Investing in Liberia

FT SPECIAL REPORT Investing in Liberia Friday April 8 2016 www.ft.com/reports | @ftreports 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 Ellen Johnson Sirleaf 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 Samuel Doe, 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 democratic handover. “We [need] to make surewehaveapeacefulandcrediblesuc- Looking the country already, in keeping with had football idol George Weah 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

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