forward and backward linkages and jobs in the domestic economy. The goal of industrial development is to expand and (ii)thedesire toaddvaluenaturalresources traditionallyextractedandexportedfrom thecountry, thereby creat economic zones or industrial estates. The rationale for industrialization is two-fold: (i) the need to diversify the economy development through thecreation ofphysicalzones designated forindustry, includingexportprocessing zones,special goal for the nation’s industrialization strategy, a key feature of which is a state-sponsored role in “kick-starting” industrial Principal features: Under the Industrial Policy statement finalized in February 2011, MOCI articulates the rationale and Industrialization offers great potentialtoimprove Liberia’s domesticintegrationaswellitsinte Text-Box 7Industrializationthrough SpecialEconomicZones Manufacturing and processing haveavitalneedforuninterruptedsupplyof concerns Manufacturing andagribusinessprocessing enterprisesare implicatedintheindustrial The intention is to create jobs for Liberian nationals. MOCI estimates that less : Otherconstraintsimpedingindustrialdevelopmentinclude legalandregu ------67 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 68 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA demand, whetherlocallyorfor export. incomplete tradeprotocols, cumbersomeregulations andcustomsprocedures, plusinadequateknowledgeaboutmarket ity ofproducers togeneratesurplusthatcanbetradedonareliable basistosupplymarketdemand,anenvironment of trade side, there is a need to facilitate trading across borders in order to reduce smuggling. Traders face inadequate capac preventing farmingsystemsbysmallholders.Onthe adoptionofbetterlandandwatermanagementpracticesmodern constraint major a also is tenure land of Security mechanisms. financing informal upon rely to need the and credit rural issuesandotherconstraints: Governance freight costsatportsandimprove tradefacilitation. coupled with inadequate supply of transport services and all-weather market infrastructure. There is also a need to reduce insufficient and poor quality feeder roads and other road links in the national roads network including those across borders connection andpenetratetheruralmilieuwithbroadband services.Onthemarketing side,farmersare constrained by information andopportunitysotherebackbonestobuildoff isaneedtoestablishdomesticinternet theinternational remove communicationtechnologyisolatessmallholdersfrom akeyconstraint. Meanwhile,thelackofmodern market foodstuffs value-added into production and exportableproductsprimary so reliable suppliesofrenewable ruralenergydispersed intostrategiczonesintheinteriorwould of transformation the prohibits power of lack the addition, In facilities. storage post-harvest of lack the plus infrastructure control water or irrigation of paucity a commodities), of grading and Infrastructure Constraints : Ontheproduction side,constraints includealackofruralinfrastructure (suchasfordrying strategy giventhattheyplaythemajorrole inmarketingoffoodcommodities. able surplus is produced on terms that compete with imports. Women in particular stand to benefit from this development with Liberia’s small scale farmers being participants and Liberia’s non-farming consumers being beneficiaries once market beneficiaries: Targetand participants as humanfood. cassava of use for potential growthgreatest the offers market African the and consumes it than cassava moreproduces already establisheditselfas aregional supplierofpalmoileventhoughdomesticdemandoutstripssupply. Liberiaalso has ECOWAS.Liberia and MRU with commodities food in trade expanding by but palm), oil for (except cropssub-sector cash through the not helped, be also will integration of regional cause The imports. by satisfied be to rice, including tion, both socialandeconomicfronts sincetheprevailing habitinthecountryisforalargepercentage ofurbanfoodconsump surplus produce to be delivered to areas of domestic demand. This, by itself, could be highly transformative for Liberia on gration throughtradeifroads, internal storageandmarketinfrastructure bringproducing areas outofisolationandenable Integration Potential: present-day GDPisimplicatedinthisstrategy. stock, the sum of which account for over 62% of the economy. live When trade and services are added, it forestry is plausible that 75% of fisheries, production, crop tree and food in involved are Economic Sectorsengaged:Smallholders same principleofstimulatingsmallholdercommercialization. the upon relying chains, value processing wood rubber and timber fisheries, developing on focused are partners opment devel with collaboration under programs other while chains, commodity specific into principles same the apply Strategy Development Rice a and Strategy Cassava a of additions Recent plantations. concession to linked schemes out-grower households andcommunities.Itwilldothisthrough smallholdercommercialization strategiesandthrough PPPssuchas has therefore beendesignedtoraiseagriculturalproductivity, strengthen sectorinstitutionsandmakemarketsworkfor crops, domains in which women have contributed a dominant share of labor. The LASIP program (which flows from FAPS) smallholders asasource ofcash,there wastraditionally lessemphasisonsurplusproduction andmarketingoffood at producing marketablesurplus.Whiletree crops, includingcocoa,oilpalmandrubberhavealwaysbeenviewedby transition from subsistenceorientedproduction aimed athome consumption tocommercially orientedbehavioraimed to smallholders encourage to intervention State-led for need a Essentially,is thereexports. that recognizesapproach this agricultural and self-sufficiency food improve to growth led sector private for calls specifically Strategy Policy Agriculture sector.and resource-basedFood domestic the of and development sectors prioritizing is GOLR facts, these Recognizing the by provided currently are agriculture sectorand,assuch,Liberia’smillion) farmingsmallholdersconstitutethelargestcontingentwithindomesticprivate (1.7 livelihoods of majority a and GDP of 50% approximatelyMoreover, sources. Principal features: Liberia’s dominantsource ofcomparativeadvantageliesinitsabundantendowmentnaturalre Text-Box 8SmallholderCommercialization includingEnhancementofTrade

Smallholder commercialization offers thebestoverallpotentialtoimprove Liberia’s domesticinte Under this strategy Liberian participants and beneficiaries are directly targeted, directly are beneficiaries and participants Liberian strategy this Under Farmers indicate that theirbiggestconstraintoutsideofroads isthelackof ------sustainable “green” practice. and nationalregulations. Measures are alsoneededtomonitorcomplianceofconcessionaires withenvironmental regulations and Measures are needed to monitor the compliance of concessionaires with the local content and CSR components of their contracts former need to see social and economic benefits accruing in order to peacefully tolerate land use and local presence by the latter. issuesandotherconstraints: Governance adequate portfacilitiesare presently aconstraint. and infrastructurepublicly-sourced upon reliance of degreegreater a is there concessions, plantation the For access. multi-user regulate and networks transport multi-modal efficient of establishment the maximize to order in installations infrastructure private but on a basis that permits multi-user access. Consequently, there is a critical state role to plan and coordinate between public requiregenerally contracts concession self-provided,companies, be mining these the that roads, For railroadsand access. port and Infrastructure Constraints:Concessionaires facenumerous infrastructure constraintsintermsoftheavailabilityreliable power, deployed forthepublicinterest. nation’s the of are capturedindirect and beneficiaries gains Liberians are fiscal all strategy,t that Concessioning extent the to only such, As growth. economic sustainable of drivers other,future catalyze to capital productive of forms other in invested be can Target beneficiaries: value chainsthere canbea degree ofdirect indigenousparticipationintheconcessions growth strategy. out-grower sourcing schemes. To the extent that concessions are effective at channeling a degree of their spending into domestic but employment local plantations cangenerateproportionately higherlevelsofemploymentforagriculturallaboreitherthroughdirect direct jobsorbywayof of levels modest provide companies mining enterprises, intensive capital As investment. direct of Target participants: huge powersupplyrequired formineraltransformation. the provide to able is and location investment risky less a be to itself proven has sub-region the when future term longer the for Leone toattracttheveryhighlevelsofcapitalinvestmentrequired forthispurposebutisanaspirationwhichmustbereserved sub-region as a location for value-addition from mineral processing could likely be enhanced if Liberia were to the of cooperate competitiveness The with users. other Sierra to and industry to costs transport reduce to much do could seaports to bordersacross roads and rail connecting networks transport multi-modal Specifically, installing companies. extractive serves that infrastructure to approach regional a pursuing from gain to much has sub-region the Inasmuch, sub-region. entire the within developed ously to the industrial mining and petroleum sub-sectors because resource deposits cross national boundaries and are being simultane vesting in multi-use infrastructure which could serve to bring peripheral areas out of isolation. Regional integration is highly relevant have thepotentialtoimprove nationalintegrationbyexertingdemanduponlocalvaluechainstosource localcontentandbyin ritorial integrity. Under a changed governance environment with the advent of new Mineral Development Agreements, concessions tioned asenclaves,were largelyunregulated andwere permittedtoestablishtheirownarmedsecurityunitsenforce theirter IntegrationPotential:Historically, Liberia’s concessionshavetendedtoworkagainstnationalintegrationbecausetheyfunc and/or SMEsandindustrybecomeexportcompetitive. concessions willcontributethemajorityofallLiberianexportsforshortandmediumtermuntilsmallholderagriculture revives agriculture and sector,mining plantation agro-forestry Together the 2020. with by GDP of 20% to grow to expected is but GDP of 3% for accounts currentlysector.petroleum Mining the future, the in and, concessions forestry and timber rubber), and palm Economic Sectorsengaged: development ofnationalcapacitythrough transferofskillsandtechnology. value addition industries; (iv) developing up-stream linkages through supply chains and local mineral-based content of connections establishment and through (“beneficiation”) (v) linkages optimizing down-stream maximizing (iii) sectors; other in growth underpin to users other to accessible infrastructure concession-supportive in investment private incentivizing (ii) activities; sustainable into est for present and future generations of Liberians. Objectives include: (i) generating resource rents so they can be reinvested husband theresources inamannerthatisgrounded inlocalconditionsandaccountabletoadvancingthecommonnationalinter to is sectors, renewable and extractive non-renewable the both GOLR’sstrategy,to of NRC applicable element core a such, As economic activityinother, sustainable,sectors,through maximisingtheec Although the GOLR does not have a formally articulated Natural Resource Concessioning (NRC) strategy,(NRC) Concessioning Resource Natural articulated formally a have not does GOLR the Although The direct participants in the concessions sector are, for the most part, foreign public or private providers private or public foreign part, most the for are, sector concessions the in participants direct The By farthebiggestpotentialfrom aconcessionsgrowth strategyistogeneratetaxandotherrevenues which Text Box9ConcessionofNaturalResources through FDI

This strategy engages the industrial mining sector, the plantation agriculture sector (including oil (including sector agriculture sector,plantation mining the industrial the engages strategy This There whereby concessions and are communities the between conflicts simmering

- - - - - 69 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 70 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA Economic Sectorsengaged: information outreach programsforaddressing butalternatives MSMEfinancingconstraintsare offered. and training financing, incentives, incubation, business of combination througha sector industrial and MSME nascent the to services support provide to expected is NIDFO The synergies. from benefit and infrastructure share can users where & FinancingOrganization(NIDFO)aswellacorridorgrowth strategytocrowd ininvestmentalonggeographicaxes features forimplementingMSMEdevelopmentincludetheplannedestablishmentofaNationalIndustrialDevelopment mation and making it available to the public and by addressing the specific constraints that MSMEs face. Complementary their serviceofferings bypromoting networkingtoshare informationandforgepartnerships,bygatheringbusinessinfor needs ofMSMEs.Consequently, therole ofthestateisprimarilytohelpthishostserviceproviders improve andexpand recognizesincome. Government that many organizations and programs already exist to buildthe capacity andtargetthe by increasing economicgrowth andtodecrease incomeinequalitysothatgrowth enablesamore equitabledistributionof poverty reduce to both are development MSME of goals The exports. and creation job growth, of sources endogenous environment for the emergence of a domestic corporate private sectorwhichcan eventually contribute substantially to lates the rationale and goal for the nation’s MSME strategy. The rationale for developing MSMEs is to provide an enabling Principal features: Under the Small, Medium and Micro Enterprise Policy statement finalized in March 2011, MOCI articu of government officials,particularly duringinspectionsandatcheckpoints,alsoneedstobe of government reduced. and breadth available in the labor market to meet the demand of enterprise. The incidence of petty corruption on the part needto complementary There isa problems. pressing improve thecapacityofjusticesystemtoallowforresolution ofcommercial disputesandtoimprove theskillsdepth most their as supply and electricity to disorder access criminal cite firms finance, small complaints, –100 largest three (20 their as firms burden medium tax Whereas and corruption land, firm. to of access cite size employees) by priorities different reveals firms local to constraints key of survey A issuesandotherconstraints: Governance more distantfuture) are otherconstraintswhichmustberelieved. of roads andtransportservicesgivingproducers reliable andcompetitiveaccesstoseaports(andpossiblyairportsinthe interior withdomesticbackboneforbroadband servicedelivery, goingbeyondconnectivityforMonrovia. Finally, availability the of requirespenetration This clusters. within networking better promote as well as demand and prices trends, market communications technologyisimperativeforMSMEstoconnectproducers marketsanddeliverbetterinformationabout can approach space-leasing help toreduce overheads and alsopromoteinformation networkingandsupplychainlinkages.Inaddition,modern a where buildings facility common business erect to into is approach clustered optimal the beneficially case this be in can but parks MSMEs industry, manufacturing with As energy. rural renewable with met Infrastructure Constraints: MSMEproductivity depends criticallyuponreliable powersupplieswhichcanbeadequately will alsobetargetedforinclusion. MSME’s ismore likelytoattractthemforemploymentopportunitythanisagriculture. Woman andmarginalizedindividuals Target beneficiaries: Association ofIndianBusinessmeninLiberiaandtheBankers’Association. the and Union Cultural Lebanese the (COLINBO), Organisation Business International Liberian Concerned Association, Liberia engaged: be also will Business institutions Fula the Commerce, of Chamber following Women Liberia the Commerce, the of Chamber the (LIBA), doing, Association Business so In Liberia. of counties fifteen all across and centers urban all in MSMEs entrepreneurshipand develop to aims strategy This have. already may they which skills vocational or youth andmarginalizedindividuals with entrepreneurial businessskillstocomplementknowledge drive andopentolearning Target participants: contribute more tonational ratherthanregional integration. Integration Potential: they constitutethelargestemployerinLiberia. five years, a majority of which are in the informal sector. Most are small, each employing 10 or fewer people, but together ing to trade to services to tourism development. The large majority of Liberia’s enterprises were established within the past This growth strategy targets direct participation by Liberian nationals and residents-- men, women, men, residents-- and nationals Liberian by participation direct targets strategy growth This Liberia’s youthare particularlylikelytogaintheirlivelihoodsintheinformalsectorandgrowth of MSMEs willbeprimarilydomesticallyorientedfortheneartomediumtermandtheirgrowth will Text Box10MSMEDevelopmentthrough CorridorDevelopment

MSMEs havethepotentialtoworkacross mostsegmentsoftheeconomy, from process Liberia needstokeepmakingprogress ontheeaseofdoingbusiness. - - - the fourprincipalstrategies toexplore theirrelevance ofcriteria, type the followingsectionapplies themcasebyto ofeach essence the defining After be mitigatedandtheirpotential rewards maximized. the fourhighlightedLiberian growth strategiescan used toprovide insightintohowtherisksofeach are criteria filter these world, real the in applied strategies are growth because Yet, transformation. for enhancing growth in Liberia, in line with the objectives an ideal world, would contribute to inclusive, stability- in maximized were each if criteria, these of sum The infrastructure and essential accompanyingmeasures. on mostappropriate timeframesforinvestmentin appraise to used are the four key growth strategies for their implications criteria, which offilter 11, Box Texta series in listed define we section this In 2.2.2 for growth. to howagreen orientationcanbeinfusedinthequest applicable, thestrategiesare appraisedwithrespect aspects constrainingtheirfullgrowth potential.Where beneficiaries targeted plus governance or infrastructure regional integrationpotential,theparticipantsand features, economicsectorsimplicated,domesticor strategy willbedescribedwithrespect toitsprincipal implementation. Intheparagraphswhichfollow, each for thestateanditsdevelopmentpartnersduring some guidanceemergestoinformrespective priorities By focusingonthetransformativeattributesofeach, aid the turn, in development ofthesmallholderandMSMEsectors. can, Corridors corridors. identified opportunity for development of infrastructure to serve Natural Resource Concessioningprovides the another. to benefits deliver can strategy example, For or are complementaryand measures toimprove one in thefuture. Inaddition, the fourstrategiesoverlap together, willaccount for the majority ofGDP growth major productive sectors of Liberia’s economyand, all upon bearing a have strategies Together,four the • • • • investment ininfrastructure. Theseinclude: attention, particularlyastheyimplyademandforpublic agenda, it may be too costly to pursue all with equal merit andwarrantattentionduringthetransformation reserving detailedreview forthischapter. Whileallhave in identified briefly the diagnosticofcurrent conditionsinchapterone, were focus of strategies four The 2.2.1 Initiatives. MSME Developmentthrough CorridorDevelopment Direct Investment Concessioning ofNaturalResources through Foreign Measures includingEnhancement ofTrade Smallholder Commercialization through Multiple Industrialization through Special EconomicZones

Introduction Introduction ofF of Key Growth Strategies ilter criteria given strategyhasoneachcriterion. a that impact or influence of degree the indicate to is given a rating ofhigh (H), medium (M) or low (Low) strategy, growth specific a to itapplied is each When infrastructure, theseare pursuedinchapterthree. public financing in partners donor or state the of role the present chapter. Where theyidentifythepriority accompanying measures, theseare developedin insight provide they Where as totherole ofthestate inprioritizingimportant one. specific each to Economic Clout benefits. This filter criterion will thus examine the thusexamine will extent towhichLiberians directly participateineach criterion filter This benefits. “inclusive” ofthepopulation anddeliversdevelopment shift intheeconomywhereby economicgrowth is pillar and GOLR’s Development objectiveistoengineerastructural Human a includes AFT the that and implementation ofagivenstrategy, bearinginmind whether of question to what extent Liberians will directly participate in the begs criterion This Builds HumanCapitalthroughDirectInvolvement against thecriterionofeconomicclout. taken intoaccountwhenappraisingagivenstrategy are aspects These performance. future of predictor performance, current results cannotbetakenasa there are bindingconstraintsthatinhibitsector potential ofagivensectorandespeciallywhere a backwards lookintime,itmayignore thefuture economic landscape.BecauseGDPdataprovides helpful inestablishingitspositionwithintheoverall given capitalintensiveandenclavesectors,butitis Liberian citizensdirectly orindirectly, particularly with jobs created orlivelihoodsgeneratedthatengage correlate itself, by not, does This magnitude. exert ontheaggregate economyinrough orders of appraise the potential “clout” a given strategy might for growth. Whenconsidered together, onecan share and rate of growth as well as future potential contribution toGDPintermsofcurrent absolute engaged byagivenstrategytoreview theirrelative This filtercriterionlooksatthesectorsthatwouldbe 9. Reducesexposure tothreats 8. Fostersregional integration 7. Promoteseconomicorphysicalintegration internal 6. Encouragesgreen growth 5. Timingofgrowth coincideswithcapacitygains 4. Engagesdomesticprivatesector 3. BenefitsLiberiancitizensindirectly 2. Buildshumancapital through direct involvement 1. EconomicClout of Liberiancitizens Box 11FilterCriteriaAppliedtoStrategies 71 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 72 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA strategies willbeappraised againstthisfiltercriterion. growth all Accordingly, infrastructure. in investments with respect tothe“inclusiveness”ofreturnsfrom cases toachieveahigherdegree ofsuccess,especially Concurrent progress onallfronts isessentialinsome institutional andinfrastructure developmentfronts. this terms ofsynchronization ofadvancesonthehuman, such, for timing As optimal state interventionwithrespect toagivenstrategyin the basis. on reflection domestic forces criterion a on innovation in laborsupplyandbecomecapableofgenerating with thehumancapitalitrequires tobecompetitive Liberia endow to time-span-- year 30 a as estimated Plan envisagesthat it willtake a “generation” – often here isthefactthatNationalCapacityDevelopment should beplannedandimplemented.Ofrelevance take holdaswellthepaceatwhichinfrastructure which structuraltransformationcanbeexpectedto planning, bothforexpectationsabouttherateat perspective on plausible time frames to guide future a contribute to seeks study this above, explained As Timing ofgrowthcoincideswithcapacitygains done tofurtherthisobjective. be might else what identifies regardand this in strategy each evaluates criterion filter this of sector.Application important to foster engagement of the indigenous private outside theconcessionssectorinfuture, itis GOLR’svision ofaneconomyfueledbyendogenousgrowth given however, juncture, this At intervention. against stateexpropriation andmeddlesomepublic investor-friendly,is which safeguardsnumerous offering that respect, Liberiahascreated aninvestmentclimate tap thecountry’s vastnaturalresource endowment.In investment forcapitalformationneededtoeffectively Liberia has been masterful at attracting foreign direct Both before itscivilwarandsincetheadventofpeace, Engages indigenousprivatesector which mightreduce them. each appraisedgrowth strategy andthesafeguardsfrom flow benefit indirect in involved risks the to as insight seeks therefore criterion This interest. public the strategyare directed inamannerthatservesthe infrastructure andotherpublic goodsgeneratedby they stand to gain indirect benefits if the tax revenues, participate directly in the execution of a givenstrategy, not do Liberians if even that recognizes criterion This Benefits Liberiancitizensindirectly institutions. Liberian publicandnon-government strategy soasto build thecapacityandrelevance of organizations willcontributetotheexecutionofagiven the extenttowhichLiberianinstitutionsandcivilsociety Liberia’s humancapital.Inlikemanner, itwillexamine population, akeyresult needed fortransformationof will aidintransferringskillsandknowledgetothelocal appraised growth strategy asthisprocess, initself, for domesticintegration. the propensity ofagivenstrategytoimprove prospects investments oraccompanyingmeasures mightimprove descriptions andaskswhatrelevant infrastructure this society,criterion startsfrom thesnapshotsprovided instrategy Liberian de-fragment to progress making analysis inchapteroneemphasizestheimportanceof against psychological perspectives.Recognizingthatthefragility strategy given domestic integrationfrom physical, social,economicor a appraises its potentialfororlimitationstopromoting greater criterion This Promotes internalintegration with respect tochoicesregarding infrastructure. perspective isaddedintothelookforwards especially rate and inclusiveness of economic growth. As such, this can beachievedinLiberia without compromising the for their own benefit and that of the region. Green growth hydro-electric potential which these MRU states can tap high rainfallenvironment to maintainthehydrology and and theprotection thereof isvitaltopreservation ofthe Guinea harbortheregion’s a primaryrainforest ecosystem from relevant particularly regional perspectivegiven that Liberia,SierraLeoneand is This stability. climatic “Green growth” isimportantforsustainabilityand Encourages GreenGrowth been identified as central concerns of this study, notably the domesticprivatesector) andothersofwhichhave important (such as building human capital and engaging being as GOLR by identified explicitly been have these to theenormoustaskof transformation.Someof desirable developmentaloutcomes thatallcontribute represent above defined criteria filter the Essentially, through UseofFilter Criteria Methodology ofGrowthStrategyAppraisal by extension,whatcanbedonetoreduce suchrisks. asksquestions mitigate orexacerbateexposure tothesethreats and, It conflict. about theextenttowhichagivenstrategycanserve in flare-ups introduce or threats whichhavethepotentialtodestabilizecountry ofcontinued range to a vulnerable being as identified thefragility analysis conductedinchapteronewhereby Liberiawas from findings the on reflects criterion This Reduces exposuretothreats regional integrationwhichisbeneficialtoLiberia. improve thedesired developmentoutcomeofgreater investments oraccompanyingmeasures whichcan perspectives. Itseekstoidentifythoseinfrastructure integration from physical,socialorpsychological its against strategy given potential fororlimitationstopromoting greater regional a appraises criterion This Fosters regionalintegration 66 65 conflict period) and it has a sluggish rate of growth rate asluggish has it post- and the period) in conflict GDP of 7% to 6 at (estimated economy Manufacturing currently contributeslittletoLiberia’s Rank: LowfortheShortTerm Economic CloutofIndustrialization 2.2.3 balance. therefore sections of issues illuminate and trade-offs following the identify to seek The term. long the for status withequitytogiveLiberiastabilityandprosperity strategies which can, ultimately, deliver middle income It isthecareful andbalanceddeploymentofallthese capital andsotransformthestructure oftheeconomy. initiatives tobuildhuman,institutionalandphysical economic growth strategies,whileintroducing new that Liberiawillcontinuetodeployitstraditional assumes study results.This of pursuit the exercisedin that transformationtakestimeandpatienceshouldbe is 1 chapter in 2 Box in articulated fragility on lessons the need to promote investment. In addition, one of the withinterest national long-term the balances that path clear thatLiberianeedstoselectanimplementation also is it beneficial, be can FDI While 2030. by status addition, the nation strives to regain middle income In investment. direct foreign welcomes present-day, Overall, itisclearthatLiberia,historicallyandtothe for Liberiainchapterthree. take forward intheelaboration ofaninfrastructure plan are both withrespect toaccompanying measures andto strategies four make recommendations on theoptimalrole ofthestate, all After appraised, theirrankingsare talliedandcontrastedto one. each impeding would most effectively address the binding constraints out draws paragraph asummary key insightsonthetypeofinfrastructure packagethat criteria, filter all of sum the against appraised is strategy each After case. and qualitativeconsiderationsasapplicableineach which follows, provided with reference to quantitative up front, backedupbyanalysis andnarrativerationale identified are Ratings not. does it that means one low the that a whereas criterion, filter given a of result means development rating high strategy performswellindeliveringthetransformational A desired. outcomes strategy performsindeliveringthedevelopmental picture emergesaboutthe degree towhicheachgiven “medium” or“low”ratingsineachcase,anaggregate ofthe four growth strategiesone by one,andattributing“high”, each to above defined criteria filter all applying green growth, stabilityandregional integration.By Other permitted co-investment areas are limited to advertising agencies, cinemas, poultry production, entertainment centers not associated with hotels, sale of animal animal of sale hotels, with associated not production,centers poultry entertainment cinemas, agencies, areasadvertising co-investment areto permitted limited Other Thisislikelyavalidconclusion,notwithstanding lackofprecision in nationalaccountsdata. the Liberianisatleast 25%,thetotalcapitalinvestedshallnotbelessthanUS$ 300,000. shall not be less than US$300,000; and, where such of the listed enterprises is owned by non-Liberians in partnership with Liberians and the aggregate shareholding of invested capital total the non-Liberians, by exclusively owned is enterprises listed the Whereof pharmaceuticals. such of sale and trucks duty heavy of operation feed,

to IndustrializationStrategy Application ofF ilter Criteria might bestbeapproached. this how consider paragraphs following The sources. Liberia istoeventuallygenerategrowth from internal to fosterconditionsforindustrialization,particularlyif low againstthiscriterion,itisimportanttobeginnow Consequently, eventhoughindustrializationisranked transition from low to intermediate income levels.” manufacturing sectorhastypicallymarkedacountry’s industrialization The policy recognizes thatthe “emergenceofadynamic economies. producing rice and and SouthKorean industrialization from originsassugar Taiwanof examples the citing transformation, provokes that activities non-traditional in engage and discover to the reminder that it is the ability of low income countries be expected to deliver to Liberia. Yet, chapter 1 provided future rather than to the immediate growth impact it can an industrializationstrategypertainstothelongerterm of value the Hence, 2016. by GDP of 5% contributing hold evenwithfuture aggregate growth atbest,possibly indicate thattheshare ofmanufacturing isexpectedto segments oftheeconomy other to compared as 2006-2009 over 2.1% averaging Rank: Medium Direct InvolvementofLiberians and afewotherexamples given certainconditions. printing commercial bakeries, plants, purification water manufacturing, production ofstoneandgraniteproducts, It also stipulates that foreign investors may invest in ice making andretail saleofriceandcementasexamples. the supply of sand, the making and sale of ice, block of certainenterprisesexclusivelyforLiberians,including term. The Investment Act of 2010 reserves the ownership were appliedinestablishingindustrialzonesthenear speed if true be especially would This sources. foreign that mostinvestmentneededforindustrywillcomefrom fact the identifies strategy this of description earlier The • the laborlaw, specifiesthat: to subject which, Act Investment the provisionsin labor the light to brings This create. to position best the in is come inthewayofformalsectorjobswhichindustry industrialization strategyintheshorttomediumtermwill means bywhichLiberianswilldirectly participateinan foreign investment and ownership. As such, the primary goods processing industryare thusleftopentopurely more substantialtypesofmanufacturingorprimary they involvealocaljointventure. Clearly, manyofthe potential competitiveadvantageonconditionthat incentivizes entrybyforeign investorsintoareas of of theMSMEvarietywhereas thesecondelement business Liberian to ventures non-industrial capital low of spheres some reserves essentially element first The Liberia butremain subjecttoLiberianlaws; Foreigners ofanynationalitymaybeemployedin 65 . Inaddition,IMFprojections 66

73 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 74 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA • Regulations includethree relevant examples,including. Relevant provisions published in the 2010 Mineral Exploration aspirations canbeconvertedtomonitored achievements. Liberia’s miningsectorprovides agoodexampleofhow “medium” against this human development filter criterion. is a keyreason whytheindustrializationstrategyisrated This investment. inward of objectives capital human greater emphasismightbewarrantedonattentionto through implementationofanindustrializationstrategy, human capital.Consequently, indispensingthestaterole Liberian employeeincomesandanupgradein gains from anindustrializationstrategytodeliverarisein not evident. This may not be sufficient to induce bona fide NIC todelivergainsinjobcreation andskillstransferis statement, but it has no teeth and the accountability of aspirational good a is This mandate. their of furtherance in foreign-investedbusinesses” for demands the meet to specifies further that theymay“facilitate the training of Liberian nationals Act NIC The regard. this in Republic” other developmentrightswithrespect toassetsofthe “participate intheevaluationandaward ofconcessionor which foreign direct investments is prohibited,” and to of theeconomyLiberiaotherthanthosesectorsin development offoreign direct investmentinallsectors NIC, the of establishment vests themwithauthorityto“promote andassistinthe the legislated of which Act 2010 Commission for Investment Thus, National tonegotiation. the example, open are specifics the case into contractualagreements withinvestors,inwhich seem thatsuchincentivesare tobebuilt,casebycase, 71 70 69 68 67 and eventuallyjobstoLiberiannationals. skills transfer to under-studies mentor and hire to directly firms oblige or encourage to themselves laws the in destination. On the other hand,there seems to belittle increase theattractiveness ofLiberiaasaninvestment to overcome skillgapsin the locallaborforce andthus the one hand,they make it feasible for foreign investors On sword. double-edged a with come provisions These • • Clause8.7.(b)“Health,Safety&Labor” Ibid Clause9.1,“EmploymentandTraining” Ibid Clause8.8.a,“SecondmentofMinistry Employees” underMLMEMineralExplorationRegulations,2010 TheNationalEmploymentpolicyhasbeen reviewed butauthorcould notgetholdoftheDecentWork LaborLawtoverifythisassertion. Medium rankingdepends heavilyontheeffectiveness incollectingandredistributing ofgovernment revenues the MinistrytoaLicensee’s operations…,” professionals (mining engineers or geologists) from “The Ministry may from time to time second up to two and businessactivities. domestic laborlawinorder toconducttheirinvestment including foreign nationals, inaccordance with standards thanrequired byLiberia;and labor agreements ifthey donotestablishlower and theiremployeesshallberegulated bytheirown Investors shall have the right to employ any persons, Investors shallhavetherighttoemployanypersons, enterprises foreign-owned between relations Labor 67 It would Itwould 68

• Rank: Medium Benefits Liberiancitizensindirectly high. industrialization strategyfrom arankingofmediumto of industrializationprogress andthiswillhelpmovethe transparently report onthehumancapitaldimension Investors andNICshouldbothberequired to Concessioning strategy. Corrupt Practices. This analysis is equally relevant to the are explored here: Premature LoadBearing and Foreign aspects Two bear. to brought be might that remedies identify to sieve finer a with risk diversion the dissecting and indeedthislabelisvalid.Ho risks are commonlycharacterizedasgraftorcorruption, ranking is conditioned on government efficacy. Diversion diversion are encountered andthisiswhythe“medium” citizens through thehandsofstate,numerous risksof to indirectly transfer benefits that time Any operate. to which are effectively “rents” inexchangefortheright royaltiesturnover and/orcorporateincometaxes,allof rents, surface of form the in government to flows fiscal and Concessioningstrategies,bothshouldgenerate citizens, Liberian against thiscriterion.Inthecaseofindustrialization for benefits consequently industrializationstrategyranks“medium” indirect produce to SME development or smallholder commercialization it must be recognized that industry is more likely than gains from an industrialization strategy. At the same time, priority thantheattainmentofdirect incomeandskills to servethepublicinterest, thisshouldtakealower taxation ofindustry, theproceeds ofwhichcanbeused Although Liberia stands to realize indirect gains from the uh esn bcm aalbe A iese must Licensee A available. become persons such Liberiancitizensforskilledpositionsasandwhen • A iese ut opy ih plcbe Law applicable with comply must Licensee “A for unskilledpositions.” of employees and may not hire non-Liberian citizens setting forththedutiesofanemployerandrights were determinedtobeunsuitable,” number oflocalcandidatesapplyingandwhythey one year, andmustmaintainwrittenrecords astothe such positions expected to haveatermof at least advertise inatleasttwoMonrovia newspapersforall qualified of employment the to preference give and employ must Licensee A positions. managerial and qualify them for skilled, technical, administrative basis continuing a on for thetrainingofLiberianemployeesinorder to provide must Licensee “A 71 70 wever, itisworth 69

72 to disbarorganizationsengaged incorruptpractices development banksalsohavesteppedupmeasures than wouldtheabsenceofanysanctions.Multilateral will haveagreater deterrent effect oncorporatebehavior These 2010. as recently as Act Bribery a adopted UK practices; theUnitedStatesisonewhichdoesand that penalizescompaniesengaginginforeign corrupt In fact,veryfewcountrieshavenationallegislation a guaranteeofintegrityonthepartforeign business. cannotassume thattheCSRmovementis governments social responsibility and business ethics, it is clear that Although side. supply the much hasbeensaidinrecent yearsaboutcorporate on corruption combat to require twopartiesandthere isthusanequalneed provided aboveservestoillustratethatcorruptpractices Foreign CorruptPractices around additionalreforms whichmightbeappropriate. sector, helpingtobuildtrustandaligntheirinterests the dialoguebetweenLiberianbusinessandpublic improve simultaneously will This institutions. similar and Commerce, theLiberiaWomen ChamberofCommerce of Chamber the Association, Business Liberia as such including representatives beneficiaries, of the Sierra Leonebusiness community indirect and investors foreign of cross-section a involve might mechanisms oversight integrity of these particular non- state functions. As such, Liberian peer by institutions with a valid interest oversight Government in the in crowds that want reporting might GOLR which to considerispromote anexercise intransparent strategy mitigation A fail. they placestress onindividualcomponents,theycan pressures overwhelmcapacityandespeciallywhen to deviatefrom organizational standards. Whenthose create different load bearing pressures and inducements tasks different management; financial public to justice apply across a range of state activities from policing to collusion thatmucheasier. Considerationslikethese itself isaccompaniedbycomplexity, ambiguitymakes agent, butalosstothepubliccoffers. Where thereform owed, resulting inprivategains totheimporterand is what reduce to payment side a official customs the offer may importer The firm. manufacturing given a by results inhigherimporttariffs forrawmaterialsrequired to serve. interest andthepublicinterest whichtheyare supposed divergence betweenwhatisinapublicagent’s private Premature loadbearingcanoccurwhenthere isalarge of the state. This is a risk which GOLR will want to avoid. legitimacy andadecrease of publictrustinthatinstitution in ashortperiod,theresult ofwhichcanbealoss demands are placedon new orreforming institutions many too when exacerbated be can This Liberia. with score indicatorsasisthecase lowongovernance change from pastpracticesisweakinsocietiesthat Premature Load Bearing Load Premature This concept is drawn from works by Pritchett, de Weijer, Kaplan and Lund, and cited in World Development Report 2011: Conflict, Security and Development, The The Development, and Security Conflict, 2011: Report Development World in cited and Lund, and Weijer,Kaplan de Pritchett, by works from drawn is concept This World Bank 2011,page101. 72 n xml mgt e ht utm reform customs that be might example An . The capacity to deliver real deliver to capacity The Te rbr example bribery The : “medium” againsttheindirect benefitcriterion. into publicgoods,theindustrializationstrategyisranked from industrializationandchannel themwithoutcorruption benefits indirect generate transparently to that systems into Liberia.GivenLiberia’s needtoimprove governance or other development rights associated with market entry conducting formalcompetitionforaward ofconcessions procurement, into norms for examplebyawarding points forsuchaspectswhen anti-bribery international to to Liberiaisbuildincentivesforcorporateadherence available tool Another Liberia. for resources institutional OECD toolssuchastheseoffer valuablereference and Transactions”. Business International in Officials Public on Tax Measures for Further Combating Bribery of Foreign Guidance” plusapublicationentitled“Recommendation but non-members not China or India. OECD has issued “Good Practice five plus countries 34 member by ratified OECD been since has latter The Transactions. Bribery of Foreign Public Officials in International Business and the OECD sponsored a Convention on Combatting promotion strategy. As responsibilities have evolved and be managedaspartofgovernment’s overallinvestment the steeringcommitteeanddirected thattheinitiative legislation specific to Buchanan, the President dissolved failure.” InlinewithadecisiontoslowthepassageofSEZ in aparticulartransaction,typicallyleadstozoneregime contradict thehostcountry‘snationaleconomicpolicy criteria” notingthat“lackofuniformity, whichcan in accordance withuniformeconomicdevelopment basis case-by-case a on consistently proposals SEZ all “a proactive strategyallowshostcountriestoevaluate unified, approachconcession-by-concession that logic the with a adopt GOLR that national SEZlegalframeworkratherthanpursuinga was advice IFC study, proximity of Buchanan port. Under an SEZ pre-feasibility ofChinatoestablishanSEZinthe the Government by offer an decline to 2008 in decided it when by Liberia bear to brought been have already may logic This sector investmentinSEZplatforminfrastructure. full steam ahead with the stage ofcommitting public fledgling the SME sector to emerge in the first allow instance before moving to advisable seem therefore would local contentlinkages.From asynchrony perspective,it requirements will operate in favor of establishing bona fide stage of maturity can it be expected that supply chain Only whentheSMEsectorhasdevelopedtoagreater and direct involvementofthedomesticprivatesector. enriched zonaldevelopment,willlikelypreclude broad if launched in the short term with the aid of infrastructure- The paragraphs above identify the fact that industrialization, Rank: Low Engages domesticprivatesector 75 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 76 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 73 the incomedisparityinLiberiaratherthanreduce it. jobs, growth from industrializationislikelytoexaggerate capacity developmentandeventualindigenizationof SEZ orrelated legislationushersinincentivesforhuman public until investment ineducationcanbegintoyieldresults and Thus, industrialization. through created where foreign workerswouldcapture thebetterjobs better baseofeducation,there islikelytobeasituation there isasevere lackofjobs,untilthelaborforce hasa mental problems through technologicalinnovation. and green innovation on new ways to solve environ breaks, incentivesforresearch anddevelopment policy environment canbeenabledthrough tax The facilities. processing and production of ficiency ef the improve and sources power non-emitting or reduce pollution,encourageutilizationofrenewable princi- relies This pally upongreen industrialpolicieswhichaimto objective. this encourages ately gether, butonlyifthepolicyenvironment deliber Green growth and industrialization cango to Rank: Low Encourages GreenGrowth problem. ofthis magnitude the identifies the MinistryofLabour’s NationalEmploymentPolicy indigenous business sector. Text Box 12 extracted from labor poolandinthenascentdevelopmentstageofits both intermsoftheeducationandskillsbaseLiberia’s criterion fortheobviousreasons thatcapacityislow this against poorly ranks strategy industrialization The Rank: Low Timing of growthcoincideswithcapacitygains development objectivessetoutintheAFT. legislation cannowbesituatedinthecontextofnational eventual as beneficial been likely has recent delay The in years. IFC by developed legislation SEZ drAFT on step wouldbeforMOCItorevive andfollowthrough seems appropriate tosuggest thatanappropriate next MOCI hasbeentaskedwithindustrialization,ittherefore

Government ofLiberia,Ministry Labour,Government “EmploymentPolicy”, April2009,page8. job opportunitiesinthecapital. of lack severe a suggests This whole. a as country for 72% against as (58%) Monrovia in participation labour therelow Monrovia.this very in tois live Added ployed unem- country’s the of half Yet, 11%. is point’) no is liketo work butare notactivelyseeking workbecause‘there whowould those include to rate defined (broadly unemployment The more. or Sec education a ondary have 160,000 only these of million, 1.1 than more of force labour (15+) adult an is there Although Text Box12“TheMonrovia Challenge” 73 Although - - - - - industrialization. of aspects green on policies no has Liberia present, At Rank: Medium Fosters regionalintegration further undertheMSMEstrategyreview below. in urban centers within the interior. This idea is explored located zones SME-supportive other add to be might to accentuateurbanmigration.Mitigationmeasures serve likely would they goods, final of costs transport make senseforexportprocessing zonesbyreducing coastal portlocations.Whilethelatterlocationswould eventually locatedonlyinandaround Monrovia orat integration. This would especially be true if zones were pragmatic a serves to unite the country through physical or economic is water this approach, itcannotbeconstrued asastrategywhich Although as power, platform. narrow a such services and communicationstoserviceindustrywithin utility zone- installs country, the specific in raised is level general networks are poorand, ratherthanwaituntilthe accepts thepremise that domesticinfrastructure Industrialization through zones isastrategywhich Rank: Low Promotes internalintegration integration could mutually benefit and contribute to contribute economic growth inthesub-region. and benefit mutually could integration scenario underwhichindustrialization andregional of type the is This employment. for eligible be would collaboration protocol, laborers from bothcountries is presently understudyinSierraLeone).Underthe for establishmentofsuchaportinthevicinitySulima Sierra Leone mineral portnearby. (Feasibilityanalysis Leone developsthetransportlinksforexportfrom a Mano Riverborder tocaterthefacilitywhileSierra designates aplotoflandforzoneontheirsidethe Liberia that be might example An investor(s). eventual collaboration, yetprovide adegree ofsimplicityforthe the from benefit economic gain would countries both that so configured be to need would This sub-region. zone mightsucceedinbringingsuchindustrytothe and Sierra Leone to establish a mineral processing However, it seems plausible that a joint effort by Liberia transformation plantsinbothcountriesisfairlylow. the world’s few large mining companies would establish that likelihood The power. of supply reliable and with achieved be only very highlevelsofcapitalinvestmentandlarge can goals These Guinea. in example, ortheproduction ofaluminumasisdone sector, thusencouragingthepelletizationofiron for of introducing transformationindustryintoitsmineral raw materials. Sierra Leone has the similar objective beneficiation bring to of mineralsintotheeconomytoaddvaluethese aims policy mineral Liberia’s skills base of its population. skills baseofitspopulation. industrialization at such time as Liberia has expanded the development andsequence theintroduction ofheavier MSME to respect with advances make first to preferable be might It industrialization. SEZ-enabled of launch the why the study concludes that the timing isnotoptimal for measures that GOLR should contemplate, it also explains such issueshelpstoidentifyimportantsoftaccompanying accessible tothepopulationatlarge.Whilerecognition of even exacerbatetensionsbycreating jobsthatare not work against the inclusive growth thrust of AFT and could or expandingDiasporainvolvementinSEZoperation work force. The alternatives of importing foreign expertise the to appraise respect to the Industrialization Growth Strategy. criteria with filter emerge findings several nine Strategy, Industrialization the applying In Constraints toIndustrialGrowth Findings onSoftandHardMeasurestoReduce destabilizing tostabilizinginfluence. participate directly injobs forindustrytoswingfrom a It isessentialthattheworkforce gaintheopportunityto to thethreats posedbypoverty andunemployedyouth. tremendous potentialtoreduce thenation’s vulnerability industry tocreate jobsand develophumancapacityhas relocation measures. Ontheotherhand,potentialof mitigated through justcompensation andappropriate to withrespect is land dedicatedtoindustrialzones,thoughthiscouldbe arise could Another that corruption. exposure conflict and patronage in of strategy vulnerabilities industrialization an of Liberia isthatitaccentuatesLiberia’s exposure tothe risk biggest The Rank: Medium Reduces exposuretothreats

Industrialization via Zones Table 2.2SummarySoftandHard Measures toImprove EfficacyofIndustrialization Growth Strategy industrialization progress. to transparently report onthehumancapitaldimensionof Obligate Investors,NICandotherGOLRoversightorgants bribery normsintonationalprocurement processes Build incentivesforcorporateadherenceanti- tointernational appropriate interests inthepublicgood mechanisms engagingcivilsocietyorganizations with and corruptionbydevelopingpeeroversightinclusion Adopt explicitmitigationstrategiestoreduce patronage in infrastructure platformstosupportindustrialSEZs. development regulations before embarkinguponinvestment objectives ofinward investmentandbuildtheseintozonal Place great emphasisonattentiontohumancapital including EZBsandEZTFs reduction strategy;incorporateMSME-orientedzones national developmentobjectivessetoutinAfTpoverty Revisit draftSEZlegislationandsituateinthecontextof Development Results Accompanying Measures toImproveand Governance expanded theskillsbaseofitspopulation. of heavierindustrializationatsuchtimeasLiberiahas MSME developmentandsequencetheintroduction to respect with advances make first to preferable be might It industrialization. SEZ-enabled of launch the study concludesthatthetimingisnotoptimalfor GOLR shouldcontemplate,italsoexplainswhythe identify importantsoftaccompanyingmeasures that at large.Whilerecognition ofsuchissueshelpsto creating jobsthatare notaccessibletothepopulation bytensions exacerbate even could and AFT of thrust in SEZ operation work against the inclusive growth importing of alternatives foreign expertiseorexpanding Diasporainvolvement The force. Liberianwork of managerialtalentandskillsgapsamongthe notably withrespect to limitationsinthesupply human industrialization successful the for in pre-requisites capital resides actually constraint bigger A to successfully relieve constraints to industrial growth. through PPPs, for an SEZ-enabled industrialization the publicsectorwouldneedtoaddress, eitherdirectly or strategy Table 2.2 identifies the specific infrastructure gaps which D ad nae oe 17 ilo pol. t s thus evident thatsmallholderagriculture, includingcrops, is It people. million 1.7 over engages and GDP Even nowthesectorcontributes more thanhalf of revealing thefundamentalresilience ofthissector. Liberia’sduring livelihoods conflict,survival and refuge offered agriculture traditional that identified 1 Chapter Rank: High Economic CloutofSmallholderCommercialization 2.2.4 eventually bedeveloped essential tosupplyamineralprocessing zoneshouldthat GRID-BASED POWER:Grid-basedpowerwouldbe quality portfacilities PORTS: Export-processing zoneswillneedaccesstogood airports ROADS: Roadswhichspecificallyconnectzonestoportsor relying upongrid-basedservicedelivery. generated through zone-specificinfrastructure insteadof Each oftheseutilityservicescouldbepurposebuiltor dedicated supplyofpower, waterandtelecommunications. ZONES: Physicallydelineatedzone(s)equippedwith Growth Infrastructure Requirements toRelieveConstraints

Commercialization ofSmallhoders Application ofF ilter Criteriato 77 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 78 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 74 several traditional practices to change. Top among among Top change. to these, asidefrom useofimproved inputpackages practices traditional requires several agriculture of intensification these, of Outside annual growth inthesector. annual budgets to agriculture and strive for sustained 6% of 10% devote to commitment CAADP its fulfill to efforts circumstances, itseemsvitalthatLiberiamakebest the In country. the in density road increasing by (2) and for inputsuppliesandthemarketingoftheiroutput, ways, (1)byconnectingfarmersintovaluechains,both program istakingactiontodothisintwoappropriate LASIP The isolation. their from zones productionremove interests. At the same time, the state must take actions to brokering recourse andjusticeinorder to fairly balance all a find must Liberia way forstateorlocalinstitutionstoalsoparticipatein high, all-time an at fragmentation and resettlement duringandafterthewar, withidentity out-migration displacement, internal of degree high the women inthemediationfunction.Nonetheless,dueto to empowerlocalcommunitiesandinvolve elders and countries (Rwanda and Afghanistan) have found it helpful landtenure customary andmodern systems,some such institutionsrequire deepknowledgeofboth Because and ownership. usage over conflicts mediate accompanied byimproved institutionalizedmeasures to be must regulation or laws land in changes Any sector. if itistoobtaingenuinetransformationinthesmallholder surplus. Liberiamustgetseriousaboutlandtenure reform orientation andavoidanceofproducing marketable the sumofwhichadduptoadeliberatesubsistence Liberian farmers adopttodealwiththeissueofinsecure that tenure, strategies coping sub-optimal of range a highlighted 1 chapter in 2 Box constraints. these of both demand. The state has a critical role to play in addressing deliver to security oflandtenure and increased exposure tomarket sufficient be in improvement an not are conditions Twoessential impact. may but necessary, are for behavioralchange.Forthistooccur, someconditions will confront farmers withmanynewstimuli and demands commercialization of process the level, individual an At Rank: High Involves Liberiancitizensdirectly economic clout. commercialization growth strategy has a high degree of services incomingyears,itisobviousthatasmallholder sector the Although is likelytogrow more slowlythanminingandpossibly estates. industrial course, due in being allocatedtomining,plantationagriculture and, production, particularlygiven thematerialportionofland of agriculture thanextension ofareas devotedto morelie will Solutions rise. to incomes intensification with smallholder modernize behavior andimprove productivity inorder for to need a is there poverty.Yet, the offer oflivestock greatest overallpotential to raiseincomesandreduce raising the and fishing artisanal NERICAisaNewRice forAfricadevelopedwithAfricanDevelop ment Banksupport by theWest AfricanRiceResearch Association,WARDA. farmers’ efforts toimprove conservationpractices. as awhole.However, securityoftenure mustprecede society to accrue will that benefits environmental the in of longtermconservationtoshare directly andvisibly are essentialinorder forfarmerswhobearthecosts These management. water improved and conservation development byintroducing incentivestopromote soil Liberia promote a green growth approach to agricultural increasing land degradation in Liberia. It is important that cultivationandotherpracticesthatare slash andburn including seedsandplantstock,istheabandonmentof Rank: High Engages domesticprivatesector participants, butthewholeofLiberiansociety. commercialization has potential to benefit not only sector possibly lowerfoodprices.Inthisrespect, smallholder benefit to others in Liberia will be higher food security and amounts of marketable surplus, the first and most obvious as acommercialization fewothers strategy beginstoproduce larger but participating, given thegenerallackofmarketablesurplus.However, those benefits it that is present at sector Liberia’sagriculture of nature very The Rank: Medium Benefits Liberiancitizensindirectly seeds, high yielding varieties of cocoa seedlings and NERICA improved of multiplication as such functions sector firms to crowd is in to value chains Liberia and flesh out key time, same the encouraging competitively recruited NGOsandprivate At like. the and practices, with respect tonewcrop varieties,crop management Rice Centre toleverageregional publicgoodsachieved Africa and IITA as such institutions regional and global vocational of institutions and highereducation,Liberiaisoptingtogethelpfrom Liberian and CARI MOA, in research and training. Because of present weaknesses organizations plusthosechargedwithextension, of strengthening institutions,includingfarmerbased importance the identified correctly LASIP, has through process of This modernization. is an area where Liberia, local and national institutions charged with leading the gains intoLiberia’s farminghouseholds,butalsotothe capacity impart to need dire a doubt, without is, There Rank: Medium Timing ofgrowthcoincideswithcapacitygains objective ofexpandingLiberia’s indigenousprivatesector. AFT the against benefits high yield will commercialization surplus. Itisevidentthatprogress insmallholder in supplying the sector and finding markets for production well astotransporters,middlemenandtradersengaged as processing for MSMEs to both links offersAgriculture 74 regional dimension of conflicts. However, a resumption a resumption However, of tradeisapromising waytorepair someofthesocial conflicts. of dimension regional sub- the to connected has factors many trade to due of retarded been resumption A Mali. as far as from traders in vibrant tradeinagriculturalproduce andlivestock,drawing clusters around Liberia’s borders previously conducted Liberiawith CôteD’Ivoire.connecting Eastern Suchmarket Leone andGuineawithWesternLiberiaaswellthose which previously tookplaceinmarketsconnectingSierra trade the of disruption the is example particular A Liberia. markets thatusedtoserveSierraLeone,Guineaand regional of devastation the in resulted this during and conflict the contraction severe suffered trade cross-border in encourage aformalizationoftrade.Liberia’s engagement supportive infrastructure andfavorableborder conditionsthat the and the important priorityistorevitalizesub-region traditionaltradecorridorswith in grow will flows trade which by trade infoodcommoditiesisthemostpromising means that revealed 1 chapter present levelsofregional tradeare quitelow. Nonetheless, but sub-region the within developing trade of premise the on established was MRU The Rank: High Fosters regionalintegration social andeconomicintegrationinLiberia. through domestictrade,thisapproach willalsohelpwith which canthenbemarketedtoconsumptioncenters the strategy of encouraging farmers to produce surplus physical aspects of integration. When combined with the to deal great a contribute will measures These road. all-weather an of kilometers five within residents rural all fifteen all connecting of county capitalstotheprimaryroads networkandbringing objectives the includes plan reconstruction offeederroads, MOPW’s road master through need addressingthis LASIP is only Not network. smallholder of commercialization isincreased necessity densityintheroad core a above, mentioned As Rank: High Promotes internalintegration CAADP program. Liberia’sto central are measures these hydrology.of All management, preservation ofsoilqualityandclimatic sound agriculturalpracticesthatseektoimprove land because success inthissphere of economic activityrelies upon criterion filter growth green the against high ranked is strategy commercialization smallholder The Rank: High Encourages greengrowth can beexpectedtoaccelerate. growth expectedfrom smallholdercommercialization as but responds to opportunity on thesupply side, therateof time, some take will those capacitygainsare made, andtheprivatesector process This like. the supply toservicewiderregional demand. private sectorunderstandstheopportunityofexpanding trade conditions,itseemsamatteroftimebefore the seedlings fordomesticrenewal, butwithbetterregional point, Ghanaisonlyinapositiontosupplyimproved this At varieties. traditional to compared half than more the incubation period before yields could be reduced by farmer hesitancytorenew agingcocoatree stands,as improved This planting. technology couldmakeabigdifference of inovercoming months 18 within yielding and have nowdevelopedanewcocoavarietythatbegins institutions have had a head-start in tackling this problem of aging tree stock and dwindling yields. Ghana’s research world marketsbut,likeLiberia,hasbeenfacingaproblem traditionally beenoneofthelargestsupplierscocoainto have potentialtoliftproductivity. Forexample,Ghanahas regionally asmentionedabove, butevenbilateralrelations stand togainfrom agricultural research beingconducted neighbors its and Liberia Africa. in security food improve continent is seeking to drive a green revolution in order to sub- the the which under compacts in CAADP finalized have region states the of Most active. to member most and are ECOWAS states AU, beneficial the which in highly spheres the be will transformation inthesmallholdersectorandisoneof cooperation Regional the violence. and ethniccleavageswhichrippedtheseareas apartduring addressed. Theseare summarized inTable 2.3. essential softaccompanying measures thatneedto be crite emerge withrespect tobindinginfrastructure gapsand filter nine findings Strategy,Commercializationseveral Smallholder the applying In Constraints toSmallholderCommercialization Findings onSoftandHardMeasurestoReduce job creation thatcanproductively engagemore youth. of marketablesurplustherefore improves thepotentialfor potential to generate profitable livelihoods. The expansion become more attractiveascommercialization proves its are attractedtotradeasalivelihoodandproduction will displaced, toattract urbanized youth back into agricultural production, they hard it finding is Liberia Although conditions, to growth right governance with development. contribute topovertyreduction, foodsecurityand,inthe in thequestforpeaceandstabilitysinceitcandirectly smallholder commercialization has much to contribute rather thanexacerbatethem.Otherwise,progress with so thatconditionsfosterareduction insocialcleavages with care be approached to needs conflict by ravaged previously areas in trade strategy.of resumptionthis The in landtenurepriorityfor issuesisthebiggestgovernance pertains to conflicts over land use and this is why progress The biggest risk arising from smallholder commercialization Rank: High Reduces exposuretothreats ria to appraise the ria toappraisethe 79 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 80 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA (such asjuicefrom fruit)andthelike.Smallscalesources or to transform primary goods into secondary products losses) post-harvest reduce and preservation enhance add valuetotheiroutputs,whetherthrough drying(to supply ofpowertosmallholderswillenablethem borders toneighboringcountries.Improvements inthe of growth corridors within the interior and across inland public infrastructure investmentservethedevelopment goods toportsforglobalexport,itisimportantthat ofbuilding infrastructuretraditional pattern to convey simultaneously addressed. Ratherthanreinforce the market, tradeandtransportinfrastructure gapsbe development. However, itisessentialthatassociated market and integration cross-border to contributing in for regional trade in food crops, allowing it to play a role food insecurity provides animportantsource ofdemand domestic andregional tradeinfoodcrops. Ironically, as hasbeenthetraditionalorientation,buttoencourage merely toenabletradeinglobalexportsofcashcrops Concurrently, thephysicalenvironment mustevolve,not will helpimprove conditionsfortrade. soft accompanyingmeasures thuspointtoaspectsthat the of All output. and productivity improved for striving farmers (both maleand female) willsee the merit in hospitable and the potential gains become evident, more ambitious.Ifconditionsfortradebecomemore tradable, there isnorationaleforfarmerstobecome surplus production. Unless surplus produce becomes change amongsmallholdersisbetterincentivesfor behavioral of root the at lie must which factor core The

Smallholder Commercialization Table 2.3SummarySoftandHard Measures toImprove EfficacyofSmallholderCommercialization volume ofgoodssmuggledacross borders reducing inspections&checkpointscorruptionandreduce Reduce costoftransportationalongcorridors&portsby TariffCommon external Ratify ECOWAS Trade LiberalizationSchemeandImplement services atborder points Facilitate cross border tradebyconsolidatingtrade-related Inclusion ofwomenisessential communities andcustomaryformsofconflictmitigation. are bothneeded,includingprocesses thatdrawnfrom commercialization. Legislativeandinstitutionalreform Land tenure reform isessentialforsuccessfulsmallholder multiplication schemescanpermitimportsintLiberia. germplasm from neighboringcountriesandregional and phytosanitarystandards underwhichimproved ease thecrossing ofborders, plusadoptionofquarantine Foster conditionsforregional trade,includingmeasures to Development Results Accompanying Measures toImproveand Governance to expanddistributionthrough thenationalpowergrid. more quicklyandaffordably thaninvestmentsrequired these powerrequirements andcanbedelivered much of renewable energywillgoalongwaytoaddressing achieved in a manner that contributes to transformation. achieved inamannerthatcontributes totransformation. it isvitalthattheexecution of Liberia’s NRCstrategybe endogenous growth capacitytobecreated. Consequently, Resource Concessioning(NRC)strategythatwillpermit of naturalresource rents generatedfrom the National the visionperiod,butitisproductive reinvestment principal the remain will drivers of growth certainly during AFT and likely throughout sources exogenous such, As growth inthesesectors. high of expectations Facility,confirming Credit Extended iin 00 Tbe . peet mdu tr growth Liberia’s term projections publishedbyIMFinits8 medium for presents 2.4 time-frame Table 2030. the Vision during growth of drivers crops) theConcessionssectorwillcontributemajor agroforestry (oil palm, rubber, timber and other possible By engagingtheindustrialminingsectorandplantation Concessioning Rank:High Economic CloutofNaturalResource 2.2.5 connections tobuyersandinputsuppliers and willhelpremove themfrom isolationandimprove stimulus ofmarketinformationforthesmallholdersector ICT: Broadbandwillimprove internet availabilityand increasing productivity inriceproduction IRRIGATION FACILITIES: Irrigationinfrastructure toenable encourage theformalizationofcross-border trade at strategicinlandlocations,plusborder crossing facilitiesto infrastructure includingcovered marketsandstoragedepots MARKETS &BORDERFACILITIES: Trade supportive renewable ruralenergy sources thangrid-basedsources The levelofdemandwouldbebetterservedthrough outputs produced bysmallholders,particularlycashcrops. help withtheprocessing andtransformationofagricultural OFF-GRID RENEWABLE ENERGY:Powersupplywill marketable surplus markets, thereby inducingincentivesforproduction of farmers intogreater proximity oflocal,nationalandregional secondary plusarteriesleadingtoborder crossings tobring to improve road density, includingruralroads, primaryand ROADS: Restorationofthetotal«agriculture road network» Infrastructure Requirements toRelieveConstraintsGrowth

Concessioning ofNaturalResources Application ofF ilter Criteriato th ReviewofLiberia’s 75 landscape helps to clarify the situation. On the economic landscape helpstoclarifythe situation.Ontheeconomic monitoring performance. A brief review of the institutional organ isexplicitlychargedwith ortakesresponsibility for specific no that is situation a such in happen can What in the“developmental”performance ofconcessions. having alegallyauthorizedinterestorgans ofgovernment exercising oversightisambiguousinthatthere are many enforcement. However, theinstitutional frameworkfor This replication. for butalsofor oversight functionisvital,notjustforlearning works what about more learn to implementation ofsuchagreements inseverallocations the policycallsuponMOCItomonitoranddocument in commercial agriculture andmining.Importantly, arrangements tolinksmallholderswithlargeinvestors agreements that contain sound and practical MSME developmentcallsforpromoting concession MOCI’sfor why,example, policy is for This jobs. create induce Concessionstosource contentlocallyandthus will come primarily through supply chain linkages that Direct Economic Engagement. engagement Eachfrontgovernance. isreviewed below. engagement, direct capacitybuildingandparticipatory involvement This era. should be fostered on three fronts: direct economic present the in Concessions direct interactionbetweenordinary Liberiansand remain vigilanttofosterconditionsformuchgreater without development.Consequently, thestatemust a majorreason whythecountryexperiencedgrowth observed during Liberia’s20 during observed isolationist orientationofConcessionenclaveswas newinvestors the develop similar production models. Nonetheless, the and as Firestone in oilpalmplantationsare beingencouragedto such firms rubber-producinglarge by practiced formertraditionally has The employed. are plantations palm oil rubber and with as such schemes out-grower where is exceptionThe enclaves. as function will Concessions incentivize betteroutcomes.Lefttotheirowndevices, local populationsunlessdeliberateinterventions little localdemand,andfeweconomicspinoffs for Generally speaking,concessionsgeneratefewjobs, Rank: LowunlessEnforced Involves Liberiancitizensdirectly

Thisleavesaside,for thisdiscussion,thelegitimateroles ofMinistryFinanceandEconomic Planning,MinistryofJustice, ofLaborandothers. Agriculture &Fisheries Annual %Change Forestry Mining &Panning Manufacturing Services Table 2.4MediumTerm Growth Outlook 2013 11,7 3,6 2,0 3,2 7,0 th centuryhistoryandis IMF Projections 2014 10,4 4,1 6,1 3,5 7,1 2015 22,5 4,3 6,2 3,6 6,0 2016 17,5 4,4 6,3 3,7 5,4 Clause 9.2on“LiberianGoodsandServices”specifies: provisions within the 2010 Mining Exploration Regulations. gap by introducing localcontentandsocialresponsibility this fill to advances made has MLME Fortunately, results thatLiberiaseeks. organ hasresponsibility tomonitorthedevelopmental establish a clearexpectationthatGOLR’s to primaryFDIoversight fails Act NIC the such, As investors.” to environments, operational sources ofinvestmentcapitalandincentivesavailable sector-relevant climate, the economy, investment opportunities, the investment about information disseminate efficiently and analyze collate, collect, “To are obligations reporting their to and modifycontracts,theemphaseswithrespect though theinstitutionisvestedwithauthoritytoperform and report onthedevelopmental aspectsofFDI.Even NIC actobligingtheCommissiontomonitor, enforce surprising isthatthere isessentially noemphasisinthe Development Agreements with companies. What seems negotiate andsignConcessioncontractsorMineral actually that organs the are MLME and MOA though even operations, NIC in included are MLME and MOA proposals. Itisthrough thetechnicalcommitteethat investment vet to committee technical inter-ministerial of investmentincentivesandwithcoordinating the analysis and receipt with charged are latter The NIC. permanent a Secretariat whichconstitutes theorganizationalcore of by served is Commission The not. are MLMEand MOA of Ministers while member appointed the CommissionandMinisterofMOCIisalegally of concessions. The CEO of NIC serves as Chairman of investment matters,includingtheevaluationandaward oversee to cross-ministerialCommission a establishes level, the National Investment Commission Act of 2010 created National Bureau of Concessions. notably the NIC, MOCI, MOA and MLME plus the newly in andare authorizedto engage withConcessions, interest direct a have government of organs five front, for maintaining records sufficient to demonstrate demonstrate to sufficient records maintaining for contract with any Person. A Licensee is responsible responsible is Licensee A Person. any with contract Subject to the foregoing, a Licensee may freely freely may Licensee a foregoing, the to Subject goods and services obtainable from other sources. sources. other from obtainable services and goods delivery, service, quantity and price, or better than, than, better or price, and quantity service, delivery, and services are comparable in quality, terms, terms, quality, in comparable are services and profits from such entities, provided that such goods goods such that provided entities, such from profits in Liberia are entitled to receive 60% or more of all all of more or 60% receive to entitled are Liberia in or formed in Liberia where Liberian citizens resident resident citizens Liberian where Liberia in formed or citizens resident in Liberia or entities incorporated incorporated entities or Liberia in resident citizens in all subcontracts under such contracts. such under subcontracts all in Liberian by provided services to and Liberia, in performance of any Work, and require their inclusion inclusion their require and Work, any of performance produced goods and materials to practical extent Section 9.2 in all contracts with third parties for the the for parties third with contracts all in 9.2 Section maximum the to preference give must it License, must include the provisions of Section 9.1 and this this and 9.1 Section of provisions the include must its under performed be to Exploration to related its compliance with this Section. (b) A Licensee Licensee A (b) Section. this with compliance its services and goods purchases Licensee a When (a) 75 At a general 81 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 82 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 76 economic andsocialdevelopment inoradjacenttoits Exploration regulations obligatealicenseetoencourage Community Enhancement Obligations”theMining “Local 9.3 Clause Under Participatory Governance. introduce them. Concessions and,ifnot,efforts shouldbemadeto applied has MOA the such measures withintheplantationandforestry whether is clear not is What agreements. Concession and MDA within applicable Liberia’s humancapital,especiallyiftheyare equally job mentoring. These are highly favorable for improving secondment ofMinistrypersonnelandthrough onthe to buildthecapacityofLiberiannationals,boththrough example ofhowtheminingregulations obligelicensees an provides 2.2.2 Direct Capacity Building. Section or developmentaltransparency. economic not but transparency fiscal covers initiative EITI Liberia’s under provided and for called reporting of type The basis. regular a on government of organs reported upontothegeneralpublicbyappropriate more clearlyarticulated,thenmonitored, enforced and expectations around economic and social the benefits if were sector Concessions the from benefit greater be domestic economy. Overall,itseemsthatthere would direct economic linkages between plantations and the the agro-forestry sub-sector to follow the generation of and whetherthere ismonitoringbeingconductedin similar applies MOA whether expectations to Concessionagreements that it signs clear not is it Finally, behavior underconcessionagreements isnotclear. which improved regulation can actually bindcorporate them immunefrom subsequentregulation, theextentto sometimes inclusiveof“stabilizationclauses”whichkeep and contractual are which of nature the MDAs, of because use Also, regulations. mining operationswere initially revived through the or licenses exploitation concerns, ministerial though thiswillhopefullybeimproved inissuanceof core than rather after-thoughts social obligationsoflicenseeswere tackedonmore as that sense the conveys This reporting. developmental geological aspectsofexplorationandzero coverageof of technicalreporting with allofsection6devotedto they strenuously emphasize thecontent,timeandform provisions coverexploration and notyetoperations stages ofconcessionprocurements. Second,the incoming investorsshouldbeincludedduringevaluation reinforcing thenotionthatsupplysideCSRstandards by good corporatevaluesbytheminingcompanyitself, against progress real that this objectivewillrevert to amatterofgoodwillor means This purchasing. import-oriented of amount any justify likely could writer the WTO, the burden ofproof islaidonthebuyerandacompetent join to aspirations Liberia’s safeguard standard forLiberianSMEs andthoughtheseprobably competition difficult providea clauses comparability the While encouraging,there are afewcaveats.Forone, This analysis is culled from material compiled by Save Fern, My Future Foundation and Global organizations Witness as well as citations from the UN Panel of Experts on Liberia, UNSecurity CouncilS/2009/290. operations upon local communities local upon operations reasonably minimizing any adverse impact of such such of impact adverse any minimizing reasonably area ofoperationsforwhich purposeit by its Exploration operations for the purposes of of purposes the for operations Exploration its by of the Licensee and of local communities affected affected communities local of and Licensee the of for meetings on a regular basis between representatives representatives between basis regular a on meetings for diversion ofcommunityfunds. is thattheyare oftenthesource ofcorruptioninthe not appreciate locallevelimpactsandtheperception may beleftinthehandsof central institutions which do power much Too signed. are agreements before start involved in negotiations with concessions right from the To rectify this trend, it is suggested that communities be account fornearly half ofLiberia’s loggingconcessions. permission from localcommunities,andtheynow over largeareas through theuseofPUPs,oftenwithout is assertedthatloggingcompaniesare gainingcontrol determining whatthatpublicinterest is.Furthermore, it voices andrepresentation shouldbebrought tobearin expropriation the of land“inthepublicinterest” anditisclearthatlocal permits constitution Liberia’s Yet, living on it whether or not specified in a formal document. Act defines customary land as owned by the communities law reform stillaworkinprogress, theCommunityRights land rights onlandalready deededtocommunities.With companies havingbeenallocatedloggingconcession failing the qualification criteria and, in at least three cases, with companiespermittedtobidforcontractsdespite timber concessionshavebeentaintedwithirregularities, express onanumberoffronts. report concern and monitor on developmentsinLiberia’s forestry sectorandthey organizations non-government for privatelandownersonsmallerareas ofland.Various sustainable outlined introduced theconceptofprivateusepermits(PUPs) legislation new practices tobefollowedbytimberconcessions,italso the Although of resource renewable the timber asan“extraction”resource include withinitscompact. to and EITI with comply to country African first the was Liberia fact, In concessions andintroducing newforestry legislation. GOLR received kudosforrevoking existingtimber bring to UN measures tosanction timberexportsaswell, subsequent to responding need 2006, In war. civil a the after was there fundamental change to forestry sector governance 2001, in diamonds” “conflict on sanctions imposed UN the Liberia’s after war, tofinance civil helped timber” “conflict Because front.on theparticipatorygovernance serve tomakethepointthat greater progress is needed Current weaknessesinloggingactivities governance indications are that this is currently a source of concern. timber concessionspromote thesameconditions,but of inclusivegrowth. Itisimportant thatplantationsand andbringinthesocialdimension enclave governance represent afundamentalchangeintheapproach to with Concessionaires are notonlyappropriate; they of thisnature tobringlocal communitiesintocontact .” Reformmeasures 76 “ The award of award The must provide provide must 78 77 to countydevelopmentfunds funds, whileagriculturalconcessions are tocontribute mining concessions must contribute to social development Second, budget. national the into flow should people intwoways.First,concessionsrevenue investment inconcessionsshouldreach theLiberian Capturing FiscalFlows. for thisgrowth strategycompletelydissolves. its responsibilities withminimalcorruption,therationale and itbearsrepeating thatunlessthestatecanexecute particularly relevant toGOLR’s Concessioningstrategy in section 2.2.3 and are not repeated here. Yet, they are “capture” versus “divergence” of fiscal flows are covered avoid repetition,effectiveness issuesofgovernment in To below. further filter integration domestic the under elements are explored here andthethird isexplored strategy to contribute to “inclusive” growth. The first two this for order in important is Accountability use. public mining sectortoinvestininfrastructure forprivateand the in especially case ofLiberia,bycausingconcessionaires inthe (3) and, interest public the for them reinvesting by (2) flows, fiscal capturing (1) FDI-led by derived exogenous, benefits which can for accrue to Liberian citizens. These are rationale development ofnaturalresources relates totheindirect overriding The Rank: High Benefits Liberiancitizensindirectly Moore Stephens,“ReportontheThird LEITIReconciliationExercise, CoveringthePeriodJuly1, 2009 toJune30,2010”May3,2011 Clause 9.3.(b) “Local Community Enhancement Obligations” of the Mineral Exploration Regulations stipulates that a licensee must expend an amount equal to at least local officialsandtraditionalleadersasto thefacilitiesthatwillbenefitfrom thisexpenditure. 2% of its approved budget each year on construction, maintenance or rehabilitation of schools or clinics in or affected by its License Area and that it must consult with Original Totals: TOTALS: Oil Agriculture Forestry Mining Sector # ofTaxpayers filing Percent Increase: EITI reports Table 2.5FiscalFlowsReportedfrom ConcessionsinFY2010 Money from foreign direct 77 . Thesheermaterialityof 67 12 17 32 6 - - - # ofTaxpayers not Memorandum: Total Tax RevenueRaisedbyCentralGov’t inFY2010 filing EITI reports 102,95% Nil 50 45 2 3 - - -

FY 2010ConcessionReceiptsas%ofTotal Taxes: TOTAL FISCALRECEIPTSEXPECTEDinFY2010: declared byGov’t only $1,388,328 or 1.9% not fully explained fully not 1.9% or $1,388,328 only unitrecords,government leavinganetdiscrepancy of achieves 2010 records, records centralgovernment (MOF)andother FY covering report a highdegree ofreconciliation betweentaxpayer EITI latest The would undoubtedlybelower. an enforcement mechanismwithoutwhichthereturns to reinforce theconclusionthatmonitoringservesas encountered inreconciling records andreceipts serve concession revenues is indisputable. However, problems and agriculture concessions.Hence,thematerialityof 13% from oil and approximately 17% each from forestry 2010. Of FY this, 53% in was raised generated by revenues mining tax companies, government total of quarter revenues from concessionswasequivalenttoone that shows Table2.5 in presented 2010 FY from data reporting LEITI and IMF of combination a instance For earlier, of mentioned reporting fiscal flows offers reasonable safeguards in this context. transparent As for framework benefit. EITI Liberia’s indirect of criterion resource Concessioningstrategytorankhighlyagainst natural GOLR’s causes flows fiscal future and current eotn rqieet ad umte LII reporting LEITI submitted and requirements reporting with complied entities tax-paying 67 Whereas airports. and those located at peripheral locations like ports and offices MOF central coordinationbetween of lack a and accounting records andreporting habitsbytaxpayers report reveals numerous challenges,includingpoor Value oftaxes $71 896113 $12 097404 $11 497768 $37 072257 Original Total RequiringReconciliation $9 035942 $1 310603 $202 454 $679 685 Amount SuccessfullyReconciled Sources: 8thIMFReporton LiberianECFand3rd LEITIReport Comparison toFY2009: declared byTaxpayer Value oftaxes $55 796435 $11 942732 $11 481487 $23 277554 $9 094662 - - - $288 000 -$14 711350 -$16 099678 -$13 794703 Difference to $71 896123 $35 425320 -$1 310603 78 Reconcile -$154 672 -$202 454 -$679 685 . Yet, the Yet, . -$16 281 $58 720 24,96% 83 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 84 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 79 the concessionaires at the close of the Fiscal Year” Fiscal the of close the at concessionaires the amount discharged as well as the outstanding liabilities of of liabilities outstanding the as well as discharged amount and other areas such as infrastructure and basic services.” basic and infrastructure as such areas other and on the concessionaires for the Fiscal year 2009/10, the the 2009/10, year Fiscal the for concessionaires the on financing investments in roads, education, health, water, water, health, education, roads, in investments financing was not able to determine complete assessments made made assessments complete determine to able not was Government will be used to promote public welfare by by welfare public promote to used be will Government and tax payments lodged at the Central Bank of Liberia, I I Liberia, of Bank Central the at lodged payments tax and on concessionaires’ assessments, liabilities discharged discharged liabilities assessments, concessionaires’ on as well as the non-integrity of data maintained by the MOF MOF the by maintained data of non-integrity the as well as 1 statedthat Reinvesting FiscalFlowsforthePublicInterest. the enhance credibility ofthestatewithpeopleLiberia. further would these benefits, economic of to reporting also and reporting fiscal level community to feasible to apply the same kind of monitoring and reporting one whichcanbuildstatelegitimacyovertime.Ifitwere and thegeneralcommitmenttotransparency isclearly exercise reporting LEITI The purpose. this for built being and private sides. Thus it is clear that competency is slowly transparency reporting, andthisisoccurringonbothpublic has Liberia that made progress eachyearintheimplementationof clear makes report LEITI 2010 FY The take much longer than expected by ordinary Liberians.” Liberians.” ordinary by expected than longer much take the population.” the and tax payments lodged at the Central Bank of Liberia, Liberia, of Bank Central the at lodged payments tax and Liberian culture and economy, its total reconstruction will will reconstruction total its economy, and culture Liberian growth and spreading development to a vast majority of of majority vast a to development spreading and growth on concessionaires’ assessments, liabilities discharged discharged liabilities assessments, concessionaires’ on “As a result of the severe destruction to the fabric of the the of fabric the to destruction severe the of result a “As this area has the great potential of enhancing economic economic enhancing of potential great the has area this to submit their respective templates providing information information providing templates respective their submit to promised dividends of peace. It further recognizes that that recognizes further It peace. of dividends promised priority in the next growth strategy because investment in in investment because strategy growth next the in priority In fact,“ through investmentininfrastructure, peopleandinstitutions. served be will interest” “public the that defines clearly AFT transformation of the economy and society. In so doing, behind GOLRsneworientationtowards fundamental are and leadership the on heavily weigh concerns These “ the Extractive Industry in Liberia for FY 2010, the AG stated: within Entities from Revenue of Collection and Assessment evidence tosupportanauditopinion.Inreporting onthe the Auditor General but by this was not possible due to inadequate certified been have should Agencies Government side, sector public the on even and, certificate audit an by MOF. Onlyhalfsubmittedtheirtaxtemplateaccompanied each ofthelattertotrackdownandverifydatareported by not anditwasnecessaryforthecomplianceauditorstochase did others 50 2010, FY during manner timely a in templates years on, Liberia’s new AFT identifies that identifies AFT new Liberia’s on, years during theLiftLiberiaperiodwillbegintoyieldreturns.Five period that the payoff from over $20 billion of FDI attracted all thatPRS1calledfor. itisinthecoming Infairness, do to possible not was it made, was progress Although the capacity of the state to deliver the long awaited and and awaited long the deliver to state the of capacity the and expectations of the citizenry has been fast exceeding exceeding fast been has citizenry the of expectations and Due to the failure of the supervising ministries / agencies agencies / ministries supervising the of failure the to Due Government ofLiberia,“Poverty ReductionStrategy,” Government page65. Infrastructure investment will be the number one one number the be will investment Infrastructure “ This explains, in large measure, why the the why measure, large in explains, This Concession revenues received by the the by received revenues Concession “the anxiety anxiety “the . PRS PRS 79

serves thepublicinterest. Resources aNatural used effectively forinvestment ininfrastructure thatbest of are proceeds its if justified be can strategy benefit Concessioning The population.” the terms of “spreading development to a vast majority of inclusive growth andthey donotperformequallyin score differently intermsoftheircapacitytogenerate have importantinfrastructure needs,however, they chapter this in reviewed strategies growth four All capital. recognizing anoverallscarcity inpublicinvestment a rationaleforrankingtheprioritiesstateintervention the totality of Liberia’sat infrastructure needs, but to establish look to strives only not It 3. chapter in elaborated present studyisdevoted to aninfrastructure actionplan MSME development which have PSD as their main focus. MSME developmentwhichhavePSDastheirmainfocus. other strategiessuchassmallholdercommercialization and and buildingthedomesticprivatesectorincomparisonto this strategy ranks poorly against the objective of engaging make that such provisions difficult to monitorand loopholes and enforce. Accordingly, conditions the identifies above sector. However, the analysis in the “direct benefits” section GOLR’s NRCstrategywillengagethedomesticprivate regulations, Local agro-forestry or with mining in comply provisions Content Concessionaires that extent the To Rank: Low Engages domesticprivatesector in itsrequirements than earlier ones,goingbeyonda contract forthePutuminingsite showsmore sophistication For instance,themostrecently negotiatedconcession is gettingbetterallthetimeat securingbeneficialterms. contract negotiations,andthere isevidencethatLiberia curveisespecially evidentwithrespect learning to On theinstitutionalcapacitybuildingside,steep pursued withinexistingframeworks. concessions isnotclearbutshouldbeenergetically to whichthisisreplicated byforestry andagricultural under mining company mentorship programs. The extent Liberian employeesandMinistrypersonnelgainskills efforts beingmadein the miningsectortoensure that On thehumancapitalside,sectionsabovedescribe laboratoriesinwhichtogrowthe learning neededskills. full advantageofthisopportunity. Itdoes,however, provide willingness toenterLiberiaandLiberia’s capacitytotake Overall, there isatimingmismatchbetweeninvestors’ why the NRC strategy ranks poorly against this criterion. explain These FDI. of inflow voluminous the by presented to keepupwiththemonitoringandoversightrequirements the into investment of concessions sectoranditsinstitutionsare alsostruggling inflow the of advantage full take Liberia’s humancapitalisnotyetatthepointwhere itcan Rank: Low Timing ofgrowthcoincideswithcapacitygains s dniid bv, ky eei t Lbra f theNRC of strategy isthatbeingemployed toinduceprivate toLiberia benefit akey above, identified As Rank: High Promotes internalintegration “medium” againstthegreen growth filtercriterion. resources andforthisreason theNRCstrategyisrated Liberia’s biodiversityandresilience todegradationofland reduce will mono-culture of expansion the that concerns to plantationtree crop concessions,however, there are exploitation reach the end of their economic life. As applied true test willcomeatthetimewhenminesundercurrent The closure. mine upon and operation mine during environmental impactandstandards expectedboth agreements are muchmore explicitnowintermsofthe Liberia’s new mining regulations and mineral development of miningsitesandtherestoration oftheenvironment. In thepast,Liberiatookfewsafeguards totheclosure stage Rank: Medium Encourages GreenGrowth improvements tomakeinthefuture. evaluation andaward processes, alongwithnegotiation also impartedvariouslessonsaboutbiddingterms, doubt,thetransaction opened ittocriticism.Without have beenembarrassingtothestateandmostcertainly would anticipated, never was event of kind This stake. 51% majority the venturepartner joint cash Indian its giving by in million $50 of gain windfall a make to reported the original awardee became a 49% shareholder and was 2011, August in Legislatureratification National for the to submitted MDA, the finalizing In deal. the from surplus” permitted the extraction of a larger amount of “consumer to runanadditional,privateround ofcompetitionandthis a for search subsequent corporate partner, the the awardee firm was able—in In effect— MDA. an concluding before capacity technical and financial better with itself bolster to awardee the obliging noted were deficiencies awardto ProjectCluster Western the two firm, given a to In fact,thoughthecompetitiveprocess madeadecision outcome rewarding the state with the best possible result. in andofitself,aprocess which wouldguaranteeafair be, to thought was concession mining Area Western the and pupil.Forexample,theuseofcompetitivebiddingfor mistakes and,onthatscore Liberiahasbeenbothteacher bestfrom that nations—likehumans—learn theirown when competingforinvestors.Inaway, itmightbesaid it will help all the countries avoid a rush to the bottom of regional collaborationis a verypositivedevelopmentas fiscal incentives in the mining, oil and gas sectors. This cooperated withSierraLeoneandGuineatoharmonize form hasoccurred and otherlearning becauseLiberiahas practice, withNIChavingconcludedhundreds ofdeals, a third party. This progress is partly because of cumulative by readilyscaling-up that permits manner a in developed stock third partyprincipleto suggestthatinfrastructure be 80 World Bank, “Infrastructure Policy Notes:LeveragingInvestmentsbyNatural Resource Concessions,” June2011. contribute the majorityofdemandalongwithwillingness the studyestimatesthatmining operationswillinfact is that of the market for infrastructure services, whereby significant, very also is which consideration, other The the in explored context ofchapter3. further is information valuable This infrastructure platformstoserveconcessionaire needs. the concessionaires orthird partiesprovide common the countrypurchases infrastructure servicesfrom purchase infrastructure servicesfrom thecountry; The sphere. study explored scenarioswhereby concessionaires this benefit in greater coordination extract public-private from could GOLR which in ways this studymadenumerous recommendations about will remain atamultipleofpublicinvestmentand billion. $1.4 under just Nonetheless, thepointisvalidandprivatespending of total a for $862,038,466 and developmentpartnerinvestmentsadding forecasting public sector investments of $499,516,670 plan drAFT the PSIP covering with 2015, June new through 2012/13 FY the under significantly increase level ofpublicinvestmentininfrastructure isdueto the Fortunately, year. per million US$90 of order the sector investmentwhichhad,untilrecently, beenon representing ahugeamountascompared topublic billion US$5 to amount could concessionaires mining in infrastructure. make bestuseofprivateconcessionaires’ investment October 2011, a study was done on how Liberia could In preparation for the high level economic forum held in functions toservenon-mineralcargousers. to Buchanan port and is further required to design its obligation torehabilitate theformerNimbarailroad line located inNimbaCountyischargedwiththecontractual to serve multiple users. Thus, for example, Arcelor Mittal designed be must facilities financed privately which by MDAs and contracts within terms specify to measures which follows.Ontheotherhand,GOLRhastaken strategy growth MSME the on 2.2.6 section in covered infrastructure. Furtherdiscussion ofthisapproach is developed with the complement of concession-financed the notion that spatial development corridors could be concession contracts.Ononehand,ithascontemplated building infrastructure investment obligationsintomining Consequently, Liberiahasbeendeliberateabout the investmentabsorbedasacostofdoingbusiness. and self-supplied largely be will services infrastructure the non-renewablecan afford for extractive industrytherefore buildsintheassumptionthat model they business however, The investment. firms, small Unlike power, roads, rail,port,waterandcommunications. substantial requirements forinfrastructure, including Concessionaires, especially miningcompanies,have improving physicalconnections throughout thecountry. possible inthepresence ofpowersupplyandby domestic integrationbyexpandingeconomicopportunity transport networkswillgoalongwaytoimproving investment ininfrastructure. Improved powerand 80 This identified that investments by investments that identified This 85 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 86 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 81 bebroughtconcerns tobearbyotherimplicatedstate by whichappropriate policy andtechnicalplanning private partnershipsberevisited tocreate mechanisms suggestion that theleadcoordination role assigned toNIC for public the add we this Tofrom benefits planning. the coordinated optimize to as so plans and needs as agroup canbeconsulted ontheirinfrastructure GOLR establishamechanismwhereby concessionaires and reinforcement. First, the study recommends that At the same time, two recommendations merit attention national publicinterest. leverage concessioninvestmentininfrastructure forthe to underlinethestrategicopportunitythatLiberiahas serve statistics These concessionaires. agriculture and will eventuallylieonlandmanagedbymining,forestry Liberia’snetwork roadof one-thirdfeeder estimated an capacity and close port to 100% of demand for for rail freight. In addition, demand national of 90% than more demand, power national of 80% than more represent viable. Forinstance,itisestimatedthatminescould economically and financially investment infrastructure reliable This services. such source ofdemandthusoffers theprospect ofrendering for pay to capacity and financial investment into a net beneficial economic economic rail the netbeneficial to pertains this a of example clear A investment. into investment financial public marginal Yet, large. investment hasthepotential toconvertanunattractive very be can infrastructure “RoadInfrastructure—A CatalystforEconomic Growth,” power-point presented byMOPW atNationalEconomicForum,Monrovia, September2011. ofexisting Rehabilitation Constructionofnew toConcession Third PartyAccess accesstopublic Concessionaire infrastructure infrastructure infrastructure infrastructure Table 2.6Overviewofkeyinfrastructure provisions inconcessioncontracts Electricity ture No existinginfrastruc- report submitted infeasibility cases plansmustbe ever isneeded,insome Right toconstructwhat- third parties. and potentiallyother energy toGovernment should) supplyexcess (and insomecases Concessionaires can power the righttosellexcess explicit butimpliedby future transmissionnot Rights ofaccessto ture existsatpresent. No publicinfrastruc- Ports Mittal atBuchananport of Monrovia andArcelor- infrastructure atFreeport ligation torehabilitate China Unionhasob- new ports. explicit righttoconstruct Golden Veroleum have BHP Billiton,Putuand approval.Government ever neededwithprior Right toconstructwhat- interfere withoperations. and third partydoesnot ity hasexcesscapacity Required as long as facil land. purchase ofadjacent facilities andfacilitate access torelevant public concessionaire priority willgive Government Leveraging Studybringsthismattertolight. (with expandedandupdatedcontent)here from the reproducedTable standardization.2.6 and consistency differently bysector, thusthere isaneedforbetter by contractandkeyeconomicissuesare dealtwith treat infrastructure developmentrequirements varies Second, theprecision with whichconcessioncontracts results relevant underprivatefinancingscenarios. cost-benefit financial to them compare and alternatives can evaluate the economic cost-benefit of infrastructure analysis unit within a key infrastructure ministry which important toestablishorstrengthen aneconomic public andprivatenetworkdesign.Inparticular, itseems that LECandMOPWhaveinputtotechnicalaspectsof be involvedinpolicyandplanningconsiderations, organs. Specifically, it is important that MOT and MLME and financial analysis (EIRR vs. FIRR) of long-lived oflong-lived vs. FIRR) (EIRR analysis financial and economic between divergence the above, identified As Rank: High Fosters regionalintegration is non-viable. On the other hand, economic analysis analysis economic hand, other the On non-viable. is investment required to extend railroads across borders conduct anFIRRevaluation andconcludethatthe sector where, forinstance,companieswillnaturally - Roads Road Greenville –Zwedru rehabilitation ofthe responsibility for ently beenassigned Putu Mineshasappar come publicproperty. concession area be- proval. Roadsoutside ap- prior Government whatever neededwith Right toconstruct for road damage. Heavy GoodsVehicles Righttotoll concerns. erational orsecurity case ofclearop- ment authorizationin - denied withGovern Required. Canonlybe they are soleuser. of suchroads unless repair ormaintenance obligation topayfor Right assured. No - Railway & Nimbarespectively mining railwaysfrom Bong to rehabilitate existing Mittal bothhaveobligation China UnionandArcelor- new railroads. have therighttoconstruct BHP BillitonandPutuboth in caseofPutu. Arcelor-Mittal and strongest weakest inthecaseof by third parties.Provisions sociated costsare covered existing operations, andas- there isnointerference with as spare capacityexists, Required, typicallyaslong exists. No publicinfrastructure 81

82 platforms thatsupportminingconcessionsisespecially infrastructure developing to approach integration regional A integration perspectiveintoinfrastructure planning. regional a bring to state the of role fundamental a justifies and underscores This criterion. decision paramount the is in thedesignanddimensioningpublicgoodswhenFIRR of finance private from infrastructure, the approach carries simultaneous limitations benefit derive to potential great clarify thefactthat,whileLiberiaanditsneighborshave the impactsofclimatechange.Boththeseexamples mitigate to serves it if ECOWAS and states MRU all benefit region’s transportnetworkisaregional publicgoodwhichwill a of externality cleaner environment resulting from inclusionofrailintothe The term. longer the for transport vehicle by reducing pressure onreliance ofhighcarbonemission region wouldmoveinthedirection of“greener” infrastructure the rail, with roads supplementing by fact, this from Aside and itseemshighlyopportunetomaximizeitspotential. the backofprivatelysponsored infrastructure investment chance to enhance their connectivity and integration off one get only will states MRU The billion. US$1 of order Liberia’s coastwouldgenerateexportcostsavingsonthe railroad linkingGuinea’s iron ore minestoportson suggests thatthepresence ofaregionally integrated West Africa Mineral Sector Strategic Assessment: An Environmental and Social Strategic Assessment for Mano River Union, The World Bank Report No. 53738, No. Report Bank World The Union, River Mano for Assessment Strategic Social and Environmental An Assessment: Strategic Sector Mineral Africa West March 31, 2010 Figure 22MineralClustersSpanBorders BetweenMRU Countries andAllRequire Infrastructure approach toinfrastructure planning. 22 clusters present theopportunity foraregionally coordinated Figure borders. along identifies three specific located locations where cross-border deposit are deposits mineral relevant withintheMRUbecause ofthefactthatseveral transformation objectiveswithinAFT. equally vitalifLiberiaistomeasure itsprogress againstthe withtransparencyimportant buteconomicgovernance is are transparency and governance fiscal that clear made mitigated through improved This analysis governance. has be can risks these of All security. food improve or youth unambiguous propensity to supplyjobstounemployed accentuates the possibility of conflict over land without have which demandorsupplysidecorruptioncanthrive.Italso without developmentanditexpandsfertileground in growth of risk the to country the re-exposes It Liberia. in or thenaturalresource “curse”tolongtermgrowth trends is validwithoutevenconsideringtherisksofDutchDisease of reducing Liberia’s vulnerability to threats. This conclusion strategy ishigh,meaningitscores lowagainstthecriterion The overall risk profile of the Natural Resource Concessioning Rank: Low Reduces exposuretothreats

82 87 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 88 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA orientation towards businessawayfrom protected and promote atransformationalchangeinthedomestic sector inwhichtoroot thecapacityforentrepreneurship in gains quantum huge terms ofeconomicoutput, but itisthemostpromising expect not does strategy The majority offormalandinformalemploymentbyenterprises. the national accounts data. Yet, this sector accounts for the impact onLiberianGDPevenwithoutbeingmeasured in valid toconcludethatMSMEscurrently exertlowoverall Unlike theSmallholderCommercialization strategy, itis Rank: Medium Economic CloutofMSMEdevelopment 2.2.6 role in the generation of power and in the planning enclaves. Meanwhile,exceptforacriticalpublic better enforce theinclusion targetsofthesepotential NRC the accompanying measures neededtoimprove or to appraise most public attentionshouldbefocuseduponthesoft that evident it criteria makes 2.7 Table filter strategy, growth the applying In Constraints toNRCGrowthStrategy Findings onSoftandHardMeasurestoReduce

Natural Resource Concessions via FDI impact &mitigation Improve oversightcapacityformonitoringofenvironmental appropriate interests inthepublicgood mechanisms engagingcivilsocietyorganizations with and corruptionbydevelopingpeeroversightinclusion Adopt explicitmitigationstrategiestoreduce patronage multi-modal linkingofconcession-sponsored infrastructure Strengthen MLME/MOPWcoordination role forplanning& mechanisms forfiscaltransparency underEITI. Continue strenghtening datasystemsandreporting local contentcommitmentsbyConcessions Introduce communityparticipationformonitoringofCSRand community welfare. as welllocalcontentlinkagesandcontributionsto reporting obligationspertainingtohumancapitaldevelopment concession oversight.Theseshouldincludetargets and institutionsinvolvedin economic gainsbygovernment Establish accountabilityformonitoringandreporting of Development Results Accompanying Measures toImproveand Governance

to MSMEdevelopment Application ofF Table 2.7SummarySoftandHard Measures toImprove EfficacyofNRCGrowth Strategy ilter Criteria in theneartermbecauseitcantakeoff more quickly. high, butwillprobably performbetterthanindustrialization against this performance criterion, because it is clearly not term. Forthesereasons theMSMEisranked“medium” nation’s aggregate economic growth rateforthemedium current base, but itwillnotexert a materialimpactonthe likely will sector experience ahighrateofgrowth relative toitsownlow This behavior. competitive induce that monopolies andlargeSOEstowards marketsignals financially spheres these viable. in utilities public making invested inbythepublicsectorandsocontributeto will helptodrivethe market foranysuchinfrastructure by private concessionaires for power and ICT services constraints. Ontheotherhand,demandexerted themselves toaddress their bindinginfrastructure private major the participants intheNRCstrategyshouldlookto uses, multi-purpose address to and regulation ofprivate infrastructure installations creation forLiberiansisitsfundamentalpurpose. the against high criterion ofdirect citizenparticipationbecausejob ranks strategy growth MSME The Rank: High Involves Liberiancitizensdirectly demand for private expansion of domestic internet backbone. demand forprivateexpansionofdomesticinternet grid-based infrastructure; yet,concessionswouldoffer viable met through privatelyfinancedsatelliteifnotsuppliedthrough andtheseneedscouldbe telecommunications andinternet ICT: Concessionoperationsrequire reliable to miningand/orplantationagriculture developmentneeds Concessions toPorts.Ruralroads withinconcessionstocater ROADS: Primaryandsecondaryarteriestoconnect need portaccessviapublicsectorinvestmentimprovements. their owninstallationswhereas plantationconcessionswill such asrubberorpalmoil.Miningoperationsshouldfinance product-- whetherminerals,logsoragriculturalcommodities for portinfrastructure cateringtotheirparticulartypeofbulk PORTS: Allconcessionsare exportorientedandhaveaneed multi-user regulation &planning. the publicsectorattendingtocoordination, standardization and These shouldbeprivatelyfinancedinasmuchaspossiblewith provide more economictransportofbulkmineralstoports. RAIL: Thelarger miningconcessionshaveaneedforrailto locations willrequire theprivatesectortofinanceinstallations that transmissionanddistributionlinkagestospecificmining to strengthen thenationalpowerutility. However, itmaybe investment forgenerationastheirsource ofdemandwillserve is meritinhavingtheirrequirements satisfiedbypublic increasing demandforpowertosupportoperations.There POWER: Miningconcessionspresent substantialand Infrastructure Requirements toRelieveConstraintsGrowth 83 rnig ih t h avnae ta a infrastructure- an that enriched corridorpromotes marketcreation; corridors advantages the economic it with bringing favorable provides trend conditions toattractfurther domesticprivateenterprise This corridors. expansion ofinfrastructure investmentservingthese Concessioning strategy)willservetocontributethe the countryandtheirpresence (asdescribedinthe situated alongconcentratedtransportaxeswithin that Liberiahasattractedmajorforeign recognizes investments approach This growth. economic in crowd concept ofspatial development corridors asa means to economic planningwasintroduced toembracethe catalytic. Inthiscontext,aparadigmshiftinnational public sectorinvestmentsneedtobestrategicand citizens directly and,forthispurpose,theassociated needs industries intosectorsthatengagemore Liberian Liberia that a strategyfocusedoninvestingrents from extractive determined MOPEA Specifically, reduction, especiallyifitkeepsincome within counties. on therationalethatemploymentiskeytopoverty Affairs Economic on and Planning 2011 of Ministry and the of 2010 behalf in conducted was Study Growth the domesticprivatesector. Inthatvein,aCorridor stimulate conditionsfordevelopingandexpanding criterion becauseitsfundamentalpurposeistodirectly Again, the MSME growth strategy ranks high against this Rank: High Engages domesticprivatesector raised bytheconcessionssector. notmake do will material contributions that compare to public revenues which firms those term; near the in formalization ofenterprises,thisislikelytoberesisted systems oftaxation.EventhoughGOLRwillencourage and therefore havealowparticipationrateinformal material themajority since generate of enterprisesare to currently intheinformalsector tax revenues expected through flows not fiscal is sector This Rank: Low Benefits Liberiancitizensindirectly farm livelihoodsinLiberia. off- of generator largest the are MSMEs earlier, noted As markets. reaching in scale of economies and inputs thereby providing theopportunityforbulkpurchasing of associations todeliverservicestheirmembers, build thecapacityofFBOsandothermicroenterprise and development agents in country extend support to They commitments. purchasing will alsohelpthemultitudeofNGOs,donorprojects content local their companies and linking them with concessions to meet subcontracting betweenmicroenterprises andlarger will strivetoachievethis objective byfostering Under theMSMEpolicy, theMSMEdivisionofMOCI Ministry of Planning and Economic Affairs, “Developing Liberia’s Economic Corridors, Volumes 1 and 2,” August 2011. Study conducted by Sibley International with with International Sibley by conducted Study 2011. August 2,” and 1 Volumes Corridors, Liberia’sEconomic “Developing Affairs, Economic and Planning of Ministry funding supportfrom USAID. 83 83 and potentialinvestorsinindustry. incubate theskillsofLiberia’s future businessleaders to which in environment favorable a offer zones These oriented towards high capital manufacturing enterprise. under theindustrializationstrategy, whichare more are fundamentallydifferent from thosecontemplated services. Whatisnotableaboutthesezonesthatthey sector investmentinessentialinfrastructure andutility domestic investmenttobebetterservedbypublic private permit could conditions efficient under activities interim. In all cases, the clustering of mutually-supportive adequate to meet the needs of emerging SMEs in the in dispersedtowns,renewable energysources are likely Liberia. Where gridbased power supplyisnotavailable development area to spurthedevelopmentofatourismindustrywithin scenic and resorts, eco-tourism, would includesuchactivitiesasrecreational latter tourism, The Sanniquellie. and for Ganta, Gbarnga, recommended Kakata, specifically were EZB’s trade-oriented business. and manufacturing and crAFTs based labor- processing, goods agricultural accommodate to terminals, warehousing, and common facility structures would includesuchimprovements astransportation former The (EZTH). Hospitality and Tourism for Zones Economic and (EZB) Commerce and Trade Business, types two of zone development, notably Economic Zones for were identified opportunities business the under (identified appropriate state intervention to catalyze corridors activity. Among growth ‘domestic integration’below)withsuggestionson specific along opportunities investment specific twenty of evaluation to competitiveness. Included inthisstudywasthe contributing thus efficiency improve and costs reduce tertiary includingvocational andacademicinstitutions. and non-formal modes of training plus primary through investment inalllevelsof education, includingformal is it opportunity, with important thatGOLRkeepapriorityonpublicsector pace keep To timeliness. of MSME growth strategy ranks high against the criterion employers intheirownright.Forthesereasons, the sole practitionerstobecomingbusinessownersand credit guarantees,Liberianscanmovefrom being or microfinance of availability with and fundamentals purchasing, inventory control, salesand other business accounting, finance, in skills complementary acquire theright supporting conditionstohelpthem gain. With livelihoods theyknowhowtomanageforpersonal encouraged be can they bydoing,tomoveaheadinpursuingthe to learn such, As business. their the technicalandvocationalskillsonwhichtobuild entrepreneurship andbusiness,manyalready have general rulealongwithexposure toprinciplesof Even thoughLiberiansneedmore educationasa Rank: High Timing ofgrowthcoincideswithcapacitygains 89 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 90 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 84 concept intwoverydifferent environments. Oneisan start to and to demonstrate the utility of the growth corridor place a suggest to but others-- the out rule to particular-- in corridors specific two identified second not spatial different five the of development axes which offer identified promise within Liberia. The phase study first Growth The Corridor axes. transport along growth in the country’s strongly interior and by crowding ineconomic will it strategy, reinforce integration bycreating internal growth poles growth corridor MOPEA the Especially if the MSME growth strategy is coupled with Rank: High Promotes internalintegration against thegreen growth filtercriterion. For thesereasons, theMSME strategyisrated“high” implantation of green energy and associated innovation. Liberian “disadvantage”actuallyfavorstheadoptionand energy haspenetratedmore deeplyintotheinterior, this In comparisontoothercountrieswhere gridbased a mannerthatprovides a mutuallyreinforcing cycle. in progress to enabled be can -- energy renewable for synchronous development of both—supply and demand scale ofpowerdemandbymostMSMEsandthe Renewable energy sources are appropriate for the Rank: High Encourages greengrowth Growth CorridorStudy, Ibid,page4. Figure 23EconomicGrowth Corridors Proposed forLiberia onay ih oterd Cut, n te south- the and endwhichfrontseastern ontheseaatBuchana County, Montserrado with boundary the south-western end which reaches the anchored in the mining concession community of Yekepa, growth endofwhichis corridorsasatriangle, thenorthern parallel road. The study describes the territory of Liberia’s Arcelor-Mittal a by rehabilitatedand be to railroad Nimba the by presence ofmajortransport infrastructure, includingthe characterized is Buchanan-Yekepa other, The route. trade domestic major a as population the of about 43% serves currently which axis Monrovia-Ganta the existing “backbone” of the Liberian economy involving “All or parts of the four counties lie within the corridor corridor the within lie counties four the of parts or “All territory - Nimba, Grand Bassa, Bong, and Margibi. The The Margibi. and Bong, Bassa, Grand Nimba, - territory primary basis for the triangular shape of the corridors corridors the of shape triangular the for basis primary is the presence of nationally-significant transportation transportation nationally-significant of presence the is routes that make up “spines” of mobility. The western- The mobility. of “spines” up make that routes most corridor boundary parallels the road running from from running road the parallels boundary corridor most Montserrado County to Nimba County (referred to … … to (referred County Nimba to County Montserrado as “National Route #2”), and a further 40 km beyond beyond km 40 further a and #2”), Route “National as Sanniquellie by unimproved roads to a terminus at at terminus a to roads unimproved by Sanniquellie the former LAMCO Iron Ore Concession boundary at at boundary Concession Ore Iron LAMCO former the Yekepa. This corridor’s 2008 population was estimated estimated was population 2008 corridor’s This Yekepa. at roughly 485,000. A second corridor runs southward southward runs corridor second A 485,000. roughly at from Ganta along the route of the privately-constructed privately-constructed the of route the along Ganta from railway that connects the Mt. Tokadeh ore mine with the the with mine ore Tokadeh Mt. the connects that railway port of Buchanan. Although roads do exist in portions portions in exist do roads Although Buchanan. of port of the area south of Ganta, there is no well-defined well-defined no is there Ganta, of south area the of highway “corridor” as such, though there is a road road a is there though such, as “corridor” highway running more or less alongside the railway line. Fewer Fewer line. railway the alongside less or more running than 35,000 persons lived in this corridor in 2008. 2008. in corridor this in lived persons 35,000 than n: Liberia’s economicgrowth. and peripheryimproving therelevance ofthenorthto integration byimproving connections betweencenter domestic of cause the growth serve would triangular These MOPEA. by the of map corridors proposed for initial public investment support a provides 23 Figure from alltheseareas bringgoodstosellintheGanta and Nimba Counties, Ivory Coast and Guinea. Women in Liberiastrategicallylocatedatthecrossroads ofBong palm oilintotheregion. Gantaisthesecondlargestcity the importanceofGantaasaprominent exporthubfor particular, Chapter 1 analysis on regional trade identified trade with Guinea and beyond. In further international could easilybeenhancedtoopenthecountry Buchanan-Yekepa corridor the that identifies 23 Figure Rank: Medium Fosters regionalintegration The third, most southerly, corridor runs along Roberts Roberts along runs corridor southerly, most third, The AirPort Highway to Monrovia’s International Airport and and Airport International Monrovia’s to Highway AirPort thereafter continues southeastwards. Its population was was population Its southeastwards. continues thereafter estimated at less than 200,000 in 2008. This corridor corridor This 2008. in 200,000 than less at estimated southerly road [is]…referred to as “National Route #1.” #1.” Route “National as to [is]…referred road southerly passes through parts of Margibi and Grand Bassa Bassa Grand and Margibi of parts through passes Counties, ending east of the seaport of Buchanan. This This Buchanan. of seaport the of east ending Counties, Figure DepictionofLiberianTrade 24Alternate andTransport Corridors 84

markets much more effective and economically rewarding. markets muchmore effective andeconomicallyrewarding. extended to make the connections with Côte D’Ivoire be could which corridor Harper-Pleebo the for true is Liberia’s markets to better serve Sierra Leone. The same border tradeandtransportinfrastructure couldexpand strategic the identifies 24 relevance Figure of a Monrovia-Foya time, corridor which, with cross- same the At conditions fortrade. would relieve thecongestion andprovide more favorable Ganta within propertyfour-acre a on sited facilities the services in this strategic trade center. Rehabilitation of was severely damaged,leaving travelerswithoutgood facility FRTUL’s terminal conflict, Ganta civil the During and secure parking for transport service providers. equipped withlodging,storage,warehousing facilities FRTUL previously served this function through a terminal transport servicesamongotherfunctions.InGanta, objectives include provision of passenger and cargo Their counties. fifteen all in offices with organization run member-national a as 1982 in established was FRTUL Liberia. of Terminal Union Transport Road Ganta of Federation the the of of rehabilitation to Growth relates Corridor study the in identified integration regional that couldpromote further MSMEdevelopmentand center. Forthesereasons, oneofthepublicinvestments to othermarkets,makingthecityabustlingcommercial market or to store in makeshift warehouses for transport 91 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 92 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA infrastructure needed to boost its efficacy. On the On efficacy. its boost to key needed infrastructure highlights the 2.8 to appraise Table recommendations forsoft measures andhard strategy, criteria growth filter MSME nine the applying In Constraints toMSMEGrowthStrategy Findings onSoftandHardMeasurestoReduce cycle ofskillsgains,employment,incomeandstability. MSME developmentcanbeexpectedtousherinavirtuous emphasizing growth intheMSME sector;onthecontrary, could oneconcludethatLiberia’s stabilitywillbeshakenby best rankedperformeragainstthiscriterion.Onnoaccount least likely strategy to produce conflicts over land use, is the virtually all vulnerability areas against and, considering that it is the well performs strategy development MSME The Rank: High Reduces exposuretothreats MSME Development via Corridors contracts. associations andmeasures tosecure leasingrightsunder business developmentservices,strengthening ofbusiness registration, taxadministration,increased supplyoflowcost Improve enablingenvironment forinformalenterprisesincluding to secure CopyrightandIntellectualProperty protections Establish NIDFONationalStandards Institutionplusmeasures function proposed undertheNationalMSMEpolicy. the MSMEunitinMOCItoenableitfulfillcoordination through alltypesofvocationalandacademicinstitutions.Fund Maintain publicsectorinvestmentforeducationatalllevelsand for privateinitiative. created bypublicinvestmentthatwillcreate favorableconditions counties anddomesticprivatesectortoseizetheopportunities MOPEA Growth Corridorstudyandencourageengagementby Give credence totheinvestmentproposals identifiedinthe Development Results Accompanying Measures toImproveand Governance Table 2.8SummarySoftandHard Measures toImprove EfficacyofMSMEGrowth Strategy environment forexpansion ofMSMEs. facility infrastructure zones toprovide ahospitable priority in re-channeled to theestablishmentofbusinessparksorcommon be development industrial SEZ-enabled for intended investment public the that fill to this gapinthemarket.Meanwhile,itisrecommended appetite their expands that incentives other or intervening only toreduce theirrisk(such asthrough guarantees) institutions financial private of hands the recommends anapproach thatleavesthisprimarilyin and SMEs to provision financing in role direct a with In addition,thestudyurgescautioninvestingNIDFO affordability andduetomattersofabsorptivecapacity. tackled duringthesametimeframe,bothforreasons of recognized thatnotallcore andfeedercorridorscanbe because itmustbe essential is This horizon. planning partner financing can be mobilized against a transparent sequencing bywhicheachcorridorisaddressed sothat critical importancetoestablishthe side,transport corridor planning is of governance suppliers MSME sectorandwillimprove connectionstobuyersandinput ICT: Broadbandwillimprove internet marketinformationforthe networks» corridors, coincidingwiththe«current» or«potentialconcession ROADS: Restorationofprimaryandsecondaryroads alongkey facilities. locate, leasespaceandhaveshelter, securityandstorage would beamodesttypeofzoneinwhichMSMEscouldco- COMMON FACILITY INFRASTRUCTUREPLATFORMS: This energy sources of demandcouldbesatisfiedfortheinterimby renewable rural for fosteringdomesticMSMEdevelopment,thoughthelevel OFF-GRID RENEWABLE ENERGY: Powersupplyisessential Infrastructure Requirements toRelieveConstraintsGrowth growth strategiesinthisregard. Itconcludesthatthe 2.9 Table conflict. aggregates the and findings from appraisal of the four chosen sensitivity public of drivers the appraised tobelowriskintermsofitspropensity toignite good. Incontrast,theMSMEdevelopmentstrategyis public NRCrevenues with have beenredeployed tothepublic up followed convincing communicationanddemonstrationthat EITI under transparency sustained public if into question,emphasizingthecriticalimportanceof concern of level accountability forresource anational rents were tobebrought to magnified be threat This populations. would neighboring with linkages enclaves orfailtoadequatelycreate jobsorlikelihood conflict- to exposuregenerating threats,particularlyifconcessions operate as Liberia’s increase to propensity study concludesthattheNRCstrategyhasgreatest contribution to reducing Liberia’s exposure to threats. The investments thatcandelivergrowth whilemakingagenuine of growth strategiesand corresponding infrastructure improve stability;thischapter hasemphasizedtheselection present studyistoidentify sources ofgrowth thatwill threats. Bearinginmindthat oneoftheobjectives day, highlightingthenation’s enduringvulnerabilityto present the to persist that conflict the from legacies light indings andConclusions onPriorities The analysis of Liberia’s fragility in chapter one brought to 2.3 Exposure to Smallholders cializationof cessionsvia opmentvia threats tion viaZones Industrializa- via Trade Commer FDI source Con- Natural Re- Corridors MSME Devel-

for Transformational Growth F - Growth without participation of direct citizen Development ticipation domestic par prevent higher launch could Premature participation of direct citizen by highlevels Reduces threat sure tothreat Increases expo- by highlevels Reduces threat - Table 2.9OverallRiskProfile ofAppraised Growth Strategies Unemployed jobs vides unskilled to extentitpro- Reduces threat Youth unskilled jobs if provides Reduces threat participation trade &youth by increased if accompanied Reduces threat jobs vides unskilled to extentitpro- Reduces threat Food through jobs citizen incomes expanding direct Reduces threat by Insecurity through jobs pands incomes Reduces ifex- food surplus of marketable direct expansion Reduces threat by supply chains plies locally;build chase foodsup- concessions pur Mitigates threat if investment capital. but leastpriorityforallocationofpublicinfrastructure state inexercisingresponsibilities, itsgovernance warranting highestpriorityattentionoftheLiberian ranks Natural Resource Concessioning as the strategy study the why explains growth.This economic inclusive in the Liberian economy expected to contribute towards negative attributes,buttotrulyengageitasaparticipant during implementation—notjusttoavoiditspotentially it isimportantthattheNRCstrategynotbeneglected measures designedtoencourage endogenousgrowth, Even though the new strategy places emphasis on other generations. future in growth internally-led generate to defined in AFT as a path which vests inoffers ameanstoanend—that ‘end’havingbeenclearly Liberiait thethat capacity is strategy this of virtue fundamental The good. for publicinvestmentthatcanberedirected forthepublic resources fiscal and benefits infrastructure generate to evident, itisalsothemostlucrativeintermsofitscapacity resource concessioning,butastheappraisalmade By farthemostriskygrowth strategyisthatofnatural benefit andovercome inherent adversequalities. deliberate measures todraw outoptimumeconomic as landdisputes)ortobetterenforce “inclusion”through greater discipline to mitigate the drivers of conflict (such conflict, whereas the others require greater vigilance and re-introducing of risks few poses growthstrategy MSME - Patronage & petty levels Exposes to Corruption threat exposure to Increases petty levels Exposes to risk this typeof exposure to Increases Conflictover threat exacerbate Unlikely to Land threat exposure to Increased Possible other uses tween them& holders &be- among s/ sure tothreat High expo- risk this typeof exposure to Increases could mitigate ness opportunity Expanding busi- mentation Identity Frag- threat to reduce this and periphery jobs incenter Must provide or exacerbate could mitigate Trade conditions ing isessential territorial polic- vate securityfor Ban againstpri- Overall Low Profile Risk Medium Medium Low- High 93 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 94 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA and equivalent measures for the lower rankings. These rankings. criterion lower the for measures equivalent filter and each by sought outcome development potential contributionbyagivenstrategytothedesired (M) andLow (L) wherein ahighranking attributes high four emerge the The rankings in to below.Table to 2.10 Table2.10 rnkings in range from aggregated High filter as many (H) to strategies Medium all growth among of summation one the from is conclusion This from FilterCriteria Development OutcomesSought Rate Contributes toGDP, Share and tions forAfTtimeframe: Infrastructure InvestmentImplica- Fosters regional integration physical integration Promotes economicor internal Encourages green growth capacity gains Timing ofgrowth coincideswith Engages indigenousprivatesector Benefits Liberiancitizensindirectly direct citizenparticipation Builds humancapacitythrough rankings: Summary logicbehindpriority INFRASTRUCTURE INTERVENTION IN PRIORITY FORSTATE GOVERNANCE INTEVENTION INHD& PRIORITY FORSTATE Priority Rankings Rack UpofRatingstoInform managed * Rankingisinitial;dependsonhow Reduces exposure tothreats STRATEGY RANKING FRAMEWORK Table 2.10RankingofAppraisedGrowth Strategiesvis-à-visFilterCriteria investment capacity entrepreneurship & germinated domestic pacity buildinghas the lattertillHRca- timeframe anddelay the formertoAfT turing. Accelerate intensive manufac- emphasizes capital sector overthatwhich the emerging SME opment thatengages Prioritize zonaldevel- strategy industrialization participants inan being effective Liberians risknot otherwise indigenous industrial zones; be builtupbefore Human capitalmust Industrialization via Industrialization 5 L,4M Zones M* L* M M M L L L L 3 2 trade facilitation border postsforregional hubs, ICTandonestop ing county-levelmarket ing infrastructure includ- Promote trade-enhanc- ing cross-border links. secondary roads includ- Emphasize primary& isolation surplus; reduces social to markets;incentivizes trade connectsfarmers domestic orforeign Engagement in Smallholders viaTrade Commercialization of 1 M,7H draw outseveraladditionalconclusions. infrastructure to helps in dimension Transformation.Each Economic for investment state-sponsored (2) and Governance, and Development Human of pillars AFT two priorities: (1) state-sponsored intervention in the key This permits each strategy to ultimately be ranked against considerations presented in thestrategyreviews above. were arrivedatthrough thequalitativeandquantitative M H H H H H H H H 1 3 Development Strategy ages intothepicture NIC localcontentlink- talent plusMOCIand frastructure planning & bringMOPWin- concessions bureau sight capabilityof to improve theover soft-side investments sector addresses structure whilepublic road andportinfra- financing ofhard rail, Emphasize private local contentlinkages extract publicgood& & coordination to in realm ofplanning public role essential State financing,but so notapriorityfor own infrastructure Investors willprovide Concessions viaFDI Natural Resource 4 L,1M,H H* L* M H H H L L 4 1 L - and quality road-port connections with upgradesin along band internet backbone forbroad- building ofadomestic power supplyand development forrural including off-grid sector investment Emphasize power of growth endogenous sources if Liberiatoachieve of entrepreneurship indigenous culture Essential tobuildan SME Development via Corridors 1 L,2M,5H M M H H H H H H L 2 4 of facilitiesthatenableSMEindustrytoemerge. industrial zones and prioritizing, instead, the installation in the installation ofinfrastructure platformsforcapitalintensive investment state-financed near-term deferring for arguments presents also analysis The coordinated. the totalnetworkaspectsofinstallationsiscarefully involvement overprivateinstallationstoensure that but there isa need for greater policy and planning infrastructure, for financing sponsored privately on rely .0 ae clear, makes resources 2.10 Table financial As infrastructure. for heavy being especially are which second the governance; devoted andattention fordispensationofquality by organsofgovernment capacity time, being first the across all pillars requires resources that are in scarce supply: intervention state-sponsored Fundamentally, development Commercialization and second to support MSME MSME support to second and Commercialization frame should be prioritized first to favor Smallholder Smallholder favor to first prioritized be should frame public infrastructure investments during the AFT time time AFT the during investments infrastructure public h NC taey hud otne to continue should strategy NRC The . this study concludes that Liberia’s Liberia’s that concludes study this term time frame. The study thereforestudy The frame. time that term concludes also and thenatcapitalintensivemanufacturinginamedium frame time AFT during sector entrepreneurial and SME if theyare pitchedatinfrastructure servingtheemerging transformation for agenda the to benefits optimal more devoted totheinstallationofsuchzonesmightreturn Liberia; itsimplysuggeststhatpublicinvestmentcapital This case. does notmeanthatSEZzonesare inappropriate for the be otherwise would than opportunities by Liberiancitizensinzonemanagementandinvestment enabling agreater eventual degree ofdirect participation This would permit national human capital to develop further, upgrade the intensity of public governance and oversight and governance public of intensity the upgrade represent growth strategies where Liberia should should Liberia where strategies growth represent Industrialization and Concessioning Resource Natural and long term time horizons for Liberia. and longtermtimehorizonsforLiberia. an infrastructure planning strategy across short, medium carried intochapterthree to informthecompositionof are findings These large. at economy and population the for benefits transformational genuinely extract to order in

95 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 96 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA CHAPTER 3 rnig owr tee nihs te forthcoming the insights, these chapter turns to a more detailed examination of Liberia’s forward Bringing enterprise intheAFTtimeframe. indigenous emerging of needs the to cater can which as to prioritize a different kind of zone or business-park industrial processing zones should be reconsidered so in investment state-financed Chapterthat concludes also frame. two time AFT the during advancements Governance and Development Human of prioritization requirestate-sponsored will strategies industrialization development. contributes to national grids. Additionally, the NRC and MSME that manner a in infrastructure sponsored privately on primarily rely should strategy NRC and the Concurrently, public for Commercialization priority term Smallholder supports that transformation.infrastructure in short investment desired highest the places to This critical so is which development capital human catalyze that activities types to of the order to years in early during timeframes privilege greater of give set staggered a against prioritized be should investments Liberia’sinfrastructure public that concludes two chapter Consequently, populace. the across impact distributional greater and deliver slower growth but with higher levels of inclusion strategy,Commercialization Smallholder a will as such of rates economy, the to growthfiscal and returns others while absolute higher deliver can strategy, (NRC) criteria. Concessioning Resource each Natural filter the as yet such identified Some, growth, against economic differently spurring performs of terms in make to contribution path. important an growth has strategy chosen Each its along to country contribute the will steering that strategies growth key attributes four the of examined chapter the context, this the country. In throughout citizens all of benefit the growth for stability-enhancing inclusive, approaches deliver will emphasizes Agenda that (AFT), the that Transformation strategy, growth acknowledging for stage with next Liberia’s began growth This future towards prosperity. recovery from examining country the to take to potential turned two Chapter for climate growth andforinstallation of physicalinfrastructure. investment improving an enjoys now and matters significant governance regulatory and made policy on progress has Liberia recovery. economic for since the advent of peace to usher in a better framework reformmeasuresmany introduced the described also It by severe depletion of the nation’s physical infrastructure. resulting decline of socio-economic status accompanied Chapter one identified Liberia’s history of conflict and the Introduction Prioritizing transformationalinfrastructureinvestments rsn fo rgoa eggmn i te eim to medium long term. the in engagement opportunity regional growth from arising economic increasing with term short the in fronts integration regional and domestic integration. Concurrent progress can be made on both give the nation to an ability to engage competitively and in regional then growth—and unity inclusive national through stability secure to forward—first propel best Liberia can that intervention for priorities those about partners development and authorities Liberian inform to aims study the timeframes, sequential over strategically constraints infrastructure binding relieving term infrastructure planning for Liberia’s own future. By of identifying parameters for short, medium and longer task important the to an returning before introduce is to perspective This ECOWAS. within countries competitiveness of relative the on implications serious with infrastructure and trade the regional on of architecture consequences be game-changing have can to due investments are stage continental infrastructure the on Developments planned. key which context in continental and regional the at look wider a takes report the retained, be to priorities and projects However, before drilling down into the merits of specificframes. time term longer and medium into migrate to and gap need might that projects of discussion short a permits infrastructure ambitious which more against the horizon close time to term longer a for gap. need likely infrastructure the reveals affordability of Liberia’sassessment an Next, of elements most pressing the address to needed investment on implied magnitude the of orders rough establish help These Liberia’sinvestment.infrastructure for “appetite” latent of estimate complete more a represent can latter The categories. then investment key and the across infrastructure infrastructure to compares this plan with a simplified allocated long list of desired portion the program pillars over its five year time frame. It identifies all of Transformationinclusive for Agenda the of costs Chapter three begins by presenting the estimated total • • • the future. Theseare definedas: infrastructure requirements for sequential time frames in beyond). (and 2040 through 2031 from Decade = term Long Liberia Rising2030 to up and post-AFT period Interim = term Medium FY 13through FY17 period investment transformation AFT = term Short CHAPTER 3 97 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 98 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 85 billion for PRS 1 for a 3 year timeframe. year 3 a for $1.6 1 PRS for billion of estimate cost ex-ante an to compares this 1, or priority realizable within the AFT timeframe. As noted in chapter highest considered projects infrastructure for is been billion $1.95 has which of program billion, year $3.19 at five estimated this of cost the total, In capacity, institutionsandinfrastructure. under AFT to launch the holistic transformation of citizen required investments of roster full the out setting 2012 December from data cost MOPEA presents 3.1 Table 3.1 AFTInvestmentPlanningvs.Desired il se Lbra no n r o nw aaiis and technologies. capacities new of era an into Liberia usher will endowment levels while in other cases new investment restorewould these cases, some formerits to Liberia In prioritization. subsequent for allow will undertaken been has analysis for design or projects cost preliminary infrastructure which of stock of inventory taking current such, As the term. near the infrastructure in its deficits of all address to Liberia allow not will deficits capacity other and financing of Scarcity physical dimension ofbindingconstraintstoeconomicgrowth. the relieve to infrastructure in investment on greaterfar emphasis by accompanied 2, PRS to 1 PRS of average annual costs shows an increase of 19% from No ex-post cost analysis of PRS 1 is available other than reports which suggest the percentage of projects completed within the available funding, which imply the $1.6 billion costestimate. Infrastructure InvestmentProjects ** Water, Sanitation&Hygieneinvestmentsof$102mare includedinPillar2 Mineral Sectorresults inadditiontoinfrastructure sectors:Energy, ICT, Roads&Bridges, Housing,PublicBuildings *Includes ETinvestmentinPrivatesectordevelopment,Macroeconomic issues,Ag&FoodSecurity, Forestry & of which 5 4 3 2 1 Sour Table 3.1Total EstimatedCostsoftheAgendaforTransformation—2012 to2017 Public Bldg&HousingResults Water, Sanitation,Hygiene Transport SectorResults Roads &BridgesResults ICT SectorResults Energy SectorResults Infrastructure Componentsinclude: TOTAL EstimatedCost: Cross CuttingIssues &PublicInstitutions Governance Human Development** Economic Transformation* Peace, Security&Ruleoflaw AfT CostingbyPillar 85 A comparison A ce: AFTCostingasperMOPEAExecutiveSummaryofdatedDecember15,2012 infrastructure investmentplannedfortheshortterm. billion $1.95 planned the afford to Liberia’sability to as arises question the then, AFT.Even the within planned investment infrastructure billion the of $4.39 excess in of far is minimum requirement which investment a capital at a amounts to infrastructure desirable for Table appetite Liberia’s that in suggest would presented former The 3.1. sub-total infrastructure infrastructure the with “all-in” tallies thus and the Plan AFT the within included elements portrays second The column queue). longer costing the in or preparation in which is the sum of currently identified projects (whether list” “wish the for estimates cost presents which of first Nonetheless, infrastructure. Tablethe presentscolumns, 3.2 two in information cost sponsored privately imperfect on given approximate information of lack fairly a and estimates cost on information is analysis This of Liberia’s from ultimate appetite for compiled infrastructure investment. spheres numerous sources, all of infrastructure which contribute to an analysis all in projects Table 3.2 therefore presents a “long list” of infrastructure energy intotheWest Africaenergymarket. surplus trade to Liberia for potential the open would but Liberia’s latent capacity would far surpass domestic needs capacity.hydro-generationLiberia’s latent of tapping from result would capacity new of Examples challenges. old to solutions new provide advances where communications Examples of new technology include renewable energy and 5 YrInvestment $1 269348260 $1 949072880 $3 186158749 $2 073831930 $101 947500 $502 481800 $100 445750 $562 787261 $358 274638 $42 522000 $18 195200 $14 578120 $90 819170 % ofTotal 65% 26% 61% 18% 65% 11% 2% 1% 1% 3% 5% 3%

TABLE 3.2 Summary compilation of desired infrastructure Projects & rough cost estimates (U.S.$ Million)

Infrastructure Includes Source of Cost Estimate Comment Current AfT Costs Category Wish List Est. 15/ Total Dec/12

AGRICULTURE Rural Agriculture Infrastructure & Technology LASIP Rural Infrastructure component $74 INFRA.

Road Transport Rehabilitate & Expand (non-concession) Feeder Rds Lasip Feeder Roads Estimate SIDA pledge of $21.1 & EU of $.67 $171 Rehab. Roads & Bridges to restore Primary Network MoPW estimates for Road Infrastructure $1 500 $1 269

HD and Governance Improv’t in Transport Sector AFT cost est. Transport Results Matrix; adds $22 $18 Airport Pave Ganta Sanniquelle 23 km segment MoPW presentation Mittal Steel to finance per MDA $29

Seaports Pave Zwedru - Greenville 119 mile segment MoPW presentation Putu Ore to finance per MDA $161

Rail Transport Rehabi Roberts Int’l Airport & 1 Domestic Transport Master Plan, 2010 prices GOLR pledge in MTEF $305 Rehab Monrovia, Greenville, Harper; Expand Buchanan GOLR pledge in MTEF $37 Maritime Rehabilitate 3 lines & Construct 1 new Transport Master Plan, 2010 prices Public sector role only; bal = private $62

Improve Int’l Ship & Port Security; Gain ISPS Compliance $5

ALL TRANSPORT All Transport Sector Projects $2 291 $1 288

Energy Sector Rehabilitate Domestic Electricity Generation Wish list est. from August 2012 AFT costs $580 $502 Expand Hydro Generation Capacity on Liberian Rivers WAPP Tractebel Study $1 565 Domestic WAPP CLSG-- Liberia Transmission Segment Financing secured for project $51 mn IDA & $19.25 AfDB, EBRD, KfW & $116 Regional regional Gov’ts RREA rural energy strategy & master plan financing Master plan EU, IDA, NORWAY, USAID TBD Rural Energy Energy master plan study WB or AfDB to undertake $1 Sector Mgm’t & Cap. Building Training & Capacity Building Norway and World Bank TBD

Energy TOTAL All Energy Sector Projects AfT Cost Est. is for Energy Sector Results Matrix $2 262 $502

ICT West Africa Regional Communications MTEF Private sector contrib. $10m $30 $15 Domestic Monrovia Fiber Optic Backbone To be provided via PPP Not estimated since private sector to lead TBD domestic backbone dev’t

ICT Total AfT Cost Est. is for ICT Sector Results Matrix $30 $15

Water Sector Water & Sanitation infrastructure & sector reform Wish list from August 2012 AFT costs $32m from AfDB & $6.2 from IDA $107 $102 Expansion of arable land under Irrigation from .2 to 5% LASIP estimate $12

Water TOTAL $119 $102

Industry TOTAL Special Economic Zone Dev’t Estimate in earlier version of PSIP $44

Other Infrastructure Housing & Public buildings Included in AFT & MTEF $43 $43 GRAND TOTALS $4 821 $1 949

Of Which, Privately Financed Component is: $431 NA Net Capital Investment Required $4 390 $1 949 99 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 100 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA over time. over the improve and likely will sources data all transparency,reconcile to ability public and standards PFM higher of Liberia’sadoption by aided undoubtedly is affordability of analysis the process, in work a still is PSIP) and MTEF the includes (which Budget Annual approved the versus AFT of reconciliation Although the post-AFTera. in ODA from graduate to it enable will capacity fiscal is that Liberia’s own economic growth and expanding its envisaged ambitions. GOLR’s aspiration, of course, with AFT the implement to order in Aid Development Official upon reliance high placing continue to need affordabilityexamination of concludes thatLiberiawill Liberia’stheyet course, due in partners development to reasonable from forthcoming is be may financing more that It expect account. into taken yet not are partners development pledges from loans future concessional that and recognizes it Yet, AFT. the for gap financing the theclose approved to help will budget), in 2012/13 presented (as years fiscal 2015 to 2013 the over donor-designatedpriorities and for GOLR million $514 over total currently which pledges, The affordability analysis assumes that identified donor of theAFTprogram. net financing is still required to meet the expectations in million $697 of minimum additional AFT,an the of years three first the during million $360 of borrowing GOLR fiscal resources and determines that, even with Tableconsidersdemands, 3.3 extensive these Given 3.2 Affordability Meanwhile, planned investment in Priority-1 projects Priority-1 in investment planned Meanwhile, years. subsequent 34% and 46% to goes and 13 FY in GDP of 27.5% at begins spending proposed AFT prioritize, to which todeferandwhatstandards toapply. projects road which between choices strategic force may and strain envelope financing Liberia’s will network roads primary the of restoration the for essential as $1.5seen is to which $1.27 investment the billion time, same the At term. long or medium the to delayed be to need will Rivers) Paul St. or Mano the for proposed those as (such rivers new hydropower generation on Liberia’s high potential thoroughly downstreamtotallythat projectsdevelop example, to more to for evident, is It requiredgap. Liberia’sinfrastructure address be will approaches financing sophisticated more with combined horizon Table 3.2, it becomes clear that a longer term planning when one considers the larger $4.39 billion wish list in capital resources needed for the AFT are sizeable and, 87 86 One point of discussion, for example, pertains to the borrowing levels that Liberia can afford in the MTEF period with GOLR proposing borrowing of $702 million whereas Medium Term the Factsheet, Budget the Budget, 2012/13 FY approved the including documents, fiscal disclosed publicly of multitude a upon draws analysis This IMF estimatesborrowing capacityontheorder of$360million.Thisanalysis takesthemore conservative borrowing figure. the of Costing the on Report Summary Executive Agenda forTransformation.2012 December the as well as Plan Investment Sector Public accompanying and (MTEF) Framework Expenditure 87 In the interim, Tablethat interim, clear the makes In 3.3 86

n hc t cnie Lbras w infrastructure own Liberia’s consider investment plansforthenext30years. Africa’s to for which in planning context better under a provide to landscape infrastructure changes present sections major next the the background, this With AFT inroutine maintenanceandupkeep. roadspublic expenditureits duringof portion major a is encouraging It to observe that Liberia plans practices. on devoting benchmark to relative under-valued clearly was for investment maintenance appetite and operations its but Africa, Sub-Saharan in highest the be to Bank World the by date that at estimated appetite investment capital voracious Liberia’s was from benchmark data presented in Figure 25. Not only evident is This 4%),2009. in reaching be to observed was Liberia (about levels high the sustains and %) (4+ low-income countries fragile Africa other and 2%) Sub-Saharan (about ECOWAS in elsewhere observed levels investment infrastructure to relative ambitious highly is rate investment 10% average An may notbeattainableforarecovering economy. investment P1 for magnitude of orders the but rate, basis growthGDP actual the and partners development by grant a on contributed burden investment of share the upon depends levels investment planned the afford can GOLR Whether basis). Value Present Net a (on GDP of 4% Meanwhile, to limited is years. borrowing annual three coming the in 10% about to levels and 12% above GDP,rises of begins6% about at alone ports and power roads, to pertaining ECOWAS Commission. the by sponsored projects regional through execution their and (PIDA) ProgrammeAfrica in InfrastructureDevelopment for the include here examined Those Africa. within each REC to develop infrastructure plans to unite and continent-wide launched been have initiatives Key and integration Africa’scompetitiveness has been to the continent’s one constraints fragmentation. that biggest fact the the of out brought have fora and studies Numerous forachieving integration. regional through blocks objective building this the as identified been member, (RECs), have a is Liberia which of ECOWAS including Communities Economic Regional continent. prosperous and integrated an as of Africa means re-positioning a as is 1991 of Treaty Community Abuja the Economic in enshrined African an of creation The 3.3

and ImplicationsforLiberia Regional InfrastructureInitiatives Items Memo Space Fiscal Expenses AfT Assume Revenue MTEF & AFT Forecast Budget&CostsOpex,MTEF Table 3.3AnalysisofGOLRAffordability ofAFTProgramme andNetFinancingRequirements ( Gap = Incremental Financing P1 projects (Energy, Ports, Total Borrowing asa%ofAFT by Donors Incremental future Pledges plus/ GapScen.1AFT Incremental financingSur AfT Spendingas%ofGDP Investment Fiscal SpaceforCapital Pledges Apply &CarryForw›dDonor GDP P1 Infrastructure as%of Recurrent OperatingCosts geted AfT-MTEF GOLR FinancingGap:Bud- proved Budget Discrep. Submittedvsap- Investments as%ofGDP COSTS AfT GROSS INVESTMENT Donor Pledges Total BudgetEnvelope Sector Projects Budget asa%ofGDP Total Revenue Government Affordable Borrowing Levels Shortfall MTEF Estimated GOLRFinancing 1,3,4) P2 Investment(AFTpillars GDP Growth Rate P1 Infrastructure (inAfT)2 Devoted to: 4 3 2 1 Fiscal YrNominalGDP Transport) ered binding relies onIMFsanctionedlevelsofaffordable borrowing forFY14and 15. upon concessionnegotiationoutcomes and$80misdependentonborrowing. Allborrowing willgotoPSIP. Thisscenario 2012 AFTCosting.Ofthe$239m approved forPSIP, 86.4Mis«core funded»,$72.6is«contingent funded»anddependent borrowing capacity ciliation. Projections forFY14forward maygetmodifiedbydonoruptakeandsupportoftheP1projects orlowerGOLR proved) Draft MTEF(OnlyFY13Ap- DraftPSIPbudgetRQsubmitted toLegislature was$4.734m higherthanfinalamountapproved, soloweramountconsid OnlyFY13approved. Datafrom approved 2012/13budgetforthatyearwhichis$8.9mlowerthanreported intheDec These projects linkspecificallytotheAfTPRS2plan,P1=Energy, Ports& Transport; P2= Youth, CapBldgandRecon Data from Approved NationalBudget2012/13,IncludesContingentrevenue estimatesof$83.4million 3 3 4 - 1 1

First 3yrscumulative final 12/13budgettext P1 Projects Only Fy 14&15derived+10% Outer yrsAFTCosting final 12/13budget Only 12/13borrowing firm PSIP Without borrowing IMF Recommendation PSIP IMF ArticleIVNov2012 Fy 14&15derived Source 2013 budgetFactsheet Dec/2012 AfTExecSum final 12/13budget Using IMFdataorGrRate Approved 2012/13 $1 768 27,5% -$246 -$485 6,0% 8,9% $269 $515 $433 $515 $672 $108 $592 $239 $106 $239 14% 33% $80 $27 $0 $2

2013/14 MTEF Projections $1 934 46,2% 12,4% -$156 -$425 -$893 -$247 8,3% $269 $476 $698 $194 $140 $558 $468 $240 $222 11% 29% $35 Unknown 2014/15 $2 063 34,2% 17,3% 10,2% -$454 -$298 -$706 -$207 5,6% $524 $724 $164 $140 $584 $407 $210 $200 10% 28% $35 Dec2012) Scen.1(AfTCost 2015/16 -$194 -$604 U.S.$ Million) 2016/17 -$498 -$48 TBD Cumula- tive Gap $3 186 TOTAL -$697 - - 101 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 102 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA between them. of energy,synergiestransport, as well as water and ICT sectors infrastructure distinct the for both vision future a casting permits growththen which continent of the on drivers and rate the on forecasts makes it point starting this From Liberia’sconsideration. for proposed horizon planning term long isthe to relevant frame time 2040 the infrastructure regard, this Africa’s In in architecture. anticipated be can which the account into bottlenecks consequent and profile growth expected take to 2040 through period the a fr h continent. the for gap Bank (AfDB) to identify and address the infrastructure Development African the and NEPADSecretariat the joint initiative by the African Union Commission (AUC), Development in Africa (PIDA) study was launched as a Completed in 2012, the Programme for Infrastructure 3.3.1 netet roiis o rgoa infrastructure regional for between now and 2040. strategic priorities guide to (PAP)investment Plan Action Priority wide generated continent- has a of PIDA endorsement member action. Union African for plan a is it study; 90 89 88 SOFRECO Consortium, “Study on Programme for Infrastructure Development in Africa, PIDA” comprising over ten volumes of reports beginning with an Inception report Issues” Emerging and Patterns Africa: Sub-Saharan in Infrastructure Public Foster,“Financing Vivien and Smits, Karlis Briceño-Garmendia, Cecilia from Reproduced February 7,2012 in 2010,Phase1and2interimreports byinfrastructure sectorandconcludingwithaPhase 3SynthesisReportpublishedJanuary20,2012. Background PaperNo.15,AfricaInfrastructure CountryDiagnostic,World BankJune2008. African Development Bank, Africa Union and NEPAD,

Development inAfrica Programme forInfrastructure Figure 25ComparativeSp ending byStatestoAddress Infrastructure Needs 89 IA s uh oe hn a than more much is PIDA 90 Source ; FosterandBriceno-Garmendia2009. The planning horizon takes Programme for Infrastructure Development a meansoffloodcontrol andenvironmental preservation. simultaneously generate hydropower, to store water for irrigation and provide constructed or are cables dams communications multi-purpose of laying with synchrony areimplemented in projects road cables, fiber-optic lines carry transmission power when as such synergies sectors among tap also can infrastructure Regional industry. lower cost providingenergy to enable expansion of agriculture, mining and by and information, and people goods, of exchange the enable to connectivity ICT and physical establishing and costs transport slashing by this do can It thecontinent. fragment and presently that isolated markets small, inefficient the of out markets competitive and integration which can offer the formation of large, integrated type of growth would be underpinned by stronger regional growth rate for the three decades from 2010 to 2040. This sustain more integration, recent higher growth trends continental and achieve a 6% annual enhanced and planning adequate with could, Africa that assumes PIDA decades, three coming the in rate projected growth population African a 2.5% Considering growth. population out-paces proven have economies the potential to lift people out emerging of poverty if economic other countries latter with The around together Malaysia. to and India, compared China, 3% by about 6% was Africa GDP in average growth 2010, to 1980 from decades three Over in Africa: Interconnecting, Integrating and Transforming (88) a Continent, growth growth 92 91

Figure 26DiagramofPresumed “SpatialDevelopment SOFRECOConsortium,Phase1Overview ofPIDAStudy, March 3,2011page36. • Developingrenewable energy resources gas pipelineprojects and oil and refineries oil high-capacity Implementing • eration andtransmissionprojects gen power clean continental and regional Developing • services forthemajorityofAfricanpopulationby: energytion ofthecontinentandenhanceaccesstomodern ronmentally friendlyinfrastructure forthephysicalintegra PIDA will develop efficient, reliable, cost-effective and envi- in efficiency, cost, reliability andsafety. mance ofARTIN componentsuptobestworldpractice way portsandairtransportservices, tobringtheperfor gate including corridors, ARTIN modern Developing • structure andservices minimizing the environmental impact of transport infra nomic cost,withpriorityforlandlockedcountries,while Infrastructure Network (ARTIN) routes at the least eco Transport Regional African the on demand Satisfying • centres pavedroads withmodern andrailsystems • Improving connectedness of African capitals and major free movementofgoodsandpassengersby: where thetransportinfrastructure andservicesenablethe To worktowards anintegratedcontinent Programme Programme” CorridorsonContinentby2040 for Infrastructure PIDA’s Transport Vision PIDA’s EnergyVision Box 13PIDAContinentalPrioritiesbyInfrastructure Sector–Visions andActions Development in Africa: Interconnecting, Integrating

91 ------and nental levels. Increasing physicalintegration attheregional andconti • Promoting intra-African e-commerce while increasing accessibility andsecurityofaccess • Satisfying African broadband demand at the least cost, by 2025 10% to 5% from GDP to contribution ICT’s Doubling • fordable ICTnetworksby: ment, business and citizen has access to reliable and af and anintegrateddigitaleconomyinwhicheverygovern To enableAfricatobuildaninformationsociety and shared aquifers. basins water transboundary on knowledge Improving • opment andmanagement devel water transboundary for Strengtheningfinances • the environment increasing waterdemandswhileprotecting peopleand infrastructurewater transboundary Developing • meet to shared waterresources on cooperation efficient for institutions Strengthening • economic developmentofAfricaby: regional integrationandensure watersecurityforthesocio strengthen transboundarymanagementframeworksfor to developtransboundarywaterinfrastructure projects, Promoting integratedwaterresource management Transforming C ntok. enhl, h wtr iin promotes vision water the affordable Meanwhile, and networks. reliable ICT accessing citizen and business government, every envisages vision ICT The passengers. and goods of movement free infrastructure the enable transport to with services and PIDA’s integration increase services. to intends energy vision modern to access infrastructure which will integrate the continent and enhance efficient, reliable, cost-effective, and environmentally friendly iei i nt eta t ay f h eiae growth evisaged the of any to central not is Liberia that fact the is 26 Figure in depiction the PIDA and forecast the of aspect worrisome the respects, some In 3.3.2 management frameworks,andtoensure watersecurity. and strengthen transboundary water infrastructure projects develop and to management resource water integrated as sector depicted each in Box 13. for objectives development and vision a developed PIDA perspective, growth this from Following the continent-widestrategyforcrowding ininfrastructure. inform which of location the continent, the within corridors growth future about expectations resulting the depicts Figure 26 approach. corridor” “growth a employing by and and implementing infrastructure projects on a regional level Exploitation of these synergies can be enhanced by planning

Liberian InvolvementinPID a

Continent, February7,2012, page 6. PIDA’s Water Vision PIDA’s ICTVision 92 For energy, PIDA envisions developing A - - - - -

103 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 104 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA Project Name T R A N S P O R T E N E R G Y Highway Trans-African Completing Kaleta ridor Multimodal Cor Dakar-Niamey Sky’ Phase1 ‘Single African sion Corridor Power Transmis- West African Corridor idjan Multimodal Praia-Dakar-Ab- mentation Decision Imple- Yamoussoukro Capacity Bldg Project Dev’t Guinea Regional corridor dougou- Abidjan-Ouaga- Program Phase1 Smart Corridor Bumbuna II Transport West AfricaAir Coastal Corridor Abidjan- Programme Port andRail West AfricaHub Table 3.4(a)PIDAProjects SlatedforImplementationwithinECOWAS RegionalEconomicCommunity - (ARTIN) anddesignatedSPDcorridors Africa RegionalTransport Infrastructure Network TAH missinglinksby2030tocomplementthe program whichfocusesoncompletionofthe This isPhase1ofthecontinentalconnectivity in Guinea Erect dam&hydropower generationatKaleta Phase 1ofOMVGpowergenerationscheme: Description PPPs forefficientcorridormgm’t organization ing tradefacilitation,one-stopborder postsand travelled ARTIN corridorinWest Africainclud- This programthemostheavily wouldmodernize gation systemfortheAfricancontinent will create ahigh-level,satellite-basedairnavi- Single AfricanSkyisacontinentalproject which of 1,000MW the existingGhanaNigerialinewithacapacity 2000 kmlinealongthecoastconnectingwith corridors onthemainland information systemlinkingwithportsandroad gional portsandfacilitatingthiswithamodern creating anewmaritimeservicebetweenre- between islandandmainlandcountriesby This program wouldimprove marinetransport membership basis and airlinestolaunchthevoluntaryclubonafull implement itandagreement withgovernments tation byidentifyingcountriesready tofully Accelerate Yamoussoukro decisionimplemen- gram ofhydro potentialofGuinea implementation oflongtermdevelopmentpro- Guinea RegionalHydro Projects preparation for war inCôteD’Ivoire the multimodalcorridorthatsuffered duringcivil This programandrehabilitate wouldmodernize al corridorefficiencymonitoringsystem. and implementationofacontinentalregion- model smartcorridortechnologyandthedesign This program includesboththedevelopmentof Freetown for 350MWlocatedabout200kmnortheastof Project withacapacityof86MWprospects REC study toidentifythemostsuitablehubfor the lackofaregional airhub.Itwillconducta service levelsinWest Africacurrently limited by This project aimsatincreasing theairtransport PPPs forefficientcorridormgm’t rganization ing tradefacilitation,one-stopborder postsand travelled ARTIN corridorinWest Africainclud- This programthemostheavily wouldmodernize the mostsuitablehubportandrail links pansion. Itwillalsoconductastudy toidentify port andraillinkagemasterplan and (b)portex- project has2components:(a)aregional hub capacity problems inWest Africanports.This This project aimsatresponding tothefuture Liberian Participation Highlighted Participation Liberian Est’d Cost, US$ Mn 2 150 1 200 2 140 179 590 275 150 540 100 169 420 290 5 5 Locations ECOWAS Guinea Liberia Sierra Leone, Ivory Coast, Niger Burkina Faso, Senegal, Mali, Africa Ghana sau, Gambia, Guinea-Bis- All MRU, countries Bissau, MRU Gambia, G- Senegal, Cape Verde, countries dorsed by actions en- upon policy TBD based WAPP Guinea - Mali Burkina Faso, Ivory Coast, Africa Sierra Leone in REC 15 countries Coast Ghana, Ivory Benin, togo, Nigeria, in REC 15 countries Liberian Involvement Liberia andSL plements supplyforimport Market through WAPP andsup- is connectedintoW.A. Energy Liberia canbenefitwhenOMVG including bridge Liberia andCoteD’Ivoire Bridge, andTAH linkbetween Highway =Freetown-MRU Missing LinksinTrans Africa interior transitgoods as thekeyevacuationportfor north ofLiberiaandseesSenegal This horizontalcorridorruns continent-wide All ECOWAS Countries,since Transmission Line Direct participantinCLSGWAPP development inECOWAS modal corridorsdueforfurther it more intotheplannedmulti- this isaprogram thatcouldlink If Liberiachoosestoengage, «club» is essentialforLiberiatojointhe to adopt»Yamoussoukro andthis Liberia’s NTPSrecognizes «need Market & connectedintoW.A. Energy mense hydro-power isdeveloped Beneficiary whenGuinea’s im- to missingTAH link Liberia butdoesnotconnectdue locked north.Itrunsparallelto corridor forgoodsfrom land- Ivory Coastaskeyevacuation This verticalcorridorpositions corridors ered asvitaltothekeyARTIN Liberia isnotpresently consid- via CLSGWAPP Beneficiary asapowerimporter in Ghana,NigeriaandSenegal include 2020gapairportslocated Countries mostimplicatedbythis to I.C.astrafficistoolightinto to stoponceitconnectsNigeria Presently, thiscorridorisseen Corridors as theseare keytohightraffic ports plusrailthrough Ghana djan, Tema, LomeandCotonou be onexpansionofDakar, Abi- evant tothestudy, emphasis will While allECOWAS localesrel- in yellow) acknowledge direct participation by Liberia by participation direct acknowledge yellow) in region as depicted in Table 3.4. Four Of the 51 projectsprojects in the PAP,(highlighted 19 engage the ECOWAS plans forthattime-frame. explored further Liberia’s own are for recommendations forming in these and below and an present Liberia decade for 2030-40 opportunity the in corridors SPD competitiveness. the within and arise will predicts PIDA presence to that bottlenecks the Third, Liberia regional for its order in maintain unity regional towards migrate should consolidated, once unity, national that is premise recommended The infrastructure. for vision term longer a critical national needs, it is important that the authorities cast to get left behind. And, though the nation must first focus on will have served a useful purpose. Liberia cannot allow itself reaction to stand up and be all counted on the regional implementation Liberian a stage, provokes vision it this if Second, the them. around for from due benefit investment indeed infrastructure will and PAP PIDA below) the in (discussed included be will states fragile other and Liberia how convey adequately not does graphic particular take- this First, during noting. for worth are points prepared Three period off. countries extended ECOWAS other an which plagued during which is sub-region conflicts instead the of but consequence bias, direct subjective the to random due a or not is outcome This nations. same MRU the other to Coast, applies Ivory for except Indeed, corridors. Project Name

WATER I C T Table 3.4(b)PIDAProjects SlatedforImplementationwithinECOWAS RegionalEconomicCommunity Fomi Environment ICT enabling Volta BasinPlan Noumbiel Gourbassy Connectivity ICT Terrestrial aquifer system usage ofthe aimed forbetter Pre-Feasibilities IXP Programme studies Pre-Feasibility Preparation ment Project ing inInvest- Capacity Build- Description water supplyforMali Hydropower stationinGuineawithirrigation broadband infrastructure sectors whowillinvestinthehighspeed best investmentenvironment fortheprivate The objectiveofthisproject istooffer the plan Development ofajointbasinmanagement tion Multi-purpose damwithhydropower genera- Multi-purpose damlocatedinGuinea submarine cablebythoselandlocked infrastructure and(b)ensure theaccessto all countryconnectionsatleasttobroadband Project has2maincomponents:(a)secure aquifer use identification ofinvestmentoptionsforbetter Development ofmanagementstrategyand traffic maximise internal nodeexchangeto nent withadequateinternet The aimofthisproject istoprovide theConti- exploring possibilityofartificialaquiferuse Development ofmanagementstrategyand mentation project identification,preparation andimple- Targeted capacitybuildingininfrastructure onc te onr it rgoa ntok o meet growing or domestic demand for services. Further details networks regional to into potential country the downstream connect offer others several while will appear in 2030 in Abidjan and border post capacity capacity post border constraint and Abidjan in 2030 capacity in appear will port container a Yet, trans-Sahel. Likewise, an efficient East-West corridor will be functional West Africancoastline. the along Liberia of east ECOWASnations and countries landlocked between traffic transit north-south serve to posts and port infrastructure will have been established good quality multi-modal road and rail transport, border located along coastlines. These diagrams suggest that ports the of most at bottlenecks major to lead will this increase by 10 to 14 times in the coming 30 years and to expected is countries landlocked from particular,traffic transit In 2040. by in six-fold increase growth but 2020 tonnage by of in double function to expected a is trade as international evolve to projected that transport is freight Future light. to forecast implications this the of brings 27 Figure Liberia. around all assuming developed have will corridors transport key 2020, and that, now between them for reveals envisaged PAPprojects the of 3.4 neighboring countries move ahead Tablewith implementation Meanwhile, programming ECOWAS of covered inthenextsection. context the in provided are Liberia engaging directly projects those regarding Cost, US$ Est’d N/A N/A 384 320 130 Mn 2,5 25 10 3 3 Locations ECOWAS Continental Guinea Ghana Guinea Basin Volta River Continental ECOWAS NW Sahara& Continental system & T-T Aquifer Lullemeden Continental Liberian Involvement reason toparticipate Benefit ifcountriesfindaway/ Guinea (NigerRiverBasin) Burkina Faso,(Volta RiverBasin) No MRUinvolvement.Ghana& Guinea (SenegalRiverBasin) No MRUinvolvement. submarine fiberopticcable through ACEconnectionto Liberia isdirectly participating involvement No direct MRU/GuineaBissau submarine fiberopticcable through ACEconnectionto Liberia isdirectly participating involvement No direct MRU/GuineaBissau reason toparticipate Benefit ifcountriesfindaway/

105 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 106 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA program. Several projects directly engage MRU states states MRU engage PIDA directly projects the Several in program. envisioned projects infrastructure the from gain to much have Africa West in states fragile other and impact. in transport depicted of Liberia, as vision 2040 their embrace by functional that made be to those need including others, 2020 by and running and up be will corridors certain that concludes PIDA ahead, look overall an establishing In environment. agricultural rain-fed rich Liberia’s in case the presently is than facilities irrigation in investment relative greater justify would scenario a Such exporters. food regional become to opportunity the environments others water-rich giving in while imports food term infrastructure longer meet supply to water costly building of instead advantage. comparative grain importing their countries water-scarce envisages of This basis to countries the for on optimal trade be may it continent, the point on the unevenly distributed makes are resources water because PIDA that requirements. meet security to strategies food trade” water “virtual in engage to ECOWAS if case the especially should decide, as the Nile Basin initiative is considering, is precious This REC. more the become to undoubtedly will resources water its nation, water-rich a as but ECOWAS of parts seven the in implicated other to projects critical water trans-boundary identified less is Liberia stage, this At own its improve corridor competitiveness. that connections multi-modal with better country the position to measures take authorities in arise the will if Liberia for opportunity an present could This 2040. countries landlocked serving constraints Figure ofTransport 27PIDAVision ImpacttoImprove ConnectivityforContinentalandGlobalTrade It is clear that Liberia Liberia that clear is It participant inthisprocess. active an become to country the for important is it and decades three coming the in Liberia around all occurring be will growth transformational that evident is it Overall, bottlenecks. and trends future from advantage seize to emerge for countries that strategically position themselves the in will opportunity greater partners that apparent equally is trading It region. as emerge to states fragile for continental growth that will, in turn, create broader better drive to help conditions will networks communications and transport energy, their of penetrate densification planned physically the not territory, may others where and implementation stages by the Commission. implementation stagesbythe Commission. or planning soft in Liberia to and relevance particular of ICT investments sectors and transport hard energy, in the measures accompanying both review sections below The sectors. ICT and transport energy, the in initiatives ECOWAS by impacted or involved especially is community. Liberia the throughout people and goods of strategic champion REC and and deliver the on the connect promisebetter design of to enabling nature regionalfree a movement to of infrastructure mandate a has Commission the Pool, Power African West the as such organizations subsidiary and directorates infrastructure specialized its Through participant. a is Liberia which in programs PIDA and CAADP in the including Africa, role West leading a in programs NEPAD of implementation the takes coordinating Commission ECOWAS The 3.3.3

Regional Initiatives Liberian InvolvementinECO WAS ZoneA,withfunctioning inter-connections includes Nigeria,Niger, Benin,Togo, Burkina Faso,GhanaandIvoryCoast. 93 and apipelineofpriorityprojects sanctionedin2004. implementation plan to interconnect countries (Figure 28) an plan, master energy regional first a of establishment the to led This pool. power regional a of establishment throughthe market broader regionalcreatingenergy a of advantage the foresaw states member ECOWAS other be could than timeframe faster a on supply energy expanded absorb to markets larger of delivery through the mobilization of financing at reduced commercial risk This countries. tariff levels for all participating nations while accelerating between scale, trade approach serves to reduce costs to optimal competitive regional energy a on permitting installations transmission and generation implement to attractive particularly it features make These scale. investment of economies by of characterized are they and amounts duration long-lived have facilities large capital, require market regional installations unified sector energy that premise fundamental a the on national based into integrate networks to electricity is address objective to strategic state the region. WAPP’s of plaguing supply power heads deficient of ECOWAS issues created by was 1999 (WAPP) Pool in Power African West The make themmosteffective. to needed measures accompanying soft to turns then within ECOWAS including those that involve Liberia and with a review of the planned physical (hard) investments a of regional rationale approach the to energy summarizing market creation. by It continues starts section This Development oftheWest AfricanEnergyMarket ZoneBincludesMali,Liberia,guinea,Sierra Leone,GuineaBissau,SenegalandTheGambiawiththe onlyexistinginter-connection betweenSenegalandMali. Figure 28West AfricaPowerPool ImplementationPlan einl oe po fr oe o EOA is ECOWAS of B Zone for pool power regional the that said be must it later, years eight Regrettably, region the with levels competitive to tariffs reduce electricity to its Liberia for imperative national makes strategic more it a growth;it does economic to This damper KwH. a as per act than $0.54 electricity at highest Africa the in likely tariffs has presently Liberia 1, a and chapter in noted tariffs into As competitiveness. regional on maintain lid them a keep blend to sources to energy of important basket is it energy, of benefits the green get to order in so, operation of (KwH) hour Kilowatt per currently cost investment higher much technologies require energy renewable Liberia addition, needs, In energy its risks. of these of both to all exposure significant have would meet to own its on Acting generation. (HFO) oil fuel heavy on reliance from arise can hikes price to vulnerability whereas rainfall patterns disrupt anomalies seasonal or if change generation climate hydroelectric on reliance from arise can disruptions supply examples, As source. energy single a upon reliance from energy arise can balanced that risks A reduces mix mix. that into sources emission) the introduction of green energy (renewable, low carbon afford better to tariffs permits and market energy developed be to mix balanced a energy for allows to it that approach are development regional a taking from benefits Additional alone. country one by accomplished ey functional very done to convert this potential into reality. into potential this convert to done em mlmnain f LG rnmsin ie due line transmission CLSG of implementation term near is situation this change will that investments key and the continent. On the basis of this logic, Liberia and and thecontinent.Onbasisofthislogic,Liberia t h mmn ad oe ut be must more and moment the at 93 One of the of One not not 107 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 108 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 95 94 transmission and generation in investment for subsequent way the pave and market energy regional the into Côte D’Ivoire, it will effectively introduce all four countries in generated power excess with supplied be initially will commissioning is scheduled for 2015. While this project and imminent is closure project sanctioned, been has Company to realize the works has and operate projectthe installation this been arranged, for institutional design of a Special Purpose Financing 14. Box in highlighted Guinea and Leone D’Ivoire-Liberia-Sierra Côte link to HFO plant at Bushrod and the rehabilitation of 66MW 66MW of 10MW rehabilitation such the a and of Bushrod installation upon, at plant the HFO Liberia) decided of case already the (in as projects national the given a as took approach This found. been been yet not has has or financing yetcomplete potential not are which studies but identified for units “candidate” and made been units, have decisions “existing” which for units generation including “confirmed” electricity projects, realizable transmission of of and stock “inventory” took vast process a updating in The completed and 2011. was October which prepared, objectives was plan master between regional ECOWAS the gap to update comprehensive a plan, the achievements in WAPP’s previous regional of energy master Because Tractebel, IBID,Volume 4,Page13. Thiscompares toa2009estimatethattypicalpowertariffs elsewhere inthedevelopingworldare around $0.07perKwH. planned routing oftheCLSGlineispresented below. well astheimportofgreen energy from solarandwind-basedresources generatedfurthernorthinduecourse.The transmission linewillfacilitateeconomicallyviabledevelopmentofotherhydro powersources inthesub-region as Ultimately, this deficits. power experiencing currently members MRU neighboring its to export can it that d’Ivoire electrification. The objective of the interconnection is to facilitate the exchange of low-cost energy initially from Côte and ManoinLiberia.Inaddition,225/33kVsubstationswillbeconnectedtothislinesupplynetworksfortherural selected lineroute passesthrough future hydro generationplantsites,notablyYiben andBikongorinSierraLeone sist of approximately 150km in Côte d’Ivoire, 100km in Guinea, 500km in Liberiaand 550km inSierra Leone. The proximately 1360kmtoconnectCôted’Ivoire, Liberia, SierraLeone,andGuinea.Thetransmissionlinewillcon The CLSGproject involvestheconstructionofahighvoltage(225kV)doublecircuit transmissionlinerunningap Box 14CLSGRegionalPowerTransmission Project o ovy h srtgc eeac o ohr ECOWAS other energy projects toLiberia. of relevance strategic the convey to elaboration further deserves This projects. generation hydroelectricity national future for options financing and gives Liberia many more options on the selection, timing reduce and grid pressures on LEC’s national current the tariff structure but into because it capacity feed will because it only not deliver, will it impact term short the This project has huge significance for Liberia far beyond to be planned on a more optimal, cost-competitive basis. all “candidate” projects, the process allowed the the $0.10 allowed per KwH. process the region through 2025 at a long term competitive tariff rate of carry to the plan supply power overall an projects, of consider optimization to “candidate” inventory regional all the same expanding due the by At Coffee time-frame. time, AFT Mt. the in at commissioning for capacity generation hydroelectric energy isdepictedinFigure 29below. for ECOWAS including voluntary development of renewable (solar plus wind) energy. renewable The resulting energy 20% mix proposed and hydro, biomass, thermal, coal, gas, projects including transmission links plus recommended generation 36 through of portfolio a in mix energy balanced a investment projects (over 80 of which were hydro) to deliver 94 This plan evaluated the merits of over 100 95

- - in the regional energy market include the restoration of of restoration the include market energy regional the in participation effective for important measures soft Other $375m. of investment increment an at capacity of MW 120 additional an install to 2 Paul St. plus million $244 of cost estimated Paul St. an at capacity of 78MW install include to 1B projects downstream confirmed the case, Liberia’s In imports. energy upon over-reliance of fears the allay to as so inclusion projects national for “confirmed” of provision make does plan master WAPP updated the time, same the At tariff. optimized regionally be met while simultaneously contributing to the target of a can needs sovereign that recognize to foremost and first leaders region’s the by will political requires that hurdle of kind the is supply.This of sources sovereign uniquely exporters rather than being all-consumed by the need for or importers as trade energy in willingly engage to need projects those prioritize to which contribute to a plan regionally optimized tariff. States will master WAPP the of context the within plans investment energy national their cast to state member each for example, be would for It important, gains. potential the of benefit measures full realize “soft” to accompanying several in themselves of energy supply, member countries would need to invest mix and structure cost Tocompetitive highly this achieve Authority (ERERA). Regulatory Regional ECOWAS regulator,the regional a of mechanism the through supply regional to approach cost pooled a taking of community entire the to benefit the demonstrates also A—it Zone into extended been have links transmission after Liberia region’sby tapped directly the be only can to that source requirements—a contributing energy total in gas relatively natural of cheaper importance the demonstrates this While Figure 29Energy MixforWest Africa,includingVoluntary InclusionofRenewableSources IDSLRBOASOTHER BIOMASS SOLAR WIND DIESEL OIL power sector. the in investment for visions term longer and medium its set the regional context in which Liberia may wish to cast These initiatives by ECOWAS on the regional energy front locations. the improveclimate for private investment in Liberia’s promising and hydro investors prospective including pool, will provide a level playing field for all players in the power harmonious regulation of at both national and regional levels setting and of presence The operations. pool power for rules market performance of benchmarking tariffs, and costs transmission codes, of calculation and grid methodology standards, operating trading technical power contracts, border cross enforcing and for responsible monitoring be also and will ERERA exchanges resolution. dispute for rules non-discriminatory applying framework, competitive a within States Member among exchange electricity cross-border unrestricted energy facilitate regional and the to obliged be of cooperation will institution latter The regulator,ERERA. authority provides the that with manner coherence a in Board and Regulatory Energy its up set eventually to served well be reductions will Liberia loss addition, In collections. and metering, billing improved pre-paid efficiency from on-going through gains LEC of creditworthiness aias n ky iis cos h cniet n plan a in continent the across cities link key to and ago capitals decades four network road continental a building of objective the approved first Africa’sleaders Transport Network Development ofaWest AfricaRegional F COAL HFO NATURAL GAS HYDRO 109 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 110 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA y CWS ebr i ter ray n other objective transport first the and to corresponds vision Treaty The their in measures to improve governance members of the sector (Box 15). ECOWAS by sanctioned subsequently was transport of importance The vital The (TAH).30. Figure in depicted is portion Highways African West Trans-Africa as denominated Supplementary ISRT Convention ECOWAS revised Article32ofthe Act/SP.17/02/12 DEC.9/01/05 Decision A/ DEC.13/01/03 Decision C/ A/P4/82 Treaty of1993 Box 15:ECOWAS Measures toImprove Governance of West AfricanRegional Transport Figure 30Trans-African HighwayPlan:StatusandMissingLinksinWest Africa HarmonizationofAxle-Loadcontrol interstate of flow smooth ensure to Transport andTransit Facilitation EstablishmentofaRegionalRoad road transportation between Conventionregulating inter-State accesstoislandandland-locked withspecialemphasisonincreased andserviceswithintheCommunity themovementofpersons,goods among member states and facilitate ciestopromote physical cohesion Member States resolve to develop ber States Standards andprocedures inMem moval ofobstaclesidentified Road transportandsupportthere Facilitation Committees established der Movements Community Trade andCross-Bor Programme in Support of Inter- ECOWAS MemberStates countries transport infrastructure and poli - - - - Coastal highway intended to join Lagos with Dakar. with Lagos Coastal highwayintendedtojoin Trans-incomplete the in Within notable most TAH.is this ECOWAS the in links missing several remain there centres roadspaved Tosystems.” rail and modern with day this major and capitals African of connectedness “Improving notably vision, PIDA the under re-endorsed measures and development of Corridor Management Management multi- which with efficiency the improve to Organizations Corridor of development and measures control weight load axle covering Convention Transport harmonized and Inter-StateRoad the to adherenceprocedures, customs standards construction common of adoption the encouraging ECOWASalso side, is soft the On corridors. efficient increasinglyacross (OSBPs) posts border one-stop plus cargo containerized and bulk for road and rail infrastructure, inland dry ports, seaside ports involving connections multi-modal promoting by borders regional trade and facilitate the movement of goods across intra- stimulate to seeks program This 2003. in Program to adopt a Regional Road Transport and between Transit Facilitation segments) landlocked countries some and coastal ports leading ECOWAS in day per vehicles 15,000 to (up heavier grew traffic and evolved time Meanwhile, should comefirst--trafficorenablinginfrastructure. ahighway what of problem egg” and “chicken with a be could this but associated traffic the carries neither roadway.transit-oriented speed, high time, same the At a for suitable drainage adequate and access controlled with pavement, or concrete asphalt notably envisaged, originally standard the to built is Neither Leone. Sierra within unpaved mostly is latter the and side Liberian the in Sierra Leone. However, the first is mostly unpaved on Freetown and Monrovia between another plus D’Ivoire This is meant to include a link between Monrovia and Côte 98 97 96 period same in 2004whileTema wentfrom 7to36percent during the percent 50 to 1999 in cargo transit Faso shareBurkina of the country’s trade. Lomé went from handling a 20 percent Temaresultedand Lomé in increasing ports share their of in Togo, Benin, and Ghana. For Burkina Faso, the rerouting out of Abidjan, forcing a re-routing of freight to other ports routes rail and road international of closing the in resulted country that in crisis 2002 particular,the In regard. this in informative highly is D’Ivoire Côte from experience Recent from there being choice and competition among corridors. convention of ECOWAS. The landlocked states will benefit ISRT the under registered get then they which links road fragile these if inter-state establishing and identifying change by to it want states could situation this that fact the is however, mostly Second, programs. are these from Bissau absent Guinea Liberia, and Guinea First, Leone, here. Sierra important are observations Two and the Borderless Partnership (www (www Hub Trade African West the as such initiatives development other corridors, East-West and North-South key these of success relative the Given d’Ivoire,Côte Benin, Togo.Ghana, and Guinea, Senegal, Mali Faso, and Niger with Burkina gateway ports, hence landlocked those in connecting Nigeria, in effective most put greater emphasis on those corridors that have proven modal corridors are managed. This program has naturally and inter-regional exchange. become an active participant in West African transit trade fragile states is that they should not consider it too late to the for lesson the competitiveness, its re-establishing to Mali trade. Although Côte D’Ivoire is now well on the way for country transit a became Faso Burkina that result the Transport CorridorstoFacilitateInterregional Trade andExports in theECOWAS Region,RISP Background Paper, November2010,AfDB “Improved RoadTransport Report,1stQuarter2012,www.borderlesswa.com Initiative,”19thRoadGovernance Governance West Africa Trade Hub is an initiative sponsored by USAID. Borderless is a collaboration developed by Publicis Ghana for the Hub which has expanded to include public Togo, Verhad Trucking ofBenin,BurkinaFaso,Ghana,Mali,Nigeria,SenegalandTogo. and HaulageLtd.inGhana.IthasthesupportofGovernments TransAllomanprojects, USAID regional other Organization, Corridor Abidjan-Lagos the Bank, World the UEMOA, ECOWAS, including stakeholders sector private and 98 . The crisis also affected Mali traffic with with traffic Mali affected also crisis The . Figure 31 . borderlesswa. . watradehub. ComparativeBehavioronWA Trade Routes www.borderlesswa.com com) com) have also crowded in to further stimulate regional trade. make improvements upon current practice. and behavior their adjust can alike-- private and public players-- all that so informed participants sector keep to routes. These measures, as epitomized in Figure 31, serve trade key the along arise that barriers and non-tariff publicize value monitor to shame” of and “praise competitiveness using while chains the upgrade to assistance These institutions work through networking and technical h piae iig etr o net n eurcig or public resurrectingincremental with and, in links rail new constructing invest to sector mining private the for potential tremendous have does Liberia However, the region withinthetimeframeofPIDAstudy. a as emerge candidate location for could hosting a hub port and rail link for Liberia that way forseeable no is rail sector public There region. the for economic what most be will investment on decisions casting ports before gateway key in problems capacity future about information gain first to intends program PIDA the why explains This grounds. economic on justify to difficult is investment public further Africa, West in railways most Given the high capital cost and relatively low volumes on well. as Liberia within applicable is which fact a region, further is hampered by This the use of different connect. gauge tracks within the not do networks national the exceptions, few with that, is network rail ECOWAS the of failing overall The moribund. essentially are Liberia in way running below commercial are standards while many, aresuch as those Others and well. reasonably concessions performing through privatized eleven been infrastructure, have which of three rail installations, have regional countries ECOWAS to respect With 97

96 96 111 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 112 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA for sovereignty concerns persuading Guinea to insist on on insist to Guinea persuading concerns sovereignty for not it were $1billion of savings cost life-cycle estimated at port Liberian a at ships to Guinea Eastern in location their from moved be could deposits other and This 33. Figure in depicted as Guinea Eastern ore in ironlocated deposit Simandou the of case the in as exists already olbrto t etn ri ntok ars borders expanding across for potential This networks changing. is public-private activity rail for extend to viability mineral collaboration the region, With the throughout ECOWAS. into connections with player term to longer a way a as itself find position might Liberia margin, the at investment 99 World Bank, “Liberia’s Infrastructure: Envisioning theFuture,” power-point presentation madeatNationalEconomicForum in2011. Figure 33 Planned GuineaRailLinetoConakryVsExtensionofLiberianLinesAcross JointBorder Figure 32SchematicofExistingECOWAS RailLinesandPossibleExpansion 2 cross border rail viability viability rail border cross use ofnationaltransitroutes yettobeconstructed. opportunity arising within the regional rail sector in the the long termfuture. in sector rail regional the within capture arising importance to opportunity itself position the to measures raises taking Liberia This of planning. rail sponsored Ghana which may are likely to gain priority under Commission- connections and D’Ivoire Côte of direction rail the in especially arise, well other cross-border region, for African West opportunities the in climate investment competitive and hospitable a seeking investors and private Liberia to loss opportunity regrettable the Despite 99

• • • • need toinclude: would measures Such Liberia. to applicable equally is soft measures that will improve trade facilitation and this the to attention critical requires region the time, same interior.the serving hubs the gateway At to connectivity multi-modal in improvements with along sub-region the for hub transshipment suitable a of identification the on by ECOWAS Commission for physical investment will be focus Consequently, countries. inland serve that ports volumes being cargo one tenth or and less than 3.5) those Tableof neighboring country (see services shipping global of terms in the underserved relatively with being regioncountry the in countries other behind far lags Liberia that clear is sector,it ports the to respect With 101 100 f euaoy rcdrs o cern cro t the at borders. cargo clearing for procedures regulatory of moving for automation and harmonization and transit, procedures in goods simplified of Introduction electronic submission, of and introduction documentation of simplification reduction oreliminationof approvals required, reduction andsimplification oftariffs, WBWARCIP appraisal AfricanDevelopmentBank,“ECOWAS PortsandTrade Facilitation,Background Working PaperfortheDevelopmentofRISPinECOWAS Region,”Nov. 2010 Ranking Country Egypt, ArabRep. South Africa Nigeria Cote d’Ivoire Ghana Senegal Mauritius Togo Benin Kenya Angola Tanzania Guinea Gambia, The Mauritania Sierra Leone Liberia Cape Verde Guinea-Bissau Sao Tome &Principe Shipping LinerConnectivityIndex 100 Table 3.5 World 2009 103 104 111 115 143 153 112 17 29 50 53 54 63 64 68 70 72 73 75 83 97 2009 10 12 13 14 16 17 24 25 26 28 30 35 38 29 Source: UNCTAD Regional 1 3 4 5 6 8 9 2006 10 12 11 15 16 30 24 28 34 29 38 32 1 2 4 5 3 8 6 9 7 rfre dsiain fr T nbe srie but services enabled IT for destinations preferred are at initial stages of positioning themselves to become A few ECOWAS countries (Ghana, Nigeria and Senegal) connectivity domestic during theAFTtime-frameasportrayedinBox16. and regional international, own its establish to strides making is Liberia that context this in is It access. cable with operators or countries among behavior competitive encouraging by bandwidth of cost as to increase their bargaining power and bring down the so points landing coastal several to to connectivity expand interest their in is It points. landing cable submarine obliges through the territory of adjacent coast which countries to access position traffic communications their transport physically to geographic them their challenges of face countries because landlocked the addition, In cables were installed to connect other communication parts (SAT-3/WASC/SAFE)of 3/West West Submarine Africa. Atlantic Africa South the and when conflict participate in to unable engaged were states fragile these but liberalization and inward investment for mobile telephony, sector in advances made have Leone Sierra and Liberia availability and cost of ICT infrastructure. Some states like There is wide disparity between member states in terms of an create to integrated regional communications market. gaps infrastructure ICT and regional connectivity address international secure to is community ECOWAS the of interest primary a divide, digital global cognizant that Africa is furthest behind with respect to the benefits to deliver public and private users. to Recognizing this, and links terrestrial cross-border plus backbones domestic comprise and cables undersea international to optic ICT development. Such networks must enjoy connection fiber for catalysts main the as through recognized now are networks communications digital modern whereas telecommunications distance satellites long upon manage extent to large a to relies still Africa West and UseofICTEfficiency Tools Acceleration ofRegionalICTInfrastructure related infrastructure. to cast its longer term vision for investment in transport- transport fronts on set the regional context in which Liberia may wish ECOWAS and PIDA by initiatives These which about only about 15% has materialized to date. of billion $475 at estimated been has services enabled additional opportunity remains. The market for IT and IT- and regional networks. including infrastructure, international connectivity and better integration transmission domestic affordable and require to regionwill dependable the objective, realizethat However, huge. be would impact socio-economic this corresponding and of youth for fraction creation a job the even market, capture to were ECOWAS If 101 113 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 114 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA This potential of VPN for the region has been cast by by cast area been wide a “ECOWAP” for vision a into Commission the has region the for VPN of exchange. potential This information confidential and timely through achievable administration to public upgrades efficiency for potential of terms over-estimatedin be cannot states member to technology this of value The states. member affordable ECOWAS for (VPN) networks cross-borderprivate virtual more of establishment the facilitate exchanges also will these Africa’s established, affect Once which competitiveness. arrangements transit exchange at the continent North-South traditional on relyingon than rather cost lower internally traffic of capture communications maximize to (IXP) exchanges node internet of multiplication the encourage to is program PIDA the of emphasis an is market which aspect Another communications development. regional for environment the improve to regulation policy and infrastructure between Authority (WATRA) to collectively manage the intersection Telecommunications Regulators Africa West the with up encourage private sector participation, WAPP has teamed cross-border and physical links. While PPP approaches domestic will be employed to for planning the ease costs and the reduce to cabling ICT with infrastructure line transmission WAPP of twinning the is end this towards One regional initiative that could certainly provide leverage Box 16ICTBroadband Connectivitythrough ACECable Private Network. be achievedbyjoiningECOWAP, theregion’s Virtual munication withECOWAS cannow governments ronment. Enhancedintegrationandsecure com of ICTservicesgivenanOpenAccesspolicyenvi of infrastructure investmentwillbringdownthecost stage first This intermediaries. cost higher through transit without be routed to traffic enable to rovia station andIXPexchangewillbeerected inMon ICTcommunicationsmarket.Alanding ternational broadband connectivitytojointheregional andin dersea cableconsortiuminorder toestablish Liberia hasjoinedtheAfricaConnectEurope un e r o h s A s e m o C e l b a C E C A : e r u t c i P Published by Financial Times Published byFinancialTimes - - - - - longer termvisionforinvestmentinICT-related initiatives. its cast to wish may Liberia which in context regional the ECOWASfronts and ICT PIDA onset by initiatives These capture. territory to another has enabled large violators to escape one from flight their now, until because, waters coastal onthe their within operating vessels fishing illegal of presence information exchanging from benefit could states likewise the coastal of All trafficking. human and gun-running trade, drug including criminality, all of with forms deal to quest their in Liberia like for states fragile attractive particularly is This collaboration. border cross- require out that governance carry of functions to core their states member among network private evident is that all five of these relatively better endowed better relatively these of five all that is evident is What Monrovia-Bong. and Waterside Monrovia-Tubmanburg, Monrovia-Bo Monrovia-Buchanan, Ganta, Monrovia- include These present. at output economic 34 Figure in portrays reproduced the principal corridors which 1A are driving Liberia’s Map below. presented figures three the in evident nonetheless is integration, regional by followed integration, domestic greater ever progressionapproach.The this to for central is strategy development corridor strategic the and term near the in Liberia’sto stability essential is infrastructure integrative that strategy corridor development. Domestic development unification domestic supported by through country spatial the integrates progressively planning a infrastructure to pursue according will Liberia whereby two chapter in revisited and one chapter in introduced Before proceeding, it is important to return to the notion of investmentsinsynchrony. efficacy the affectingmeasures physical accompanying soft and both addresses It sub-sector term. short to the devoted in aspects attention greater with turn in in justified as infrastructureeach sector takes analysis The time-frames 2. chapter 2040) to (2030 term long and 30) – proceeds 18 (FY medium 17), discussion to 13 (FY short the through such, As AFT. under embarking upon is Liberia that transformation fundamental the value of medium and long term reinforcement of mind the in bears approach This consider. to want might authorities that trade-offs and priorities strategic terms the of in cast are frames time term long and medium the whereas cost estimated and scope their projects, plan term specific of short terms in precision greater the contains naturally earlier, indicated As Liberia. strategy for planning infrastructure time-sequenced a of for appetite elaboration the to leads This place. taking development strong its meet infrastructure must as well as Liberia the regional which context context of fiscal growth in the and cast to served above sections The ime-Sequenced Infrastructure 3.4

Planning forLiberia T 1and2”,August 2011 102 ordr ae pks edn it ad u o Monrovia of and they are predominantly centered out on the coast. and into leading spokes are corridors concentration clearly reinforces the central triangle and and triangle central the reinforces clearly concentration Maps produced byLISGIS, commissionedbyMOPEAandfundedUSAIDthroughstudy, IBIInternational “DevelopingLiberia’s Economic Corridors,Volumes Figure 35FeederCorridorsRequiringImprovements inQualityofConnectingTransport Infrastructure Figure 34ExistingEconomicCorridorswithinLiberiaasAssessedin2009 102 This ln o irr h ojcie o te nlsv growth inclusive the of objectives transformation strategyunder AFT. the mirror to infrastructure inclusive plan more a for need the underlines 115 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 116 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA • • • is designation geographic a provided foreach: and the connect towns map this following on corridors “feeder” six The better to integrate theeconomyanditspeople. order in course due in upgrade to ambition the has GOLR that corridors” “feeder supplemental six thereafter. Consequently,reproduced1B Map EastwardsFigurein depicts 35 heading connectivity but poor to Greenville very road afunctional which of Barclayville benefit the and has Buchanan between corridor to adjacent County Côte D’Ivoire. There is Maryland also a sparsely populated coastal Southeastern the in is zone neglected third A Ganta. to Monrovia connecting another road the beyond especially is D’Ivoire, Côte and Guinea There corridor.to adjacent County Nimba in central cluster population dense nation’s the connected to poorly is that Guinea and Leone Sierra to adjacent County Lofa in center population dense a is there Northwest, the in Beginning Liberia. within zones fail to adequately integrate three other densely populated corridors existing the that revealsis also map this What corridor Harper-Ganta:8 Corridor Central North to Southeast corridor Northwestern Corridor 7Foya-Gbarnga: corridor vertical Western Bopolu: – Tubmanburg 6 Corridor Figure 36Future DomesticCorridors andtheirPotentialConnectionstotheWiderRegion which follow. within the short, medium and long-term planning sections designations geographic their referenceto with corridors future various these of discussion a resumes report The countrieswithinECOWAS.landlocked northern the to countries MRU all link which roads Inter-State of A plausible alternate vision is one of a developed network in that it posits possibilities which merit further exploration. infrastructure for planning term long to helpful is partners development and MOPEA by done This visualization region.of kind ECOWAS the with trade in constructively Liberia income which has recovered to from fragility and is ready middle to engage a but of thereof, vision powerful placement under the convey the projects predict rail to actual or represent planning to much so not links, rail regional potential as cross-border depicted are connections Three states. MRU neighboring through links strategic through region ECOWAS broader the to Liberia future connect potential to here depicts envisioned are 36 which corridors Figure in 1C Map Finally, • • • inland corridor. Western Way: No Tubmanburg-Camp Triangle 11 Corridor Central Buchanan-Nimba: corridor 10 Corridor Coastal Eastern corridor Buchanan-Greenville: 9 Corridor • • stabilityinthefirstinstance; exposure to internal drivers of conflict which threaten • following the to elements: consideration gives here employed methodology the frame, time by proposals out setting In preserved. be should decisions priorities what and about required implementation during needed be will possible trade-offs some that probable Yet,is time. it shortest of amount the in gaps progress fundamental maximize closing to at order in high plans aiming AFT often are infrastructure, to respect assess with Transformation. hy prioritizeandhow? to Particularly for Agenda critical Liberia’s of is feasibility affordabilitythe of discussion The 3.4.1 h bs srtgc ac bten synchronous sector, between match public strategic best for The roles respective best The domestic prioritizing of importance vital The Smallholder Commercialization Industrialization via Zones in physical infrastructure; investment concurrent with and fronts Development Governance Human the on advancements development partnerandprivatesectorfinancing; Liberia’s reduce to term short the in integration

increasing productivity inriceproduction IRRIGATION FACILITIES: Irrigationinfrastructure toenable and associatedICTproductivity tools at strategic locations with Sierra Leone, Guinea and Côte D’Ivoire REGIONAL TRADEINFRASTRUCTURE:One-stopborder posts availability andstimulusofmarket informationandreduce isolation plus domesticbackbonetopenetrate ruralmilieu.ICTwillimprove ICT: andregional Broadbandincludinginternational connectivity internet storage including product dryingandtransformationfacilities,laboratories DOMESTIC TRADEINFRASTRUCTURE:Trade supportiveinfrastructure markets intheSoutheastwithmarketablesurplusofagriculturalproduction. the privatesectorandresult inlowercosttransportsolutionsforservingdomestic in rampsandlandingfacilitieswillfosterthedevelopmentofCoastalShippingby SMALL PORTS: DevelopmentofGreenville (Sinoe)andHarperportsviainvestment served through renewable ruralenergy sources thangrid-basedsources smallholders, particularlycashcrops. Thelevelofdemandwouldbebetter processing andtransformationofagriculturaloutputsproduced by OFF-GRID RENEWABLE ENERGY: Powersupplywillhelpwiththe farmers intogreater proximity oflocal,nationalandregional markets. connecting countycapitalsandalsoleadingtoborder crossings tobring road density, includingfeederroads, secondaryandprimaryarteries ROADS: Restorationofthetotal“agriculture road network”toimprove supply amineralprocessing zoneinthelongtermfuture manufacturing butgrid-basedpowerwouldlikelybeessentialto GRID-BASED POWER:Zone-specificpowercouldbeadequatefor PORTS: Export-processing zoneswillneedaccesstogoodqualityportfacilities ROADS: Roadswhichspecificallyconnectzonestoportsorairports infrastructure insteadofrelying upongrid-basedservicedelivery. utility servicescouldbepurposebuiltorgeneratedthrough zone-specific zone-based supplyofpower, waterandtelecommunications.Eachofthese ZONES: Physicallydelineatedindustrialzone(s)equippedwithdedicated Infrastructure Requirements toRelieveConstraintsGrowth grading facilitiestoupgradequalitystandards, covered marketsand W depots plussecure cargo trucktransitparksat strategicinland Table 3.6(a)Infrastructure Required forSuccessfulExecutionofKeyGrowth Strategies and • • r urgt rvt sco fnnig s el asthose investment. sector public for priority well fitting a are as which financing sector private relatively outright or (PPPs) have partnerships private public which for potential areas better those a asserts about It for not. judgment or provision installations made physical and desired included the has plan AFT whether the evaluates also table This realization. time-frames their appropriate for the and priorities key the of assessment independent an forward brings 3.6 Table review, that from Drawing more growth. faster, economic the for inclusive conditions possible notably to best institutions, the reduction, and release people poverty Liberia’s of of development aspects reinforce will other that projects infrastructure of types the to respect with insights yield two chapter in strategies The factors above combined with the analysis of growth h ptnil o otr rae rgoa integration regional greater foster to potential The may needtocarryintothemediumtermand, n pbi aaees eonzs ht prosperity that canbebettergainedfrom tradethanconflict. that recognizes awareness public border and petty that basis the skirmishes will on diminish when poverty has term decreased long the in The fiscal constraints that suggest restoration priorities Includedin Yes, Modest Hard +Soft Soft stage/ Yes, partial measures AfT? Y/N Not clear Not clear study Yes Yes Yes Yes No No done onthis *?Financing Study tobe orPrivate Potential forPPP Unlikely topic Yes- Yes- Yes- Yes- Yes- Yes- YES No No PPP ifdeveloper Appropriate Could leaveto predictable forPublic competitively **Funding priority Medium Not yet selected Ditto Ditto High High High High High TBD Medium Term Medium Term Medium Term TimeFrame Appropriate Short Term Short Term Short Term Short Term Long term ST &MT Most Ditto Ditto 117 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 118 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA r nt nldd n h ATPa porme for programmed AFT-Plan the in included not are investment infrastructure recommended of elements certain that clear makes table This strategies. growth key Liberia’s of execution successful the improve to investments certain for frames time appropriate most The right-hand column proposes a conclusion about the Notes MSME Development via Corridors Natural Resource Concessions via FDI to miningand/orplantationagriculture developmentneeds Concessions toPorts.Ruralroads withinconcessionstocater ROADS: Primaryandsecondaryarteriestoconnect demand for private expansion of domestic internet backbone. demand forprivateexpansionofdomesticinternet grid-based infrastructure; yet,concessionswouldoffer viable met through privatelyfinancedsatelliteifnotsuppliedthrough andtheseneedscouldbe telecommunications andinternet ICT: Concessionoperationsrequire reliable such asrubberorpalmoil product-- whetherminerals,logsoragriculturalcommodities for portinfrastructure cateringtotheirparticulartypeofbulk PORTS: Allconcessionsare exportorientedandhaveaneed serve demandintheSoutheast sector andresult inlowercosttransportsolutionsforSMEsto will fosterthedevelopmentofCoastalShippingbyprivate Harper portsviainvestmentinrampsandlandingfacilities SMALL PORTS: DevelopmentofGreenville (Sinoe)and **Includes fundingbyDevelopmentPartners be trulyfeasible,soisMediumorLongTerm potential *’ YES’ indicates PPP approach could be suitable in ST. ‘Yes-’ indicates that other conditions must improve before this would economically transportbulkmineralstoports. RAIL: Thelarger miningconcessionshaveaneedforrailto increasing demandforpowertosupportoperations. POWER: Miningconcessionspresent substantialand Growth Infrastructure Requirements toRelieveConstraints energy sources of demandcouldbesatisfiedfortheinterimby renewable rural for fosteringdomesticMSMEdevelopment,thoughthelevel OFF-GRID RENEWABLE ENERGY: Powersupplyisessential concession networks” key corridors,coincidingwiththe“current” or“potential ROADS: Restorationofprimaryandsecondaryroads along facilities. locate, leasespaceandhaveshelter, securityandstorage would beamodesttypeofzoneinwhichMSMEscouldco- COMMON FACILITY INFRASTRUCTUREPLATFORMS: This input suppliers the MSMEsectorandwillimprove connectionstobuyersand ICT: Broadbandwillimprove internet marketinformationfor Table 3.6(b)Infrastructure Required forSuccessfulExecution ofKeyGrowth Strategies in thesectionswhichfollow. a later time frame. These implications are also covered certain to deferred be follows. that better might investments programmed is which recommendation our narrative cases, other the In is in issue the highlighted case, the further is this Where term. near the private sector Yes, Modest Yes, Modest Included in AfT? Y/N Not clear Limited Left to Yes Yes Yes No No done onthis Financing?* Not inShort Study tobe or Private Potential for PPP topic Term Yes- Yes- Yes- Yes- YES YES YES No Appropriate Regulatory Funding** for Public important Medium Medium priority High High High High High High High role Appropriate Time Frame ST, MT< Short Term Short Term Short Term Short Term Short Term Short Term ST &MT ST &MT ST &MT Most 103 stacking areas without monopolizing the entire port, while or wharves to limited be will but financiers private the of needs the serve likely and will Monrovia investments in the structures Buchanan, port critical of addition or rehabilitation as such cases, within other In zones. roads concession feeder as well as Zwedru-Greenville) and roads(Ganta-Sanniquellie primary network the in arteries key of rehabilitation for case the is Such large. at meeting public the of of those purpose as well as dual companies mining of a needs the serve will projects the of Some country. the in needed financing infrastructure in scale investors large FDI of role important the in built explicitly have authorities the that in is example realism One mind. of aspects several with plans investment its cast has and tradeoffs several against infrastructure for wish list in Table 3.2, GOLR has already weighed its need longer the to comparison in that, clear makes Table3.7 its owncore, contingentand debt-financedpledges. of all meet concurrently can Liberia that assuming million 3.7 Tableestimates the financing gap pillar), to be approximately is $400 Development Resource which Human the water under (including pillar infrastructure physical respect narrowerthe to With plan. AFT the of pillars all to pertains that million, $700 of order the on gap financing a Tableidentified Whereas 3.3 time. present the at gaps financing to respect with situation net approximate the information and MTEF estimates, the under GOLR by pledged cost financing about AFT the time- including AFT frame, the for physical programmed the projects of infrastructure list detailed fairly a presents 3.7 Table 3.4.2 Forum, June2011, page 2 World Bank, “Infrastructure Policy Notes: Leveraging Investment by Natural Resource Concessionaires,” background paper prepared for High-Level National Economic

for theShortT Recommended Priorities erm well asissueswhichneedmore attention. apparent the key objectives by sector for the near term as transport the highlighted in Chapter 2. The sections which follow make in strategies investment growth inclusive more the support can public sector strategic how example an of is This time. present the at transport road isolated Southeast on a basis that is more affordable than up the potential for domestic goods to be supplied to the open effectively will This transport. of form cost lower a as shipping coastal private of rise the support will ports smaller the of development because enterprises nascent and smallholders incentive for environment enabling and structure the in change a to will contribute simultaneously Liberia infrastructure, financed publicly with needs sector however,private that, these Beyond to catering in GDP andfiscal revenues for GOLR. forestry and operations, all of which will contribute to the logging expansion of as well as plantations rubber and palm oil private the of needs the to cater to important is infrastructure on a similar scale to mining companies. This road and port finance privately to them enable not does operation of scale whose exporters key those for Harper and Greenville of ports the in constraints relieve to seeks the to respect with smaller ports. GOLR’s is investment pledge under the PSIP allocations resource ODA and GOLR intentions to be strategic in planning scarce public $5 billion in commitments to date. to commitments in billion $5 about at valued be to estimated was and considerable is thereof magnitude the but investment private planned of totality the to respect with incomplete well. very is as 3.7 Table these of some rehabilitate to concessionaires upon relyingare authorities plan, AFT the within featured not are investments rail though even own Also, requirements. their to unique investments port other access and improve routes to expected be will sector private the 103 Another example of of example Another 119 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 120 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA

TABLE 3.7 (a) SUMMARY COST ESTIMATE AND FINANCING ASPECTS UNDER SHORT TERM AFT TIME FRAME (U.S.$ MILLION) FY 12/13 through FY 16/17

GOLR GOLR Dev’t Comments on Af- Infrastructure AfT Costs financing Sector Partner Current Wish fordability during ST Includes Source of Cost Estimate Comment Dec/2012 pledged financing Financing Category List Total 1 AfT Time Frame Estimate as P1 per PSIP Identified Road Transport Overall Road & Bridges Transport Investment Detail not available but will go to restoration of roads network $1 269,34 $1 269,34 Apparent financing gap Restore primary Roads network, including Rehab. & Expand (non-concession) Feeder Roads Lasip Feeder Roads Estimate SIDA pledge of $21.1 & EU of $.67 and $170,65 $7,50 Likely secured assume GOLR cash for work tradit. Road maintenance applied here On-going roadworks, pavements & bridges PSIP. Cost estimates vary $28,50 widely between laterite vs. Locations not specified paved asphalt construction. Construction of new major roads and bridges $135,00 Financing and Transport Master Plan Table 3.8 identifies Long Wish List affordability recommends Emergency Maintenance of roads & bridges nationwide $25,70 of Primary rehabilitation of laterite roads Maintenance = GOLR Responsibility Road Network & AFT seeks to pave primary DfID & EU pledges into Tust Fund = restoration is a roads network work in process. $57.6 + IDA roads projects $151.3 + Approx AfDB projects $65.27 . Not all sums May have $500m financing gap. strictly attributable to roads since some pledged is for other rural infrastructure. Rehab. 2 bridges in Montserrado & 1 in Gbarpolu $1,25 Connect to borders with all-weather roads, incl. TAH Build Buchanan-Tappita missing link Build Buchanan-Harper missing link Incl. in program is Paving of Fishtown - Harper & beyond Restore Key Cross-Border Bridge(s) -- Loguatu to I.Coast Cost estimate taken from WB Critical artery; now served by ferry $2,00 infra. paper Pave Ganta Sanniquelle 23 km segment MoPW presentation Mittal Steel to finance per MDA $28,71 Secured under MDA Pave Zwedru - Greenville 119 mile segment MoPW presentation Putu Ore to finance per MDA $160,60 Secured under MDA Institutional Strengthening of Transport Sector AFT Cost estimate is for $18,34 $18,34 Likely secured Transport Sector Results Matrix; additive to roads & bridges Capacity Building in Transport Sector MTEF Pledge from National Transit Authority, 30 buses, parking & facilities $3,00 Feasibility studies & road bidding document prep’n $2,50 Purchase of (7) weigh bridges $1,10 Road Safety & other transport governance tasks Coastal Corridor study Apparent financing gap Airports Overall Airport Investment $305,00 Rehabilitation of Roberts International Airport Transport Master Plan Incl. in Transport Master Plan $10,00 Refurbish Terminal and Apron Zone Envisaged to be completed in Some donor financing has been Nothing Cargo Terminal Technical Zone three phases: $90 m Phase 1 mobilized but nothing on the scale of evident Commercial Zone to 2015; $85 m Phase 2 to 2020 what is recommended in the Transport other than Parking, Lighting & Consultancy Fees and $130m phase 3 to 2025 Master Plan GOLR commit- ment Rehabilitation of a Domestic Airport Transport Master Plan, 2010 Est’d $20.5 mn in 3 phases $20,50 prices Seaports Overall Seaport Investment GOLR pledge of $37.4 in MTEF $37,40 $37,40 Apparent financing gap Rehabilitation of Port of Monrovia China Union to invest for its needs Nothing Extend marginal wharf, pave container stack facility Estimate is $15 m evident Fuel unloading facility Estimate is $7m other than Rehabilitation & Expansion Port of Buchanan ArcelorMittal to invest for its needs GOLR Dredging/Rehabilitation Port of Greenville (Sinoe) Other port upgrades to serve rubber, tree commit- Rehabilitation Port of Harper palm & other NRC players to be provided ment & by GOLR private FDI investors 1 The AFT is a five Maritime:year program, Int’l Shipbut the & Port Public Security Sector ISPS Investment Compliance Plan is only prepared for a 3 year period so GOLR spending commitments against 2 final years of AFT are$4,90 not yet known. $4,90 2 P1 Projects are considered “National Priority Investments” and are more likely to remain firm commitments by GOLR than “Sector” projects. Pledge amounts cover 3 years, but only 2012/13 is so far approved. 3 Data on sector projects is sourced from the draft PSIP and amounts could change. TABLE 3.7 (b) summary cost estimate and financing aspects under short termaft time frame (u.S.$ Million) fy 12/13 through fy 16/17

Dev’t Comments on AfT Costs GOLR financ- GOLR Sec- Infrastructure Partner Affordability dur- Includes Source of Cost Estimate Comment Dec/2012 ing pledged tor financing Category Financing ing ST AfT Time 1 as P12 per PSIP3 Estimate Identified Frame

Energy Sector Overall Energy Sector Investment $502,48 Mostly secured but for T&D needs outside Governance Conduct energy needs assessment nationwide $0,27 Monrovia Mt. Coffee Generation Rehab, T&D to Bushrod Island Tractebel/WAPP est. $383 Norway $70m + EU 40m€ $190,00 $125,00 Mostly secured Net gap may Thermal Diesel HFO Power Station $20,70 $30,00 remain Net gap may Transmission & Distribution in Monrovia Donor aide-memoires Norway & USAID & EU $91,20 $42,00 remain Financing Se- Electricity system enhancement project (LESEP) Donor aide-memoires $43.4m from IDA $43,40 cured Domestic Financing Buchanan Private Sector Renewable Energy Generation WB Paper on Infras. For Diversification $170 from OPIC, McBain Secured Via River Diversion Project to Supplement Mt. Coffee GOLR financ- Financing required Future: Mano River Hydro Electric Power Generation Updated WAPP Master Plan 180 MW on SL/L Border ing may include some Future: St. Paul River 1B + 2: Hydro generation Updated WAPP Master Plan 198 MW on St. Paul River partner financ- ing and thus Future: Tiboto Cote D’Ivoire 2/ transmission to Buchanan Updated WAPP Master Plan 225 MW on L/CI Border may reflect $150 mn IDA & $19.25 double count- WAPP CLSG-- Liberia Transmission Segment (consortium) Financing Se- Regional Donor aide-memoires AfDB, EBRD, KfW €31m & ing, leaving $221,93 & Cross Border electrification (EU) cured EU €9.6m a net higher Norway, USAID, EU,IDA, financing gap Rural Energy RREA rural energy strategy & master plan & installations Donor aide-memoires $11,60 Some secured AfDB Sector Mgm’t Energy master plan study $1.1 from AfDB Some secured & Cap. Training & Capacity Building PSIP for LEC& pledges in minutes Norway, IDA, GOLR $0,50 Some secured Building ICT Overall ICT Sector Investment $14,58 IDA Financing under WAR- Basics secured International Connectivity Precedes AfT $14,58 CIP with interior backbone to be Monrovia Fiber Optic Backbone & Postal Installations PSIP GOLR Pledge $3 m in MTEF $3,00 privately financed Water Overall Water & Sanitation Sector Investment $32m from AfDB & $6.2 Apparent financ- Water & Sanitation infrastructure & sector reform Aft Cost Esimate for WASH Results Matrix $101,95 from IDA ing gap Rural water supply & hygiene services $1,50 Solid waste collection in Monrovia communities $1,95 Expansion of arable land under Irrigation from .2 to 5% Source: LASIP Program estimate Left for private investment GOLR to zone Monrovia Apparent financ- Other Infra Public Buildings and Housing PSIP $42,50 $4,40 bldgs ing gap Industry SEZ Special Economic Zone for Industry PSIP $5,40 Infrastructure results ma- Apparent net trices for Housing & Public GRAND TOTALS $1 949 $554,17 $21,60 $988,51 financing gap of Buildings omitted from tally +/- $400m of AfT Cost Estimate 1 The AFT is a five year program, but the Public Sector Investment Plan is only prepared for a 3 year period so GOLR spending commitments against 2 final years of AFT are not yet known. 2 P1 Projects are considered “National Priority Investments” and are more likely to remain firm commitments by GOLR than “Sector” projects. Pledge amounts cover 3 years, but only 2012/13 is so far approved. 3 Data on sector projects is sourced from the draft PSIP and amounts could change. 121 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 122 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA Rivers, but the cost/benefit of these facilities is lower facilities Mano these and of cost/benefit Paul the but St. Rivers, the on generation hydro-power additional for potential term. have does medium Liberia Alternatively, the in competitiveness improved with importer energy an become to Liberia enable will term short the in MRU the within development sector power to approach aninter-dependent launching of benefits The period. AFT the during it to Liberia’sconnection of CLSG the importance strategic the of explains and line transmission establishment with complemented be commence must This grid. CLSG the into power and surplus supplying potential hydro-generation effective cost- more inherently their out build to due are Sierra Leone and Guinea effective. becomes market energy occur in the medium and long term when the West Africa are reduced. This more dramatic cost reductioncosts can production only marginal run long the whereby scale technology (away from HFO) plus a change in in generation change a upon depend but significantly more much costs. power Liberian Generation costs have the potential in to be brought down dent modest a make could and term short the in tackled be can losses non- technical and Technical losses. non-technical and technical losses generation, of costs unit high factors: three to due is this and continent the most on electricity expensive the perhaps has Liberia 1, Chapter in noted As support inclusionandstability. to Monrovia of outside services of expansion the and electricity of pricing the term: short the in realizable is aspects bear special mention vis-à-vis the limits of what Twokey season. dry the during capacity HFO with up back- and season rainy the during resources hydro on year-roundcapability generation functional reliancewith to is focus term to plant hydro-electricCoffee short Mt. destroyed restorethe main the that reveals 17 Box of AFT, which must be launched with immediate priority. objectives transformational the to vital is supply energy rural since constraints financing do of thecasualty become investments smaller these that important is SME It and smallholder (b). Tablesand in 3.6(a) highlighted was of as productivity development to the important strategically support are they grid, formal the in be much less costly than the major restoration will investments mini-hydro and solar as such installations grid off- in investments Though frame. time AFT the during arethey launch for priority gain should and important all Although expansion. projects, these of some for raised be than to yet is financing rather restoration grid on be to needs term short the for emphasis the network, marginally expand the territory served by the distribution soft and hard infrastructure both are depicted in Box 17 and in while these will investments economic and Planned activity growth. enterprise to contributor a as energy reliable of importance the of because urgency the highest priority for investment as a matter of national considered is distribution) and transmission generation, (including grid power pre-conflict the of Rehabilitation Energy not Box17Hard andSoftPowerInfrastructure Investment hns o h etbihet f LG oncin to connection CLSG WAPP whichshouldbecommissioned by2017. of establishment the to thanks importation and self-generation between made be can choices strategic more that is waiting of advantage the must wait until the medium or long term time frames and generation electricity of expansion further that clear is it this, than Other season. wet during load spinning with cope to and season dry during energy supply to order in implemented be must plants HFO dual back-up The generation. HFO upon reliance relieving by costs down bring and plant hydro Coffee Mt. the of capacity round year- the increase to frame time AFT the during River througha reservoir/diversion structurePaul fromSt. the by GOLR and development partners to the installation of given being consideration is there Nonetheless, Leone. Sierra and Guinea from contributions potential the than has invested in improved metering equipment, there is there equipment, metering improved in invested has this is due to electricity theft. Even though the company deferred losses address represent about non-technical two-thirds of However,total and losses, and LEC. the bulk of at turnaround maintenance a implement to contractor management a of hiring the through tackled being are which losses, technical are losses the of third one Approximately interim. the in costs power reducing of means as 2013) in 30% nearly reached have (which losses non-technical and term technical short reducing to devote efforts must and can Liberia Meanwhile, •Rehabilitateandextend •Construct&rehab •Installstand-alone •Reconstruct64MWMt. •ConstructHFOdelivery •Reconstruct • Connect18communities • ConstructWAPP CLSG • InstallHFO-fired Power SectorPhysical in Monrovia the distributionnetwork communities mini-hydro inrural communities solar PVpowerinrural Coffee hydro facilities atPort Tubmanburg andMonrovia-Gbarnga Monrovia –Kakata- Monrovia-RIA Airport; transmission lines— to CLSGline transmission line generating capacity Sector Goal:Increaseenergy accesstomodern Planned duringAgendaforTransformation Infrastructure services &affordable powerby2017 •Establishintegrated •Promote investment •Reviseenergy sector •Designframework •Assessrenewable Accompanying Measures Training Center Energy Research and generation options in lower-cost power Energy Policy more inclusiveNational plans toimplement and strengthening sub-sector reforms policy anddevelop supply, ruralandother participation inenergy for privatesector river basins pico hydro-plants in plants andmini/micro/ mini-micro biomass coastal windenergy, energy sources including Power SectorSoft and limited customer ability to pay on the client side. client the on pay to ability customer limited and side public the affordabilityon reasonsand viability for national time present the entire at proposition viable a the not is territory cover or milieu rural broader serve to the grid formal the of expansion Yet, strategic. 18 communities theirto the CLSG transmission line is highly of connecting of project penetrating pilot the evidence reason this For milieu. services that see to sponsored important begin government critically population is interior the It and plantations. mines service Monrovia, rubber to extended capital it the where for of except had outside grid presence power Liberia’s limited conflict, the before matter. Even inclusion or stability a is issue key other The a viable investment. expansion grid making of function commercial vital the serve and demand provide will that base customer primary this is it and term near the in operations mining by most significantly bemanifested will it significantly, drop tariffs once demand power forecast to difficult is it While term. longer ofthe the in network distribution expansion national viable financially inhibiting of effect knock-on the has this demand, domestic constrained for and building up capital reserves, and, combined with charging from LEC prohibits further cost High demand. constraining ultimately customers, income low by pay to ability limited with met being is cost high the though, electricity, either legally or illegally. For legal connections, the resell opportunity business the by is driven often also connect to drive the However, LEC. to connecting in interest high a demonstrate and tariffs higher paying or have access to a third party network are, on average, self-generate who customers residential or commercial comes online at the end of 2015. On the Coffee Mt. when occur other to expected currently kWH, hand, per small reliable supply can be provided at tariffs below US$0.30 and costs a until LEC to switch to unlikely are administrative these Thus, losses. without but LEC, costs to generation similar at self-generate currently MW) 7 to the Coca Cola bottling plant, with peak loads from 1MW larger foreignindustrial LEC, loads (e.g., to Cemenco, and Club connected Brewery, NGO, already and have Government, institutions embassy few a but all While grid- for base costs. electricity high by constrained is electricity based customer legitimate the of Expansion to bemadeinthepowersectorshortterm. improvements marginal for order in essential is officials cooperation that state’sthe enforcement and law company emphasizes the between this time, same the At addressed in order for the power sector to truly recover. interfering with financial recovery of LEC. This should be is which corruption crime entrenched of a problem a this suggests make to Reluctance act. criminal a theft the fact that GOLR constant does not currently by for consider electricity exacerbated is costs situation The repair. staff and monitoring higher and out, increased revenue, burn of meter loss a to leads This junctions. a constant problem of illegal branching before the meter important stabilizingimpactonthenation. rural energy solutions on a faster timeframe will have an of delivery that fact the and properties economic for their also but benefits “green” their for just not Liberia to relevant highly are sources energy renewable clear that is It Center. Training and Research Energy the of coastal wind to be explored through a new institution, points along with other options such as the harnessing renewable install solar, biomass, to and mini hydro dimensions green energy infrastructure soft and physical management both on taken sector being are Accordingly,measures plan. the to complement important an energy renewable off-grid to recourse makes This to different paving technology and alternate transport transport alternate solutions. Thesefactorsare furtherexaminedbelow. and technology paving different to recourse financing, sector private prioritization, corridor essential support for key growth strategies: these include affordability and between demands the off trade in to order play into brought be can or alternatives Four ports airports. and centers production between links focus upon selective more and arteries cross-border upon dependence lower network, road feeder a of need less MSME with requirements and limited more have strategies NRC growth Industrialization, investment. road network” road public “agriculturefor list wish extensive most the represents it the and as to referred is This the production. deliver surplus encouraging will of and incentive required markets to will closer roads farmers primary bring and improved secondary feeder, as of insofar density infrastructure road for demanding appetite most is the it has that respects sector some smallholder the In priorities. road and solutions growth different strategies have different that needs with respect to transport apparent it make (b) and (a) 3.6 Tables gaps. financing possible given time-frame AFT the during deployed be to need will strategies both that likely is it reality, In approach.” budget “unconstrained the dubbed standardsbeen asphalt has paved this and to roads laterite AFT plan upgrading of target stretch the for opts The plan. AFT finalized the transport within for aimed road the to dubbed investment, the approach” cost of which would been be about 5% of that budget has “constrained current This their standard. to miles technology paved laterite few and majority surfaces the road of maintenance emergency and only affordrestoration would that approach an with budgeting austerity of premise a on prepared was Plan Master Transport The diverge. still roads views primary and network the restoring to approach best the on partners development among and Liberia within debate both substantial been has there fact, In ambitious. investment be to is approach infrastructure chosen the and plan AFT for the under priority critical the second is network roads primary the of re-establishment and hostilities Nonetheless, future. the of into long end case the remain the will since ever priority a been has roads of rehabilitation sector, transport the Within Transport 123 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 124 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 104 ekn cnetvt bten hi pouto zones production their between connectivity seeking concessionaires sector private by needed are 11 and 6 Similar logic suggests that further development of corridors enforcement ofconstructionstandards. for rail regulation as well as for road sector planning and capacity public develop to be will required investment in the future. In such an instance, the main public sector accommodate passenger and non-mineral freight traffic to built is railroad the if an especially vision, development with combined Liberia’scorridor serve financing can solution transport alternate sector private how example an of provides scenario development corridor the core central triangular corridor bisecting Liberia. This the subject of an MDA negotiation), can serve to densify (currently railroad, Nimba the of restoration addition, In corridor. triangular central the to zone this connecting under the terms of the MDA with private resources, thus built be to due is link road Ganta-Sanniquellie the that of Mittal Steel iron presence concession within Nimba county means the Fortunately, Ganta. to Monrovia and Buchanan to Monrovia links that triangle Central the of extension an become can it and priority clear another is (Buchanan-Nimba) 10 corridor that consider we these, 7 and 8 naturally qualifies them as priority candidates. Of population densities present Thehigh along “feeder” corridors priority. 10, greatest 35merit Figure in identified corridors feeder six the of which is dispute, question bigger the in not are priorities these While denoted 34. Figure corridors in economic existing five the service continue during AFT has aimed at restoring to functional to due and 1 PRS during undertaken investment sector to Figures 34 and 35 presented earlier. Much of the roads refersanalysis this prioritization, corridor with Beginning Dalbergpowerpoint deckentitled“IFCLiberiaInvestmentPromotion Strategy:Sector Prioritization”issuedJune12,2012,pages 36-38. orva n Hre cud e 4 fse through faster 44% be coastal shipping while costing could 44% less. Harper and has Monrovia It play.between time travel that into example, for estimated, brought been be can solutions shipping coastal that so environment enabling better a create to this to alternative road transport and encourages GOLR a as transport shipping solution. The Transport Master coastal Plan discusses to resorting of alternative its of because corridors inland two other the over advantage an has corridor Coastal” “Eastern Buchanan-Greenville and ODA financing if they are topublic be of realized.need Of these,in the most and investment private through (Buchanan- developed be to arelikely that least Greenville)those as 9 and (Harper-Ganta) 8 7 (Foya-Gbarnga), corridors leaves This zones. other essential prioritizes sector the mobilize to financing for key arteries in these zones while the public encouraged should be investors direct therefore Foreign export. of ports and pledged forroad transportinvestment. for possible reallocation of a portion of the large amounts and this therefore shipping bears re-examination incoastal by the authorities investment public identified clearly any reflect not Tabledoes time, 3.7 same the At alone. construction road upon reliance by achieved be would a faster transport solution for domestic connectivity than encouraged during the AFT time frame in order to deliver This trend has begun to develop and it should be further operation. and purchase ferry in invest to sector private the leaving while ferries passenger and vessels multi-purpose cargo for infrastructure landing and ramps in invest to sector public the for be would approach The a faster timeframe that reliance upon road construction. on agriculture smallholder Liberia’s of the competitiveness improve and losses post-harvest minimize would 104 These factors investment fortheAFTtime-frame. depicts 18 the aspirations Box for roads account, and into bridges infrastructure considerations above the Taking must buildinanabilitytorespond toclimaticissues. into vulnerability take created should be to capacity maintenance the (iii) and account; highways and roads of climate change and climate vulnerability; (ii) the upgrading of account take that standards design develops it (i) ensurethat for should Liberia measures regard, this adequate In resilience. climate by accompanied be should change climate and huge investments in roads and bridges infrastructure to vulnerability its of cognizant remain must Liberia approach, this implementing In possible. as much as financing concessional and grant with network roads primary its of paving the tackle it help to partners human and development levy) its to fuel looking while development capacity fund a road (through financing planning, including levels county and central at functions maintenance of recurrent institutionalization the into and maintenance resources scarce its of a portion devote sizeable will GOLR that is AFT within assumption the on blocked and deteriorated road conditions. Accordingly, delays to due transporters by incurred cost tremendous the and maintained be must roads Liberian which under road durable more of surfaces resonate as favor valid the At given the in high rainfall conditions arguments aside. time, same issues past—conflict the of the experience from different be would This maintenance. with up keep will to investment commitment sincere an without economic such be and not of Liberia cost in the high that is doubt paving no is there terms, absolute In budget” “constrained the of costs maintenance and Tablecapital unit the contrasts which presentsdata 3.8 maintenance. of cost relative the and surface road the of longevity the of issue the is matter this of At heart the 8. and 7 corridors of cost the reducing to solution ground middle appropriate an become might this and technology asphalt-concrete to alternate an as blocks One final alternative being explored is the use of concrete 1 Approach Constrained Budget Approach Unconstrained Budget Unconstrained Approach RoadRehabilitationisdefinedas“Emergency” rehabilitation onlyunderConstrainedApproach, butas“Upgraded,paved road” under Table 3.8UnitCapitalandMaintenanceCostsunderContrastingChoicesofRoadTechnology ment Costover5 year TimeFrame $1,569,000,000 Capital Invest- $49,207,000 Rehabili- Miles of 1454.2 1305.3 tation Road 1 Cost perMi. $1,202,023 Unit Capital $33,838 to thecapitalcostofrestoring alateriteroad anew. equal virtually roadis laterite a on maintenance of years four where much point the to are construction, laterite for unit higher per costs maintenance the However, paving. of cost heavy the comparedto as areminiscule rehabilitation emergency of costs capital that is clear is What approach. asphalt paved budget” “unconstrained the versus approach restoration laterite predominantly Investment PlannedduringAgendaforTransformation •Replacecorrugated roads andbridges •Maintainsecondary, •Installbaileybridges • Rehabilitate&pave (Buchanan-Tappita & • Constructmissing • Rehabilitateand Roads &BridgesPhysical Sector Goal:Enhanceaccessibilityandconnectivity metal pipesfordrainage primary andurban structures more durablebridge and replace somewith primary roads network Buchanan- Harper) secondary road links maintain feederroads Maintenance Box18Hard andSoftTransport Infrastructure 18,832,000 1,979,719 by ensuringallroads are pliableyear-round Infrastructure Cost of 1397.12 Miles of Mainte- 2340.3 nance • Developtechnical road andbridge •DevelopGISdatabase RoadSafetycouncil •EstablishaRoads •ImplementECOWAS insurancescheme- relevant conventions •Harmonizewith implementation •FinalizeNational Accompanying Measures Unit Maint. in road safety standards andtrainstaff maintenance system for feederroads &usefor Road Fund& Authority, including Road Axleloadpolicy facilitate cargo transit including Brown Card policy &ratify ECOWAS transport framework Transport Policy &Safety Transport Sector Soft cost per $8,047 $1,417 mile Capital Cost Ratio: Main- tenance to 23.78% per Mile 0.12% 125 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 126 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 105 prah aoe b te iity f ulc Works requiring Public road segments course. due in attention of of list Ministry following the the identified by favored approach budget unconstrained The paved. currently are roads of 10% than fewer and environment rainfall in high Liberia’s expensive particularly is is construction This road term. because near heaviest the the billion—in receive investment—$1.269 to targeted sector infrastructure the is transport road that confirm 18 Box and Table3.7 regional links. This can be understood from two two from understood GOLR that be imperative is it can hand, one On perspectives. This upon links. does it than regional network roads domestic the emphasis upon greater places plan investment present The partners canorienttheircontributionsaccordingly. priorities among the feeder corridors so that development priorities or not, Liberia is encouraged to clearly articulate medium term. Regardless of whether GOLR adopts these the way up the Southeastern-North Central corridor in the all extended be to this for is aspiration reasonable a but objective, former the to contribute will AfDB by financed be to Fishtown to Harper from segment road A isolation. to paid relative their of out be proposal Counties Lofa and Maryland attention bringing The deliberate that above. is discussed here advanced as corridors key of importance the to according investment road sequence Liberia has the opportunity to investments, prioritize road about among strategic projects be to and need the Given medium term. the into well carry to need will that construction road in million $300 least at of balance a therebe period, still will if GOLR succeeds in raising $1.269 billion during the AFT Sanniquellie-Loguato(CôteD’Ivoire Zwedru-Greenville ) Redlight Monrovia -Ganta/GuineaBorder Road Location Ganta-Tappita-Zwedru-Fishtown-Harper Gbarnga-Voinjama-Zorzor-Mendicorma Cotton Tree-Buchanan Ganta-Sanniquellie Pleebo- Barclayville Brewerville -Bopolu Madina -Robertsport Buchanan -Yarkpa Town-Greenville Rehabilitation of50milesUrbanRoads Yarkpa Town -CestosCity border “RoadInfrastructure—A CatalystforEconomic Growth,” power-point presented byMOPW atNationalEconomicForum,Monrovia, September2011. Table 3.9UnconstrainedBudgetApproach toUpgradeofPrimaryRoadNetwork 105 What seems clear is that even even that is clear seems What Missing Link Northeast Monrovia-Ganta Corridor North-SouthEast Northwest Buchanan Monrovia- Northern Southeast Coastal Eastern Coastal Eastern Urban Coastal Eastern LengthtoPave, competitive to attracting transit traffic from landlocked landlocked from traffic transit attracting to competitive more itself make will and neighbors ECOWAS of ahead be will it corruption, petty this in rise a implementing without policy of kind in succeed can Liberia If parallel. in a culture of rent-seeking behavior to arise or gain traction implementing and the control stations measures, weigh but also installing in preventing in only Vigilance not regard. needed this be will in culture new a some impose take to undoubtedly time will it and sector roads the in investment their preserve to Liberia help will measures control load axle of adoption The regulations. ECOWAS with harmonization on term near to the expects in progress Liberia make that identifies 18 Box contrary, the On ignored. being is integration regional that mean not does this roadreconstructionplan, the of focus central a manner. However, thoughphysicallinksare notpresently energetic an in launched being before term medium the effectiveof regional road until wait to needs this and links establishment the to attention its turn can it before do to greatdeal a has Liberia therefore,that conclusion, is The will present, at than attract more traffic.‘Builditandtheywillcome. quality passable better of if roads, cross-border that likely highly is it revived, been has trade to nation’scapacity the once and however problem egg” of return for such projects. This is very likely a “chicken and rates economic low yields this presentand the time at low economic hand, the traffic better counts across border arteries are extremely generate of the smallholder commercialization strategy. to serve On the other will and component key a revive, to trade domestic for conditions as this Liberian stability the instance, reinforce first to the integration in population domestic greater deliver 1,305.3 miles 176.47 26.72 miles 35.1 47.8 57.2 119 288 291 147 29 23 50 15 Cost,US$ $1,569.40 $160.60 $311.00 $234.32 $359.72 $182.60 $36.21 $33.00 $28.71 $64.44 $79.92 $33.00 $25.00 $20.88 Mn Kuwait Funddoingfeasibility Funding Source Not Identified Not Identified Not Identified Not Identified Not Identified Not Identified Not Identified AfDB, partial World Bank World Bank Putu Ore Co. Mittal Steel s a key element key a becomes affordability Hence, extension. backbone of costs capital the sponsor to wherewithal internet the have broadband not do investors, NRC the unlike with but service, comes which connectivity market benefit the significant from gain will MSMEs and for ICT services in the interior. If affordable, smallholders play its part in responding to expanding market demand milieu. Hopefully this will rural be adequate and the the private into sector will out branch and initiative the take to operators telephony mobile competing multiple the establishing induce will policy Access Universal the that expectation to role sector public connectivity within the the post offices limited in each has county with the it Accordingly,market. ICT domestic a building in sector GOLR is appropriately reluctant to crowd out side, the private physical the On planned. are which investments soft and hard the both from evident is interior the into services delivering and decentralizing of objective The far below is pledge financing public own GOLR’s that to 2 Phase $85m 2015; 2020 and $130m in phase 3 to 2025. Yet, to it also reveals 1 Phase $90m three phases: in completed be to rehabilitation RIA envisages TransportTablePlan fromthe Master evident 3.7, is As bringing James Spriggs Payne airport back into service. upgrading the safety of Roberts International Airport and on focused have date to efforts that and conflict the to that Liberia had been endowed with twelve airports prior light to brought 1 chapter transport, air to respect With as regulators. and well engineers planning for building capacity as issues access circumstances and safety such upon focus in to is investment sector public for role appropriate The investors. direct foreign of needs from substantial benefit private will investment sub-sectors to these serve the that particular fitting thus is it and strategies growth industrialization and NRC the to vital into back infrastructure railroadsarerail and seaport that clear is It service. and to levels up functional seaports moderately standards, safety international to up are Airport focuseduponbringing RobertsInternational sector transport the within investments planned Other cargo,thiswilladdtocompetitiveness. and international “Brown Card” for insurance that can cover both domestic at institutionalizing new instruments such as the standard countries in the medium term. If Liberia is also successful • • •

Box 19Hard andSoftICTInfrastructure InvestmentPlannedduringAgendaforTransformation Harper and up-country 3 regional offices in Buchanan, Zwedru and towns in offices post 6 Construct connectivity station forinternational Finalize installationofICTIXPandlanding connecting post offices to Public Access Public to Network offices post connecting Set upICTconnectivityinallcountiesby Sector Goal:Increase Access forLiberianstoaffordable PostalandTelecommunications Services ICT PhysicalInfrastructure • • • • •

planned divestiture inthecomingyears. its undergoes CCL the when participation equity their other mobile companiesmayhave theopportunitytoexpand plus they subscription; ACE the to each million $5 contributed Twooperators vested. private been has station landing the which into vessel equity the (CCL), manner taken to establish the Cable role Company of the Liberia in reflected important also is approach an PPP This MOPW. implies for which lines, of power coordination or roads the of building the with concert in done is it if affordably more done be could interior the into cable optic fiber of laying county.the slide, physical the On by monopolies from small into operators country the private carving discourage and encourage to competition as so vigilance with conditions market the On regulatory side, it will be important for Liberia to monitor growth. transformational of drive help inclusiveness to the interior the of penetration successful in and MSMEcommercialization beginstobearfruit. come into demand in the medium term when smallholder perishable horticulture, fish and other fresh products will of handling the to cater can which air infrastructure cargo that likely more is It transformation. under-pinning strategies growth key the of any to constraint binding the yet not are services cargo air that illustrate (b) and (a) Yet,Tables3.6 climate. business FDI-friendly the to safe provision of international air transport service is vital that doubt no is There justified. seems prioritization this balance, On investment. network road of favor greater in down come has and transport air and road between tradeoffs the weighed has GOLR that evident thus is It AFT. during pledged million $10 only with levels these C mre i te onr. o 1 peet te near the term investmentplanfortheICTsector. presents 19 Box country. the in market ICT the interior with domestic spines to expand the this penetrating domestic of However,challenge the objective, 16. key a as Box leaves in depicted as (ACE) Europe Connecting Africa in participation through connectivity it has already made progress in establishing international internet and related e-services in the country. To this the end expanding broadband of affordability the improving and availability of importance the recognizes Liberia ICT in ICTenvironment Access framework to promote private competition Review broadband policy & Implement Universal Decentralize LTA Regulatorto3regions Create ICT-based financial&electronic services programSet upE-government elsewhere incountry for Officers Information ministries +120technicalstaff inE-services Chief train and Recruit ICT SoftAccompanyingMeasures 127 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 128 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA industry sectors are three-fold. First, GOLR might might a GOLR in investment First, planned re-orienting three-fold. consider to are and want trade sectors the to industry respect with recommendations Our near termisapparent inBox21below. GOLR’s Yet, reliable. intent to experiment with Special and Economic Zones in the abundant available is the supply and power risks investor reduced has climate must wait until the long term future when the investment strategy), NRC successful a from evolve to encouraged be is should (which it minerals, of transformation but that clear the industry and in trade interest for direct environment enabling have also strategies NRC and industrialization the Meanwhile, strategies. these from catalyze the results and transformational impacts desired should be accelerated into the near term so as to better business investment of types these utility-enhanced that is assertion Our in parks. leasing space provided that through as such infrastructure common-facility facilitate regional trade while MSMEs would benefit from to posts borderimproved and infrastructureprocessing and market hold. domestic from benefit would take smallholders to T reasons, entrepreneurship these For encourage to and sector, surplus SME marketable producing for incentives provide to emerging essential the are environment trading the in improvements and smallholders For appraised. strategies growth key the of all to industry and trade of importance the out brought two Chapter Trade andIndustry sustainability andcommunityinvolvementinfacilitiesthat the ensure to issues side WASH soft to the devoted be for will sector planned investment the of part large A water, in investment planned sanitation andhygieneinthenextfiveyears. the presents 20 Box Water • • • • • • Box 20Hard andSoftWater, SanitationandHygieneInfrastructure InvestmentPlannedduringAFT

rural watersupplies Rehabilitate 3000andConstruct2000new system Rehabilitate 100%ofMonrovia sewerage water points,sanitation&hand-washing Establish 136SaniCentres atdistrictlevelfor Rehabilitate distributionsystemforMonrovia treatment plantservingMonrovia/environs 100% rehabilitation ofWhitePlainswater towns &citiesover5,000people Rehabilitate 3waterfacilitiesandsystemsin Sector Goal:Increase accesstosafewatersupplyandsanitationimprove hygienepractices WASH PhysicalInfrastructure be . hglgtd h fc that fact the highlighted 3.6 able • • • • • • in the short term so that Liberia can position itself for greater regional competitiveness inthemediumterm. itself position can Liberia that so term short the in appropriateProgressterm. short the for priorities vital is competitiveness and trade are very encouraging and are multiple softmeasures envisagedpromoting economic the Third, institution. the financing owned state a avoiding of pitfalls while sector banking private reluctant a by lending risk MSME into entry reducing incentivizing therefore and of benefit the have may approach This basis of meritorious business plans which they the appraise. on awards sector banking private the which loans behind guarantor as role a take to be might approach credit constraint which a plagues relieving small interests of enterprise. A objective better special core the from other divert can or which elites are experience, by capture institutions to own financial prone state-owned Liberia’s that including suggests history, Past reconsider attributing it a direct role in financing MSMEs. to encouraged are authorities offer,but can it services development business the for institution welcome a is a of industry establishment Organization Financing Development Industrial National the within Second, improved. positions have will ownership) management possibly into capital (and human supply to but capacity Liberia’s when abandoned, term long to medium be the until deferred should development industrial jump-starting to approach SEZ-enabled the that not mean would This term. short expansion the in entrepreneurship an of encouraging of entry thereby the instead, to cater MSMEs would that interior the in parks business more or manufacturing-orientedone into SEZ encouraged. since this is an area where private initiative is likely to be term short the in structures irrigation into envisaged is irrigation facilities. However, no actual public investment identify to order areasthose arewhich Liberia host of to positioned best in basins water lowland evaluate to work preparatory for call AFT under plans investment agricultural The rehabilitated. or installed newly be will Implement schoolWASH packagein2000schools population inhygienepromotion (3,500total) Train 1Community HygieneVolunteer per1000 services Carry outwillingnesstopaysurveyforWASH Develop detailedsectorinvestmentplan maintenance managementstructures Establish/refresh communityruralwatersupply commissions thatitwillsupervise and SanitationBoard, plusoperational institutions includingNationalWater Resources Establish andmakefunctionalkeysector WASH SoftAccompanyingMeasures that end, the Ministry of Public Works has established a to permitbettereconomicintegration withtheregion. To establishing regional roads tolinkitMRUneighbors Meanwhile, Liberiaiswell aware ofthedesirability of support Liberiainthisendeavor. corridor developmentwouldhelppartnersto medium term.Clarityvis-à-vistheprioritysequencingof recommended thatthetaskbeplannedovershortand not becompletedwithintheAFTtime-frameanditis Liberia’s primaryroads network isanendeavorthatwill On the domestic front, it seems clear thatthe paving of Transport-Roads in particular. planning focushere onthetransportandenergysectors Accordingly, considerationsformediumterminfrastructure emphasis onregional infrastructure inthemediumterm. trade spheres during AFT will pave the way for greater capacity andregional harmonizationinthetransportand addition, softmeasures thatwillbeintroduced toimprove should bedeliberatelydeferred tillthemediumterm.In while others,notablywithrespect toindustrialization, financing of lack for term medium the into move to need the investmentsplannedforrealization duringAFTmight preceding sectionbringsouttheconclusionsthatsomeof Discussion of the short term infrastructure plan in the 3.4.3 • • Box 21 infrastructure andutilities Establish commodities to facilities Construct Medium Term Recommended Prioritiesforthe provide Industry, Trade andPSD Infrastructure Hard andSoftTrade &IndustryInfrastructure InvestmentPlannedduringAgendaforTransformation for a new for agricultural special grading, storage, economic processing marketing products Sector Goal:Promote PSDthrough EconomicCompetitiveness, zone in and and Diversification, Value Addition& Trade each (SEZ) processing storage county with of • • • • • • • • • • Industrial Property Offices modernize Enact Ensure integrityofleasesgranted improved integrityofregistration Encourage of businessassociations of including Improve Reform Bureau ofIndustry Establish volume ofgoodssmuggledacross borders reducing Reduce Tariffimplement CommonExternal Ratify services atborder points Facilitate Finalize &implementNationalTrade Policy area toprevious usetofacilitateindustrialdevelopment Rezone exclusion from thewiderECOWAS markets. and isolation present its from Liberia removing by benefits stability significant deliver could connectivity regional that An additionalconclusionarising from thepresent studyis in termsoftheeconomicreturns thatcanbeexpected. but projects execution, regional and financing of purposes upon regional architecture are “national”projects for the that PIDA studymakesclearisthatmanyprojects withabearing Oneconclusion rise. will levels traffic that basis levels traffic currently the plyingsuchroads, butoneshouldplanonthe to comparison in excessive seem may Current are concerns thatcostsofcross-border arteries cost ofsucharteriesinorder toacceleratetheirrealization. be appropriate tocommenceforecasting theinvestment projects have not yet been precisely estimated but it would segments toasphaltpavement.Costestimatesforsuch the desire is to upgrade all of the cross-border crossing the CavallyRiveratsubstantialaddedinvestment.Overall, Côte D’Ivoire. Thiswillrequire investmentinabridgeacross has theeffect ofextendingthatarteryacross theriverinto the CavallaRiversegmentrepresents anadditionwhich Zwedru-FishTown-Harper–Cavalla road asanexample, counting. AnexceptionistheCavallaBridge.Taking the in table3.10whichincludes a highdegree ofdouble- short extensionandcostfarlessthanthetotalpresented roads are complete,theregional roads oftenrequire onlya reconstruction planand,assuch,oncethoseinternal list havealready beenincludedintheAFTprimaryroads by countrybeingconnected.Mostsegmentswithinthis Figure 37depictsthedesired MRUlinkscolor-coded the estimatedcost.Thisisreproduced inTable 3.10below. list ofthekeyregional linkswhichare desired alongwith low cost Copyright ECOWAS Gardnersville cost inspections cross registration, enabling NIDFO Copyright, formalization business Soft AccompanyingMeasures of border transportation Act & environment Trade development & tax National industrial Intellectual trade checkpoints and of administration, land Liberalization by Industrial consolidating along ownership park Standards for Property services, corruption & informal corridors Property Monrovia increasing & Protection Scheme Institutions strengthening sales trade-related and enterprises & Act Freeport ports through reduce supply and and and by & 129 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 130 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA with higher quality technology. This is so because they they because so is This technology. quality higher or with scale larger a on facilities dimensioning justify could potential regional missed the of a appreciation where to opportunity lead can this but paradigm development to being conceived and executed on the basis of a national within a single nation’s sovereign territory, are often prone In other words, such projects, when located D’IVOIRE LIBERIA- LIBERIA- LIBERIA- GUINEA SIERRA LEONE COTE Road Segment Monrovia-Klay-Mano RiverBridge Gbarnga-Zorzor-Voinjama-Mendikoma Gbarnga-Guinea BorderGbarnga-Guinea Zorzor-Yeala Voinjama-Guinea Border Ganta-Saniquellie-Loguatou Saniquellie-Guinea Border Ganta-Tappita-Tobli Zwedru-Fishtown- Harper-Cavalla River Table 3.10DesirableRegionalLinkswithMRUNeighborStates Figure 37Liberia-MRURoadLinks geographically geographically Length (KM) 117 284 150 275 6,5 20 83 - - Linked Border Town MRU State Bo Koindu N’Zerekore Koyama Macenta Danane Lola Toulepleu Tabou needs to be careful not to over-invest in port capacity, but strategic examples of how this logic applies pertinent to Liberia. The country both and are borders to projects connect that roads Port trunk integration. greater with comes that growth economic the of virtue by affordable by serving more customers from wider markets and more viable economically more rendered be to potential have Paved Unpaved Unpaved Unpaved Unpaved Unpaved Unpaved Unpaved Unpaved Current Status Intervention Required pavement Investigation ofresidual lifeof Upgrading toAsphaltpavedroad Upgrading toAsphaltpavedroad Upgrading toAsphaltpavedroad Upgrading toAsphaltpavedroad Upgrading toAsphaltpavedroad Upgrading toAsphaltpavedroad Upgrading toAsphaltpavedroad Upgrading toAsphaltpavedroad Estimated (US$ Mn) $700 Cost 213 106 208 90 17 59 7 - - to move ahead, there is little doubt that the Loguatou Loguatou the that doubt little is there ahead, move to Côte due is TAH traditional the and as Even Loguatou. Liberia at D’Ivoire between point border transit greater freight for transit active most current the of itself and profile the raises scene cargo transport positioning regional the Liberia on competitiveness of notion The longer termfuture. in preparation for physical rail investments in the 2030-40 this the institution railways building a that in capacity to management appropriate domestic devoted is be It time-frame term system. medium rail national that a capacity important coordination be for and first regulatory will establish it the happen Liberia to to this given for and be should course due in borders across rail thought extending for potential more addition, In the phenomenonofpettybriberyandcorruption. reduce else, anything than important more almost and, processes enabled ICT of mastery their improve norms, harmonization facilitation trade global and their regional with proficiency and improve to Liberia for imperatives multiple the confirms it side, soft the On operations. port into integrated fully to and posts border extended of reaches far the tools efficiency ICT communications e-enabled by and capability accompanied if efficient and their transparent more to made areprocesses Such destination. goods speed and borders across procedures and quarantine phytosanitary functions, fiscal customs procedures,export and import harmonize to serve these as arteries key at attractive become eventually will posts border one-stop side, physical the On ports. to sea heading or air cargo of costs and times transit reduce to planning multi-modal requires This efficient. more Liberian ports and region the in locations between corridors its supplemental render to measures accompanying of and infrastructure basket must entire an roads by regional accompanied in be investment Liberian reality, In Competitiveness Multi-Modal CorridorEfficiency is Key to and reduce tensionsinthis border area. livelihoods improve to help could link road better a that of recent troubles in Côte D’Ivoire and the expectation is important an priority to construct. remainsThis is all the it more important in that light concur and routing TAH original the of importance have the upon D’Ivoire conferred recently Côte and Liberia Danane, to Loguatou the in from has, moving traffic by eclipsed routing been years, intervening this Although D’Ivoire. Liberia Côte and between and segment Leone Ganta-Tobli-Toulepleu Sierra the and Liberia between segment Bo establish to Trans-Africa plans Highway (TAH) traditional links including the the Monrovia- includes 3.10 Table investment willbecomejustified. and Liberia is table to attract cargo to its ports, increased competitive more become traffic transit for conditions as road during AFT has been completed and traffic traffic reaches and completed been has AFT roadduring secondary a as construction laterite for due link missing priority in the medium term. When the Buchanan – Tappita for consideration due given be corridor economic highly this that appropriate seems It beyond. further Bamako and Guinea to connectivity better offer will completed, is D’Ivoire Côte Danane, and Guinea Nzérékoré, between link planned the once and, Faso Burkina northwardsinto lead that those including side Ivorian the on roads traffic higher to connect would it side; Monrovia Liberian the on Freeport to connection paved by up backed is being of artery TAH southern advantage the more offer will triangle northern this the developed, as time such Until LEC facilitiesinthenearterm. and Coffee Mt. through supplied are needs domestic essential the to if especially seem disadvantages, the case outweigh this sovereign in rewards developing the supply, of of sources favor in arguments always are there while and term medium energy the for an policy import embrace to need would Liberia that imply would corridor This transport capabilities. its scope associated of and greater infrastructure build-up with the it upon focus leaving to term, medium the in investment generation power heavy burden of fiscal the of Liberia relieve could projects these of realization The with amore permanentstructure inthemediumterm. bridge Bailey current the of replacement a require will find a means of connecting itself to this triangle and that between N’zerekore and Danane. It behooves Liberia to the link paved a establish to collaborating areD’Ivoire and Côte in Guinea that important considering when more especially interim, remain will crossing border Figure 38LiberianBorder Crossing Roadsandtheir Connectivity toInteriorLandlockedCenters 131 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 132 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA sector during AFT demonstrate that this sector is still is sector this that demonstrate AFT during sector energy the in investments planned of discussion The Energy be might TAH original appropriate tocompletein the2030-40timehorizon. the paving, warrant to stage a 106 the gridby2017,Tractebel formulated from export or to import to countries allowing countries MRU the between market energy regional a start jump On the basis that the physical CLSG transmission link will ECOWAS. within available sources energy into perspective regional a took WAPP of behalf on done analysis Nonetheless, Energy AfDB financing. with underway sector get soon a will which of Plan Master context Sector the in investments other important for the economy. It is probably wise also to program is is which costs term generation decrease and Coffee Mt. from medium supply and year-round increase to help will short it as appropriate the in reservoir/ tackled and “via the in diversion” ofSt.Paulriverwhichislikelytobeappraised investment generation Further in Liberia’s energysector. investment of generation next a for recommendations on EU the to consultants by made recommendations EvaluationofEUEnergy FundinginLiberiaandRecommendations , MontgomeryWatson Harza,July2012 106 Figure 39 and ElectricityProjects inLiberia Recommended PlanningforFuture Energy ae h rcvr poes el no h medium represents which the 39 Figure into in evident well is This process term. recovery will the that vision take a established already have partners distribution and development its and Liberia reason, capacity.this For transmission generation, installed the five year PRS 2 duration to restore it to its originally than more take will it and mode recovery profound in region identified: medium term investment in power generation for the sub- for recommendations the this, from Resulting countries. between sharing energy encourage to vocation regional a have they that and/or size 150MW minimum a for aim facilities that were projects generation regional select to supply to term Two medium grid. sub-regional the used into criteria energy more the in undertaken be should projects generation key which about recommendations 2. 1.

into theCLSGgrid. power export and 2021 by commissioned be could it $214 but of identification of stage the at cost is project The million. investment estimated an at MW 135 generate can This Guinea. and Leone Sierra between and becommissionedby2019. grid regional the into power supply also could this million, $69 at line CLSG of 1060km addition an by complemented If million. $520 of cost investment estimated an at MW 400 Bumbuna II & Yiben Hydroelectric plant which could generate Kassa Hydroelectric plant, to be installed on the river river the on installed be to plant, Hydroelectric Kassa 107 aside PPP approaches that it will also undoubtedly undoubtedly downstream also that is will here recommendation it the pursue, that approaches PPP enhancement aside will Leaving corridor tradeoffs. Liberia financing strategic that make to of plausible need still is it types costly, are these investments that Given and theborder are uptothestandard required. Buchanan between links highway and rail the then, by facilities, if, Buchanan at port terminal container possible expand a including to investment appropriate be Complementary then would market. regional wider much a from traffic capture and networks a rail other into borders require across connect still to as so would perspective regional expansion the such time, of same economics the At transport. additional cargo and non-mineral passenger in of introduction investment permit to require stock rolling would This trade. regionalgrowthfromin economic pushengagement an Liberia’son capacity orderin reallycorridors to key gain and density the increase to capacity rail in investment decade. 2030-40 term physical prioritize to which in long decade the be would This the into on carry might self-sufficiency prioritizing energy from over competitiveness rewards transport the that seems it planning, Building upon the logic behind medium term infrastructure 3.4.4 3. Mano River Tiboto Benkongor Bumbuna III Bumbuna II St Paul2 St. Paul1B Amaria Souapiti Via Mt. Coffee & Kaleta Site Tractebel, WAPP EnergyPlanRevision, Ibid.

commissioned by2021. be theoretically could but stage identification at also at a supplemental cost of $100 million. This project is Liberia in Buchanan to line transmission kV 225 a to connected be then would which million $578 of cost investment estimated an at MW 225 generate could Tiboto Hydroelectric Plant in San Pedro Côte D’Ivoire Côte Pedro San in Plant Hydroelectric Tiboto Table 3.11ComparativeEconomicsofHydro

the LongTerm Strategic ChoicestoContemplatefor Liberia/S.L. Côte D’Ivoire Sierra Leone Sierra Leone Sierra Leone Liberia Liberia Guinea Guinea Liberia Guinea Country Investment inMRU 107 Capacity Potential 180 225 200 120 377 515 240 90 40 78 66 Est’d Investment Cost/KwH US$ 2625 2570 2447 1950 1950 3123 3123 1256 1344 5803 1114 mn advantages thatintegrationcanoffer. the fully embraces it if future the in participation regional of era an into transformation domestic of era an from moves it if advantage tremendous gain will Liberia that point the into links transmission Liberia. with These are good choices and they serve to reinforce Tiboto at plant Ivorian an of River plant with Sierra Leone or cooperation in the Mano installation a of sponsorship direct through whether neighbors, term energy long projects are best Liberia’sthose which that involve collaboration appear with its does it case, any In supplying itintothegrid. other and Guinea of step the take and capacity which latent their tap neighbors to degree the on measure large in depend relianceregionalwill of theThis on grid. evolution of a bona fide WAPP market and the feasibility recurrent basis in the coming decade to take a stock on of options the investment and policy energy its evaluate in re- high to Liberia for important be thus will It appear terms. relative costs investment making projected hydro-resources, Liberia’s in advantage comparative better even enjoy countries MRU other time, same the best ECOWAS relative the to most of the non-MRU countries. At of one within has potential hydropower in Liberia endowments “absolute” that doubt no is There exporter arise. will WAPP from energy importer an as remaining an versus become to positioning choice policy between the term, medium the in case the is As by aregional corridordevelopment strategy. indigenous business sector its and these of will be skills preferentially entrepreneurialenhanced the cultivate to labor for industry. In the interim, Liberia will be well served present era will have yielded a ready supply of talent and educational better opportunity and with human development investments in the up grown have will Liberians for purpose of this study. By then a generation of young term” “long as defined period 2030-40 the of end the this era will emerge, but it is not likely to materialize until greater when predict a to hard want is It control. will sovereign of degree it which over power for demand huge a have country the will then Only development. of and the vast opportunities that open up with that phase transformation mineral includes it that sense the in fide as Liberia enters the era time of bona fide industrialization, bona such until deferred be investment generation of inclusive and transformational growth. Infrastructure growth. transformational and inclusive of era an foster to potential the have that strategies of 2 chapter 1. These then inform the examination in chapter underlying threats to stability are thoroughly examined in central and transformation.Thecurrent stateofthenationand of recovery towards is path continued stability Liberia’s to of concern preservation The Liberia. in gap infrastructure the and integration regional stability, themes: major three explored has report present The 3.5 SummaryConsiderationsfor Infrastructure PlanninginLiberia 133 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA 134 INFRASTRUCTURE AND INCLUSIVE GROWTH IN LIBERIA ewe cmeig ed, at ad eie should desires and Tradeoffs wants needs, competing impact. between transformational maximum deliver can that investments infrastructure public those select the short beyond term. Therefore, endureit will remain important to to carefully expected be also can this and scarcity capital of presence the in made be to need will longer time frame. At the a same time, infrastructure investments over programmed of be objectives Accordingly, should the transformation frame. reinforce time to AFT planning infrastructure the will than infrastructure, longer society, and take Liberian institutions people, of the including with transformation begin that study this conclusion from drawn insights Key destination for manufacturing, mining and agro-industry. investment attractive an as a stage competitive on globally and markets trade transit and communications energy,ECOWAS the within stage regional a on Union, River Mano the within stage trading agricultural an on role larger a play to Liberia enable relative will its These isolation. of out investment Liberia bring best infrastructure can that related priorities the and Regional strategies 3. chapter in integration is explored examined in arethe priorities context of investment forthcoming promising growth and for strategies these to vital is the journey isparamount. the journey stable, a middle income country as is important, the inclusiveness of Liberia of destination the reaching While pace. concurrent a at transformed all are endowments infrastructure and institutional human, when achieved be can This term. longer a over a path growth with inclusive nation and transformational the a sustain and endow launch to to capacity aim instead but growth spurt, five-year a Liberia give to aim not should AFT during Investment institutions. domestic its improving and capital human Liberia’s building of objectives AFT two other the to contribute simultaneously will projects makers policy should be asking themselves gap, how different infrastructure infrastructure of current objective the the closing from Aside networks. infrastructure public with connectivity the maximize and benefits user multi- for potential the enhance to as so planning the in engage to is role appropriate government’s capital, private infrastructurewith installing is whereFDI sectors in Meanwhile, development. MSME be support to second should time-frame AFT prioritized first infrastructure to the favor smallholder commercialization public during and Liberia’s investments that concludes study The mind. in goals transformational AFT with made be Central BankofLiberia,Newsletter, June2011. Associated D.C.: Washington, Liberia. of History Publishers. Economic The (1941). W. George Brown, Asia”, in Costs Trade Asian DevelopmentWorking Paper, and No.123. Infrastructure, Cooperation, “Regional (2008), H. Douglas Brooks, Neopatrimonial of Logic The Rule”, Third World Quarterly, Vol. Ringers? 22,No.5(Oct.2001),pp.697-723. Dead Leone: Sierra and “Liberia (2001), Morten Boas, WorldThird Quarterly, Rule”, Vol. 22,No.5(Oct.2001),pp.697-723. Neo-patrimonial of Logic The Ringers? Dead Leone: Sierra and “Liberia M. Boas, Blibo, Jeff (May1,2009).“TheDrowning ofLiberia’s DomesticPrivateSector”,Author’s files. No.1 48, Vol. Literature, Economic of (March 2010),pp.3-57. 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