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held up relatively well, partly thanks to visits by aid and charity workers during Inside and after the Ebola crisis. Construction has also borne up, with cynics suggest- Election threatens Tough tests ing that some of the international inflows have found their way into con- fragile stability creteforprivatehomes. President and would-be As if Ebola were not enough, Liberia successors has been badly affected by the China- induced commodity downturn. Not look still to come ahead to onlyhasthathadadirectimpactonrev- enue, it has also put a question mark the poll over new investments. The collapse of Page 2 the National Oil Company of Liberia, a fiasco of overspending and possible cor- after ‘double ruption, has brought the once-soaring ambitionsoftheoilindustrycrashingto earth. While oil prices remain as Spending cuts loom depressed as they are, there is little Government departments are at whammy’ odds over where the The election is highly axe should fall unpredictable and takes Page 2 place as UN peacekeepers Election looms as country recovers from Ebola Battling deforestation and commodity price shocks, writes David Pilling are preparing to leave Norway commits $150m to help conserve heyarecallingitthe“double recover from the blows that have prospectofdevelopmentanytimesoon. Liberia’s forests and whammy”. First, the Libe- brought the economy to its knees. Not AsaresultoftheEbolacrisisandcom- rian economy was hit by a only has growth ground to a halt, but modities slump, an economy that had reduce carbon emissions devastating outbreak of external debt, though still manageable been growing at about 7 .5 per cent a Page 3 T Ebola, which was not only at about 40 per cent of gross domestic year over the previous eight years has tragic in terms of lost lives, but also product, is rising fast. The budget is in a nowgroundtoavirtualhalt.Someecon- brought investment and much com- precarious state and Liberia will con- omists expect it to recover somewhat Miners dig in to merce to a halt. Even as the country was tinue to rely on international support thisyearandnextonthebackofdomes- weather the storm dealing with that crisis, another was fortheforeseeablefuture. tic demand. Given the tough external Commodity price falls looming. The price of iron ore and rub- Indeed,thingsmighthavebeenworse environment, sustained recovery is far and the Ebola crisis ber, Liberia’s principal exports, col- haditnotbeenforinternationalfunding from certain. Unemployment is rife and lapsed, depriving it of precious export to help fight Ebola. That included a poverty levels high. At best, social dis- affect big projects earningsandtaxrevenue. $49m increase in the IMF’s extended content is bubbling just below the sur- Page 4 Afteradecadeofrelativestabilityand fund facility to about $130m. The econ- face. palpable, if uneven, progress, Liberia omyalsobenefitedfromthestartofpro- Benoni Urey, a wealthy businessman faces its stiffest test since the end of a ductionattheNewLibertygoldmineby and likely presidential candidate, says Tyremaker hopes for civilwarin2003.Asthetwo-termpresi- the UK’s Aureus Mining. Throughout continued poverty and lack of employ- rubber price rebound dency of moves the Ebola crisis, steel producer Arcelor- ment prospects make it hard to heal the Production has fallen, into its final stage ahead of elections Mittal continued to ship iron ore, divisions left over from the civil war. but Bridgestone expects next year,the country confronts several although the bigger second phase of its “How can one reconcile when he’s hun- a slow turnround interlockingchallenges,evendangers. projectfacesuncertainty. Streets apart: West Point, a Monrovian slum, under an enforced quarantine in gry, when he doesn’t have a job, when Page 4 The most pressing question is how to Services, particularly hotels, have 2014 (above) and in February this year (below) — John Moore/Getty Images Continuedonpage3 2 ★ FINANCIALTIMES Friday 8 April 2016

Investing in Liberia Election threatens fragile stability Leadership Four probable contenders

he says of a former notorious warlord, Politics President now a two-term senator, whose support Ellen Johnson Sirleaf for Ms Sirleaf was seen as decisive in the lastelection. tells David Pilling that For his part, Mr Johnson, who has few UN withdrawal will not kind words for Ms Sirleaf’s administra- tion, says he would not play a similar harm security rolethistimeround.“I’mnotgoingtobe Joseph Boakai Prince Johnson the kingmaker,” he says. “I’m going to runstraightforthehighestoffice.” y the standards of Liberia’s Benoni Urey, a wealthy businessmen At 71, vice-president Joseph Prince Yormie Johnson recent tragic history, the past andanotherpotentialchallengerforthe Boakai is likely to be one of (Prince is a first name and decade under president Ellen presidency, says he would petition the the oldest candidates in the not a royal title) is a second- Johnson Sirleaf has been a UNtostayuntilelectionsaresafelyover. presidential race. Insults are term senator from Nimba B period of rejuvenation and “Wedon’t want any more trouble in our already flying in what is county. Now 63, he is better stability. Those fragile gains could now country,” he adds. “If anybody thinks expected to be a known as the former warlord be put under strain as the country pre- that we will have anything less than a rambunctious campaign, — a word he does not like — pares for its first democratic transition free, fair and transparent election, with one opponent saying he who captured Monrovia in sinceitwastornapartbycivilwarinthe they’rejoking.” does not want the executive 1990 and who oversaw the CharlesTaylorera,whichendedafter14 MrUreysayshefearsthegovernment mansion to become “an old mutilation and execution of bloodyyearsin2003. will seek to use its institutional and folks’ home”. Nor can Mr , the former Notonlyisthefieldcrowdedwithcan- financial muscle to ensure victory for Boakai rely on the president. The event was didates with links to Liberia’s fractured JosephBoakai,vice-presidentandprob- advantages of incumbency notoriously captured on past, but elections will also take place in able candidate of Ms Sirleaf’s Unity alone to sweep him into video. For some, Mr Johnson October 2017 at a time when the UN is party.“What concerns us in the opposi- office. The Unity party’s is all that is wrong with withdrawing its military forces. The tion is the use of government resources disappointing performance Liberian politics: a grisly peacekeepers have been in place since and money to perpetuate her govern- in the 2014 senatorial hangover from a grisly past. Taylor, a former president, went into ment in power,” he says. “We are not elections suggests that its But for others, especially in exile and then prison. The next 18 goingtoallowthat.” support may be waning. Nimba — Liberia’s second- months will test Liberia’sability to han- Mr Boakai, who says he has not yet Still, Mr Boakai says he is most populous county — he dlewhatisshapinguptobearowdycon- been formally nominated, maintains proud to stand on his remains a hero who test. At least 20 hopefuls are likely to whoever emerges as the party’s candi- government’s record, “protected” his people standforpresidentandcolourfulinsults datewillbeabletorunonwhatheargues claiming it has achieved against Mr Doe’s brutality. arealreadyflyingthickandfast. is the government’s strong record. In 10 more in the past decade Asked about his past deeds, First the good news. Unlike in many years, he says, it has achieved more in than in the rest of the he says he prefers to focus other African countries — including terms of infrastructure and attracting country’s 169 years as a on the future. “That’s the Uganda,ZimbabweandBurundi,where foreign investors and donors than in the republic. On persistent past. We’re talking about leaders have clung on well past their divisions within Liberian building a solid, democratic constitutional sell-by date — Ms Sirleaf, society, he says: “People feel foundation.” He says he 77, intends to step down. Asked if she is their life must be touched. wants to end divisiveness, tempted to stay on, she says emphati- ‘The country wants a They want to be part of the particularly between cally: “Our people would not take it. peaceful election; we know whole. People [want] access Americo-Liberians and the And my age wouldn’t allow it. So that’s to the same opportunities indigenous population. He is outofthequestion.” what we went through’ and benefits.” a born-again Christian. Liberia, she says, is ready for a demo- cratic handover. “We [need] to make surewehaveapeacefulandcrediblesuc- Looking the country already, in keeping with had football idol as his rest of Liberia’s 169 years as a republic. cession process and that we get a succes- ahead: their drawdown plan,” she says. “Our vice-presidential running mate, boy- “It’sarecordweareveryproudof.” sor who will carry on and consolidate president security forces have taken over and cotted the second-round run-off in Nor, says Mr Boakai, is the increas- whatwe’vedone—andimproveuponit.” Sirleaf hopes those areas have gone on with their nor- 2011,claimingtheelectionwasrigged. ingly spiky rhetoric in the pre-election Ms Sirleaf says she is not unduly wor- for a peaceful malactivities.” Mr Tubman, nephew of William Tub- campaign cause for alarm. “There are ried by security as peacekeepers with transition Not all her potential successors agree. man, one of Liberia’s longest-serving difficulties, yes,”he says. “You hear a lot Sajjad Hussain/ the UN Mission in Liberia (Unmil), who AFP/Getty Images Winston Tubman, who campaigned presidents, remains deeply suspicious of talking on the radio. But the country once topped 17,000, are reduced to unsuccessfully against Ms Sirleaf in ofaprocesshesaysistaintedbyitsasso- wants to see a peaceful election because fewer than 2,000 by this July. “Unmil 2011,saysitdoesnotmakesenseforthe ciation with figures from the past. “She we know what we went through. has moved from so many places around UN to pull out now. Mr Tubman, who protected people like Prince Johnson,” Nobodyhasbenefitedfromconflict.” Benoni Urey George Weah

Ebola’s effect on a nation: ‘Everybody was in a state of confusion’ Benoni Urey, 58, is a The 49-year-old retired successful businessman with football sensation was a big stake in Liberia’s named the best player in the Countries often reveal themselves in a crisis. ones. Ebola is most contagious in the corpses Point, a slum in the capital, the government telecoms sector, a farm and world by Fifa in 1995. The outbreak of Ebola in Liberia, which killed of those who have recently died and, by some cordoned off the whole area. As tensions rose, several radio stations. As a However, he has long since nearly 5,000 people and brought much estimates, as many as 70 per cent of cases the military were brought in and shot dead a result, he has been loosely traded sport for politics. economic activity to a halt, was no exception. were contracted during funerals. 15-year-old boy. “The West Point issue was compared to Silvio Idolised by many in Liberia, The picture that emerged was “Ebola was something that nobody, not just unfortunate,” admits Mr Boakai. Berlusconi. Once a close George Weah ran for contradictory. Liberia showed itself as both in Liberia but in the region, had any idea A western diplomat who lived in Liberia associate and friend of president in 2005 as head of ill-prepared — with just 50 doctors before the about,” says Joseph Boakai, the country’s throughout much of the crisis says: “They had Charles Taylor, the former the Congress for Democratic outbreak for a population of more than 4m — vice-president. “So, at the beginning, a pretty shaky start . . . but Liberia was [one president now in jail for Change, losing to Ellen as well as resilient. It was slow to react, yet everybody was frantic. People were not sure of] the first [countries] to be declared Ebola- crimes against humanity, Johnson Sirleaf in the one of the first in the region to be declared how to respond. The medical practitioners free.” Part of the reason for initial difficulties, Mr Urey says he has the second round. In 2011 he Ebola-free — despite subsequent flare-ups. who were in the frontline were dying, and he says, was that authorities had a Monrovia- business savvy to turn the stood as vice-presidential Trust in official institutions was low; everybody was in a state of confusion.” centric view. economy around. He has a running mate on Winston rumours spread that Ebola was man-made or Liberia’s outbreak began in March 2014 After a false start, the government realised confident air and the money Tubman’s ticket, a decision that the government was exaggerating the when the first two cases were reported. they needed to enlist the help of local to run a splashy campaign. he now regrets. In 2014 he scale of the outbreak in order to cash in on communities, including tribal chiefs. Projects Judging by an interview with was overwhelmingly elected foreign aid. Yet traditional chiefs proved such as Mr Plan-Plan — a radio drama funded the FT, his stump speeches to the senate, defeating the valuable allies in the fight against Ebola, Ebola is most by USAID that contained messages and are likely to pull no punches. president’s son, Robert, in getting the message to isolated and contagious in practical information about the struggle “Look at where we are,” he the process. He has hit back corpses soon after mistrustful communities about how to halt death; up to 70 per against Ebola — were particularly effective. says. “Medicare is zero. at those who say he lacks the disease’s march. cent of cases were Experts say Liberia is now far better Education is zero. Commerce education, saying that the A World Health Organisation report found contracted during prepared to meet any fresh outbreak of the is zero. The economy is in educated elites were the countryside was particularly affected. funerals disease, both in terms of physical complete disarray. They are precisely those who led the “Personal protective equipment was in short infrastructure and, more importantly, recasting the budget every country to ruin. “There’s a supply, as were essential medicines. Almost Diagnosis was difficult because symptoms are knowledge about how to contain its spread. six months. People are high possibility I will run,” he no villages had ambulances or trained similar to malaria, which is extremely common Indeed, a few cases at the end of 2015 were starving. Go into the streets tells the FT. The man who ambulance crews and burial teams,” it said. in Liberia. quickly brought under control. of Liberia. People don’t have spent Liberia’s war years “The few vehicles available were poorly By June, Ebola had spread to Monrovia, the “If anything good came out of this,” says money to pay their children’s playing football in Europe maintained and fuel was scarce.” capital, setting off the world’s first large the diplomat, “it was the first time the central tuition. Innocent people are says he is untainted by the A central problem was traditional burial outbreak in a big city. government had to communicate properly being locked up without due country’s past. “No one practices in which relatives bade farewell by In August, after an Ebola treatment clinic with the community.” process of law. There is fear person says: ‘George hurt touching the bodies of their deceased loved was attacked by an angry crowd in West David Pilling all over Liberia.” me, he’s a wicked man.’” Drastic cuts in store for twice-hit economy

2017 election. Officials speak of “donor peacekeeping operation — and fees due The government is prioritising agri- Budgets fatigue” and explain that much of the to the Economic Community of West Liberia real GDP growth culture, including local processing international money front-loaded for African States. “The list goes on,” says Annual % change plants. But in order to achieve that Government departments at the fight against Ebola has already been Mr Kollie. “We’ve got a very serious seeminglysimpleaimthecountryneeds odds over where to trim spent. Without extra assistance for this problem ahead of us. I believe we’ll get 8 to solve all sorts of hitherto intractable spending, writes David Pilling yearandnext,itishardtoseehowLibe- through it, but I’ve no idea how. That’s problems. These include improving ria’sfinancesstackup. whyIdon’tsleep.” security of land tenure for farmers, pro- “We have to make some very tough These are the immediate budgetary 6 viding reliable and affordable power for Liberia’sfinances look rocky.The coun- decisions,” says James Kollie, deputy concerns — born of the twin shocks of cold storage and processing plants, and try’s finance ministry predicts a $70m finance minister, who predicts govern- Ebola and the sharp fall in commodity upgrading and maintaining roads. The shortfall in a budget of $622m in the ment revenue will fall to $478m in the prices — of an economy that is slowly same applies to efforts to diversify in 2015-16 fiscal year, obliging it to make 2016-17 fiscal year, against projected being rebuilt after 14 years of civil war 4 otherareasoftheeconomy. swingeingcutsacrosstheboard. revenue of $552m this year. Public-sec- that ended in 2003. When the Sirleaf As Ms Sirleaf concedes, Liberia has The cuts have precipitated a row with tor pay will account for more than half administration took over in 2006, its Ebola been a stop-start economy. “It’s a his- the legislature, which objects to an ofthat,at$254.5m. priority was to resuscitate an economy tory of boom, bust. Things are moving outbreak 2 attemptbyAmaraKonneh,financemin- “Do you want to run a country where thathadallbutexpired. detected up.Allofasudden,boom,”shesays. ister,tocutpoliticians’pay.Theconstitu- you can’t pay the civil servants?” he “When this government started, we Economically, Liberia has two stiff tional power to determine tax and says, adding that to do so would risk knewtherewerestructuraldeficiencies, challenges. The first is to recover from spending decisions rests entirely with socialupheaval. but we had to start somewhere,” the 0 the lingering effects of the Ebola crisis the legislature, they say, implying Mr Other untouchable outgoings president says, referring to the depend- 2010 11 12 13 14 15 16 andcommoditiesslump. forecast Konnehhasoversteppedthemark. include$35.5mondebtservicing,essen- ence on export of unprocessed raw Source: IMF But the more important, longer- If the tussle between the different tial if Liberia is to maintain its materials,suchasrubberandironore. term, task is to re-engineer the econ- branches of government is distracting hard-earned status, regained under “We had to start with what we have, omysothatitbecomesmoreresilientto now, it is likely to get only worse. In the PresidentEllenJohnsonSirleaf’sadmin- and then begin to build and then begin Indeed, if Liberia’seconomy is to pro- shocksliketheseinthefuture. year ahead, the ministry is forecasting istration, as a country to which interna- to transform and begin to attack the vide the rising living standards and jobs Its ability to get the latter right an even bigger budgetary hole of some tional institutions can safely lend. Then structural problems. And so the process to which its young people aspire, it depends on tackling the deep-seated $150m, even before it pays the nearly there is money for health, education, has started. It hasn’t gone far enough, urgently needs to diversify and to move structural problems that have held $60m estimated cost of running the security — vital as the UN winds up its butithasstarted.” upthevaluechain. Liberia’seconomybackfordecades. Friday 8 April 2016 ★ FINANCIALTIMES 3

Investing in Liberia Green revolution aims to stem deforestation

Norway in a forest. Then, if the land is not hardformanyforest-dwellingLiberians Liberia was one of 10 African coun- Environment cleared, the carbon that is retained in to appreciate, particularly those who tries that pledged to restore a combined has committed $150m the forest — or not emitted through have seen neighbours benefit from 31m hectares of degraded and defor- clearing—canbesoldasoffsets. workingwithplantationcompanies. estedland. to conserve forests and “One of the main drivers of deforesta- Sime Darby,one of the world’slargest Mr Kempinski says that for the first cut carbon emissions, tionisthekindofagriculturewedo—it’s palm oil producers, has halted clearing time lower emissions are part of a glo- mostly shifting cultivation,”says Harri- on its estate 45km north-west of the bally agreed initiative on reductions. writes John Aglionby son Karnwea, managing director of capital, Monrovia, while surveys are He adds that the UN deal provides a Liberia’sForestryDevelopmentAuthor- carried out to assess whether the land is platform for launching “significant” ity, referring to the nomadic way of life sufficiently rich in carbon for the com- development funds to deliver reduced evolutionisintheairinLibe- led by many of the two-thirds of Liberi- panynottofellthetrees. forestemissions. ria. Or, more accurately, in ans who live in forests. “We need to Zubh Kponeh of the Whistleblower Mr Helgesen agrees that “the era of the forests, which cover change that. We also think the forests Union, a civil society group working unlimitedaccesstolandthrough[defor- more than 40 per cent of the can make money without cutting down with the Malaysian company, says local estation]ishistory”. R country and are considered thetrees.” residentsarefrustratedbythedelay. one of west Africa’smost important car- Norway is leading the charge, provid- “It will be difficult for money to win bonsinksandbiodiversityhotspots. ing $70m to help Liberia develop the over Liberians who are used to farm- The movement is not seeking to top- policyframeworkandcreatecapacityto ing,” he says. “They don’t know about ‘We see this as a long-term ple the government. Indeed it is the implementthechanges.Itisprovidinga financial management and to deprive administration, backed by more than further $80m to pay for the first carbon them of their traditional and cultural partnership — this is not $150m of international aid, that is driv- offsets. Other governments and private practiceswouldbeinhumane.” the kind of issue that will ing the policy upheaval. The aim is to investorsarewelcometobuytheoffsets. Advocatesofthenewpolicyarguefor- enable the country and communities to “We see this as a long-term partner- est dwellers will not be idle but actively be fixed in three years’ make money — possibly tens of millions ship — this is not the kind of issue that Decline and fall: Liberian forests cleared for rubber plantations Anne Chaon/AFP/Getty conservingandmanagingtheirlandina of dollars a year — from reduced carbon will be fixed in three years,” says Vidar sustainableway. emissions. Helgesen, Norway’s minister of climate FFI project adviser, says predicting the forest governance and conservation Investors appear to have little choice. “Responsible companies with explicit The UN estimates that 30,000 hec- andenvironment. financial returns at this stage is “all but management. The Liberian government is insisting sustainability policies and a willingness tares of primary Liberian forest is Fauna and Flora International (FFI), impossible”, but he believes “demand But implementation will be challeng- that all forest clearing should be done to be transparent can play a crucial role clearedeachyear. a conservation organisation, helped for carbon offsets is likely to increase ing. It is likely to be two to four years sustainably. Its position has been rein- in the economic development of Liberia In theory, the scheme is simple: Libe- develop the system in Liberia over the dramatically”. before significant sums start flowing to forced by the international climate and countries like it,”he says. “There is rians will be paid to leave the forests past seven years and next month will Mr Kempinski says communities are communitiesbecauseoftheneedtover- change agreement reached at the UN a massive opportunity here to do good alone. First, carbon levels are measured start a pilot project. Josh Kempinski, an already benefiting through improved ify reduced emissions over time. This is conferenceinParislastDecember. anddowellatthesametime.” Tough tests still to come after ‘double whammy’

Continuedfrompage1 hischildrenareoutofschool?”heasks. Against this difficult economic and social background, Liberia is entering a potentiallydestabilisingperiodofpoliti- cal transition. For the first time since president Sirleaf’s election in 2005, the country is preparing for a democratic handover. Few doubt that Ms Sirleaf is was virtually non-existent. Institutions prepared to stand down. That is no hadallbutcollapsed. small thing given the record of a conti- Improvements since then have been nent where ageing leaders are wont to tangible, if insufficient. With most of its clingon. debts forgiven, President Sirleaf’s The election is highly unpredictable administration set about rebuilding a and takes place as UN peacekeepers are rudimentary economy, attracting the preparing to leave. People say Liberia is likes of ArcelorMittal in mining and resilient.Itisaresiliencethatisaboutto Sime Darby, a Malaysian agricultural betestedtothelimit. group,inpalmoil. The field of possible replacements is The government has also made a crowded and noisy and, in many cases, credible start at rebuilding infrastruc- closely linked with the country’s trou- ture.Partsoftheroadnetwork,muchof bled past. Joseph Boakai, the likely can- it built by the Chinese, is surprisingly didate of the ruling Unity party and the good, though maintaining and expand- currentvice-president,wouldrepresent ingitwillbekey. a vote for continuity.But there are signs In March, the president opened a new that patience with the Unity party is road from Monrovia all the way to the wearingthin,evidencedbyitslacklustre border with neighbouring Guinea. Gov- performance in senatorial elections. ernment ministers say the road can be Even his supporters wonder whether an “economic corridor”, binding previ- Mr Boakai has enough fire in his belly to ouslyisolatedcountiesclosertogether. drumupsufficientsupport. Just as important as building physical That leaves the field wide open. Some infrastructurewillbeshoringupinstitu- 18 months before polling day, contend- tions. Again, there has been some ers are already lining up, taking to the progress, such as the establishment of airwavesandpepperingeachotherwith an anti-corruption body and a freedom of information act that, in theory at least, allows citizens to scrutinise gov- $469 $13,000 ernment spending better. Two general Liberia’s nominal Typical monthly elections, though disputed, have been gross domestic salary for successfully held since 2003. Schools product per head Liberia’s have been established and a degree of in 2015 politicians power and administrative responsibil- ity has been transferred closer to the colourful insults. The number of candi- peopleatcountylevel. dates vying for the presidency could Still, trust in the government remains surpass20. low and the perception of corruption “Despite all the clamour and all the high. Persuading ordinary Liberians noise and all the things . . . Liberian thattheorgansofstatearetheretoserve people do vote wisely,” says President them, not to suck them dry, is still an Sirleaf. “And I expect that they will do uphill battle. Attempts by politicians to that again.”Nor, she says, is she unduly protect their relatively high wages and worried about the UN drawdown given allowances — at least $13,000 a month that troops are already a fraction of the in a country with annual GDP per head numbertheywereattheirpeak. of$469—havebeenunedifying. Few but the president’s most ardent MsSirleafacknowledgestheproblem, detractors would deny that Liberia has though she sees it as society-wide and come a long way in the past decade. Ms not just restricted to government offi- Sirleaf’s administration took over at a cials in Monrovia. “We hear it and we time when state coffers were empty, know it,” she says. “And yes, I’ve had roads had been destroyed and power somedisappointments.”

Contributors

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Investing in Liberia

Comment Abebe Aemro Selassie Miners dig in to weather storm of the IMF’s African Department on four steps Liberia must take Extraction Collapsing commodity prices and Liberia is at a transition point. The great progress the country made in the Ebola outbreak have the decade following its long civil war hit the industry hard, has been set back by two external shocks: Ebola and falling commodity writes John Aglionby prices. As a result of these misfortunes, he iron ore loader rising growth in 2014-15 was less than 1 per Abebe Aemro Selassie of the IMF more than 20 metres into cent, compared with pre-Ebola the sky at ArcelorMittal’s projections of 13 per cent for that sector — weighed down by low berth at Buchanan port is period. It is likely that the economy profitability, weak governance and T testament to the multina- would have gone into recession limited business opportunities — tional company’s ambitions in Liberia. without the financial aid it received to through better regulation and It is part of a $1bn expansion plan to tri- tackle Ebola. supervision would foster development ple annual production from the current The resilience Liberians showed to outside natural resources, particularly maximum of just over 5m tonnes at the fight the disease will be required even for smaller enterprises. These Tokadehmine,240kmtothenorth. more as the country tries to revitalise companies could play a key role in But the loader stands idle. Construc- its economy. Liberia because their profit and know- tion halted after Ebola struck the west Additionally, in the next 18 months how would remain in the country. African nation in 2014 and many con- the country will undergo important But private sector investment and tractors used clauses in their contracts political and security transitions. activity will also depend on improving to stop working. As Liberia tackled the How can Liberia best enhance its the extremely weak business deadly virus, the price of iron ore fell to economic resilience and boost growth? environment, which continues to be less than a quarter of its 2011 peak and First, the health emergency is over marred by poor governance and heavy work has not resumed on the expansion Expansion derailed: a freight train carries iron ore from ArcelorMittal’s Nimba deposit to Buchanan port — JB Dodane/Alamy but continued vigilance, a stronger administrative constraints, including project. That is despite the country health sector and maintaining effective laws that require foreign companies to being over the worst of the Ebola crisis downturn in prices persists. “We’ve got going to kid you about the reality but following in its footsteps include Hum- response protocols will be essential to use domestically made products. and the price of iron ore rising more the ore, we’ve got the strategy,we know thereisthepotentialtobesuccessful.” mingbird Resources, another London- pre-empt any resurgence of Ebola and Finally, the country needs sound than 40 per cent from its December there’samarketforit,”MrWandkesays. One investor that is starting to suc- listedminer. renew investor confidence. macroeconomic policies to support 2015low. Company executives in London and ceed in Liberia’s extractive industries is The scale of the challenges is demon- Second, the crisis in natural growth and economic stability — The loader’slack of use highlights the Liberia praise the government and Aureus Mining, a London-listed gold strated by Aureus’s share price, which resources underlines the importance particularly important during the challenges mining companies face in unions for their flexibility during the miner. In March it announced it had fell 97.5 per cent between its 2011 listing of promoting diversified economic political transition. Liberia. There is plenty of potential but, past two years. “The president under- started commercial production at its price of 106.5p and when commercial growth. Key to the success of Credible development plans, which through a mixture of bad luck, unfa- stands the need to build the private sec- New Liberty mine in the west of the production was achieved last month. diversification will be well-targeted can attract external financing, coupled vourable market forces and ineffective tor,”Mr Wandke says. “And the govern- country, the first such Liberian gold Thiswastwiceasfastasthepriceofgold investments in energy and, if feasible, with domestic resources, will be development policies, much of the ment is realistic about where the iron venturetoreachthismilestone. over the same period. The share price road infrastructure. essential to allow social spending and extractiveindustryissuffering. ore industry is. They understand it’s David Reading, its chief executive, hassincerecoveredalittle. public sector investment, while ArcelorMittal, which began commer- tough.” says national development is not hap- Despite this Mr Reading says his keeping external debt under control. cial operations in 2011, is the sole major The company originally planned to pening “as quickly as it could and “glass is half full” but would be fuller if Related to this, reforms to develop iron ore miner still based in Liberia. lay off 450 full-time workers as a result should be”. But he stresses: “There’s moreincentiveswereoffered. The resilience Liberians public sector governance and the Two much smaller miners withdrew in of the downturn. But Mr Wandke says nothing fundamentally wrong with the “In other countries you can’t get land showed to fight Ebola quality of public spending would help the past six months. ArcelorMittal is good relations between the govern- country, with the government enabling for love nor money,”he says. “In Liberia improve the welfare of the population still there only because, according to ment, the company and unions helped orassistingus.” they have the mineral wealth and will be required even and build taxpayer confidence in the Simon Wandke, chief executive of the reduce the number to 167 out of a total Having worked in other parts of west potential and people want to work. more to revitalise the use of public funds for the welfare of company’s global mining operations, it full-timeworkforceof1,035. Africa, Mr Reading believes the invest- Theyjustneedastructuredprogramme all Liberians. manages the whole value chain in the Patrick Sendolo, Liberia’s mines and ment environment is less hostile and tohelpattractforeigninvestment.” country’s economy Difficult as these challenges are, the country. “We control the mine, the rail energy minister, says the government’s threatening in Liberia. The sector is Analysts say the scale of the chal- strength and perseverance shown by and the port,”he says. But production is strategy is to do what it can to help likely to pick up, he believes, if Mali’s lenges should encourage adventurous A past challenge was several Liberians historically provides the best expectedtobeonly3mtonnesthisyear, investors. But he stresses that ministers progress from having no gold mines in investors. “When the risks are higher, competing priorities for the assurance that the country can return down from 4.9m last year and 5.2m the will not be giving anyone a free ride. 1994toeightnowisanythingtogoby. the returns should be higher too,” says investment budget, causing resources to growth and development. yearbefore. “Investment in Africa has to be seen Aureus developed its $175m facility John Davies, head of the Liberian Bank- to be spread across too many areas. A Operating costs on a per-tonne basis through a different prism,” he says. during the Ebola crisis and, like most ersAssociation. more focused investment strategy to Abebe Aemro Selassie is have been slashed by 46 per cent since “You have to accept the bed won’t investors, found logistics and a lack of “That’s when venture capital will do unlock potential value chains could deputy director of the IMF’s 2014 and the company is in discussions always be made neatly. Those that rec- access to cheap power major chal- best. You will be able to get concessions yield large dividends. African Department, which with the government to renegotiate ognise there are challenges and work lenges. It also suffered from being the from the government now that you Third, strengthening the financial covers 45 countries some terms of its contract while the through them will succeed. I’m not first gold miner in the country. Others won’tgetwhenthingsaremorerosy.” Tyremaker nurses heavy losses as rubber price falls

prices, agriculture is one of the brighter Agriculture spots on the country’s economic hori- zon. In addition to Firestone staying, The commodity’s price has two of the world’s biggest palm oil pro- fallen but Bridgestone ducers — Sime Darby of Malaysia and remains committed to Indonesia’s Sinar Mas through its sub- sidiaryGoldenVeroleumLiberia—have Liberia, writes John Aglionby just started or are about to start com- mercial production. Both have invested hundredsofmillionsofdollars. When a subsidiary in a small country David Rothschild, a GVL director, thousands of miles from the company’s admits the investment has been more headquartersloses$100minfouryears, difficult than the company expected senior managers would probably be for- when it started operations a little over givenforthrowinginthetowel. five years ago. He cites the often woeful Investors would doubtless be even infrastructure and dollar-based econ- moreforgivingiftheyknewcompetitors omy that raise costs, tricky land rights in the same sector in the same country issues, a dependency culture that per- hadmothballedtheirfacilities. vadesmuchofsocietyandenvironmen- But despite suffering such a financial tal problems that have to be worked loss, tyremaker Bridgestone Americas through. has, for the moment, no intention of “But we’re optimistic about the coun- closing Firestone Liberia. For 90 years, Sap on tap: Firestone’s plantation try,” he says. “It’s complex, costly and the subsidiary has run what has risky but those with a long-term and become the world’s largest single natu- Liberia rubber production resilient business should be OK. When ralrubberoperation. and rubber price the commodity cycle turns, Liberia will Firestone’swoes,andtoalargedegree bewellplaced.” Liberia’smore broadly,stem from a col- Production European While the plantation companies have (’000 tonnes, rubber price lapsing commodity price — rubber has 12-month sum) (€ per tonne) hadtocontendwithaccusationsofenvi- fallen 80 per cent from its 2011 peak — ronmental mismanagement, the and14yearsofcivilwaruntil2003.Dur- 120 450 broader benefits of their investment are ing the conflict, management of Fire- already apparent. Gbah, the town near- 400 stone’s 200 square mile plantation 25 100 est the Sime Darby plantation, has tri- mileseastofthecapitalMonroviaallbut 350 pled in size since 2010. “There was no collapsed. Production is currently 26 80 300 bank when we arrived [in 2009] and percentofwhatitwasinthe1990s. nowthereis,”saysRosliMohamedTaib, 250 “There are people who say we should 60 the head of Sime Darby’s estate. “And a pack up but it’s easier said than done,” 200 court [house]. And all three cell phone says Edmundo Garcia, president and 40 150 companies are now here. The place is managing director of Firestone Liberia. booming.” 100 “We’retryingtodoeverythingwecanto 20 Moses Zinnah, Liberia’s agriculture survivebecausewehavealongview.” 50 minister, has ambitions for his sector. That involves cutting costs by 18 per 0 0 He is particularly looking at fisheries: cent over the past four years and not 2007 10 12 14 16 Liberia has a deal in place with the EU replacing much of the workforce — Source: Thomson Reuters Datastream over fishing rights, piers are being built which stands at 7,000 — when they and the government is hoping to attract retire.Thecompanyhasintroducednew investors to build processing plants, growing techniques, and diversified renovation programme, which aims to warehousesandotherfacilities. from just harvesting rubber to making provide long-term, low-cost financing Another area of interest is cocoa, the furniture from rubber wood and plant- for 600 farmers to replant and rejuve- price of which has risen “astronomi- ingothercropssuchascocoaandcoffee. nateupto8,000hectaresintotal. cally”,hesays. Mr Garcia estimates it will take until The company is hoping the govern- “The extractive industries are not 2035 for production levels to return to ment will reward its decision to stay by doing too well so we have no choice but pre-civil war levels, although he says granting tax breaks and other incen- to invest in agriculture,”he adds. “In all this calculation does not take into tivestoseeitthroughthecrisis. these areas the government will enable account the new agricultural tech- “The government is saying all the the environment for the private sector niquesbeingadopted. right things but we’re not the only issue toinvest.” Firestone is also working with the they have to handle,”says Don Darden, But Mr Zinnah is also realistic in that, government to help local farmers. One a Bridgestone director. “They have a lot considering Liberia’s circumstances, he scheme both Firestone and the govern- of priorities and we’re hoping to is likely to achieve about only half his mentareinvolvedinistheInternational becomeoneofthem.” aims. “If we can do that, I would be Finance Corporation’s $25m rubber Despite the drop in commodities happy,”headds.