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Report No. 1642a-LBR Current Economic Position 7 and Prospects of Liberia Review of Major Sectors Public Disclosure Authorized

February 28, 1978 Western Africa Country Programs I

FOR OFFICIAL USE ONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS

The official monetary unit is the Liberian dollar with a par value equal to that of the U.S. dollar. Apart from the Liberian dollar, the U.S. dollar is legal tender in Liberia. FOR OFFICIAL USE ONLY

TABLE OF CONTENTS

Page No.

MAPS

PREFACE

COUNTRY DATA

SUMMARY AND CONCLUSIONS ...... **** ...... *... i-vi

I. POPULATION, MANPOWER AND EMPLOYMENT ...... I1......

II. ECONOMIC STRUCTURE AND GROWTH ...... 3

III. PUBLIC FINANCE ...... 12

IV. MONEY, BANKING AND PRICES ...... s ...... 17

V. EXTERNAL TRADE AND PAYMENTS ...... 22

VI. THE DEVELOPMENT PLAN AND MEDIUM-TERM PROSPECTS .26

ANNEXES

A. AGRICULTURE ...... A 1

B. THE MINING SECTOR ...... A23

C. THE TRANSPORT SECTOR ...... A37

D. TRAINING AND MANPOWER ...... A45

STATISTICAL APPENDIX

This report is based on the findings of an economic mission which visited Liberia in November/December 1976. The mission was composed of Mr. F.A. Atabani (Mission Chief), Mrs. A. Uluatam (General Economist), Messrs. K.T. Yurukoglu (General Economist), W. Kock (Agricultural Economist), D.S. Jovanovic (Transport Economist), J.H. Coates (Manpower Specialist) and S. Rexworthy (Minerals Economist - Consultant). The final draft of this report was discussed with the Government in Monrovia in November 1977. Further comments were made by the Government in February 1978.

Preface

This report updates the information and analysis contained in the report No. 426a - LBR entitled "Liberia: Growth with Development, A Basic Economic Report" dated March 1, 1975, and the subsequent short economic report No. 873 LBR entitled "Liberia Economic Memorandum" dated September 15, 1975. The conclusions of the present economic report are somewhat different from those reached in the previous reports because the recent developments in the international economy, particularly the 1974-1975 recession in industrialized countries which adversely affected the performance of Liberia's major exports and hence the overall performance of the-economy. Besides projections on the demand for manpower and production and exports of iron ore, the present economic report contains no macro-economic projections mainly because of the extensive revision of the Development Plan, currently underway.

This report also includes a review of the major sectors of the economy as well as a summary analysis of the main aspects and problems of Manpower and Training.

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Page 1 of 2 pages

COUNTRY DATA - LIBERIA

GROSS NATIONAL PRODUCT IN 1975 ANNUAL RATE OF GROWr{ (%, constant 19/1 prices)

1 US$ Mln. _ 1967 -70 570 -74 1975

GNP at Market Prices 662.8 100.0 7.0 6.3 -4.3 Grcss Domestic Investment 192.0 29.0 0.2 2.5 27.9 Gross National Saving 97.0 14.6 21.5 17.2 -52.4 Current Account Balance -95.0 14.4 Exports of Goods, NFS 403.7 60.9 9.7 2.2 -30.5 IMports of Goods, NFS 354.9 53.5 7.6 -2.6 3.5

OUTPJT, LABOR FORCE AND PRODUCTIVITY IN 1975

Value Added Labor Force- V. A. Per Worker US$ Mln. Mln. U $

Agriculture 196.6 25.0 0.470 79.0 418.3 31.6 Industry 2/ 349.1 44.3 0.018 3.0 19,394.4 1,465.2 Services 241.7 30.7 0.023 4.9 3,098.7 234.1 Unallocated . . 0.078 13.1

Total/Average 787.4 1595 100.0 1,323.4 100.0

GOVERNMENT FINANCE General Government Central Goverrnment r En.) _ of GDP (^sSMln.) f cf GDP 197 197 196 -7 -19?5 - 1975 19.70_ 74

Current Receipts ...... 125.3 13.9 17.4 Current Expenditure 78.1 9.9 12.1 aurrent Surplus ...... 6.o . Capital Expenditures ...... 29.5 3.7 2.9 Sxternal Assistance (net) ...... 12.5 1.6 1.0

MONEY. CEEDIT and PRICES 1972 -1973 1974 1975 tM1lion $ outstanding end periodTF Money and Quasi Morey Bank credit to Peiblic Sector 17.5 9.1 4.8 4.0 Bank Crej±t to Private Sector 47.4 54.2 71.8 76.8

(Percentages or Index Numbers) Money and Quasi Money as % of GDP General Price Index (1963 - 100) 3/ 131.0 156.0 187.0 212.5 Annual percentage changes ins General Price Index 3.9 19.5 19.5 13.5 Bank credit to Prblic Sector .. -48.0 -47.3 -:6.7 Bank credit to Private Sector .. L4.3 32.5 7.0

NOTE: All conversions to dollars in this table are at the average exchange rate prevailing during the period covered.

'4 Total labor force; unemployed are allocated to sector of their normal occupation. "Unallocated" consists mainly of unemployed workers seeking their first job. 2/ Over 30% is accounted for by iron ore 3V Consumer Price Index (Sept.Nov.1964 - 100) .. not available not applicable Page 2 of 2 pages

COUN\TRY DATA - LIBERIA

BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1973-75)

1973 1974 1975 US $ Mln % (Millions US $)

Exports of Goods, NFS 329.9 407.2 403.7 Iron Ore 250.6 67.3 Imports of Goods, NFS -226.7 -316.1 -354.9 Rubber 51.2 1j.7 Resource Gap (deficit a-) 3-7 7Ti 48.8 Diamonds 32.5 8.7 Logs and Lumber 15.7 4.2 Interest Payments (net) -4.7 -4.3 -4.9 Coffee 4.5 1.2 Workers' Remittances -20.0 -22.0 -24.5 Cocoa 3.5 0.9 Other Factor Payments (net) -92-0 -120.0 -145.0 Net Transfers 22.3 24.8 30.6 All other commodities _J. 4 4.0 Balance on Current Account 8.8 -30.4 -95.0 Total 372.8 100.0

Direct Foreign Investment 49.o 45.0 20.4 EXTERNAL DEBT. DECEMBER 31. 1975 Net MLT Borrowing -4.6 -12.3 1.7 Disbursements 8.2 5.1 18.0 US S Mln Amortization -12.8 -17.4 -16.3 Subtotal 44.4 32.7 22.1 Public Debt, incl. guaranteed 170.0 Capital Grants ...... Non-Guaranteed Private Debt Other Capital (net) -2.8 -1.0 -0.5 Total outstanding & Disbursed I Other items n.e.i . _l/ Increase in Reserves (+) 50.4 -1.2 -73.4 DEBT SERVICE RATIO for 1975-

Gross Reserves (end year) Net Reserves (end year) . . . Public Debt, incl. guaranteed 5.4 Non-Guaranteed Private Debt FNael and Related Materials Total outstanding & Disbursed 5.4 I.Torts 14.7 56.4 48.3 of which: Petrolewm 11.6 53.2 44.4 Exports - - - of which: Petroleum - - - IBRD/IDA LENDING, (December 31, 1976) (Million US $):

IBRD IDA RATE OF EXCHANGE -

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not available

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IMarch 4, 1977. SUMMARY AND CONCLUSIONS i. According to the National Population and Housing census conducted in February 1974, the total population of Liberia at that date was 1,503 million with an average annual growth rate of 3.3 percent. 41 percent of the population is under 15 yea s of age. The average population density is estimated at 14 persons per km ; the majority of the population is engaged in traditional shifting agriculture. 29 percent of the total population live in urban areas which registered an annual growth rate of 7.9 percent. The population shift towards the, cities is evident in every single county irrespective of its individual population growth rate. ii. Liberia has a dualistic economy where production techniques, production and consumption patterns as well as income distribution differ considerably between the monetary and the traditional sectors as well as between foreign owned concessions and the national economy. The monetary economy generates almost 85 percent of GDP while 60 percent of the total population still live in the traditional economy and produce predominantly for subsistence. In 1974 per capita GDP in the traditional economy was less than $120 in current prices as against almost $900 for the monetary economy, while per capita income in the concessions sector was about $2400. The economy is dominated by the mining sector - mainly iron ore mining - whose contribution to GDP was about 29 percent. At present, the country has an iron ore production capacity of 25 million tons which places it as the eleventh largest producer in the world. However, iron ore mining is a highly capital intensive activity and has little impact on local employment. Agriculture is the second largest productive sector in the economy accounting for one fourth of GDP. Traditional agriculture accounts for about 60 percent of total agricultural output but has minimal infrastructure and little or no access to capital and the modern agricultural inputs. On the other hand modern agriculture is dominated by foreign-owned rubber plantations and logging companies. Rubber is the largest single commodity and provides more than half of the sector's net output. 'Other commodity producing sectors - mainly manufacturing and'energy - are relatively small and contribute about 5 percent of GDP. Because of the 'dominant role foreign investment plays in the economy, it is estimated that in any single year about one fourth of GDP is repatriated abroad as factor payments, implying that GNP is consistently less than 80 percent of the total value added in the economy. iii. The pattern of overall economic growth between 1964 and 1974 was mainly a reflection of the growth of iron ore and rubber output. Up to 1970 the economy grew at an annual average real rate of about 6.4 percent. How- ever,'between 1970 and 1974 the real rate of growth of the economy declined to about 4.2 percent partly as a reflection of the decline in the rate of growth of iron ore production as full capacity levels were reached and partly due to the stagnation in rubber production. The growth performance of the economy was particularly disappointing in 1975 as GDP registered a decline in real terms of -1.1, mainly in response to a significant decline in iron ore production brought about by the economic recession in Western Europe and - ii -

the United States. The weak world demand also adversely affected the production of export oriented commodities such as rubber, forestry products, and diamonds. Preliminary estimates for 1976 indicate that economic performance might marginally improve and the economy may achieve a growth rate of about 2.5 percent in spite of the continued decline in iron ore production. How- ever, the Government estimates a rate of growth of 3.14 percent based on a new national accounts series. Prospects for 1977 may not be much better than for 1976 in view of the uncertain world market dpmand for iron ore.

iv. Throughout the past decade, public sector finances in Liberia did not come under serious pressure mainly because of the passive role assigned to the public sector in the process of economic development of the country. With the inauguration of the first Socio-Economic Development Plan 1976-1980, the role of the public sector has dramatically changed and is expected to spearhead the country's economic development effort. However, with the relatively high investment targets, public sector finances came under some pressure during the first year of the Plan's implementation. Although the growth of Central Government current expenditure has been kept around the average for 1970-75 and public revenues have improved to some extent, the ambitious investment program and the growing financing requirements of the public corporations have added significantly to total expenditures. As a result the need for foreign borrowing is estimated to have increased from US$18 million in 1975 to US$45 million in 1976. The pressure on public finances is likely to increase in 1977 leading to higher levels of foreign borrowing. v. To reduce the need for undue reliance on foreign borrowing and/or a reduction in the public investment program, a more intensive revenue effort on the part of the Government is needed as well as attempts to improve the efficiency of public sector corporations so that they may be able to finance a larger proportion of their own expenditures. Improvements in budgeting of expenditures are also necessary. There are indications of recent efforts by the Government to achieve more rigid tax enforcement. On the other hand, the Government expects revenues from iron ore to increase by no less than 18 percent during the Plan period despite the decline in iron ore production. vi. Balance of payments estimates for Liberia are particularly difficult to make in view of the open nature of the economy, the use of the US dollar as the predominant medium of exchange, and the incomplete data on some service and capital transactions. Available information on the external balances of the economy need to be interpreted with great caution. However, it is clear that the Liberian economy is "export oriented" and is dominated by the large volume of foreign trade. The country's external accounts are characterized by a relatively large surplus on trade balance, but due to substantial factor payments abroad, Liberia has traditionally had a deficit on the cur-rent account. Recently, the surplus on the trade accounts has been declining while the deficit on the current account has been increasing. This is mainly a reflection of the sharp increase in oil and other import prices and the effect of the world recession on Liberia's exports - particularly iron ore and rubber. However, the Liberian authorities expect a significant reduction in the current account deficit for 1976 and the following years. - iii -

This might be too optimistic an expectation in view of the uncertainties of the market prospects in Western Europe and the United States particularly for iron ore, on the one hand and the import requirements for the substantial investment program on the other. vii. Liberia's external outstanding and disbursed public debt was estimated at US$170 million at the end of December 1975. The debt service as a proportion of exports of goods and services was estimated at 5.4 percent in 1975 and 5.3 percent in 1976. However, as a percentage of budgetary revenues (a more meaningful ratio in the context of Liberia which uses the U.S. dollar) debt service was 21.1 and 17.3 percent for 1974 and 1975 respectively. Although relatively high, these ratios are expected to decline until 1980. Given continued satisfactory economic performance Liberia remains creditworthy for sizeable external borrowing; however, in order to minimize its future external debt liability, Liberia should intensify its public sector savings efforts so as to contribute from domestic resources as large a share as possible of its rapidly expanding public investment program. In view also of the structural weaknesses of the economy and the relatively low per capita income, conventional borrowing should be blended with concessionary funds. In recognition of this, a number of aid donors have in the past provided substantial assistance in grant form averaging around US$14.0 million per year between 1972-75. viii. Medium-term prospects for the Liberian economy have to be viewed in the context of the country's first Socio-Economic Development Plan 1976-1980. The Plan, whose main objective is to achieve higher standards of living for all Liberians, is the most important economic policy document produced by the Government so far. The Plan, more than anything else, signifies the concern of the Government for the economic development of the country and the leading role it wishes to assign to the public sector in widening the productive base of the economy. The plan anticipates a 6.8 percent annual real rate of growth in GDP between 1976-1980. Development expenditure by the public sector over the next four years is expected to reach US$415 million of which US$251 million is projected to come from foreign sources and US$164 million from domestic resources. The majority of planned investments are allocated to long gestation projects - mostly in infrastructure and agriculture. The Plan's growth targets are more closely linked to the developments in the iron ore sector rather than to the planned investment activities. The projected 6.8 percent growth rate assumes that (a) iron 'ore production will be sustained at existing maximum capacity and (b) that investments in new mines, particularly Wologisi, will start in 1977 with Bie mountain following close behind. However, soon after the'publication of the Plan it became apparent that neither assumption will hold true during the Plan period. In view of the existence of excess capacity in the iron ore industry resulting from the decline in world demand and the uncertain path of economic recovery in industrialized countries coupled with the delays in the decision to-go ahead with the Wologisi mine, it seems more appropriate to project a real rate of growth of GDP of between 3.5 to 4.0 percent per annum up to 1980. The Government has already reduced projected growth targets from 6.8 percent to 4.5 percent for the Plan period. - iv - ix. These recent developments have necessitated a substantial revision of the Plan which is currently being undertaken. It is hoped that the Plan revision will concentrate more on domestic resource mobilization rather than a reduction of investment targets. Although financial, technical and manpower aspects may constrain plan implementation, more serious bottlenecks may arise from the lack of adequate micro-economic work - particularly sector and project analysis, project identification and preparation. Almost half of the projects in the Plan are ongoing and may be completed by the end of 1978. If the remainder of the projects are not fully identified and prepared by that date, projected investment may substantially decline with resulting serious shortfalls in development objectives. The ongoing plan revision can fruit- fully address this problem and recommend the creation of appropriate bodies that will ensure that project identification and preparation is an ongoing exercise. x. The Plan accords a high priority to the agricultural sector and views agricultural development as the vehicle for diversification of the economy, broadening its productive base and leading to a more even distribution of income between classes and geographical regions. However, a reorientation of agricultural policies is needed before the sector can contribute to the future growth of the economy. Past agricultural development efforts in Liberia were characterized by a succession of ad hoc projects and crash programs (e.g., programs for upland rice production, swamp rice production, special projects, etc.) derived mostly from the urgent desire of the Government to achieve faster progress in rural areas. The limited success of these programs is mainly due to inadequate planning without farmer involvement on the one hand and the lack of support services on the other. Future development efforts in the agricultural sector should take these lessons into account and lay appropriate emphasis on the strengthening of the agricultural support services. Thus agricultural development in Liberia requires a consolidation phase where emphasis would be on institution building with long-term objectives and policies focusing on the farmer as the center of the decision making. xi. The mining industry is the single most important sector in Liberian economy as evidenced by its contribution to GDP (23 percent), export earnings (67 percent) and government revenues (20 percent), though its contribution to employment is relatively unimportant. Despite the quantitative importance of the mining sector in the Liberian economy, the significance of this sector to the development of the rest of the economy has been relatively small because of the enclave character of the activity and the limited linkages with the rest of the economy. xii. The growth of iron ore mining in Liberia in the post war period has been spectacular as annual shipments rose from 3 million tons in the early 1960s to a capacity peak of 25.4 million tons in 1973/74. Since then, shipments have declined to 20 million tons in 1976 in response to the slump experienced in the iron ore markets as a result of the downturn in the world economy during 1975/76. However, sales revenues have continued to grow - v -

because of price increases. Prospects for increased production and exports of iron ore are encouraging particularly in view of the recovery of the economies of the industrialized countries and the demand for iron and steel products. It is likely that exports of iron ore may increase by about 3 percent per year between 1976 and 1980 while prices may increase by about 5 percent per annum during the same period. By 1980 Liberia's exports of iron ore may reach close to 24 million tons a year.

xiii. Liberia could be well placed to maintain or improve its share of the international iron ore market in the 1980s, if decisions are taken soon to bring one or more of the Wologisi, Bie mountain and Putu deposits into production. Liberia's annual output could be increased from 21 million tons in 1976 to 32 million tons in 1984 provided the decision to implement the three new projects is taken by the end of 1977.

xiv. Given the size and importance of the iron ore industry, the Liberian Government has been seriously considering different policy options towards the mining sector. The available alternative policies range from maintaining the status quo to the introduction of a mining code and/or creating a separate state mining enterprise. The relative merits of these options need careful study for which the Government would neet outside assistance. In the meantime, the Concession Secretariate - the arm of the Liberian Government that controls the mining industry - should be strengthened through the direct recruitment of appropriate staff.

xv. The development of the transport infrastructure in Liberia followed the activities of the enclave economy. At present the transport system is barely adequate to support non mining activities and will require major investments for extension aad modernization, particularly in view of the Government's objective of creating a more diversified, agricultural based economy. To this end the development Plan lays adequate emphasis on the extension and improvement of the present transport network. The Plan allo- cates 42 percent (about $153 million) for investment in the transport sector. This is seen as an attempt to redress the imbalance that resulted from years of neglect of investment in the transport sector. Other than the inadequacy of the transport system, the major problem in the sector is the lack of satisfactory planning, coordination'of different modes of transport and management. With the Government's increased emphasis on expanding the transport infrastructure to support and serve a more diversified economy, integrated transport planning and policy formulation has become indispensable. A reorganization of the present structure is therefore essential for achieving the Government's sectoral policy objective. xvi. Perhaps one of the most important shortcomings of the Development Plan is the lack of appropriate analysis of manpower issues. The lack of adequately trained manpower, at all levels, is perhaps the single most important constraint to the economic development and diversification of the Liberian economy. Given the lead time necessary to produce the appropriate cadres in the required numbers and in the important sectors, it is likely that manpower will continue to constrain economic development for some time to come. Similarly the treatment of employment issues is fragmentary. Unlike - vi -

the shortcomings in these areas, the problems of the educational system are treated in depth in the Plan, although the consequences of the educational deficiencies on the growth of the economy and Plan implementation are not given sufficient weight. More emphasis would have to be placed on the need for an increased share of the Government's expenditures to be devoted to coping with problems of education and training. The need for manpower planning at the national level, its integration into the planning process in each sector and the generation of the necessary data base, are issues that the Government is taking seriously and which could have been treated more conspicuously throughout the Plan.

xvii. In spite of its shortcomings, the Plan demonstrates the determina- tion of the government to play a more active role in the development of the country's resources for the benefit of Liberians. The Plan's objectives to broaden the country's productive base, disperse economic activity more widely throughout Liberia and to achieve an equitable distribution of the benefits of growth seem an appropriate strategy to meet the country's development needs. The emphasis on the agricultural sector should provide the opportunity to develop the country's renewable natural resources, e.g., rubber and forestry, and, through increased support to the small farmer, at the same time help government achieve its income distribution objectives. The need to develop the country's productive potential indicates that the large investment planned in the transport sector should be critically examined to ensure that it is properly directed towards creating the infrastructure for a more diversified and agriculturally based economy. xviii. The Plan envisages an ambitious public investment program which will require skillful financial management on the part of government. Whilst Liberia is clearly creditworthy for continued sizeable external borrowing, the government would be advised to limit its debt servicing liability through a more concerted effort to raise revenues from domestic resources. This will require a close review of existing tax concessions and privileges as well as an examination of the scope for introducing new taxes and for improving tax collections. - 1 -

I - POPULATION, MANPOWER AND EMPLOYMENT

1. A National Population and Rousing census was conducted in February 1974. Although the complete analysis of the census returns is still not available, a few facts are already clear. The total population of Liberia in 1974 was 1,503 million with an average annual growth rate of 3.3 percent. 41 percent of the population is under 11 years of age. The average population density is about 14 persons per km . The majority of population is engaged in traditional shifting agriculture based on a system of land rotation with a long fallow cycle and therefore requiring a substantial amount of land to support a typical farm family.

2. According to the preliminary census figures, 29 percent of the population live in urban areas which registered an annual growth rate of 7.9 percent compared to 3.3 percent for the population as a whole. The population shift towards cities is evident in every single county. For example, in Grand Bassa county, which has one of the lowest average growth rates, about two thirds of the absolute increase in population was concentrated in the town of Buchanan whose population doubled over the past twelve years. Similarly, in Montserrado County which registered one of the highest growth rates, two thirds of the additional population lived in Monrovia (Table 1.1).

Manpower and Employment

3. Employment in the modern sector of the Liberian economy in 1974 was estimated at 210,000. This is about 40 percent of the economically active population the remainder of which works in traditional agriculture and trade. The largest employers in the modern sector are modern agriculture (43 percent), Government (13 percent), and mining and quarrying (10 percent). The remainder of modern sector employment is distributed as follows: professional, technical and related workers (6 percent), sales workers (including proprietor and employees of retail establishments) (6 percent), service workers (including proprietor and employees of hotels, restaurants and other service establishments) (5 percent), clerical workers (5 percent), administrative and managerial workers (1 percent), and 12 percent in unidentified occupations (Table 1.2).

4. The availability of trained personnel at the professional and technical level, the administrative and managerial level, and the skilled crafts- man and production worker level, has been inadequate to meet the demand from the public and private sectors. This shortfall in appropriately trained manpower has been made up, where possible, by the use of expatriate personnel. Foreigners, of whom 80 percent are from other African countries, constitute about 14 percent of the wage labor force. There is an especially high concentration of expatriates in the professional and technical occupations (18 percent of the total in this occupational category), administrative and managerial positions (19 percent) and sales workers (37 percent) (Table 1.3). - 2 -

5. Monrovia's labor force in 1974 was estimated at 68,000, with 54,000 people actually employed. Wholesale and retail trades provided about 30 percent of the jobs, Government 25 percent, community and personal services 15 percent, and the other sectors under 10 percent each. The high rate of unemployment (20 percent) is due to the high rate of rural/urban migration over the past few years, which exceeds the rate at which cities can provide jobs. The flow of rural inhabitants to the cities is creating serious social and economic problems in the urban areas, as well as reducing the manpower available for agricultural development.

6. Census results also indicate that the educational level of the labor force has increased markedly since 1962: 17 percent completed at least first grade (9 percent in 1962), and 8 percent completed at least 9th grade (3 percent in 1962). Educational level by occupation is highest among administrative and managerial workers where 40 percent completed at least one year of college, compared with 22 percent for professional and technical workers, 10 percent for clerical workers, and under 10 percent for the remaining occupations. Among the 33,600 skilled workers in the production and related workers category, 20 percent had completed at least one year of high school, a level comparable to that of sales workers and skilled workers in modern agriculture. However, the educational system is not adequately geared to preparing persons to function effectively in the public or private sector without extensive training. As a result, productivity in the economy as a whole is low, and training programs have had to be established at all levels to bring performance standards to adequate levels. Recent governmental pressures to Liberianize the workforce have increased the importance attached to the training of Liberians.

7. Public expenditure on education in 1975 was about 13 percent of total Government expenditures and 2.5 percent of GNP, both percentages being among the lowest in Africa. Despite the low public expenditure, the enroll- ment ratios of 65 percent at the primary and 15 percent at the secondary level, and the pupil-teacher ratios of 35:1 at the primary and 26:1 at the secondary level, are about average for African countries. However, as a result of underexpenditure, weaknesses in administration and concentration of public and private educational expenditures in the Monrovia area, the education system is facing problems of low quality and geographical inequities.

8. An important characteristic of Liberia's education and training system is the relatively large participation of private concessionaries, operating in enormous geographic enclaves in iron ore and rubber production. Concessionaires often operate their own systems of primary education and most of them provide vocational training which is superior in quality to that provided elsewhere in the country, and which constitutes an important resource for economic development. (A separate annex to this report is devoted to a more complete discussion of the issues affecting future development of manpower and training). -3-

II. ECONOMIC STRUCTURE AND GROWTH

9. The Liberian economy is dominated by the mining sector and iron-ore mining is the single largest activity. Its direct contribution to gross domestic product has averaged around 29 percent between 1964-1974 with an average growth rate of almost 6 percent per annum. Total mining production, which also includes diamonds and gold, is exported. At present, the country has an iron-ore production capacity of about 25 million tons per year, which places it as eleventh largest producer in the world. Iron-ore mining which is a highly capital intensive activity and an almost negligible domestic employment effect, is operated by four mining companies all of which are foreign owned and controlled. The largest is a Liberian American Swedish joint venture (LAMCO) which exploits the rich Nimba mountain deposits on the Guinea border. In 1974, its output accounted for 52 percent of total production followed by BONG Mining Company (BMC), which operates in the Salala district in the southwest part of Bong County (26 percent), the National Iron Ore Company (NIOC) which operates the Mano River mine in Grand Cape Mount County (14 percent), and The Liberia Mining Company (LMC) which operates the Bomi Hills iron ore mine in Montserrado County (8 percent). However LMC's operations are expected to be phased out by mid-1977. Meanwhile, the second pel- letising plant of BONG is expected to come on stream, adding to the country's total production capacity some 1.5-2 million tons. -4-

Structure of GDP (%)

1964-66 1968-70 1972-74 1975 1976 /1 Average Average Average

1. Agriculture 7.5 8.9 10.0 9.1 9.9 - Rubber 5.3 5.8 5.8 5.5 5.3 - Forestry 0.3 0.9 1.8 1.7 2.4 - Other 1.9 2.2 2.4 2.0 2.2

2. Mining 30.4 31.6 30.6 26.0 24.2 - Iron-ore 28.9 28.3 27.9 24.6 23.1 - Other 1.5 3.3 2.7 1.4 1.1

3. Manufacturing 3.0 3.7 4.6 4.5 4.4 4. Construction 4.7 3.9 3.3 4.5 4.5 5. Government Services 6.6 6.7 5.9 6.6 6.7 6. Other Services 31.1 30.2 31.0 34.0 34.8 MONETARY GDP (f.c.) 83.3 85.0 85.4 84.7 84.6 7. Traditional Economy 16.7 15.0 14.6 15.3 15.4

TOTAL GDP (f.c.) 100.0 100.0 100.0 100.0 100.0

GNP (f.c.) 73.8 77.7 77.6 77.8 80.3

Source: Tables 2.1 and 2.2, Statistical Appendix.

/1 Preliminary.

10. Agriculture is the second largest productive sector in the economy. Including traditional agriculture, it provides one-fourth of gross domestic product, in real terms. The traditional agriculture accounts for about 60 percent of total agricultural output and is primarily based on staple crops such as rice and cassava as well as some cash crops such as cocoa, coffee oil palm and sugar cane. Traditional agriculture has minimal infrastructure with little or no access to capital and other modern agricultural inputs. On the other hand commercial operations of modern agriculture are dominated by foreign-owned rubber plantations and logging companies. Rubber is the largest single commodity which provides more than half of the sector's net output. There are seven foreign companies which operate large rubber plantations under concession agreements. These firms, among which Firestone is the largest producer, with highly trained managerial and technical staff use modern production techniques which are optimal for large-scale operations. Foreign investment in rubber also induced some Liberian-owned commercial farms around the concession areas. Although they account for about half of - 5 - the total acreage under rubber, these farms produce only one-third of the total rubber production due to low average yields. Like the activities of the mining sector, production of commercialized agriculture is geared almost solely for exports.

11. Aside from mining and agriculture, Liberia has very limited production base. The output of other commodity producing sectors - manufacturing and energy - has hardly exceeded 5 percent of gross domestic product, up to the present. Although there is no specific income distribution data for Liberia, its economic structure and patterns of growth have generally resulted in an uneven distribution of income among different classes as well as different regions in the country. Using existing national accounts and population data, the mission constructed the following table which indicates the vast variations in incomes between different sectors of the economy.

Income Distribution (1974)

Current Prices

GDP Population Per Capita ($ Million) (Thousand) GDP ($)

1. Traditional Economy 111.4 930 119.8 2. Monetized Economy 539.7 620 870.5 - Foreign Concessions 260.5 109 2390.0 - Non-Concessions 279.2 511 546.4

TOTAL ...... 651.1 1550 420.1

Source: Mission estimates calculated from National Accounts and Popula- tion Data.

12. Liberia clearly has an "export" economy, with the vast export sector almost exclusively controlled by the foreign companies. While during the past two decades, the foreign private investments in Liberia have been very effective in generating overall economic growth - measured essentially by accelerated production and export of major raw materials - their impact on productive capacity and the production base of the national economy has been very limited. With little knowledge available, it is estimated that in any single year almost one-fourth of GDP is repatriated abroad as factor payments.

13. The pattern of overall economic growth between 1964 and 1974 has mainly been a reflection of the growth of the output from the iron ore and - 6-

rubber concessions. Their output, up to 1974, has always shown a positive growth rate. However, these growth rates have shown a marked downward trend since 1970, as the production of iron ore more or less stabilized, at or near, full capacity levels while rubber production tended tc stagnate. Over the same period, the growth pattern of the non-concession commodity producing sectors was somewhat similar to that of the enclave economy. Though not as pronounced, the rate of growth of these sectors also slowed down after 1970 as the production of major cash crops - coffee, cocoa, palm kernel - stagnated while the growth of manufacturing output also declined after the high rates achieved in late sixties during the construction phase of the oil refinery. The service producing sectors, on the other hand, registered an accelerated rate of growth throughout the seventies, with the exception of construction activities which were almost stagnant until 1974.

Growth of GDP (%)

Annual Average Annual 1964-67 1967-70 1970-74 1975 1976 /1

1. Agriculture 4.3 4.6 4.7 -7.0 10.9 - Rubber 4.4 4.1 3.1 -7.0 - - Forestry 4.0 65.0 16.7 - 40.8 - Other 9.5 15.5 2.4 -13.0 14.9 2. Mining 10.1 7.0 2.2 -12.8 -4.4 - Iron-ore 8.4 6.7 2.9 -11.0 -3.7 - Other 38.0 10.2 -5.5 -35.8 -8.0 3. Manufacturing 6.4 16.3 6.5 -1.0 - 4. Construction 8.0 -6.8 - 33.3 3.0 5. Government Services 6.5 6.7 1.8 7.4 5.2 6. Other Services 3.4 5.7 6.2 6.4 5.1 MONETARY GDP (f.c.) 7.1 6.7 3.9 -1.1 2.4 7. Traditional Economy 3.1 4.2 5.6 -1.2 2.9 TOTAL GDP (f.c.) 6.4 6.3 4.2 -1.1 2.5

Source: Statistical Appendix, Table 2.1 and 2.2.

/1 Preliminary.

14. Between 1970 and 1974 the Liberian economy sustained a satisfactory annual real growth rate of 4.2 percent on the average. This trend, however, did not continue in 1975. For the first time since 1964, the economy registered a negative real growth rate of about -1.1 percent, with the decline of output both in monetary and subsistence economies. In monetary economy this was mainly due to a significant decline in iron-ore production in response to the marketing difficulties resulting from the economic recession in Western Europe and the United States. The weak world demand also adversely affected the production of other export oriented commodities such as forestry products, diamond mining and rubber, whose production was further affected by long-term structural factors. - 7 -

Production of Iron-Ore (In Millions of Long Tons)

Companies 1972 1973 1974 1975 1976

1. BONG 5.50 6.20 6.50 5.70 6.34 2. LAMCO 10.74 11.95 12.86 11.21 10.14 3. LMC 2.61 2.32 2.06 1.83 1.68 4. NIOC 3.58 2.73 3.39 2.82 2.87

Total Production 22.43 23.20 24.81 21.56 21.03

Total Exports 22.60 25.20 25.20 18.10 --

Source: Concession Secretariat, Ministry of Finance.

After a rapid expansion for nearly eight consecutive years, the production of Liberian owned rubber farms started to decline particularly after 1974. Owned by urban elite - implying a high degree of absentee ownership - these farms have been poorly managed, less well-capitalized and thus producing a significantly lower average yield compared to the foreign owned plantations. In addition, inadequate credit and low yielding of trees have been major deterrents to increased output, whilst the relatively low producer purchase prices set by Firestone may not have provided sufficient production incentives, even for the larger farms; for the small farms even tapping of the trees became uneconomic in view of the high opportunity cost of labor. On the other hand the total production of foreign owned farms rose slightly, despite the ongoing replanting program of Firestone.

Production of Rubber (In Millions of Pounds)

1972 1973 1974 1975 1976 /1

Foreign-Owned Farms 132.2 128.6 124.9 128.1 136.0 Firestone 92.9 83.0 75.9 73.4 -- Other 39.3 45.6 49.0 54.7 -

Liberian-Owned Farms 48.1 59.1 69.8 53.4 45.0

Total Production 180.3 188.7 194.7 181.5 181.0 Total Exports 182.9 188.9 190.1 178.3 --

Source: Ministry of Planning and Economic Affairs.

/1 Preliminary. - 8 -

15. The decline of the output of traditional agriculture in 1975 was brought about mainly by shortfall in the production of paddy due to unfavor- able weather. The decline in local rice production in 1975 was accompanied by lower levels of rice imports, thus implying a deterioration of natural diet in subsistence sector with a lower per capita rice consumption and a shift to inferior rice-substitutes.

16. Preliminary estimates for 1976 indicate that iron-ore production has continued to decline. Although the export performance of this sector has been better than the previous year, the expansion of sales has been met through the depletion of stocks built up in 1975 rather than through new additional output. At the same time the growth potential of the agricultural sector continues to be constrained by the lack of adequate infrastructure, extension services and credit, as well as inappropriate pricing policies. On the other hand, the service sectors are likely to continue to sustain their recent growth trends in 1976. Since the output of these sectors is linked not only to the volume of total domestic product, but also to the volume of external transactions, their growth performance in 1976, has reflected the growth of external trade and transactions.

17. In summary, it is likely that GDP in the monetary economy may have increased by about 2.5 percent in 1976 mainly as a result of the expansion of the service sectors. It is unlikely, however, that total GDP would show a significantly higher growth rate mainly because of lower growth prospects for rice and other products of traditional agriculture. The prospects for 1977 are that real output may expand only marginally. Production prospects for iron ore will continue to be uncertain due to the large stocks already held by the companies as well as the slow economic recovery in Europe and the United States.

Investment and Savings

18. After a period of large investments in iron-ore sector in late fifties and early sixties, the Liberian economy experienced a period of low investment that lasted up to the mid seventies. This was due not only to the phasing out of enclave investments but also to the retrenchment of the public sector. Though not following a definite trend, the ratio of total gross domestic investments to GDP in real terms declined from about 24 percent in 1964 to some 17 percent in early seventies. In 1974, however, there was a sharp increase in total capital expenditures which continued to grow markedly during 1975 but less so in 1976.

19. Little is known about the sectoral composition of capital expenditures of the private sector. However, the majority of capital expenditures in Liberia consist of expenditures on machinery and equipment which are imported and have a very high depreciation rate due to the lack of adequate maintenance. An approximation by the economic mission based on import data indicate that at the present, almost two thirds of total capital expenditures are undertaken by the private sector and their expenditures are primarily concentrate in mining - 9 -

and related activities such as metal processing, transport equipment and energy (Table 2.5). In the non-enclave private sector the investment expenditures financed by LDBI - which accounts for about 5 percent of total private capital expenditures - have been largely concentrated in service sectors. Manufactur- ing and agriculture also received relatively large shares.

Gross Domestic Investment $ Million (current prices)

1973 1974 1975 1976 /I

I. PUBLIC SECTOR 36.8 26.6 48.7 79.4 - Central Government 16.0 14.1 29.5 39.0 - Public Cotporations 20.8 12.5 19.2 40.4

II. PRIVATE SECTOR 63.7 101.2 143!4 135.6

TOTAL 100.5 127.8 192.0 215.0

Source: Liberian Authorities and Mission's estimates.

/1 Preliminary.

20. In the public sector, investment is undertaken in almost equal proportions by both Central Government and Public Corporations. In 1975 total capital expenditures in public sector rose substantially. The major expenditures were related to the land development in agriculture, the tele- communication expansion program, the five year program for Road Maintenance and Development and the establishment of a sugar plantation and factory near Harper. Although a breakdown of public investments by sectors is not available, partial data indicate that up to 1976 most of the Central Government capital expenditures have been allocated to infrastructure. In 1976 public sector investment continued to grow and there has been a marked shift of investment towards the development of the agricultural sector. This marked expansion of public investments is the initial impact of the ambitious investment targets set by the Four Year Development Plan which became effective in July 1976.

21. During the past fifteen years domestic savings performance of the economy was very satisfactory. As a result of the policy of retrenchment, the domestic savings ratio to GDP reached almost 50 percent for some years in the late 1960s. However, the domestic savings ratio declined almost continuously from 1970 onwards, with the decline becoming more marked in - 10,-

1975, At the same time factor payments abroad grew at an accelerated pace leading to a substantial decline in national savings ratio particularly in 1974 and 1975 (Table 2.3). Up to 1976 Central Government savings have been higher than central government investment, while public corporations have always been unable to finance their investments out of their own savings - and some have registered substantial deficits. This is partly due to acute shortages of qualified management and partly due to centrally administered pricing policies. Investment by public corporations has been financed by substantial foreign borrowing undertaken on their behalf by the Central Government.

22. It is estimated that total public sector investments in 1976 may be twice as high as those of 1975 while public disposable income is expected to experience a lower rate of growth. This implies the emergence of a savings gap for the Central Government and doubling of the already existing gap for public corporations. These gaps will have to be financed through external borrowing (a $30 million Eurodollar loan was negotiated late in 1976. The loan is for seven years at 2 percent above LIBOR with a two year grace period). Even with a conservative assumption on the growth of public consumption, it is expected that the financing requirements of the public sector are likely to continue to grow in 1977 leading to the need for more borrowing. A more intensive resource mobilization effort by the Government is needed if undue reliance on foreign borrowing and/or a reduction of the public investment program are to be avoided. - 11 -

Macro Balance for Total Economy 1/

($ Million - Current Prices)

1973 1974 1975 1976 2/

1. GDP (m.p.) 544.9 698.6 837.2 922.7 2. Factor income from Abroad -116.7 -146.3 -174.4 -170.0 3. GNP (m.p.) 428.2 552.3 662.8 752.7 4. Net Import of Goods & Serv. 13.5 55.2 125.6 85.0

TOTAL RESOURCES 441.7 607.5 788.4 837.7

5. Gross Domestic Investments 100.5 127.8 192.0 215.0 - Public 36.8 26.6 48.7 79.4 - Private 63.7 101.2 143.3 135.6 6. Consumption 341.2 479.6 596.4 622.7 - Public 61.6 74.5 76.2 88.2 - Private 279.6 405.1 520.2 534.5

7. Public Disposable Income 83.3 98.0 113.9 126.9 8. Private Disposable Income 339.2 459.9 560.5 630.8 9. Gross National Income 422.5 557.9 674.4 757.7 10. Discrepancy (9-3) - 5.7 + 5.6 +11.6 + 5.0

11. Public Savings Gap -15.1 - 3.1 -11.0 -40.7 12. Private Savings Gap - 4.1 -46.4 -103.0 -39.3 13. Total Savings Gap -19.2 -49.5 -114.0 -80.9 14. Discrepancy (13-4) + 5.7 - 5.7 -11.6 - 5.0

Source: Mission Estimates

1/ For the derivation of this table see Annex I.

2/ Estimates of Liberian Authorities. - 12 -

IV. PUBLIC FINANCE

23. The public sector in Liberia is made up of the Central Government, County Governments and a number of non-financial public enterprises which include a marketing agency (The Liberia Produce Marketing Corporation - LPMC) and fifteen other enterprises the most important of which are The Liberia Electricity Corporation and The National Port Authority. In addition the Government holds a 50 percent interest in the iron ore companies. The Government financial transactions are made through separate Recurrent and Development budgets. The Recurrent Budget is prepared by the Bureau of the Budget in conjunction with the budget committee compose of the Ministries of Finance and Planning among others, and includes regular operating expenditures, including interest and amortization payments on the public debt. The Develop- ment Budget is prepared by the Ministry of Planning and Economic Affairs while the responsibility for project execution lies with the operating ministries and departments. Extra budgetary expenditures are those financed directly from foreign sources. Foreign grants are used mainly to finance the recurrent costs of technical assistance personnel while foreign loans - mainly concessionary but also include some commercial borrowing - are used to finance capital expenditures.

Revenues:

24. Liberia's tax base is extremely narrow reflecting the rather limited production base of the economy. Tax revenues account for about 80 percent of total budgetary revenues and are dominated by income taxes and import duties. Liberia depends far less on indirect taxes than most developing countries. Income taxes are derived basically from iron ore companies which pay 50 percent of their net distributed profits - after allocations to reserves and interest payments - in lieu of company income tax. The Indivi- dual and Corporation income taxes and the Austerity tax are the other principal sources of revenue from income. In 1975 total income taxes accounted for about one-half, and the import duties about one-third of total tax revenues. Among the non-tax income, the maritime revenue is a special category which comes from the tonnage tax collected when a vessel is registered under the Liberian flag and from the annual tonnage tax collected thereafter.

25. Between 1965 and 1970 the tax revenues rose more rapidly than GDP and their proportion to monetary GDP rose from about 13.5 percent in 1965 to some 17 percent in 1970. Although, this ratio remained more or less stable - around 16.5 percent up to 1975 - income from iron ore as a proportion of net income generated in iron ore mining sector has been continuously declining and reached an all time low in 1975. Between 1967-1970 the Government of Liberia's take from profit sharing - about $11 million yearly - accounted for about 8.5 percent of iron ore sales income and for about 12 percent of iron mining net output (value added). Both ratios fell to about 6 percent in 1975. This, accompanied by a stagnation in import duties, caused the overall tax ratio to decline significantly in 1975; while monetary GDP in current prices grew by some 23 percent, the growth of total tax revenues was only 8 percent indicating a sharp drop in overall tax elasticity from a more or less stable unitary rate between 1970 and 1974 (Table 5.2). - 13 -

26. The deterioration of public revenues from iron ore mining was brought about by growing share of interest payments as well as the increased proportion of retained earnings (undistributed profits), by the companies. The companies have maintained a relatively high debt/equity ratio resulting in rather heavy interest payments that, on the average, have been almost twice as high as the Government's take from profit sharing. The renegotiations of the Concession agreements with LAMCO (in 1974) and BONG (in 1975) did not bring about significant changes in principles of profit sharing. Although in 1976 public revenues derived from iron ore mining improved noticeably - from 6 percent of sales income in 1975 to 8.5 percent in 1976 - this improvement is not expected to continue in the medium term mainly due to an expected "cost-squeeze" situation facing the iron ore companies. Although consultations between the Government and the existing companies are likely to continue, a mutually acceptable understanding on dividend policies is yet to be reached. The Government has recently amended its concession agreement (1967) with LISCO for the exploitation of Wologisi iron ore deposit. The terms of the amended agreement are similar to those with LAMCO and BONG. However, despite the high value of pellet production expected to come into stream in 1982, if investments begin in 1978, preliminary projections indicate that the project may not generate distributable profits during the first ten years of production, implying that until 1992 the Government of Liberia's take from Wologisi may not exceed royalty payments which are 1 percent of sales incomes during the first five and 2 percent of sales income in second five years of production.

27. In Liberia the foreign concessionaires in mining, rubber and forestry enjoy substantial tax privileges and only one third of the total imports are subject to import duties. In 1974, Government revenues from import duties increased sharply in response not only to a high rate of growth of expenditures but also to an increase of effective rate of import duty of about 4 percent on the average as a result of a new tariff reform. This new tariff was designed primarily to stimulate development by accentuating the protective and incentive aspects of the tariff schedule. In May 1975, a new legislation granted a total waiver of import duty on all agricultural equipment, machinery and other inputs. In 1975 and 1976 revenues from import duties have not shown a sigificant increase mainly as a result of a higher proportion of duty - exempt goods as well as a slower growth of expenditure on imports.

28. In recent years there has been a marked improvement in revenues from non-concession income taxes as well as taxes on domestic transactions which increased considerably in 1973 and subsequent years. The improvements have been due mainly to increased stumpage rates and, in 1975 and 1976, to the buoyant conditions of logging industries. Revenues from excise-taxes, on the other hand, have been sluggish reflecting mainly the decline in demand for petroleum products (only one third of total petroleum consumption is subject to duty, the remaining two thirds represent consumption by iron-ore and electricity sectors both of which are exempt from petroleum excise duties) (Table 5.2). The improvement in individual income taxes in 1976 is mainly a reflection of a new system through which the tax-free fringe benefits of the Government employees have been converted into taxable cash payments. - 14 -

The overall improvement in these taxes, during the recent years, is mainly attributable to improvements in tax administration and tax auditing. How- ever, the widespread practice of tax evasion, especially under the individual income tax, excise taxes, real estate taxes and customs duties still remain a major shortcoming of the existing tax administration. A summary of the sources of central government revenues is given in the following table.

Central Government Revenues (US$ million)

1976 1973 1974 1975 Jan-Oct

1. Taxes on Income & Profit 31.5 41.5 46.9 54.2 - Iron-Ore Profit Sharing 14.0 13.9 16.3 24.5 - Corporation Tax 7.7 13.5 12.7 12.0 - Austerity Tax 4.7 5.7 7.0 6.9 - Other 5.1 8.4 10.9 10.8 2. Taxes on Property 1.4 1.5 2.0 1.9 3. Taxes on Domestic Transc. 7.6 7.8 8.0 7.8 4. Taxes on Foreign Trade 24.9 33.0 33.8 33.5 - Import Duty 20.7 27.4 28.2 28.2 5. Other Taxes 6.0 5.6 6.0 6.8

TOTAL TAXES 71.4 89.4 96.7 104.2

6. Maritime Revenues 8.6 9.9 16.5 12.0 7. Non-Tax Revenues 9.8 9.3 12.1 7.2

TOTAL REVENUES 89.8 108.6 125.3 123.4

Expenditures:

29. The public expenditures are carried out in accordance with the Central Budget of which Recurrent and Development budgets are prepared separately by the Ministry of Finance and the Ministry of Planning and Economic Affairs. The local governments have negligible sources of revenue and depend heavily on transfers from the budget of the Ministry of Local Governments. The Public Corporations also receive sizeable income transfers from the Central Budget. The budgetary resources are supplemented by a substantial amount of external resources in the form of loans, grants, and technical assistance which together finance the "extrabudgetary" expenditures of the public sector. - 15 -

30. Between 1965 and 1973 the rate growth of central government current expenditures has been kept around 5 percent, on the average, which is lower than the growth rate of GDP in current prices. In 1973 and especially in 1974 the current outlays for all categories rose substantially. In 1975, however, apart from an overall salary increase of 12.5 percent to all government employees, the growth in current expenditures had been effectively controlled and total current expenditures rose by only 5 percent as aginst 20 percent in 1974. On the other hand development expenditure was only a small proportion of total Government expenditures in early seventies. However, development expenditures increased substantially in 1974 and subsequent years reflecting the government's growing concern and attention to development issues. As a result between 1974 and 1976, the Development budget more than doubled thus pushing total public expenditures (including extra-budgetary expenditures) to almost one-fourth of the Gross Domestic Product at factor cost in 1976. This ratio is the highest achieved since 1970. Total public sector expenditure as a proportion of GDP has been declining since 1970 mainly due to the decline in foreign debt obligations as the final portion of the heavy debt incurred during the early 1960s was paid off.

31. Although Liberia has had a history of relatively sound fiscal management and public finances, the budgeting of expenditures remain deficient in two ways: a) expenditures financed by foreign borrowings, grants and technical assistance are not fully integrated with the Central Government budget. Although a global approximation of the size of the "extra-budgetary expenditures" has been introduced in 1975, no ex-post information was later incorporated into the budgets about the actual level, and the end-use of these extra resources. This deficiency makes it difficult to conduct a more comprehensive and meaningful analysis of public resource allocation and expenditure control; b) secondly, transfers to Public Corporations from the central budget are not classified separately. This, exacerbated by the fact that little is known about the transfers from the "extra budget" makes it difficult to identify the resource transfers from Central Budget and the Extra-Budget to Public Corporations. Under these circumstances it is not possible to construct and assess a consistent statement of income and expenditure accounts of the total public sector. Both issues have become more important since 1975 but particularly so in 1976, with the inauguration of the Development Plan with its emphasis on higher public sector investment targets and the implied higher financing requirements. The policies and measures for expenditure control will clearly become more important throughout the Plan period, and will assume an important role in the Government's attempt to maintain a healthy public finance situation.

Public Sector Finances and Budget for 1976/77

32. Throughout the last decade, public sector finances in Liberia did not come under serious pressure. This was mainly due to the fact that the public sector in Liberia did not assume a leading role in the process of economic development. Although on the one hand public revenues were buoyant and on the other hand the country was lacking in basic infrastructure, health and education facilities, the public sector did not undertake an active role - 16 - in addressing the urgent social and economic needs of the country. Nor was the public sector active in initiating activities and actively encouraging investments in the non-enclave private sector. In short the public sector assumed a completely passive role and its investments were completely stagnant throughout the last decade. More recently, however, the Government has adopted a totally different attitude and has assigned the public sector a more active role in the development of the country. The first Socio-Economic Development Plan, which became effective in 1976, recognizes for the first time the need for a more active public sector which is expected to maximize the productive use of existing public resources as well as concentrate on a more effective resource mobilization effort - both internal and external - to realize its ambitious targets.

33. With the relatively high investment target the public sector finances came under some pressure during the first year of the Development Plan. Although the growth of current expenditure has been kept around the medium-term average of 1970-75 and the public revenues have improved to some extent, the ambitious investment program has substantially increased the development expenditures as well as "extra budgetary expenditures". As a result the need for foreign borrowing is estimated to have increased from $18 million in 1975 to $45 million in 1976 (Table 5.1). The pressure on public finances is likely to continue as indicated by the budget for 1976/77. 1/ The new budget did not bring about any changes in revenue structure. The Government revenues, on the basis of existing taxes, are estimated to grow by 18 percent over the 1975/76 actuals (covering July to June period) reflecting basically the improvement of Government's take from iron ore profit sharing. The concession (enclave) sector and related activities are the principal source of income for government and appear to offer the largest potential for contributing to public revenues. Outside the concession sector there are also prospects for increasing public revenues from import duties, property taxes and individual income taxes via re-adjustment of tax privileges and tax rates as well as by increasing the efficiency of tax administration. Also, the maintenance of more appropriate pricing policies by public sector utilities would reduce the burden now falling on the central government from financial support operations. A summary of public sector finances is given in the following Table:

1/ Beginning in 1976 the fiscal year runs from July 1 through June 30th. Previously it corresponded to the calendar year. - 17 -

Summary of Public Finances (US$ Million - Current Prices)

1976 /77 1973 1974 1975 1976 /2 Budget

1. Budgetary Revenues 89.8 108.6 125.3 151.0 155.6

2. Current Budget 61.4 74.2 78.1 88.2 97.6

CURRENT BUDGET SURPLUS 28.4 34.4 47.2 62.8 58.0

3. Development Budget 11.1 15.0 24.0 33.8 39.0

BUDGETARY SURPLUS 1/ 17.3 19.4 23.2 29.0 19.0

4. Extra Budgetary Expenditures 19.2 15.3 27.5 59.0 --

5. OVERALL DEFICIT -1.9 4.1 -4.3 -30.0

6. FINANCING OF DEFICIT

- Foreign Grants 11.0 12.3 11.3 14.0 -- - Foreign Loans 8.2 5.1 18.0 45.0 -- (Borrowings) (Amortization) -12.8 -17.4 -16.3 -18.0 -- - IMF (net) -0.9 -1.1 -0.5 -- __ - Other -3.6 -3.0 -8.2 +11.0

Source: Ministry of Planning and Economic Affairs

1/ Before debt amortization.

2/ Preliminary estimates.

IV. MONEY, BANKING AND PRICES

The Monetary System

34. Liberia is one of the very few countries where the predominant medium of exchange is a foreign currency, namely the US dollar. Although the official monetary unit is the Liberian dollar which is at par with US dollar, issuance of the Liberian currency has been limited only to coins of one dollar and less. The fact that the US dollar, which is, at the same time, an international reserve asset, constitutes the major portion of - 18 -

domestic money supply held by Liberian citizens and government and their claims on foreign banks, means that the foreign exchange reserve of the country is identical with her domestic money supply. In other words, the change in the money supply is not only a direct result of a balance of payments deficit or surplus, but also independent of the policies of the monetary authorities in Liberia. The existence of a monetary authority in Liberia started with the establishment of the National Bank of Liberia in July 1974. Prior to this, the First National City Bank of New York (Liberia), Inc., formerly the Bank of Monrovia was performing some central banking functions, such as providing the US currency to the economy, acting as a banker to the government and as a clearinghouse for the rest of the banking system. However, there was no supervision over the banking system with exception of the usury law which set a ceiling of 10 percent for the interest rate on loans.

35. The National Bank of Liberia assumed most of the central banking functions with the exception of the power to issue a national currency. Its main functions are: (i) supervising the commercial banks; (ii) advising the Government on the matters of economic policy; (iii) holding Government's accounts; (iv) issuing Liberian coins up to and including one dollar (v) providing clearing facilities for the banking system. Since most of these functions are regulatory and could be handled without a central bank, it is, therefore, difficult to assess the contribution of the National Bank of Liberia to the economy as far as the mobilization of domestic resources is concerned.

36. The actual monetary performance of the Liberian economy is only partially known. The recorded money supply excludes US currency in circulation 1/, nor do other monetary data reflect the change in the domestic resources deposited abroad and financial transactions of the concessionaries which are mostly held by banks abroad. Therefore, the existing data on monetary and credit developments only permit analysis for the government's and part of the private sector's financial transactions.

The Banking System

37. At the end of 1976 there were five commercial banks operating in Liberia - four of these were either branches or wholly owned subsidiaries of internatinal banks. The fifth has a large proportion of Liberian capital, but it is also partly owned by an international bank. The National Bank establishes minimum reserve requirements on all deposits. These requirements were originally 6 percent on demand and time deposits and 2 percent on savings deposits. These ratios were changed in March 1975 to 3 percent on demand deposits and 3 percent on time and savings deposits. The maximum

1/ The National Bank of Liberia estimates the amount of US currency in circulation in the range of $50 million to $80 million. The mission estimated that a range of $75 million to $90 million would be a better approximation from the comparative monetary data. - 19 -

lending rate, which seems to be the only other instrument available to the National Bank to monitor the commercial banks' operations in Liberia was also changed from 10 percent to 25 percent in March 1975. It was hoped that the ii,crease of the interest rate ceiling would encourage commercial banks to extend more credit to the economy. While the increase in the credit volume has been rather insignificant during the following eighteen months, commercial banks enjoyed high interest rates ranging from 10-25 percent on loans and overdrafts. However, the ceiling on the lending rate of commercial banks was again lowered to 10 percent, as of November 26, 1976. The interest rate for saving deposits is 5 percent, for time deposits 6 percent and no interest is paid for demand deposits.

Monetary and Credit Developments

38. Commercial bank lending in Liberia is strictly limited to the short- term credits channeled to the commercial sector. As in the past, commercial and personal loans accounted for almost 70 percent of total credit volume to the private sector in 1976 (Table 6.6). Agricultural credits which account for another 19 percent of the total, are extended to large scale rubber farmers again on a short-term basis.

39. Following a sharp credit expansion, mostly for import financing in 1974, the credit volume to private sector increased by 7 percent in 1975. Similar development was observed in the first three quarters of 1976. On the deposit side, the increases have been at slower pace during 1974 and 1975. In 1975, this was partly due to a sharp decline in corporate deposits by US$10 million in 1975, attributable to the Government's collection of tax arrears in 1975. The developments in the first three quarters of 1976 show significant increases in the private sector deposits; 9.9 percent for personal deposits, 60.4 percent for corporate deposits and 29.7 percent (US$2.6 million) for the deposits of the public corporations. The overall rate of increase in the deposits was 23.8 percent during the first nine months of 1976 as compared to a 2.6 percent increase for the same period in 1975 (Tables 6.4 and 6.5).

40. The recent increases of deposits with the banking system changed the commercial bank's net foreign assets from a net overdrawn position of US$7.9 million at the end of 1975 to a net credit balance of US$14.9 million in September 1976. Although the commercial banks had resorted to borrowing from abroad during the liquidity squeeze in 1974 and 1975, an outflow of domestic resources through the banking system is likely to have taken place in 1976. Despite the Government's improved net position with the commercial banks since the inception of the National Bank, the public corporations (mostly due to LPMC) remain a net lender to the banking system, (Table 6.2). Net foreign assets of the National Bank rose by US$2.06 million in 1975, and further improved by US$7.05 million increasing from US$13.9 million at the end of 1975 to US$20.95 million at the end of September 1976 (Table 6.1).

Other Financial Institutions

41. There are two specialized financial institutions in Liberia, established to foster Liberian-owned investment and generate resources for - 20 -

development. These are the Liberian Bank for Development and Investment (LBDI) and the National Housing and Savings Bank (NHSB). The Liberian Bank for Development and Investment has broad objectives for financing private sector projects in manufacturing, agriculture, transportation, tourism and srvices. LBDI's loan and equity portfolio was US$7.6 million at the end of 1975. After a record level of approvals of US$4.8 million in 1974, the operations slowed down in 1975 when a total number of 42 projects amounting to US$3.0 million was approved. Provisional figures as of October 31, 1976 show that approvals increased significantly in 1976 reaching US$4.1 million (Table 6.7).

LBDI's Summary of Operations (US$ Million)

1973 1974 1975 1976 1/

Approvals 1.216 4.523 3.000 4.132

Commitments 0.885 3.120 3.726 3.673

Disbursements 0.476 2.997 3.899 2.990

1/ as of October, 1976

Source: LBDI

LBDI has set up a subsidiary which will administer the revolving agricultural fund for the IDA-assisted agricultural project in Lofa County. The subsidiary commenced its operations mid-1977 and will also provide commercial banking facilities. A similar arrangement is also foreseen for Bong Agricultural project.

42. The National Housing and Savings Bank which is a wholly government owned entity, has commenced operations on January 20, 1976. Its objectives are to mobilize domestic savings and provide long-term mortgage financing. At the end of the first year of operations, savings and time deposits amounted to US$2.3 million. Despite the availability of funds, total mortgage lending was only US$0.2 million for a few recipients in Monrovia area. NHSB has opened a branch in Sinkor (a residential area in Monrovia) in November 1976, mainly to provide banking facilities for the nearby JFK Hospital and its employees. NHSB was also looking into the possibility of extending commercial banking facilities to other areas of the country.

Consumer Prices:

43. The only available price index in Liberia is the Monrovia Consumer Price Index (MCPI), which is based on a limited household expenditure survey - 21 - conducted among the Government employees in 1963. The index is now far from reflecting the prevailing urban consumption patterns and price movements due to its outdated and arbitrary weighting. While the Ministry of Planning and Economic Affairs has been conducting a national household expenditure survey to revise the current index and generate new consumer price indices for other urban and rural parts of the country, the MCPI remains the only indicator for price movements. It should therefore be used only as an indication of the trend and changes of the prices in Monrovia retail market.

44. After a two-year period of soaring consumer price inflation at a rate of 19.5 percent in 1973 and 1974, the rate of increase of the MCPI declined to 13.5 percent in 1975. This slowdown was mostly the result of lower prices of imported food items such as rice, sugar and flour, and a less rapid increase in prices for fuel and light. Developments in the first three quarters of 1976 present relatively favorable outlook for the consumer price increases in Monrovia. The rate of increase in the MCPI has declined to 4.8 percent by the third quarter of 1976 over the same period of the previous year. The annual rate of increase of MCPI 1976, however, could be expected to be around 6-7 percent. (Tables 9.1 and 9.2).

Producer Prices

45. The producer prices for major cash crops are determined by foreign concessionaires for rubber and by the Liberian Produce Marketing Corporation (LPMC) for cocoa, coffee, palmkernels and other crops. The producer price for rubber is largely determined by Firestone which is the major purchaser of rubber (mostly specification and non-specification coagulum) from Liberian farmers. Only a few large scale farmers sell latex to the concessionaires. The monthly purchasing prices are set according to the dry rubber content of rubber deliveries based on a formula which takes the quoted level of RSS 1, f.o.b. Singapore in the previous month into account as well as processing and other costs. As a result of the increasing rubber prices in the world market, the producer prices for specification coagulum increased from 13.8 d/lb in February 1973 to 39.9 i/lb in February 1974. Towards the end of 1974, the producer prices for rubber started to decline sharply to as low as 14.3 4/lb in February 1975, which remained almost unchanged throughout 1975. Although the prices for rubber recovered slightly in the first three quarters of 1976, the spread between the export and producers prices seemed to have widened (Table 9.3).

46. Liberian Produce Marketing Corporation (LPMC), a wholly-government owned corporation since October 1975, is the effective price setter for coffee, cocoa and other crops, although the prices are, in theory, determined by the Ministry of Agriculture upon the recommendations of LPMC. The purchase prices are determined according to f.o.b. export prices after deducting the processing costs, profits and allowances for the Price Stabilization and Agri- cultural (Tree Crop) Development Funds created within the LPMC. Generally, LPMC deductions are very high and result in low producer prices. The coffee price has been increasing since 1974, but the ratio between the producer and export prices dropped significantly since December 1975. The cocoa price was - 22 - changed three times in 1975, from 36 #/lb to 30 #/lb in July 1975 and to 25 #/lb for fair average quality (FAQ), which remained effective until September 1976. With the beginning of the new campaign year, the cocoa price was increased to 45 /lb FAQ in October 1976, which is expected to remain the same for early 1977 (Table 9.4). However, the purchase prices announced by LPMC do not necessarily reflect the actual prices received by the producers, mostly due to traders operating parallel to LPMC's buying agents, offering immediate cash payments at lower farmgate prices. Although deductions are made for the Price Stabilization Fund when calculating the purchase prices, LPMC uses this "Fund" as a part of its working capital (largely for purchasing stocks) rather than setting it aside for price support purposes when necessary. Furthermore, palmkernel purchases are heavily subsidized (US$4 per bag) at the expense of coffee and cocoa producers, a practice that may act as a disincentive for coffee and cocoa production. The current pricing policies of LPMC by and large act as a significant disincentive, and farmers are unlikely to increase production. Since the present purchase prices are determined on a residual basis after making allowance for LMPC's operating costs and profits, it is important to ensure that such deductions are a true reflection of costs and reasonable profits. More importantly, perhaps, there is a need to make the pricing formula more sensitive to increases in export prices.

VI. EXTERNAL TRADE AND PAYMENTS

47. Official detailed balance of payments statistics are not compiled by the Government of Liberia. Estimates of the balance of payments are particularly difficult to make in view of the open nature of the economy, the use of the U.S. dollar as the predominant medium of exchange and the absence of knowledge of capital movements. A joint survey has been initiated by the National Bank and the Ministry of Planning and Economic Affairs, but the situation is not expected to change substantially. Although information on some items of the balance of payments can be compiled (Table 3.1), the lack of knowledge in some key areas, such as capital transactions other than for the central Government, changes in currency in circulation and the value of some service transaction, renders the available information severely deficient for analytical purposes.

48. However, it is clear from available data that the Liberian economy is dominated by the large volume of foreign trade. The country's external accounts are characterised by a relatively large surplus on trade balance, but because of the rather large factor payments abroad, Liberia has traditionally had a deficit on the current account. Recently the surplus on the trade account has been declining while the deficit in the current account has been increasing. This is mainly a reflection of the sharp increase in oil and other import prices and the effect of the recession in industrialized countries on Liberia's exports - particularly iron ore and rubber. Incom- pleted data on the capital account which is composed mainly of direct foreign investment and Government borrowing and debt repayments, indicate that Gov- ernment borrowing has tended to increase particularly in 1975 and 1976. - 23 -

Foreign Trade

49. Four commodities namely iron-ore, diamonds, rubber and logs, provide nearly 95 percent of total- export earnings, with iron-ore alone accounting for more than two thirds of total. Iron ore export prices are set by the companies for a period of one year. Recently the iron-ore prices have been considerably higher than previous years in spite of the decline in world demand for iron and steel products. 1/ However, the companies had to cut back on the production of iron-ore as the export quantities declined at the prevailing prices. This, however did not depress export earnings from iron-ore but rather led to a decline, in real terms, of the contribution of this sector to Gross Domestic Product. Unlike iron-ore exports, earnings from rubber fluctuated widely in recent years, primarily in response to the fluctuations in export prices (see table below). Although at the present the export market for rubber is totally controlled by foreign concessions and the Liberian owned production is more sensitive to purchase prices of Firestone rather than the actual export prices, the relatively favorable future prospects for rubber holds substantial promise for the Liberian owned rubber production if alternative marketing arrangements can be made. The newly established Liberian Rubber Processing Company may function as a permanent purchasing agent and fulfill this objective. In fact this would not only encourage the production of Liberian owned farms but would also guarantee a more or less stable amount of rubber for "processing" activities.

Liberia - Exports of Goods

VALUE (US$ m.) | % DISTRIBUTION 1973 1974 1975 1975 1/ 1976 1/ I 1973 1974 1975

1. IRON-ORE 196.7 262.6 293.6 224.8 263.0 | 60.7 65.5 74.4 2. RUBBER 42.9 64.5 46.2 31.8 37.8 | 13.2 16.1 11.7 3. DIAMONDS 42.3 29.9 18.4 13.7 12.5 | 15.2 7.5 4.7 4. LOGS AND LUMBER 16.6 17.6 12.8 6.2 25.8 I 5.1 4.4 3.2 5. COFFEE 5.1 4.0 4.5 4.2 6.3 | 1.6 1.0 1.1 6. COCOA 1.9 4.3 4.4 2.8 1.7 I 0.6 1.1 1.1 7. PALM PRODUCTS 2.8 8.5 3.2 - - | 0.8 2.1 0.8 8. SAWN TIMBER - - 1.8 - - | - - 0.8 9. OTHER 3.4 3.6 3.6 11.9 2/ 10.9 2/1 1.0 0.9 0.9 10. RE-EXPORTS 5.5 5.6 5.9 - - | 1.7 1.4 1.5

11. TOTAL EXPORTS 324.0 400.0 394.4 295.4 357.9 1100.0 100.0 100.0

1/ End September 2/ "Other" of 7 to 9. Source: External Trade of Liberia and Ministry of Planning and Economic Affairs.

1/ The unit export prices of iron ore rose by 33 and 56 percent respectively in 1974 and 1975. - 24 -

Liberia - Imports of Goods

SITC GROUP ------Value ($ Million)------… 1973 1974 1975 1975 1/ 1976 1/

0. Food and Live Animals 30.2 38.4 38.6 26.3 36.5 - Rice (12.3) (15.8) (13.6) - 5.8 1. Beverages and Tobacco 4.1 4.7 6.2 4.4 4.5 2. Crude Materials 1.6 2.1 3.0 2.3 3.0 3. Mineral Fuels, Lubricants 14.7 56.4 48.3 32.1 40.1 4. Animal, Vegetable oil & Fats 1.2 2.4 1.0 0.7 1.3 5. Chemicals 12.8 18.5 22.0 14.8 15.4 6. Manufactured Goods 39.0 54.4 70.2 47.3 51.8 7. Machinery & Transport Equip. 68.8 85.4 115.7 75.9 88.0 8. Miscellaneous Manufc. Articles 18.6 23.4 22.0 12.6 16.4 9. Other 2.4 2.8 4.1 1.8 2.0

TOTAL 193.5 288.4 331.2 218.2 259.0

1/ By end August. (Total imports by end September in 1976 is $280.6 million as against $254.4 million in 1975).

Source: External Trade of Liberia; Imports and Ministry and Planning and Economic Affairs.

Recent Developments

50. In 1975 earnings from merchandise exports declined slightly (-1.5%) compared to 1974 mainly due to the decline of both export prices and sales of rubber, timber, palm products and diamonds while exports of coffee and cocoa stagnated. Although the quantity of imports rose more rapidly in 1975, the expenditures on imports grew more slowly than in 1974 as a result of the slowing down of the severe rise in import prices. The rapid and sustained growth of imports in recent years have reduced the traditionally positive trade surplus of the economy. This became more marked in 1975 when the trade surplus fell to a record low of US$63 million compared to US$111 million in 1974. USA and Germany are the largest trade partners of Liberia. In 1975 the country had positive trade balances with both of these countries as well as with Italy and negative trade balances with United Kingdom, Sweden and Japan. (Table 3.4). The deterioration of the trade balance accompanied by growing factor payments abroad resulted in a steep rise in current account deficit to US$95 million in 1975 compared to US$30 million in 1974. (Table 3.1).

51. Inspite of the relatively large increase in export prices in 1974, Liberia's terms of trade deteriorated due to a sharp rise in import prices, - 25 -

particularly the fourfold increase in petroleum prices. However, in 1975 the rate of increase of import prices declined to 8.3 percent (as compared to 47 percent in 1974) while the overall index of export prices rose by 43 percent mainly due to a higher iron ore and log prices. As a result Liberia's terms of trade registered an improvement of sufficient magnitude to offset the deterioration recorded since 1971. However, provisional figures for 1976 indicate a worsening of the terms of trade. (Table 3.5).

External Debt and Creditworthiness

52. Liberia's external public debt outstanding and disbursed was estimated at about US$170 million at the end of December 1975. Loans from Gov- ernments account for over two thirds of Liberia's outstanding and disbursed foreign debt. Loans from multilateral sources account for about 20 percent of the total debt (Table 4.1). The Bank Group share is about 13 percent of total outstanding and disbursed foreign debt, but, given the level of commitments up to the end of 1975, is projected to grow to about 29 percent by 1980. However, such a substantial increase is unlikely to materialize in view of the increasing involvement of other sources of foreign capital in Liberia e.g. the Eurodollar loan of US$30 million and a US$10 million loan from the German Government, both concluded in November 1976 and the relatively large foreign financing requirements of the Development Plan.

53. Most of Liberia's foreign debt was contracted on relatively soft terms of 5 percent interest, 25 years maturity, and grace periods of 6 years. Debt service payments on existing debt amounted to US$19.3 million in 1975 and are estimated to increase to US$20.7 million in 1976 (Table 4.2). The debt service as a proportion of exports of goods and factor services was estimated at 5.4 percent in 1975 and 5.3 percent in 1976 as compared to 5.6 percent in 1974 and 8.6 percent in 1970. However, as a percentage of central government revenues (a more significant indicator for Liberia, which uses the US dollar as its medium of exchange), debt service was 21.1 and 17.3 percent in 1974 and 1975 respectively. These ratios are projected to decline up to 1980 as the heavy debts incurred in the early 1960's are paid off. While Liberia remains creditworthy for sizeable further external borrowing, it would be advisable for the country to limit the growth of its external debt. Government should make a concerted effort to increase revenues from domestic sources (see paragraph 28); also, in view of Liberia's relatively low per capita income and the structural weaknesses of the economy, external borrowing on conventional terms needs to be blended with concessionary loans. In recognition of this, Liberia has in the past received some IDA funds and other donors have provided substantial assistance in grant form. Between 1972 and 1975 foreign grants to Liberia averaged around US$14.0 million per year and are estimated to have increased to US$17.0 million in 1976. Recently the European Commission (FED) advanced a grant of 25 million units of account to Liberia to be disbursed over the period 1976-1980. - 26 -

VII. THE DEVELOPMENT PLAN AND MEDIUM TERM PROSPECTS

The Government's views on the medium term prospects of Liberian economy are outlined in the country's first Socio-Economic Development Plan 1976-1980, which came into effect in July 1976. The Plan whose main objective is to achieve higher standards of living for all Liberians, is the most important economic policy document produced so far by the Government of Liberia. It recognizes the urgent need for a diversified structure of the non-enclave economy and adopts a highly ambitious public sector investment program to achieve the development objectives. These are:-

(1) Diversification of production.

(2) Geographical dispersion of sustainable socio-economic activities throughout the country.

(3) Greater participation of entire population in the development efforts and

(4) Equitable distribution of the benefits of economic growth and diversification so as to ensure an acceptable standard of living to all Liberians throughout the country.

55. To achieve these objectives the Plan aims at a public sector investment target of US$415 million over the plan period. About 54 percent of the total is allocated to basic infrastructure and about 20 percent to agriculture (including forestry) mainly for large scale tree crop farming and rural development in the subsistence economy. The Plan divides the public sector investment program into two categories - Category "A" includes those projects which are either already ongoing or whose preparation is substantially completed. In monetary terms, Category "A" projects account for more than half of the total public sector investment target of which approximately US$155 million is already earmarked for seven large and significantly advanced projects. These are: (a) the integrated rural development projects in Upper Lofa and Upper Bong counties which aim at substantially improving the incomes of about 15,200 traditional farm families; (b) tree crop plantation projects which aim at developing oil palm, hybrid coconut and coffee in several counties; (c) a package of road projects assisted by IBRD/ADB; (d) Monrovia street improvement project; (e) road maintenance program; (f) a conference center and new international airport terminal and (g) a power project for expansion of electric power generating capacity. On the other hand category "B" projects are those which are either new or are prepared only in a preliminary manner. Foreign financing for projects in this category is yet to be arranged. - 27 -

Investment Targets of the Development Plan

(US$ Millions)

Distribution "A" Projects* "B" Projects** Total of Total

1. Agriculture 38 34 72 17.3 2. Forestry 3 5 8 1.9 3. Manufacturing 9 8 17 4.1 4. Transport and Comm. 116 58 174 41.9 - Road Transport (83) (55) (138) (33.2) 5. Public Utilities 25 23 48 11.6 6. Social & Comm. Serv. 39 35 74 17.8 7. - Education (16) (19) (35) (8.4) - Health (9) (13) (22) (5.3) 8. Miscellaneous 15 7 22 5.3

TOTAL 245 170 415 100.0

* On-going or substantially prepared projects. ** New projects prepared in preliminary manner.

56. The domestic finance requirements of total development expenditures are estimated to be US$164 million while the remaining US$251 million (60 percent) is projected to come from external sources. The Central Government is expected to provide 89 percent of the total domestic finance requirements through budgetary surpluses of US$146 million. These are based on projections of current revenue and expenditures totalling US$622 million and US$476 million respectively over the plan period. The revenue projections do not include any provisions for new taxes or higher rates for existing ones. Revenues from profit sharing with the iron-ore mining companies are estimated on the basis of the effective distribution formulae for 1974. Current expenditures are projected to grow less rapidly during the plan period, at an annual rate of approximately 12 percent as compared to an actual growth rate of 13.5 percent between 1970 and 1975. - 28 -

Financing of Development Expenditures - Plan Projections

(US$ Million)

"A" Projects "B" Projects Total

TOTAL DEVELOPMENT EXPENDITURE 245 170 415

1. Foreign Financing 142 109 251 2. Domestic Financing 103 61 164 - Central Government 86 56 142 - Public Corporations 17 5 22

57. Since the majority of the planned investments are allocated to infrastructure and productive projects - mostly in agriculture - characterised by long gestation periods, the plan growth targets are more closely linked to the developments in iron ore sector rather than to the planned investment activities. The plan projects a GDP growth rate of 6.8 percent per annum on the average for the period 1976-1980 assuming that (a) the iron-ore production will be sustained at the existing maximum capacity and (b) the investments in new mines, particularly Wologisi will start in 1977 with Bie Mountain following close behind. However, shortly after the publication of the Plan it became clear that the two key assumptions of the Plan, and particularly those concerning the new investment in Wologisi and Bie Mountain may not materialize at least until 1979. This has immediate implications both for the overall growth targets as well as for the public sector revenue projections, and necessarily implies a substantial revision of the Plan. It is understood that the Plan is currently undergoing revision and updating. How- ever, this revision should not necessarily imply a change in the magnitude or composition of the public sector investment program. Long term considerations of the development objectives indicate the need to place a more concerted effort on resource mobilization rather than on a reduction in the investment targets. In fact, public sector revenues in the Plan may have been under-estimated. With a 5 percent yearly inflation rate (plan assumption) and on overall public revenue elasticity of 0.90, the total public revenue by the end of 1980 may well reach a cumulative total of US$650 million - even with a scaling down of overall growth targets from 6.8 percent to some 4.0 percent per year. This estimated revenue figure exceeds the plan estimates by some US$30 million.

58. However, there are two crucial issues relating to the financing of development projects in Liberia that need more careful analysis during the Plan review. These are: (a) the relatively high dependence on foreign financing, which constitutes 58 percent of the project costs in Category "A" and 64 percent in Category "B". Although this partly reflects the import requirements and the need for foreign technical know-how due to - 29 -

the skilled labor constraints in the economy, it is also an indication of the domestic resource gap which is likely to impede the development process if foreign financing could not be secured and (b) both current and capital public expenditures seem to be considerably underestimated. The impending salary reform and the implementation of already enacted social security now would substantially add to current budget in subsequent years, while the initial cost of Category "B" projects is likely to increase as project preparation gets underway in earnest. Both these issues are critical enough to place more emphasis on the need for a more vigorous fiscal policy designed to increase public revenues, as well as a closer monitoring and scrutiny of public expenditures so that a larger share of planned investments could be financed by public savings.

59. The Plan signals a new departure in economic policy formulation and is evidence of the concern of the Government with the development of the country. While in general, the Plan is well conceived and outlines a strategy borne out of the realities and bottlenecks of the Liberian economy, it has left out of consideration a number of issues of economic policy that would have been useful to consider. The ongoing plan revision affords a good opportunity to focus on some of the more important areas of economic policy such as (a) fiscal and financial policies designed to improve domestic resource mobilization, including improvement in national banking; (b) price support systems and price incentive policies for Liberian owned cash crops; (c) financial support and incentive policies for potential agro-industrial undertakings. While financial, technical and manpower aspects may constrain plan implementation, more serious bottlenecks may arise from lack of adequate micro economic work particularly sector and project analysis, project identification and project preparation. Almost half of the development projects in the plan - Category "A" Projects - are already ongoing and may be completed by the end of 1978. If category "B" Projects - which are still tentative at present - are not fully identified and prepared before 1978 the investment activities may substantialy decline by that date with resulting serious shortfalls in development objectives. Consequently, during the early years of the plan period more intensified efforts in sector and project analysis, project identification and preparation will be most critical to plan implementation. Without adequate work in these areas not only will the present plan fall short of its objective, but future planning efforts will be seriously jeopardized.

60. In 1976 a high percentage of iron-ore stocks carried forward as a result of the recession in Europe and the United States has been liquidated. The mission estimates that, assuming (a) the operations of LMC are phased out in 1977, (b) the second pelletizing plant of BONG comes on stream, (c) the iron-ore exports grow at 3 percent per year on the average, and (d) with some improvement in agricultural ouput, the economy can realistically grow at 3.5 to 4.0 percent per annum in real terms on the average during the Plan period. Even with these reduced real growth rates, only with additional emphasis on domestic resource mobilization, can the economy carry out the planned public sector investments with no major price distor- tions and/or balance of payments and debt problems. To guard against such - 30 - developments, the Plan investment targets need to be kept under constant review. It might perhaps prove necessary to institute an in-depth annual plan review since it is only through such a review that problems are iden- Lified and appropriate measures can be taken to ensure that the effects of adverse developments are minimized.

61. The development strategy outlined in the Plan correctly places emphasis on the need to broaden the country's productive base, disperse economic activity throughout the country, encourage the participation of all sectors of the population in the development efforts and ensure equitable distribution of the benefits of growth. The composition and balance of the public investment program seems broadly responsive to these objectives. However, in implementing the program government will need to examine each investment critically against its contribution to the country's development goals to ensure that the country's priority needs are met. At the same time policy and institutional issues will need to be addressed to remove the constraints which may inhibit the achievement of sectoral objectives.

62. The development of the agricultural sector should be the keystone of the government's policy to diversify the economy, achieve greater control by Liberia over the exploitation of its natural resources, and ensure a more equitable sharing in the benefits of growth. Priority should be given to the development of rural development projects which will not only increase agricultural production but help raise the incomes of the rural poor, both farmer and laborer. This will require the development of appropriate institutions for the distribution of farm credit, the strengthening of extension services, improved distribution of farm inputs, appropriate producer pricing policies, better marketing infrastructure and the restructuring of the Ministry of Agriculture into an effective policy formulating body and control institution to guide agricultural development in Liberia. At the same time investments in forestry and rubber should be designed to ensure that Liberians gain a greater control over and share in the benefits of the country's natural resources. Potential also exists for developing linkages between the agricultural sector and manufacturing industries - e.g., wood and rubber processing. The promotion of labor intensive small-scale manufacturing would help alleviate the growing unemployment problem in Monrovia, provided this is comple- mented by raising the living standards in the rural areas so as to check the rate of rural-urban migration.

63. Liberia's basic transport infrastructure is very poorly developed and the Development Plan gives emphasis to this sector. However, priority should be given to these investments which will support the development of the agricultural potential of the interior and integrate the traditional economy with the more developed monetized sector. As regards other infrastructure, there is also need to expand coverage of public utilities - electricity, water supply sewerage - in both urban and rural areas. There should be scope, in the context of investments in these sectors, to improve the living conditions of the lower income groups through the provision of improved services and appropriate credit arrangements. There should also be a concerted effort to strengthen the management of public utility entities and improve their financial and operating performance. - 31 -

64. The lack of adequately trained manpower at all levels is perhaps the single most important constraint to the economic development and diversification of the Liberian economy. The government's response to the manpower problem includes several initiatives to improve the quality of education at all levels, reduce geographical inequities, diversify curricula, with increased emphasis on science, technical and practical subjects, and improve teacher training. The recent establishment of two training entities - the National Council for Vocational and Technical Education and Training and the Agricul- tural and Industrial Training Board - are important contributions to improving the country's training programs; however, a sustained effort in this area over several years ahead will be required to remove this major constraint upon growth.

ANNEX Page 1

MAJOR SECTORS OF THE ECONOMY

A. AGRICULTURE:

I. THE SETTING

1. About 54% of the total population of Liberia work in agriculture, but 70% of the population live in communities of under 2,000 persons, termed "rural". More than half of the population lives in three (out of nine) counties, namely Bong, Lofa, and Nimba. With 15 persons per square kilometer, (40/square mile) average population density is low, ranging from 5 to 20 in the various counties. There are only about 150,000 agricultural households in the country of which the above three counties account for 55%. The remainder is scattered in about 8,000 to 10,000 holdings per county, making it extremely costly to provide modern physical and social infrastructure required for intensified agriculture.

2. The importance of large private holdings is demonstrated by the fact that two thirds of the cultivated area belong to only 7% of holdings. The remaining third, cultivated by 93% of the farming population, consists of family farms with an average size of 5 acres. Large privately owned commercial farms (mostly by absentee owners) are especially spread around Monrovia, in the "settlements" along the coast, and in the "rubber belt", the area with a concentration of rubber plantations in Bong and Nimba counties. In all other areas land is allocated by the chief according to tribal custom. The major crops in Liberia are rice, rubber, oil palm (mostly wild), coffee and cocoa.

Rubber Farms

3. A distinctive feature of Liberian agriculture is the existence of a dominant rubber industry, accounting for 70% of all agricultural exports and employing one third of the national labor force, or 90% of all agricultural wage earners. The rubber industry is divided into foreign owned concessions and* Liberian owned rubber farms (Table 7.3). Six foreign owned concessions operate a total of 140,000 acres with capital intensive modern management methods based on their own research effort. A Liberian owned private sector developed parallel to this, initially as an outgrower scheme of the country's largest concessioner, Firestone, to meet increasing rubber demand during World War II. Planters response to rubber prices has been highly elastic. Many of them are absentee land-owners working with hired labor, and two decades of declining rubber prices led them to abandon and neglect many plantations. As a consequence only 143,G00 acres (38% of the total 375,000 acres planted) are in production at present, and most plantations (200,000 acres or 53% of total) are estimated to be overaged by 1984. Poor planting material and low management standards are responsible for the low yields achieved, averaging 568 lb/ acre compared with 1,285 lb/acre (October 1975) on the foreign concessions. ANNEX Page 2

Liberian Owned Commercial Farms

4. This group consists of larger capital intensive farms mainly growing rubber with a few also growing a variety of crops like coffee, cocoa, rice, and vegetables and also keep livestock. Enjoying relatively easy access to capital, they employ moderately capital intensive methods, but management is often poor except in cases where large farmers have employed qualified managers.

Traditional Farms

5. For the bulk of Liberia's family holdings only tree crop production is for sale. Practically all grow rice for subsistence, and about two thirds cultivate cassava, the two staple foods in the country's diet (Table 7.1). Since both crops are grown in shifting cultivation in cleared rain forest uplands, the effect is increasing erosion and impoverishment of the undulated upland soils. There is a need for gradual shift of rice production from uplands to swamps and the planting of tree crops in the uplands.

6. Farming systems are remarkably homogeneous throughout the country. Among tree crops, coffee and cocoa have an equal share. However, coffee tends to be dominant in the more densely populated counties. Sugar cane is grown on many farms for manufacture of juice and rum, while palm oil is produced by half the holdings, mostly collected from wild oil palm but increasingly from oil palm plantations.

II. COMPARATIVE ADVANTAGE OF AGRICULTURAL CROP PRODUCTION

7. A comparison of net incomes generated from rice and tree crops shows rice to be inferior to the latter.

Net Income (US$) Crops per acre per day

Upland Rice - traditional 112 2.00 - improved 153 2.55 Swamp Rice - improved, rainfed 273 2.60 Coffee - traditional 98 2.46 - improved 332 4.05 Cocoa - traditional 76 3.30 - improved 223 6.37 Rubber - replanted 182 3.64

The lower attractiveness of upland and swamp rice production explains why farmers generally expand rice production only to cover their subsistence needs, and that any further expansion goes into the more remunerative tree crops (for details see Table 7.2). ANNEX Page 3

8. Under conditions of ample land but limited labor supply, net income per day becomes the decisive criteria for the relative weight of crops in the farming system. Since net income per day from tree crops tends to be higher than from rice, there is no incentive to increase rice production significantly beyond subsistence. This is one of the reasons for the lack of progress in covering the country's rice deficit. Another is the fact that the preconditions for improved upland rice production, particularly adequate availability of improved seed and fertilizer supply, are not met. Swamp rice production on the other hand is relatively new, and implies hard work, and sometimes health risks.

9. Among the tree crops, cocoa offers higher returns per day than coffee, which, in addition, has a higher peak labor demand during harvest, thus limiting the acreage a family can handle. Cocoa on the other hand can only be grown on the better soils showing adequate profiles and texture. Available areas tend to be more limited than for coffee which can be grown on more mediocre soils. Experience with the Liberia Produce Marketing Corporation (LPMC) tree crop program confirms that farmers prefer to expand cocoa production over coffee, so that expansion of the latter has markedly slowed down even in counties favorable for coffee such as Lofa and Bong. Net returns from rubber tend to be lower than from intensified tree crop production. This explains why many private rubber plantations have been neglected in the past and why the institutional backing of a special project is required to increase rubber production from holdings where rubber is only part of the farming system.

III. PERFORMANCE OF THE AGRICULTURAL SECTOR IN THE LIGHT OF GOVERNMENT EFFORTS

10. Impatience with lack of progress in rural areas has led Government to undertake a number of special projects and crash programs in order to improve the rural situation and to increase agricultural production. These programs, however, are mostly concentrated on rice and tree crop production.

Rice a) Production and Government Strategy

11. Production of the country's main staple food is stagnating. Accord- ing to the annual Rice Production Survey, total production declined from 249,000 tons in 1974/75, to 229,000 tons in 1975/76. Production for 1976/77 is estimated at 245,000 tons. Since over 90% of total production still origi- nates from uplands, the country's susceptability to the rainfall distribution remains. (Early rains leave a relatively short time for land clearing while excessive rains hamper weeding and harvest.) More weather-independent swamp rice production on the other hand, will only increase slowly. However, rice imports decreased slightly from 50,000 tons to below 40,000 tons over the last 5 years, but this decrease reflects lower consumption rather than better supply as the following figures indicate: ANNEX Page 4

Unit 1974/75 1975/76

Marketable Production metric tons rice 128.7 117.6

Imports metric tons rice 30.6 37.5

Total consumption metric tons rice 159.3 155.1

The decrease in per capita consumption indicates a shift to other crops, mainly cassava, which could indicate that the natural diet has deteriorated rather than improved, particularly in the last two years.

12. In October 1975, the Government tried to encourage production by increasing producer prices for paddy froml10 to 12 cts per pound. LPMC is obliged to buy at a fixed price. Estimated actual prices received by farmers have been 20% lower than the announced prfces.-TThis isfdue to: (i) transport difficutfei-s n-d-lack of warehouses, and (ii) LPMC is forced to buy through sub-agents who not only offer lower prices to cover their margins, but often buy in volume measures which the farmer cannot relate to LPMC prices. In addition, many farmers are not aware of the announced producer prices. Taking into consideration the comparative disadvantage of rice production to tree crops there are no economic incentives to increase rice production.

13. Over the years the Ministry of Agrictilture (MOA) has developed a number of programs to increase rice production, that can be grouped as follows:

(i) Encouragement of Upland Production

This program is based on introduction of the improved variety LAC-23 into the traditional upland cultivation. About 3,000 farms have received packages in 1975 consisting of improved seed and fertilizer for every acre. The packages are delivered free of charge, and the farmer has only to return an equal amount of seed after the harvest while the farmer has to make payments for fertilizers after the first season. It was hoped that, backed by extension effort, the demonstration effect of these packages will lead to a spread of improved cultivation techniques.

(ii) Encouragement of Swamp Rice Production

In the so called "Expanded Rice Program", farmers are persuaded and advised in production techniques by special teams. ANNEX Page 5

(iii) Integrated Prolects

The two World Bank/USAID financed projects in Lofa and Bong counties aim at converting 28,000 acres into intensified upland rice cultivation and increase swamp rice cultivation by about 9,000 acres.

(iv) Special Projects

These are projects in specially selected areas and often combine swamp rice production with upland cultivation; the latter not only for rice, but also for the establishment of tree crops. Uplands were cleared and prepared mechanically with the Government owned Land Development Corporation, AGRIMECO, to be sown with rice for one or two years, after which tree crops (oil palm and coffee) are to be established. Areas of upland and swamps have been allocated to farmers, assuming that farmers undertake weeding and harvest and repay the development costs. Participating farmers are organized into cooperatives, charged with product marketing and input supply, except for tree crops which is the responsibility of LPMC. These projects are expected to be operating about 3,000 acres of developed land by end of 1976 (Table 7.4).

(v) Rice Corporation

The Government has established an independent rice corporation. This corporation is to operate intensive large scale irrigated projects of which one is developed at present and another is at a pilot stage: "Saye Doube" (Grand Gedeh County) with a potential of 2,150 acres, and "Cestos" (Grand Gedeh/Nimba County) with a potential of 15,000 acres for 2 to 3 crops per year (of which one might be Soya) but will incur development costs of $4,000 to $5,000/ha. While the Saye Doube project under management of Chinese technical assistance is being developed with 225 acres ready for cultivation, the Cestos project is still in its planning stage. A consultant team (Taylor- Woodrow/Dalgety) is preparing a feasibility study based on experience with three cropping seasons on 100 acres by the end of 1977. b) Performance of Government Programs

14. With more than 90% of production originating from upland rice, Government's emphasis on improvement of upland rice cultivation is for the time being justified, until swamp rice production can gradually increase ANNEX Page 6 and fill the gap. Theoretically the introduction of the improved variety LAC-23 in all uplands, even without added fertilizer application, would be sufficient to cover the country's rice deficit. After obtaining higher yields, economically reacting farmers, however, are expected to reduce their upland rice acreage to subsistence requirements in favor of expansion of the more remunerative tree crops. Although this reaction would be in the country's interest as it tends to reduce the soil destructing practice of annual crop cultivation on the hilly uplands, it would not contribute to covering the country's rice deficit. However, this deficit could more economically be covered by improving the comparative economics of rice production and providing the necessary support services for the farmer. In the absence of these preconditions the justification for special extension programs is questionable. To obtain self-sufficiency in rice through upland rice development, there is an acute need to first develop a comprehensive seed multiplication program. At present the existLing seed multiplication program is not sufficiently structured to produce enough improved LAC 23 seed for introduction to upland farmers on a mass saturation scale. There is likewise no generally organized fertilizer supply system on a commercial basis; MOA and LPMC distribute fertilizer for their special projects and programs only. Although with the opening of a new extension training college the extension effort can be expected to improve, the existing general extension staff of 133, outside special projects, at a ratio of one for 1,000 farmers, is still too weak to carry such a crash program effort. Finally the low buying share of LPMC, due to its limited purchasing network, has little impact on actually paid producer prices.

15. About the same applies to Government's "Expanded Rice Program" for the promotion of swamp rice production. Although the progressive development of the country's productive swamps is desirable, this long-term program calls for a sustained effort with high quality staff and sufficient availability of inputs as well as organization of marketing. Both programs should therefore be merged under a long-term sustained effort of a specialized agency, e.g. the Rice Corporation.

16. Government's "Special Rice Projects" have proved to be very costly and slow in implementation. Furthermore the large scale mechanized rice development program also seems to be very expensive (Table 7.4). Although available data are vague and sometimes contradictory, some judgment of costs and performance can be formed. A comparison with the newly started integrated projects reveals that special projects seem to be considerably more costly although aiming at the same intensity:

Special Rice Integrated Projects Unit Projects Projected

Costs to-date million $ 4.6 37

Improved acreage of swamp and uplands acres 4,512 61,250

Costs per improved acre $ 1,019 604 ANNEX Page 7

In addition to incurring higher costs, special projects have often produced unsatisfactory farmers' response and participation. Project managers complain about lack of farmers' interest in maintenance of plantations and structures created for them, neglect of weeding crops planted for them, etc. Since projects were planned with acreage and farming system prescribed, and without much regard to the farmers' economic and cultural preference, this lack of interest is not surprising. Farmers are only theoretically involved in cost sharing (they are supposed to repay for the development costs at a later stage). Thus the projects have generally amounted to considerable spoon-feeding for a limited number of farmers without generating the necessary stimulus. The policy of diverting considerable public resources to capital intensive projects in a few small areas has therefore neither yielded significant production increases, nor had a significant income and employment effect on the rural population. The special projects, derived from a period of Government's impatience with progress in rural areas, should now be integrated in the general extension effort, based on improved agricultural support services, while leaving the economic decisions to the farmer and allowing for his full involvement in cost sharing of these projects.

17. Roughly the same applies for the so called "Independence Projects", consisting of clearing annually about 2,000 acres for the annual independence celebrations changing from county to county. On the cleared acreage, upland rice is grown in the first year, to be followed by tree crop plantings under the LPMC tree crop program. Mechanical upland rice cultivation with the use of combines has, under these conditions, generally proved to be uneconomic. Poor seed quality and weeding problems caused low yields, while mechanized harvesting during wet conditions led to excessive costs and poor grain quality.

Rubber

18. Rubber production tends to stagnate (Table 3.5). This is largely due to the decline in production from Liberian owned holdings which account for less than one third of total production. Production of rubber concessions increased only slightly, due to the extensive replanting program of the leading concessionaire, Firestone. Under this program 5,000 acres have been cleared and replanted annually since 1960. With the first replantings coming into tapping age, rubber production is expected to increase again.

19. To aid Liberian owned rubber farmers, the Government has established a Rubber Advisory Service, working with expatriate specialists. This service is to provide extension and training to rubber farmers in addition to establishing rubber nurseries for replanting. Based on the successful experience with this program, the Government plans, with World Bank assistance, a rehabilitation project for about half of all Liberian owned rubber farms. Over a 5 year period, the project aims at rehabilitating 23,500 acres of existing plantations, and to replant 40,000 acres at a cost of US$30 million. Gradually increasing rubber prices (Table 7.5) should aid smallholder development to successfully compete with other tree crops. Parallel to the establishment of ANNEX Page 8 the Rubber Advisory Service, a Liberian Rubber Processing Corporation has been created. A first processing plant with a capacity of 500 tons a month has been constructed at Gbarnga and a second is being planned. Unr1J.i. .he proposed rubber project a rubber development unit would be established as a semi-autonomous entity within the Ministry of Agriculture with the responsibility for providing extension services and training to the Liberian-owned rubber farmers.

Other Tree Crops

20. Production of the other two leading tree crops, cocoa and coffee, have shown very little increase. This is reflected in the purchases of LPMC, the Government's monopoly buyer and exporter (Table 7.6). After an initial increase, production of palm oil and expeller cake, processed by LPMC's oil mill, has stagnated, indicating that farmers may be increasingly less prepared to collect fresh fruit from wild trees. In order to stimulate collections, LPMC has had to raise purchase prices for palm kernels to 10 cts/lb, thus subsidizing palm kernels at the expense of coffee and cocoa.

21. Government has launched an ambitious tree crop development program for the promotion of oil palm, coffee, cocoa and coconut plantations. So far about 11,000 acres of cocoa and 3,400 acres of oil palm have been planted. Owing to late arrival of seeds, coffee planting started late and reached 45 acres. Sixty-nine central nurseries as well as several group nurseries have been established in the main growing areas with improved planting material imported from the Ivory Coast. LPMC's program for the next 5 years foresees the annual planting of over 11,000 acres, which may prove over-ambitious as it depends very much on farmers' response and progress of special projects. Farmers tend to prefer the more remunerative and less labor demanding cocoa to coffee. As a result, demand for coffee seedlings has already declined in the more densely populated areas (e.g., Lofa). Although some reversal is expected to take place as a result of project efforts to improve management standards in coffee cultivation, especially the introduction of pruning, coffee production is expected to expand slowly.

22. The tree crop program follows two approaches: the smallholder program, and the program under the special projects. Under the smallholder part the farmers plant coffee, cocoa and sometimes oil palm on land cleared for upland rice cultivation after the first crop is grown. For areas below 10 acres they receive the seedlings free of charge together with planting advice from LPMC tree crop advisors. A new oil mill with a capacity of I ton Fresh Fruit Bunch (FFB) per hour red palm oil has been established at Totota to cater for palm oil production resulting from this program. On the other hand, under the special projects about 2,500 acres have been planted with tree crops (Table 7.4). The land is cleared mechanically, after which sometimes a crop of upland rice is grown, followed by oil palm and coffee plantings under the management of LPMC with hired labor. (Cocoa is excluded as its establishment demands initial shade; its introduction under this system would demand the establishment of plantains as shade crop first after ANNEX Page 9 which cocoa could be planted.) The land is then allocated in 10-acre plots to farmers who are paid $30 per month during the first 4 years for the maintenance of the new plantations. However, farmers' response has not been satisfactory, so that in many cases LPMC had to withold payments to farmers and undertake the maintenance with hired labor under direct management. This provides yet another example of how the Government's impatience with lack of progress has led it into relatively inefficient capital intensive crash programs, when at the same time the success of the smallholder program demonstrates that the same progress can be achieved with a fraction of the costs. This lesson has important implications for future Government strategy in the agricultural sector.

Forestry

23. Liberia's forest reserves are still considesable. The country's sustained yield is estimated at between 2-3 million m , of which only a small proportion is presently exported. This gives Liberia the chance to plan its forest utilization through selective cutting regimes and zoning to protect designated forestry areas from encroachment of shifting cultivation. 3 Estimated production of logs in 1976 amounted to 600,000 m . Pro- duction has picked up again after a temporary decline owing to the recession in buying countries. There are presently 48 concessions operating in the country, covering a concession area of 9.4 million acres of forest land (78% of total forest area). However, only 32 were reported cutting on half of the concession area. Government has increased the stumpage fees for valuable species (2 species account for over half of total cuttings) to protect these in further cuttings. Likewise under the "processing rules", (introduced in 1973), compulsory processing rates have been increased and concessionaires are now obliged to process 40% of logs cut in the country. Prices received for exported logs are still 20% to 40% below prices in neighboring countries. This is justified by greater transport and shipping difficulties in Liberia.

24. With foreign assistance (German Technical Aid, and US Peace Corps), the Government has started a reforestation program for the replanting of exploited areas and establishment of a pulpwood industry. So far 12,000 acres have been replanted at an annual rate of 3,000 acres. This rate is determined by availability of funds gained from reforestation fees, but is insufficient for the establishment of a sizable pulpwood industry which requires the planting of 20,000 acres annually. Under a planned World Bank financed project, a pilot plantation of 15,000 acres is foreseen, while a Swedish company is planning to plant about 300,000 acres of pulpwood in Bong County.

25. In spite of some ongoing research efforts to test the suitability of various species for reforestation, little is known about the effects of present exploitation policies on the future potential of the forest. Research ANNEX Page 10

would be needed to assess the long term effects of present cuttings on regrowth and future distribution of species in present cutting regimes, the possibilities to preserve valuable species through reforestation, and the effect of reforestation (with pulpwood) on soil fertility and regrowth in following growing cycles. There may, therefore, be an acute danger that present forestry exploitation policy is at the expense of future potential.

IV. ECONOMIC AND INSTITUTIONAL ISSUES

Economic Issues

a) Prices and Market Prospects of Export and Import Substitution Crops

26. In spite of increased competition from synthetic rubber, world market prospect(s for natural rubber appear favorable. Producer prices in Liberia are set at the quoted level for RSSI (specification coaqulum) f.o.b7.- Singapore in the previous month less a discount for processing and other related costs. Firestone, taking 73% of produce from Liberian owned farms, is the effective price setter. The Government is considering the possibility of renegotiating the price formula to base it on New York c.i.f. prices, where most of Liberia's rubber production goes, instead of Singapore. C.i.f. prices in New York were on the average more than 15% higher than comparable c.i.f. prices for Singapore. It remains to be seen whether the establishment of new processing plants, permitting independent marketing, would allow sufficient producer price improvements to induce farmers to increase rubber production and to ensure success of the planned rubber project.

27. Prospects for cocoa are likewise favorable. With only 2% of world production, Liberia's share is insignificant. Furthermore, it is not a member of the International Cocoa Organization and therefore not limited by quota restrictions. Producer prices for the season are proposed by LPMC to the Government according to a formula by which deductions of 10% each are made from effective f.o.b. prices for a stabilization and tree crop development fund. After a decline in 1973/74, the share of producer prices increased again to over 60% of f.o.b. prices, thus improving incentives to the farmer. However, there is a need to improve quality in order to maximize return from exports. Occurrence of moldy and slaty beans cause an average 2-5% price reduction for Liberian cocoa on the world market. Recognizing this problem, LPMC has announced producer prices according to a grading system that allows for price differentials of 4% between grades I and II, and 10% between grades I and III. It remains to be seen whether these relatively small price differentials and the introduction of quality controllers will produce an effective inducement for quality improvement.

28. In spite of the present high prices, future world market prices for coffee are projected to decline from their high levels in 1976, while projected prices for 1980 are expected to remain above 1974 and 1975 levels. Coffee production in Liberia on the other hand, is estimated to increase only slowly since most trees are overaged and, due to farmers' reluctance to ANNEX Page 11

prune, a considerable extension effort would be required before production can be increased. Under the 1976 Coffee Agreement, Liberia has a quota of 100,000 bags (6,000 metric tons), and its exports can be increased by 10% annually until it has reached this quota, thereafter at an annual rate of 5%. Presently this quota is not enforced by ICO and any enforcement in future would be based on Liberia's export at that time. Large increases in coffee production may therefore face quota restrictions and any future projects involving heavy coffee expansion would require a careful assessment of long-term market effects. However, annual increases of more than 10% are not expected in the near future, and in case marketing difficulties due to restrictions should arise, these could be overcome by reducing the flow of smuggled coffee from neighboring countries, believed to constitute between 20% and 25% of Liberia's total supply of clean coffee. About 50% of LPMC's purchases are in dried cherries, while the rest is hand pounded coffee prepared by the farmer. For quality reasons LPMC tries to encourage the latter and to mill its coffee instead. This is done by fixing prices unfavorably for cherries. Farmers however, tend to adhere to traditional handpounding allowing them lower delivery costs. More market information will therefore be necessary to improve coffee quality from Liberian shipments.

29. Rice prices are fixed by the Government taking into account the domestic supply situation in the country. With only 3% of all domestically produced rice marketed in Liberia purchased by LPMC, this organization's influence on prices is limited. Moreover, the fact that LPMC has to rely for most purchases on licensed buying agents, claiming a share of between 20% to 50% of announced prices, reduces its influences on producer prices further. An increase of the announced purchasing price by LPMC seems therefore not sufficient to effectively improve the competitive position of rice and to increase its production. Price increases would have to be accompanied by more market information to the farmer and improvements of the buying network. However, with producer prices equaling present import prices, a slight producer price increase would not significantly increase consumer prices while improving the competitive position of rice in the farming system.

30. Consumer prices for food in general have increased more rapidly than for total consumer goods (Table 9.1). While meat and fish showed the highest increases, other foodcrops, like plantains and palm oil, contributed to the above average increase. Improved infrastructure and support services would have the most marked effect on increased food delivery to Monrovia. The intended feeder road improvement project and a Government financed foodcrop and vegetable promotion in Central Montserrado near Monrovia should contribute to improve food supply for this city. b) Input Pricing

31. In the absence of permanent institutional arrangements for input supply and credit, the Government has followed a policy of delivering free or quasi free inputs, in an attempt to provide sufficient stimulus for its various special projects and programs. Under the upland rice program, ANNEX Page 12 participating farmers receive free fertilizer in the first year. Although theoretically given on the basis of a long-term credit, land clearing and development in special projects is in effect free, as there are no speci_lX arrangements to recover the development costs from participating farmers at a later stage. Under the Tree Crop Program of LPMC, seedlings are given free, as well as plantation establishment for farmers in special projects. Farmers are, however, paying for these services with lower producer prices, since deductions are made from f.o.b. prices for a tree crop development fund. While such arrangements may be justified in initial phases, they do not provide a rational basis for permanent development, since they tend to distort relative prices within the farming system and tend to impose undue strain on Government's resources. Moreover, farm budgets in the integrated projects have shown that farmers can support the full costs of inputs without an undue reduction of income leading to lower adoption rates. In these projects therefore, where adequate provisions for input supply and credit recovery will be made, the Government has agreed that farmers could be charged the full costs for all inputs provided under the project. However, adopting different arrangements for farmers within and outside integrated projects, may tend to create a situation of imbalance. Farmers working in these projects may complain about preferred treatment of their colleagues outside projects and adoption rates of these projects may consequently suffer. The Government should therefore be encouraged to take the decision to charge the full cost prices for all inputs supplied to all smallholder areas as soon as all institutional improvements permit this.

Institutional Issues a) Road Infrastructure

32. Lack of road access to markets of the scattered agricultural population represents a main bottleneck for the growth of agricultural production. Liberia's feeder road network of some 2,600 miles has been developed mostly by forestry and rubber companies. Recently, additional road construction components have been included in the two integrated projects, Lofa and Bong, while a feeder road component is likely to be included in the upcoming integrated project in Nimba County, financed with German bilateral assistance. But for further development there is a need for a well organized program of feeder road development and maintenance.

33. Presently several agencies and ministries are engaged in feeder road construction: the Ministries of Agriculture (through its clearing agency (AGRIMECO), Rural Government and Rural Development, Action for Development Progress, and Public Work, besides local communities. These programs are largely uncoordinated and there is a general lack of economic priority in road selection, inadequate standards, and insufficient provision for maintenance. There is, therefore, an urgent need for a coordinated approach with overall responsibility concentrated in one institution (for a fuller treatment of this subject, see the section on transportation below). A special feeder road project, including institutional improvements with ANNEX Page 13 responsibilities for construction and maintenance, concentrated in a Feeder Road Unit of the Ministry of Public Works, is currently under preparation by the Government for World Bank financing. This preparation should also include an analysis as to whether some of AGRIMECO's feeder road construction programs should be taken over by the Feeder Road Unit, which would probably be better equipped and more experienced for this type of work. b) Land Clearing and Development

34. As already pointed out the Government has started ambitious land clearing programs for tree crop and rice development. For this purpose the wholly Government owned Mechanization and Land Development Corporation (AGRIMECO) was established under a management contract with AGRIDEV of Israel, that has now been terminated. Starting in 1972, this company had by 1976 cleared 16,000 acres of upland and 1,140 acres of swamps (Table 7.9). Most of these areas are located in special projects. AGRIMECO plans, for the coming few years, to continue clearing at an annual rate of about 5,000 acres to reach a total of 36,000 acres of uplands as well as about 17,000 acres of swamps by 1979/80 (Table 7.10). Provisions in the Development Plan, however, cover only $12 million out of the estimated $36 million costs, so that $24 million would have to be sought from foreign sources if this ambitious program is to be realized.

35. Although AGRIMECO's charges appear to be within the range of similar charges in neighboring countries (Ivory Coast), AGRIMECO is still incurring losses in its operations. Its operating statement for 1976 shows losses of $520,000 of which $65,000 are interest payments on loans. An inventory of existing machinery, however, shows that out of a bulldozer fleet of 42, more than half are out of order and that estimated repair costs amount to 70% of the present book value of the fleet. These figures explain the present financial difficulties of the Corporation which relied excessively on loan finance. To overcome these difficulties, the Corporation has asked the Government to transform its present loan obligations, estimated $3.2 million, into equity as well as extend a new loan of $3.0 million on soft terms to purchase new machinery. Although the Corporation has taken some steps to improve its financial management, it still faces numerous problems in the physical management of its many scattered sites as well as in the maintenance of its equipment. Some machinery has been idle during 50% of the total operating time. Furthermore, the quality of land clearing would require substantial improvements through the use of topsoil-protecting equipment and methods.

36. The Government's ambitious land clearing program is therefore still placed on a weak footing. Considerable savings could be gained if all upland land clearing programs for special projects were terminated, since they have proved to be inferior to smallholder development. This would entail the elimination of all mechanized upland rice production for which an extensive fleet is maintained (especially combines), and which has shown poor results. Furthermore, the program for large mechanized swamp rice ANNEX Page 14

development seems overambitious at a time when these projects have not yet proved their economic viability at existing export prices. A reduced program limited to justified oil palm and coconut development with some supplementary swamp development in existing projects would allow AGRIMECO to consolidate its operations and avoid excessive losses and the consequent drain on Government finance. AGRIMECO would thus serve as the country's land clearing contractor operating on a commercial basis. This of course raises the question of whether such a reduced work program justifies a national corporation in the public sector, or whether the remaining work could be carried out more economically by private contractors. It is understood that at present the Government is reviewing the entire land clearing program.

c) Cooperative Development

37. Liberia is actively promoting cooperative development. The movement started in 1971, and at present 47 societies with a total membership of over 14,000 are registered. Individual membership ranges from 200 to 2,000 members per society. Agricultural cooperatives are primarily active in marketing of agricultural products, such as cocoa, coffee, and palm kernels, as well as rice. They are licensed buying agents in certain areas which gives them a quasi monopoly for the buying of coffee, cocoa and palm kernels. Except for cooperatives in special projects, they have not been involved in input distribution and credit operations. Only one society (Voinjama) has successfully established a rural savings bank with 140 accounts.

38. In spite of its impressive growth, the cooperative movement still suffers from severe management problems that have to be overcome if cooperatives are to be an effective tool of rural development. An auditing survey of all societies indicates that only 18 out of 47 societies carry out commercial operations. Some have ceased operations due to business failure, but many have been founded in anticipation of tree crop programs and have not yet started operations. The survey points to management weakness resulting from lack of training, especially in accounting. Furthermore, there is a certain dissatisfaction among members who resent the dominance of influential farmers in management, lack of democratic procedures marked by infrequency of board meetings and member information, absence of secret voting, etc. The future role of cooperatives will therefore depend on the movement overcoming its present weakness. Thought should also be given to the question whether their present functions as agents of a Government Corporation with monopoly powers for product purchase at prices dictated by Government, will enhance their image as a true farmers' organization serving the interests of its members.

39. Government has established a Cooperative, Credit and Marketing Division in the Ministry of Agriculture with a cooperative section in charge of promoting cooperative development. Its staff is presently insufficient to carry out effective auditing as well as providing the necessary training and management assistance to overcome the present weakness of the movement. Although some foreign assistance (US) in cooperative training has eSep secured, awomre concerted and sustained effort backed by permanent n i utions will De required to ensure a successtul growth ot the cooperative ANNEX Page 15

movement in Liberia. A successful start has been made with the integrated projects, where cooperatives are in charge of product purchase and input distribution, and are backed by a considerable management and training assistance effort of the projects.

d) Credit

40. Agricultural credit has mainly gone to large farmers, cooperatives, and special project farmers. There is no organized system of smallholder credit. In the absence of an effective credit institution, the Government has created a credit section in the Ministry of Agriculture that is charged with advancing short term credit of less than $5,000 for seasonal inputs and hand tools, medium term loans below $15,000 for pasture establishment, and long term loans exceeding $15,000 for irrigation and plantation establishment. All loans are provided in kind. Since 1972, loans totalling more than $5.6 million have been made (Table 7.11). Of these 96% have been for rice, mostly as long term credit. Very little (6%) have been repaid, which is not surprising in view of the large share of long term credit (repayable over 15 years). However, for most long term credits in the special projects there are no fixed credit agreements. Moreover, the credit division of the Ministry of Agricul- ture, staffed by only 4 credit officers without adequate logistic support, is not in a position to supervise credit recovery from these loans. It is therefore doubtful whether these loans will be recovered at all. Present credit procedures are geared to large loans, and therefore too cumbersome to fit the needs of mass smallholder credit.

41. The credit division in the Ministry of Agriculture is intended to be a forerunner of the Agricultural and Cooperative Development Bank scheduled to commence operations during 1978. A study, commissioned by the Ministry of Agriculture, recommended the establishment of such a Bank geared to the special needs of the rural population. Pending the establishment of the Bank, LBDI has agreed to open subsidiary branches in Lofa and Bong counties to cater for the credit and saving needs of cooperatives in these project areas and to be responsible for the management of the project's revolving fund.

e) Reorganization of the Ministry of Agriculture (MOA)

42. Realizing that its present structure is not well suited to implement policy decisions, MOA has progressively delegated operational functions to newly created special agencies. In the course of this policy the Liberian Produce and Marketing Corporation (LPMC) has been charged with marketing of agricultural crops; a Liberian Rubber Processing Corporation (LRPC), and a Forestry Development Authority (FDA) have been created. Recently a number of commodity corporations have also been established: the Liberian Sugar Cor- poration (LIBSUCO), the Rice Corporation, the Palm Products Corporation, and the Coffee and Cocoa Corporation; the latter two being subsidiaries of LPMC. This specialization of activities is well in line with successful experiences of similar approaches in neighboring countries, such as the Ivory Coast and Ghana. ANNEX Page 16

43. The remaining operational areas, not covered by special agencies, are the field of support services necessary for smallholder development as well as livestock and fisheries. MOA has commissioned a study to propose a suitable structure for smallholder development. The study, now completed, recommended the establishment of a Rural Development Authority (RDA) comprising all support services necessary for this purpose. The reasoning for the establishment of RDA in this study, however, is rather superficial as it justifies its proposal mainly on fault finding and criticism of cumbersome administrative procedures, and actually recommends the reintegration of RDA into the Ministry once these problems have been overcome. A more meaningful justification for this proposal, and one consistant with Government policy would be the need for a clear division of operational functions (carried out by special agencies) and regulative functions (carried out by MOA). MOA, although not rejecting some of the study's conclusions, has therefore demanded a more comprehensive and detailed follow-up study dealing with institutional changes for rural development as a whole.

f) Research

44. Agricultural research is carried out at three institutions: the Firestone Company for rubber research; the College of Agriculture and Forestry carrying out applied research on forestry and annual crops; and the Central Agricultural Experiment Station (CAES) operating the main research center of MOA in Suakoko. Since there has been little coordination between these programs, a Liberian Agricultural Research Council was established in 1974, but so far the Council has not had any impact.

45. CAES has not been very effective in developing a meaningful research program, as its present operations consist of a conglomeration of independent experimental programs aided by various donors, but with little coordination between them. Moreover, the station has organizational and logistical problems. MOA intends to commission a study to address the current problems facing CAES and to suggest ways of making it more effective. It is expected that the study would draw on the experience gained in the International In- stitute for Tropical Agriculture (IITA). In addition, USAID has a mission for the same purpose. The two reports should result in a meaningful program as well as improve CAES organizational structure.

V. FUTURE STRATEGY FOR THE DEVELOPMENT OF AGRICULTURE

46. The previous agricultural development efforts in Liberia were characterized by a succession of ad hoc projects and crash programs derived from the urgent desire of Government to achieve faster progress in rural areas. Their limited success is mainly due to inadequate planning without farmer involvement on the one hand, and the lack of support services on the other. Future development efforts should take these lessons into account by laying appropriate emphasis on the strengthening of agricultural support services. Thus agricultural development in Liberia requires a consolidation phase where the emphasis would be on institution building with long-term objectives, and policies focusing on the farmer as the center of decision making. ANNEX Page 17

a) Individual Crops and Enterprises

47. The rice deficit of the country could be more easily covered by appropriate economic incentives and improvement of support services than by special projects and programs. A modest increase in producer price, coupled with improvements in buying procedures, would sufficiently improve the competitive position of rice within the farming system. In the long-term the emphasis would have to be on promoting swamp rice cultivation, while intensification of upland rice cultivation should be limited to the objective of obtaining sufficient production to satisfy subsistence requirements from a smaller acreage. The emphasis should be on the introduction of improved seed rather than high fertilizer applications, as the latter requires higher cultivation standards. The bulk of commercial rice production should come from farmers who specialize in the production of swamp rice.

48. Special rice projects should be consolidated by carrying out com- plementary land development investments to make them fully operational, after which they could be integrated into the general development effort. Under these conditions any additional large-scale capital-intensive swamp rice projects are not needed to cover the rice deficit. They would appear justified only if extensive pilot operations have proved that they can compete succes- fully on the export market; that sufficient management standards can be assured (involving expatriates in the initial phases); and that they do not constitute a drain on scarce resources required for higher priority investment programs. The two projects presently started (Saye Dube and Cestos) do not appear to fulfill the conditions above. While the sites chosen seem to offer a sufficient potential for two to three tree crops annually, the projects are expected to face high development costs and management problems. The scarcity of labor will dictate capital-intensive mechanized farming methods that may prove extremely difficult, with most planting, weed control, and harvesting to be carried out under wet conditions.

49. Rubber development should focus on bringing Liberian-owned rubber farms into production by establishing support services for rubber production. The generally wealthy Liberian rubber farmers should be sufficiently involved in cost sharing of any investment that increases their income. Improvement of producer prices will be facilitated by the establishment of processing facilities, which may also strengthen the negotiating position of Liberian farmers with the major buyers.

50. Liberian-owned commercial farms would deserve Government's attention as producers of rice and tree crops as well as livestock. The entrepreneurial spirit that has led to the establishment of these farms deserves support in helping the farmers to improve their management methods. In addition to the proposed general improvement of support services, these would require special management assistance in farm planning, modern production techniques and effective utilization of investment credit. A special farm planning service, established under MOA could have a considerable effect on the production of rice, tree crops and possibly livestock. ANNEX Page 18

51. Tree Crop Development other than rubber should progressively gain in importance as an export earner and as a means to diversify the economy by better utilizing Liberia's natural potential without damaging soil fertility. The development effort should distinguish between coffee and cocoa on the one hand, and oil palm and coconut on the other. While the latter should be developed through commodity corporations, the former, being part of smallholder farming systems, should be developed through integrated rural development projects whereby the Coffee and Cocoa Corporation could still carry out specific functions such as marketing, nurseries, etc.

52. Oil Palm and coconut promotion as plantation and outgrower development appear desirable objectives within the budgetary limitations and the possibilities to attract foreign donors. Ecological conditions for these crops are favorable and largely similar to neighboring Ghana and the Ivory Coast, where their successful development has contributed to diversification of agriculture in the rain forest belt. Results of exiting oil palm plantations undertaken by LPMC indicate similar yields to those of the Ivory Coast. Oil palm and coconuts justify the establishment of specialized commodity based corporations, as their development requires a processing plant on site for the adequate supply of which a nucleus estate is essential. The latter again is in the best position to provide all production promotion and marketing services to surrounding outgrowers. The need for simplicity in management of commodity corporations is an argument against their establishment as subsidiaries of LPMC, as the latter deals only with marketing of smallholder crops.

53. With the establishment of the Forest Development Authority, forestry development should start to receive the attention in Government policy it deserves. In addition to improved supervision of selective cutting regimes by concessionaires, more emphasis should be laid on implementing existing forestry legislation for the protection of zones reserved for forestry exploitation from encroachment by shifting cultivation. This may imply a further planning effort supported by photo interpretation for effective zoning. Reforestation efforts for the establishment of a pulpwood industry as well as the preserva- tion of valuable species need further acceleration. Uncertainty as to the long-term effect of present forest exploitation and reforestation on the pre- servation of valuable species as well as on the maintenance of soil fertility, indicates the need for long term research. Since this can be more effectively carried out by a scientific organization than by a Government agency or project, contacts for the establishment of long-term research programs should be initiated with scientific organizations in donor countries. b) The Structure of Agricultural Services

54. The outlined strategy would demand three overriding organizational tasks: ANNEX Page 19

The spreading of the integrated approach into the smallholder sector of the non-project areas and the establishment of commodity corporations in the plantation sector;

The buildup of sufficiently dynamic operational support services; and

- The restructuring of MOA into an effective policy formulating body and control institution to guide agricultural development in Liberia.

While the establishment of commodity corporations would follow well established patterns, the restructuring of support services to fully meet the needs of smallholder development raises the question whether this could be done by restructuring MOA or whether an autonomous specialized agency would be better suited for this task. To answer this question an outline of the required tasks of the future agricultural administration by (a) operational and (b) regulative or supervisory functions becomes necessary.

55. The case for spreading the integrated approach is easily made: It allows the development of specialized services to deal with the farming system and therefore the farmers' needs - as a whole - instead of dealing only with one enterprise. Liberia's low population density, on the other hand, allows the establishment of comprehensive projects only in the more densely populated areas of the country. In the remaining areas with an average number of 8,000 to 10,000 smallholders per county, this structure would cause excessive administrative overheads. In these areas a more suitable structure comprising a minimum package of basic services concentrated at county level is more suitable. The absence of a project structure, however, necessitates a stronger administrative and professional backing of the non-project counties by a central agency.

56. The tasks and functions that need to be urgently addressed by the Government can be summarized as follows:-

- Initial buildup of a common service organization for the integrated projects to reduce administrative overheads and to allow an earlier localization of their management by setting up centralized professional backup services. Common services for projects would comprise: financial control and procurement, extension, staff training, seed and planting material production, land planning and registration, planning and evaluation;

- The integration of special projects into the general development of the sector;

- Expansion into remaining smallholder areas and takeover of remaining general extension staff at county level; and

- Planning of new projects and programs. ANNEX Page 20

57. With these requirements in mind, the question arises of whether the MOA can be sufficiently restructured to allow for the flexible and dynamic operational procedures required for the implementation of these pre-requisites of agricultural development. Since it seems difficult to reorganize the Min- istry of Agriculture into a body that can effectively carry out field operations, the alternative of establishing a separate Agricultural or Smallholder Development Authority has been suggested. This is in line with MOA's already established policy to delegate all operational functions to specialized agencies. The basic idea is that, relieved of most operational duties, the MOA would be free to develop into a leading policy formulating body in rural development with the specialized agencies acting as its executive arm. At any rate, such far reaching proposals require intensive thinking by the Govern- ment particularly in view of the severe limitations of skilled manpower at all levels particularly at the senior and middle level management. When determining the future role of the MOA, particular attention should be paid to the Ministry's present limited capability to provide adequate logistical, financial and other support services and their effects on the size and scope of future agricultural projects in Liberia.

ii) The Role of the Ministry of Agriculture

58. Ideally, management assistance, cooperative training and other central services should be concentrated in a central cooperative service (say "National Federation of Cooperatives") to ensure that these functions are not neglected and carried out by an organization that has a vested interest in their efficiency. For Liberia this solution may be premature and has to wait further development of the cooperative movement. In the meantime the Government may have to continue performing these functions. This would demand that a separate and effective Cooperative Division be set up in MOA. The network of primary and secondary cooperative societies should be extended on a country-wide basis as a precondition for intensification of smallholder agriculture.

iii) Credit Policy

59. At present agricultural credit is handled by a section in MOA. How- ever, this arrangement is not suitable for an efficient supply of smallholder credit and it therefore does not fulfill the preconditions necessary for developing into an agricultural credit bank. It can, therefore be regarded as an interim solution. The same applies to LBDI. Its small share of agricultural lending has exclusively gone to large farmers, since its statutes as a profit making organization, paying dividends to private shareholders, prevent it from entering into the risky and administratively expensive field of mass smallholder credit. The question of whether the arrangements adopted for integrated projects are acceptable for country-wide application would depend on a number of preconditions, namely: ANNEX Page 21

that all cooperatives are sufficiently strengthened and supported to take over individual credit administration as in integrated projects; and

that the statutes of LBDI subsidiaries can be sufficiently altered to fully reflect their envisaged functions as rural banks at county level, that is; (i) provider of campaign finance for cooperatives; (ii) manager of revolving funds for cooperatives credit operations; (iii) individual savings bank; and (iv) provider of individual credit to non- members of cooperatives. The latter function seems important to cover also the needs of the non-agricultural rural population and to prevent a monopolistic situation of cooperatives forcing farmers to become members in order to avoid discrimination. iv) Seed Multiplication

60. The attainment of goals for increased rice production (para. 49) would hinge on the existence of an effective system for seed multiplication. A survey would be required to access future seed requirements for improved upland and swamp rice and to recommend where best to produce it. The selected special and integrated projects, possessing specialized extension services, would seem to offer the best possibilities for the time being. On the other hand, seed production and multiplication should be organized as a commercial activity whenever possible. This would presuppose the existence of a few sufficiently large farms possessing the necessary management standards. Quality control and planning of distribution, however, would remain the responsibility of MOA. v) Rural Trade

61. Successful market orientation of primarily subsistance farmers in distant rural areas necessitates an effective input and consumer goods supply. The beginning involvement of some cooperatives in consumer good supply con- tributes to effective competition with local traders of whom frequently one or two dominate the local market. Improved storage facilities and organized purchase and supply would become necessary to spread this approach, which could become the task of the central cooperative organization proposed above. Similarly, foodstuff supply to the cities requires improvement, as rising consumer prices for foodstuffs indicate. The specialization of a cooperative in vegetable production and marketing in the Central Montserrado project, financed by the Government, is a step in the right direction and may be followed in neighboring areas of Lower Bong, Grand Bassa, and Cape Mount, depending on experience gained with this approach. ANNEX Page 22

VI. PROJECT POSSIBILITIES

62. A number of projects that are in line with the proposed approach of combining physical development, institutional improvements and specialization are already under preparation for possible consideration by the World Bank Group along with other aid donors. These are Rubber Development, Forestry Development and Feeder Road Construction. There are, however, a number of other projects that meet the criteria outlined above, and for which some preparatory work has been done but no final decision by the Government or a donor agency has been reached. These projects include the following:

(i) Strengthening Support Services for Smallholder Development

The objective of this project would be the establishment of institutions capable of bringing about a sustained development of smallholder agriculture for export production as well as import substitution. The main issues which could come under this project are the future role of the Ministry of Agriculture and the strengthening of the Cooperative Division within the MOA to provide management assistance, training and external auditing services for primary and secondary societies as well as the organization of the supply of consumer goods and inputs not provided by LPMC.

(ii) Oil Palm Plantations and Coconut Development

This project would aim at the establishment of oil palm plantations with outgrowers as well as the establishment of smallholder coconut plantations in the coastal sands. However, a thorough and careful economic analysis should be undertaken before proceeding with these projects.

(iii) Pulpwood Plantation for the Expansion of Nucleus Pulpwood Plantation

B. THE MINING SECTOR

63. The mining industry is the single most important sector in Liberia's economy. The industry is dominated by iron ore mining whose importance to the economy is evident in its contribution to GDP, export earnings and government revenues. Iron ore mining is estimated to have contributed 23 percent of GDP in 1976 (a further 1 percent is contributed by other minerals). Exports of iron ore are estimated to reach $343 million in 1976 and will account for about two thirds of the value of total merchandise exports for the year. The contribution of iron ore receipts to government revenues is estimated at $29.3 million equivalent to about 20 percent of total government current revenues. However, the contribution of iron ore mining to Liberian employment is relatively unimportant despite its large influence in other respects. In 1974 employment in the entire mining sector was estimated to have been 21680, or 10 percent of the total employment. This percentage has not significantly changed since that time. Despite the quantitative importance of iron ore mining in the Liberian economy, the significance of this sector to the development of the rest of the economy has been relatively small, because of the enclave character of the activity and the limited linkages with the rest of Liberia's economy. ANNEX Page 23

Growth of Iron Ore Mining

64. The growth of iron ore mining in Liberia in the post-war period has been spectacular. The Liberian Mining Company (LMC) started production in 1951 and its annual shipment steadily rose to about 3 million tons by the early 1960s. In the first half of the 1960s three companies: the National Iron Ore Company (NIOC), the Liberian American-Swedish Minerals Company Joint Venture (LAMCO JV) and DELIMCO (now Bong Mining Company (BMC), started new mines. Total annual shipments rose to 15.6 million tons by 1965 and reached a peak in 1973/74 when they averaged 25.4 million tons. Since then, shipments have declined to 20 million tons in 1976 in response to the slump experienced in the iron ore markets as a result of the economic downturn in the world's economy during 1975/76. However, sales revenues have continued to grow because of price increases. Sales revenues in 1976 are estimated at $334 million, an increase of 21 percent over the 1974 figure, despite a 17 percent decline in shipments over the same period.

65. In 1975 Liberia ranked as the eleventh largest iron ore producing country in the world (just behind Venezuela). In order to maintain its market position, Liberia must in the near future attract large amounts of capital which would be used to increase its production by opening new mines and expanding present ones. Failure to develop new iron ore resources may result in a loss of the country's traditional markets in Western Europe to new mines in Brazil and Australia.

Regional Distribution of Iron Ore Exports

66. Table 8.1 shows the tonnages and destination of Liberia's iron ore products over the period January 1, 1975, to November 30, 1975. Some 62 percent of shipments comprised fines and concentrates, while the remaining 38 percent was divided equally between lump ore and pellets. Western European countries accounted for 80 percent of the shipments, while the United States took only 11 percent, reflecting Liberia's favorable geographical location with respect to the European markets. Eighty-four percent of the shipments went to six countries - Germany, Italy, Holland, United States, France and Belgium - each receiving more than I million tons. Germany and Italy were the largest importers of Liberian ore (41%), reflecting their ownership of BMC's mine.

67. The preference for pellets by American steelworks is reflected in the fact that the USA took 93 percent of its shipments in the form of pellets and lump ore, while 90 percent of the fines were shipped to Western Europe where the preference is for sinter feed. However, on account of the small percentage of shipments to the USA, 82 percent of Liberia's pellet production was exported to Europe, with Germany taking about half. Given the historical marketing association with Europe, any expansion of Liberia's iron ore production in the future is ideally placed to take advantage of expanded demand in that region over the period 1980 to 1985. ANNEX Page 24

Industrial Organization of the Industry

68. Liberia's iron ore is produced from four mines at Mano River, Bomi Hills, Bong and Nimba, and a further three deposits at Wologisi, Bie Mountain and Putu are currently under investigation as potential new sources (see map). The principal features of the seven deposits are given in Table 8.2 and salient features on production, average prices and sales income for the four mines that are in production are summarized below:

ESTIMATED SHIPMENTS FOR 1976

Average Tonnage Price Sales Income + Million tons % $/ton million $ %

LMC (Bomi Hills) 2.09 10.4 15.26 29.55 8.8

NIOC (Mano River) 2.79 13.8 7.69 21.88 6.5

LAMCO JV (Nimba) 9.11 45.1 17.08 156.41 46.7

BMC (Bong) 6.20 30.7 19.94 127.06 38.0

Total 20.19 100.0 16.43 334.90 100.0

The largest exporter is LAMCO JV with a 45 percent share of total shipments, followed by BMC with 31 percent. BMC shipped the highest unit value tonnage, which resulted in this company contributing 37 percent to the total sales income. This is because half of BMC's shipments are in the form of high-value pellets in comparison with 19 percent pellet shipments for LAMCO JV. The NIOC accounts for 14 percent of the shipped tonnage but only 7 percent of the total sales income due to the low unit value of its poorer product. The LMC accounts for 10 percent of the shipped tonnage and 9 percent of the total sales income.

+ f.o.b. Monrovia/Buchanan. ANNEX Page 25

Market Outlook

69. The period 1975/76 has not been favourable for iron ore producers owing to the decline in world steel output. Steel output fell by 8 percent in 1975 from 710 million tonnes in 1974 to 652 million tonnes in 1975, as a result of the downturn in the world's economy. Reductions in iron ore production levels were, however, less severe as stocks were built up at mines, ports of shipment and steelworks. LAMCO JV alone has stocks of 4 million tonnes, equivalent to three months' production, at the end of 1976.

70. The recovery of the US economy now appears more certain with the Business Week Index, reflecting American industrial activity, up 7 percent on a year ago. Western European economies may follow the USA, albeit at a slower rate. As the recession continues to recede, iron ore requirements will ultimately increase in line with the general growth in the world's steel consumption. Current forecasts suggest a growth in iron ore demand of some 4.0 percent per annum until the 1980s. 1/ Growth of demand in the EEC countries is likely to be even lower, may be around 3.0 percent per year.

71. Plans for new iron ore capacity have been delayed, due to the world recession as well as the inflationary increase in the capital cost of new mines. Some shortfall of iron ore supply could materialize over the period 1980 to 1985, given the long lead time of four to five years to bring in new mines. Calculation of the supply/demand balances is difficult due to the inherent flexibility of output from open cast mines and the uncertain timing of projects in the pipeline and their effects on expanded production. Al- though a possible shortfall in Europe could represent a marketing opportunity for Liberia, it could also be filled by increases in production from existing mines, especially from those in Brazil and Australia. However, Liberia could be ideally placed to take advantage of further market growth in the 1980s provided decisions are taken soon to bring at least one of the Wologisi, Bie Mountain and Putu deposits into production. Liberia's annual output could be increased from 21 million tons in 1976 to 32 million tons in 1984, provided the decision to bring the three new projects is taken by the end of 1977.

Prices Structure

72. A review of the Liberian iron ore mining companies shows that the mines will suffer a cost squeeze in 1977/78, largely as a result of anticipated increases in the price of oil products. Liberian mines are forecasting a 15 percent increase in cash operating costs for 1976 which is expected to decline to a 12 percent increase in 1977. This is not expected to be counter- acted by any significant price increase, owing, in part, to the large stocks of iron ore available to the steel producers and the strong anti-inflationary policies being adhered to by most Western countries. However it is expected that, in the medium term (five years), prices will stabilize and that they

1/ TOK-X Feasibility Study, Granges International Mining, 1975. ANNEX Page 26 will keep step with inflation as the world economy emerges from the recent recession. In the long term, Western European prices (in constant terms) should increase as a greater percentage of iron ore will come from Brazil and Australia and new sources in Africa. These new mines will be located further away from the ports of shipment than before and this, together with longer shipping routes, will result in increased tranportation charges which in turn will be passed on to the steel producers in the form of higher prices.

Iron Ore Product Mix

73. The iron ore industry produces four main types of iron ore product: lump, fines, pellets and pellet feed. Lump (rubble or blast) ore (+10 mm) can be fed directly to the blast furnace. Fines or concentrates (-10 mm +100#) can be mixed with lump ore for direct feed to the furnaces, but are more commonly first sintered with lime and coke or anthracite to produce self- fluxing or super-fluxed sinter feed for the furnace. Very fine-grained iron ore concentrates with more than 30 percent (-200#) material can only be used as pellet feed. Pellet plants are usually located at the mine or port of shipment but a limited market (7 million tons per annum in Western Europe) exists for pellet fines which are used as a feed for pellet plants attached to steelworks.

74. Steel producers' preferences with regard to the type of iron ore product vary from country to country. In Europe the preference is for sinter fines, which, in the past, have been readily available from the traditional suppliers. The USA prefers pellets, the only product which can be made from their indigenous fine-grained taconite ores. The European countries (except for Germany) have sufficient sintering capacity to provide 80 percent of the feed to their blast furnaces. The market for sinter fines is likely to become tighter in the future, which, however, may not necessarily lead to higher unit prices. European countries will buy lump ore but only at a discount as they have to cover the additional cost of crushing the ore prior to use in the sintering plants. The trend in the iron ore industry is to crush lump ore at the mine to produce suitable fines for the steel producers.

75. European producers would ideally like to use a self-fluxing pellet but at present such a product is technically inferior to other types of feed. In anticipation of the impending shortages of supply of sinter feed, the EEC is planning to build two new pellet plants, one in Holland and one in Britain, which will double the current annual pellet output from 7 million tons to 14 million tons. Liberia, in view of its traditional marketing association with Western Europe, could be in a favourable position to supply the pellet feed for these two new pellet plants from one or more of the new mines where the grain size of the ore is too small to produce acceptable sinter fines.

Projected Iron Ore Exports

76. By 1980, due to the closure of the LMC's mine and projected expansion projects at the other three mines, the sales from existing mines are expected to increase to about 23.8 million tons worth about US$490 million. ANNEX Page 27

Shipments are expected to rise by 14 percent and the gross revenue by 43 percent over the four-year period to 1980. The sharp rise in revenue will be caused mainly by the doubling of BMC's high unit value pellet production and an anticipated general price increase of about 5 percent per annum. The rise in shipments from 1976 to 1980, averaging about 3 percent per annum, is compatible with expected forecasts for increases in the world's iron and steel industry.

77. Three new iron ore deposits at Wologosi, Bie Mountain and Putu are currently being investigated by foreign mining companies. However, at best, production from any of these three sources would not start before the early 1980's given the long lead time for construction and the lack of firm agreements on Bie Mountain and Putu between the Government of Liberia and in- terested foreign mining companies.

Government of Liberia's Take From The Iron Ore Industry

78. The mining companies are exempt from the laws of general application under their concession agreements with the Government of Liberia (GOL). In the case of LAMCO JV, BMC, the NIOC and the LMC, the Government of Liberia (GOL) receives, under the profit-sharing agreement, 50 percent of the net distributed profits after appropriations to reserves and interest payments. In the case of the Liberian Bethlehem Iron Mines Company (LIBETH), a 50 percent income tax is levied on the company's net profit after imputed interest payments. Each company guarantees the Government of Liberia a set percentage (Table 8.2) of the sales income, f.o.b. Monrovia or Buchanan, as a "royalty" which is deducted from the net profit.

79. Table 8.3 shows the combined cost and income structure together with the GOL take for the five operating companies for each of the past nine years (1967/75). Individual cost and income statements for the mines are found in Tables 8.5 to 8.9. The aggregated costs and incomes for the five companies are given in Table 8.4 and are summarized below: ANNEX Page 28

1967 /75 Sales Income Total %

Shipments - tons 195.94

$ million

Sales income 1,648.64 100.0

Operating, administration and selling costs 882.95 53.6

Amortization and depreciation 269.93 16.4

Depletion allowance 13.84 0.8

Other costs (income) (0.09) -

Total costs 1,166.63 70.8

Earnings before interest and GOL take 482.01 29.2

Interest 178.93 10.9

Net profit before GOL take 303.08 18.4

GOL take 117.56 7.1

Reserves and foreign dividends 185.52 11.3

GOL take as a percentage of sales income 7.1

GOL take as a percentage of earnings before interest 24.4

GOL take as a percentage of net profit 38.8

GOL take per shipped ton $0.6

Note: GOL - Government of Liberia ANNEX Page 29

As the table above shows, Government of Liberia (GOL) take over the past nine years averaged 7.1 J/$ sales, equivalent to 60i per shipped ton. However, within the industry the GOL take varies widely from 0.8 J/$ sales for the NIOC, reflecting the poor financial state of this company, to 14.2 k/$ sales for the LMC, reflecting the company's low interest charges set against the net profit. The GOL take from BMC is only 3.4 #/$ sales, on account of the high proportion of interest charges. The figure for BMC is, in fact, only marginally above the mandatory 3.0 /$ sales required by the Government as "royalty".

80. Some criticism has periodically been levelled at the iron ore companies over the apparently low GOL take in comparison with tax revenue generated by the iron ore sector in other countries. Such comparisons are of dubious value because the basis of comparison between iron ore industries in different countries varies considerably. Differences such as capital and operating costs, debt/equity ratio, market and transport situation, product mix, tax structures and the historical background make such comparisons almost valueless for purposes of analysis. Save for a few minor accounting details, auditors have consistently reported that their clients have followed the terms of the concession agreements with the government.

81. It must be assumed that the Government is, in broad principle, satisfied with the degree of control over the development of its resources allowed by concession agreements. This is reflected by the recently signed concession agreement with the Liberian Iron and Steel Corporation (LISCO) for the Wologisi deposit, an agreement which in its concepts is little different from those signed with existing companies in the 1950s. Although changes to some conditions within existing agreements could improve the benefits to the Government, any major change in the underlying concepts behind the concession agreements would result in the companies having significantly to change their financial structure. Such a change would not only delay current expansion plans in existing mines but will also create an unfavourable climate for raising the $2,000 million to $2,500 million required to develop the three new iron ore projects which Liberia requires in order to maintain its present position in the iron ore markets. ANNEX Page 30

Liberia and Liberian Receipts

82. The following table estimates the total Liberian receipts including revenues from the profit sharing agreements, and thus represents the total sums of money that remained in Liberia in 1975.

$ Million

Lamco JV BMC LMC* NIOC Total*

Liberian payroll and salaries 24.0 4.7 3.2 3.6 35.5

Consular invoices 0.3 0.4 - 0.1 -

Other taxes 1.0 0.2 - 0.3 -

Payments to local contractors 4.0 1.5 2.1 0.4 52.6

Local purchases 14.0 22.5 - 2.6 -

Others (contributions, schools, etc) 3.0 0.1 - 0.1 _

Withholding taxes 1.4 - - - 1.4

Sub total 47.7 29.4 5.3 7.1 89.5

GOL take ("profit sharing") 12.3 3.0 2.9 - 18.2

Total 60.0 32.4 8.2 7.1 107.7

Sales income, % 41% 32% 37% 37% 37%

* Estimate

The above figures indicate that $108 million, or 37 percent of the total sales income from iron ore sales, remained in the Liberian economy. However, some $50 million of this represent payments for oil products, explosives, cement, etc, which are bought directly from overseas by the iron ore companies. In terms of Liberian payroll and salaries, the money retained in the country is estimated at $36 million or 12i for every dollar of sales income generated by the iron ore industry.

Short-Range and Medium Range

Projections (1976/80)

83. Table 8.4 contains projections for the annual combined cost and income structure for the five iron ore mining companies for the five-year period ANNEX Page 31

1976/80. Individual cost and income projections for the individual companies are found in Tables 8.5 to 8.9. The aggregate projections of costs and incomes for the five companies are summarized below:

1976/80

Sales Income

Total %

Shipments - tons 113.14

$ Million

Sales income 2,116.78 100.0

Operating, administration and selling costs 1,415.76 66.9

Amortization and depreciation 284.88 13.4

Depletion allowance 29.24 1.4

Other costs 10.76 0.5

Total costs 1,740.64 82.2

Earnings before interest and GOL take 376.14 17.8

Interest 129.84 6.2

Net profit before GOL take 246.30 11.6

GOL take 117.43 5.5

Reserves and foreign dividends 128.87 6.1

GOL take as a percentage of sales income 5.5

GOL take as a percentage of earnings before interest 31.2

GOL take as a percentage of net profit 47.7

GOL take per shipped ton $1.04 ANNEX Page 32

These projections indicate that the GOL take, as a percentage of sales 4 is expected to deteriorate over the five-year projected period to 5.54/$ sales. This is due to an unexpected cost squeeze in the first part of the projection period, together with increased interest charges resulting from the debt financing of major expansion programmes for LAMCO JV and BMC, and an anticipated re-equipment programme for the NIOC. However, in terms of the GOL return on shipment tonnages, the historical figure (nine-year average of 604/ton shipped is expected to increase by 75 percent to $1.04 average over the five-year projected period, reflecting the higher unit value of the production.

Long-Range Prolections (1981/90)

84. Projections of the GOL take for the 1980's are speculative. They depend on the commencement of commercial production from the three new mines at Wologisi, Bie Mountain and Putu, the maintenance of the output at the existing mines and the chance that Guinea-Nimba ore will be shipped along the LAMCO JV railway to Buchanan. For the purposes of indicative projection, it is assumed that commercial production from the new projects will commence on the following dates:-

Bie Mountain - January, 1981

Wologisi - January, 1982

Putu - January, 1984

Guinea-Nimba - January, 1985

Slippage on the date of first commercial production could easily be one to five years, depending on the medium-term outlook in the iron ore market and the outcome of negotiations between potential foreign participants and the Government. Long-term projections in constant 1976 dollars are given in Table 8.10. They are based on the assumption that there will be no change in government policy and that the Government will continue to use concession agreements similar to the one recently signed with LISCO for the exploitation of the Wologisi deposit. The full impact of maintaining this policy is shown in the projections. Whereas shipments will increase 123 percent and the sales income by 157 percent over the ten-year period, the GOL take will decline 30 percent from 5.64/$ sales to 3.94/$ sales. However, in absolute terms, the COL take from the industry will increase from $22.3 million in 1981 to $39.7 million in 1990, equivalent to a 78 percent increase.

85. The decline in the GOL percentage of sales income is due in part to the low projected profitability of the Wologisi project, despite the high value of $33/ton placed on the pellets. The project may not be able to generate distributable profits until the eleventh year of production. It has been assumed that results of the Putu project will be similar. Thus, over the ANNEX Page 33

period of projection the GOL take from Wologisi and Putu is represented only by the royalty payments, which vary from 1 percent to 2 percent of the sales income.

Alternative Policy Options Open to the Government of Liberia

86. Given the size and importance of the iron ore industry, the Liberian Government has been seriously considering different policy options towards the mining sector. Alternative policies for the government for the control of the development of its iron ore resources could include the following:-

(i) Maintain status quo. Negotiate concession agreements with foreign mining companies similar to those in existence, for new iron mines.

(ii) Open up existing agreements and renegotiate more uniform and favourable terms regarding the GOL take and control of the industry. New concession agreements would be similar to the existing but renegotiated agreements.

(iii) Abandon the concession agreements and introduce a mining code. Mining companies would have no exemption from the laws of general application and would be subject to income tax, excise and import duties.

(iv) Maintain existing concession agreements with or without some renegotiation of terms and create a true joint venture mining enterprise with or without Government control to exploit one or more of the three new iron ore deposits.

87. The GOL take is greatly influenced by the debt/equity structure of the operating companies. The concession agreements with LAMCO JV, BMC and LISCO allow debt equity ratios of up to 3.5:1. The companies have taken advantage of this provision and have tended to maximize their debt, more often than not with loans from shareholders. These loans have not been amortized and interest payments have continued to be high (BMC's interest charges were 60% of earnings over the period 1967/75) and have adversely affected the GOL take.

88. The so-called royalty payment is unusual in that it is a de- ductable expense against net profits applicable to the profit-sharing agreement with the Government. It is calculated on the sales revenue (fob Mon- rovia or Buchanan) and varies from 1 percent to 4 percent for LISCO to 4 percent for LAMCO JV.

89. The government position was somewhat improved as a result of renegotiations with the companies in 1974, but a feeling does exist within the ANNEX Page 34

Government that further renegotiations could bring about a greater GOL take. However, Liberia requires large amounts of capital over the next five to ten years in order to develop its iron ore resources. It is doubtful whether the Government is inclined to open up the existing agreements and thereby create uncertainty concerning the stability of contracts between foreign companies and the Government.

90. The objective of a state mining enterprise would be the exploitation of Liberia's iron ore resources through Liberian effort. Initially a major part of the technical and managerial staff would have to be expatriates employed on a temporary basis due to the lack of qualified Liberian personnel. Every effort would be made to phase out the foreign staff as Liberians receive on-the-job training from the expatriates.

91. It has been suggested that more direct GOL participation in a mining venture might be initially considered on a relatively smaller and less complex project, such as Bie mountain, provided further studies indicate this to be a viable project. It has also been suggested that the capital required for the creation of a state mining company could come from such sources as GOL and private foreign and local shareholders for equity, and from supplier's credits, commercial banks, international agencies and customer financing through sales contracts.

92. The establishment of such a venture would need very careful study, however, and too radical a policy change could place the Government in a difficult position vis-a-vis the foreign mining companies already operating in Liberia. Furthermore, monitoring the existing concession arrangements has not been sufficiently close, and no clear demonstration has as yet been made of the degree of fairness of those arrangements to the parties involved.

93. In any case, more thorough analysis needs to be done to establish a basis for any new policy directions, and to determine what would be a reasonable split of benefits between the Government and the foreign mining companies. Alternative policies for the future and their impact on the split of benefits from existing mines and future projects should also be assessed. The expertise for such an analysis apparently does not exist within the Government and the retention of outside consultants for a suitable study seems warranted, unless suitably qualified staff can be recruited to the Con- cessions' Secretariat as suggested below.

Government's Control of the Iron Ore Industry

94. At present the Government of Liberia oversees the mining industry through the Concessions' Secretariat which, besides negotiating concessions with mining companies, is also responsible for similar concession agreements with foreign rubber companies. The Secretariat is run by a Controller who reports directly to a Ministerial Board comprising some ten Ministers. The Secretariat is housed in the Ministry of Finance and for all intents and purposes is controlled on a daily basis by the Minister of Finance. The Concessions' Secretariat has a shortage of experienced staff able to ANNEX Page 35

advise the government on the negotiations and financial aspects of the concession agreements. In the past, this shortage was made up by a four-man team from the UNDP, but only one team member now remains. There exists a requirement for one or two financial/legal analysts within the Secretariat and it is recommended that the Secretariat hire the two analysts directly. Part of their responsibilities could be to carry out studies of the relative merits of alternative policy options as outlined above.

Mineral Other Than Iron Ore

95. The geological survey of Liberia is far from complete. Apart from the existence of diamonds, which are currently being exploited, potential exists for gold, base metals (copper, lead, zinc), heavy mineral sands (rutile, ilmenite, zircon, monazite), barite and kyanite. The lack of interest by international mining companies in Liberia's mineral resources, other than iron ore, could well be due to the lack of a formal mining code, which will deter industry despite the country's "open door" policy to foreign private enterprise.

The Liberian Beach Sand Company (LIBSEC)

96. LIBSEC, comprising a consortium of three Dutch companies, has located a heavy mineral sand deposit along the coast between the Cavella and Cestos rivers near Greenville. The mining project will require a $10 million investment and yield a projected annual sales revenue of $5 million. The reserves are sufficient for ten years and will give direct employment to between 100 to 150 persons.

Diamonds

97. Exports of diamonds have declined drastically to 0.41 million metric carats in 1975 from 1972/73 boom conditions when Liberia exported some 0.8 million metric carats. The GOL revenue from this source is expected to be little more than $0.5 million in 1975, equivalent to 3 percent of the total value of exports valued at $17.8 million (down 37 percent on 1974). Despite continuing diamond-mining operations on the Lofa River by Globex Minerals (Liberia) Inc., owned by private American investors, the GOL take from this source is expected to decline further in the future.

Gold

98. Exploration for gold is currently being undertaken in an area of some 1,300 km by Liberia International Gold and Diamond Mining Company, owned by a consortium of private American and German investors. Small quantities of reserves have been outlined, warranting a project costing $0.5 million, and the government has recently entered into a concession agreement with the company. ANNEX Page 36

C. THE TRANSPORT SECTOR

I. Transport System

99. Liberia's strategic geographic location on the southwestern corner of the western bulge of the African continent on the Atlantic coast makes it an ideal transit point for international air traffic and shipping to and from the Americas and Europe. However, internally Liberia has thick inland deci- duous forests, coastal mangrove swamps, heavy seasonal rainfall and poor road-making soils - all of which contribute to a comparatively high cost of ground transportation. Although these geographical features do not constitute a major obstacle to transport development, they render road construction rather expensive.

100. The country is rich in natural resources, notably in iron ore, timber and rubber. Despite its potential, past economic development has been modest and the development of the transport infrastructure followed the enclave-based economy. The transport system is focused on Monrovia and consists of 4,600 miles of roads, three privately-owned railways totalling about 300 miles, four seaports and about 15 airfields. However the system is barely adequate for the present enclave-based economy, and will require major investments for extension and modernization, particularly in view of the Governments objectives of creating a more diversified agricultural-based economy. At present, the major transport flows reflect the pattern of economic activity; the transport demand is mainly based on iron ore and timber, followed by rubber and other agricultural products, fuel and imported goods. Railroads carry some 20-25 million tons of iron ore annually to the Ports of Monrovia and Buchanan. Road transport is unevenly distributed; more than half of all road transport, the predominant mode for passengers and goods other than iron ore, is concentrated around Monrovia region and along the Monrovia- Ganta axis. Internal air transport is negligible and commercial coastal shipping non existent even though the latter could provide the most direct link between Monrovia and the southern coast.

Road Transport a) The Highway Network

101. Liberia's public road network totals about 3,200 mi of which about 1,900 mi of all-weather roads and about 1,300 mi of roads serviceable only during the dry season. There are only 224 mi of paved roads, equivalent to about 7 percent of the public road network. In addition, the rubber and lumber concessions have built about 1,400 of private, mostly laterite-surfaced roads and an undetermined mileage of tracks in the forest areas (Table 10.3). The system is inadequate both in extent and condition except to serve the existing enclave-based economy which depends only marginally on road transport for movements of exports. Many potentially productive areas of the country as in the Lofa, Grand Bassa and Grand Gedeh Counties (see Map), have only poor and circuitous connections to the ports and market centers, and other vast areas particularly in the Southeast are not served at all. In some of these areas, ANNEX Page 37 head poterage for hauls up to 15 miles are commonplace. All important roads radiate from Monrovia. The most important route Monrovia-Totota-Ganta (160 mi) with the branch from Gbarnga to Kolahun (150 mi) penetrates remote but economically active Lofa County, while the other route Ganta-Zwedru-Harper (280 mi) provides the only link to the East and Southeast of the country. Unlike the other countries in West Africa, even the basic trunk road network is far from established. Liberia also does not have a coastal road, with exception of a stretch from Monrovia to Sierra Leone border and to Buchanan.

102. To improve the above situation, a sine qua non to the success in developing rural agriculture and general economic development, the Govern- ment has embarked on an extensive road development and maintenance program. In its first phase, to cover the 1973-1979 period 1/, the road program focuses on improvement of road maintenance, rehabilitation and upgrading of key sections of the primary road nework, improvement of road access to the Monrovia port and initiates the extension of the secondary and farm-to-market roads. The Bank Group Second and Third Highway Projects have been assisting the Government carry out the Program. The African Development Bank, USAID and the Federal Republic of Germany have also been participating. The second phase of the program is expected to continue with upgrading of primary roads and with construction of farm to market roads. Proper analysis of investment timing and alternatives is essential to (i) coordinate road investments with those in the rural/agricultural sector, (ii) reduce the temptation to over- design, and (iii) make optimum use of the LAMCO line, for non-enclave transport. The Planning and Programming Division of the Ministry of Public Works (MPW), in charge of highway administration, is expected to prepare a coherent long- term development plan for the whole road network with technical assistance provided under the World Bank's Second and Third Highway Projects and in collaboration with the Government ministries and agencies particularly those involved in preparing and executing the rural/agricultural sector plans.

103. Future strategy for the road network development should assign priorities to the reconstruction of the branches of the country's major routes (Monrovia-Ganta) to the North (Kolahun) and to the South (Zwedru-Harper). The development of the network, however, should not always be based on the actual pattern of population distribution. It has already been demonstrated in West Africa that population tends to migrate to the areas of improved road condition. Therefore, upon reconstruction of the southern route (Ganta-Harper), attention should be given to build its connecting routes to the coast, since (i) the coastal road appears too costly to be justified in the near future, and (ii) presently isolated Grand Bassa, Grand Gedeh and Sino Counties have good potentials for economic development. Thus, the backbone of the network would be completed and would support further country-wide development of the feeder road network, presently concentrated mostly in Lofa and Bong Counties. b) The Road Transport Industry

104. In general, there are no major problems in the road transport industry. Vehicle registration, inspection and axle load control is done by

1/ Incorporated later in 1976-80 Development Plan. ANNEX Page 38 the Bureau of Motor Vehicles (under the Ministry of Justice) while the licensing of commercial vehicles is under the Ministry of Commerce, Industry and Transportation. Tariffs exist only for inter-city passenger transport. Freight transport and passenger transport is performed by more than 1,000 private truckers. There is free entry into the industry and no controlled tariffs. Competition is keen and since there is no price regulation or "middle-man" a considerable proportion of decreases in operating costs are passed on to producers and consumers. However, the economic mission was informed by the Ministry of Commerce, Industry and Transportation that the Government is studying the possibility of introducing a system of tariffs for transport outside of Monrovia. Although, the situation in the industry in generally satisfactory, the existing system of regulations split between the two Ministries is not appropriate and the enforcement of the regulations (vehicle weights and axle load limits, vehicle inspections) is poor and unsatisfactory.

Ports

105. Liberia has four seaports: Monrovia and Buchanan which are deep- water ports and handle over 85 percent of foreign trade; Greenville and Harper, both shallow-water ports, handle mainly log exports. A summary description of the recent port traffic handled is given in Table 10.5. Port traffic has increased at an annual rate of 7 percent between 1965 and 1973. The major growth occured in iron ore; general cargo and transhipment traffic has been stagnant or slightly declining partly due to restrictive customs regulations. However, due to the world economic recession which affected the Liberian economy as well, the total traffic in the ports declined in 1974 and 1975 to 20,000 tons (Table 10.5).

106. National Port Authority's (NPA) administration extends over three ports, excluding Buchanan whose operations are still directed by LAMCO. NPA operations are fairly efficient, although the need for stronger forward planning and additional professional personnel continues to exist. Its overall operations are profitable, resulting in an annual profit of about US$1-2 million. Efficiency of the Monrovia port, the most important port, is reasonable although a recent consultant study indicates that the efficiency could be increased by about 30 percent by 1978 if measures are taken to improve supervision and quality of cargo handling and equipment. The Port of Rotterdam, under an exchange program with NPA, is providing technical assistance to improve operations.

107. Existing capacity is adequate for all the ports at present. However, on the basis of consultant forecasts of general cargo traffic, the Monrovia Port would require provision of additional general cargo quay length and more warehousing space between 1978-83 even if the productivity is increased as mentioned above. Furthermore, the develpment of iron ore mines at Wologisi and Bie Mt. could also give rise to significant additional capacity needs, before 1982. However, NPA does not seem to consider further general cargo quay provision necessary before the early 1980's. The future needs of the Buchanan port will be determined by the outcome of the discussion on the development and transport of Guinea's iron ore on the LAMCO line. If the 15 million tons ANNEX Page 39

p.a. of this traffic materializes by 1982, the total volume of iron ore, assuming that LAMCO present tonnage remains the same, will be about 27 million tons p.a. compared to the present 18 millions tons p.a. capacity of the port's iron ore storage and loading facilities. A study is currently underway to determine ways to handle the expected increase in demand. The capacity of the Greenville port to handle general cargo and especially logs is currently being extended (by about 150,000 tons) under a Federal Republic of Germany loan and the development of Harper port is expected to be studied under the proposed EEC aid program. For both of these the capacity requirements will be determined primarily by the growth of timber exports from their hinterlands where exports could be expanded to about 800,000 tons per year and eventually by possible mining operations at Putu mine, some 80 miles from the coast.

II. Government's Sector Objectives and Four-Year Development Plan

108. The Government's objectives for the transport sector as outlined in the First Development Plan 1976-1980, are (i) to improve road maintenance; (ii) to improve road access to the port of Monrovia; (iii) to upgrade key primary roads and extend the secondary road system to centers of agricultural development activities; (iv) to provide most urgent feeder roads to support rural development in key agricultural regions; notably Bong County and Lofa County, (v) to increase port capacity in Monrovia and Greenville; and (vi) to modernize the international airport in Monrovia. Most of the emphasis is, however, on highway development. In general, these principal objectives adequately reflect the sector investment needs. More recently the Government is considering the need for increasing the capacity of the LAMCO railway and of the Buchanan port to accommodate an expected additional 15 million tons annually of Guinea's iron ore export.

109. Total investments envisaged for transport sector in the period 1976-80 amount to about US$153 million or 42 percent of all investments envisaged in the Plan (Table 10.2). This compares with actual investments between 1972 and 1975 of about US$10 million. Foreign sources are expected to contribute about US$110 million, while the Government contribution is expected to be about US$43 million. The program is clearly ambitious, although the transport infrastructure has been neglected for years and the ongoing Plan aims at redressing the balance (Table 10.1). However, it seems unlikely that the package envisaged for the sector can be implemented as planned. Some of the projects do not have secured financing and furthermore it is not clear whether the Government could provide sufficient local resources to meet its share. Some-of the road projects have questionable priority at present. In general, although there is a clear need for intensive investment in the sector, the priorities of transport projects do not seem to emerge on the basis of a well established development policy integrated with other economic sectors. Nevertheless, the Plan marks a new positive departure in economic policy by bringing a more organized medium term approach to resolution of problems that have built up over the years.

110. The majority of the investments for the sector, (about US$141 million or 92 percent) are planned for improvement of the neglected road network ANNEX Page 40

(Table 10.2). At present, about 170 miles of road construction projects in the Plan are either underway or have already been completed in 1976. If the Plan is executed on time, which does not appear likely, about 330 miles would have to be constructed to paved standard and about 355 miles to gravel standard by 1980 1/ The Plan incorporates the Government's Four-Year Road Maintenance and Development Program (1974-77) developed with the World Bank assistance and is being implemented with financial assistance from the World Bank, the African Development Bank, USAID and the Federal Republic of Germany. Feeder roads were also included in the Plan; construction of about 270 miles is planned for the four-year period. ill. A master plan for port development is still sometime in the future. Expansion of Greenville port has been embarked upon without adequate consideration of regional development needs, while the investment studies for the port of Monrovia are advancing slowly. The Development Plan does not provide for development of the railroad sub-sector which is essentially a function of concessionaire needs, but the Government may find it necessary to play some role in the interests of efficient coordination with port development and road transport. Air transport plays a minor role and its treatment in the Plan appears to be adequate, although the amount of investments (US$3.25 million) envisaged appears to be on the low side.

III.) Major Problems of the Sector

112. The major problem in the transport sector is lack of satisfactory planning, coordination of different transport modes and management. Road network development is handled by Programming and Planning Bureau (PPB) of the Ministry of Public Works; vehicle registration, inspection and axle load control is done by the Bureau of Motor Vehicles (under the Ministry of Justice); licensing of commercial vehicles and civil aviation is under Minis- try of Commerce, Industry and Transportation (MCIT), while the National Port Authority, an independent public corporation, is managing the ports with the Minister of MCIT as chairman of the Board. Three existing railway lines and the Port of Buchanan are integrated with privately controlled mining operations and consequently out of the Government's immediate control. Iron ore berths and loading facilities are leased to the mining companies on a long term basis and, for the period of the lease, are outside the NPA's effective control. The Ministry of Planning, which is charged with integrating transport investment policies into the general framework, has a section for transportation and communications but has so far had little impact. In the past, however, the effect of this wide dispersion of responsibilities has been minimal since there was little investment and very few planning and coordination issues. The mining companies have planned and coordinated their railways with their port activities, while MPW and NPA have planned their minor investments with some World Bank assistance. With Government's increased emphasis on expanding the transport infrastructure to support and serve a diversified economy, however, integrated transport planning and policy

1/ At this point it is estimated that work on more than 400 miles of roads stands a good chance of being started or completed before June 1980. ANNEX Page 41 formulation will become indispensable and Government therefore needs to reorganize the present set-up and to reinforce the planning and regulatory functions.

113. The Government seems aware of the lack of coordination in the sector. In the Liberian context the most appropriate approach to the problem would seem to be to concentrate the power in and reinforce the existing Bureau of Transportation (BT) in MCIT. If the BT proves to function effectively it may emerge as an independent Ministry at a later stage. Presently, however, the first requirement is that the BT should exercise its overall responsibilities for transport planning and coordination. Its two divisions (for Land Transport and Civil Aviation) plus creation of a new division for Ports and Maritime Affairs should be additionally staffed by 6-8 highly qualified expatriates, for 2-3 years 1/. The Government should provide additional financial resources and assign adequate counterparts who will acquire additional on-the-job training. b) Road Maintenance Funds

114. Despite the importance it attaches to road maintenance the Govern- ment has not been able to provide its full financial contribution envisaged under the Second Highway Project through timely allocation to and replenish- ment of a Revolving Fund created for the purpose. This failure has been partly responsible for the delay in implementing the four-year maintenance Program (1974-1977). The problem stems mainly from weak budgetary controls rather than from a shortage of local resources. The revenue from road user charges (Table 10.7) has exceeded annual expenditure for highway maintenance provided from the general budget. No revenue is earmarked for highway expenditure so far. However, appropriations for road maintenance have been recently increased through a Revolving Fund. 2/ c) Ports Development

115. The four ports of Monrovia, Buchanan, Greenville and Harper perform essentially separate functions. Monrovia is the main import port and exports iron ore for three mining companies. Buchanan handles LAMCO iron ore and a limited volume of general cargo, while Greenville and Harper are mainly timber ports (Table 10.5). However, as Monrovia, Greenville and Harper, and prospectively the general cargo berth at Buchanan, have since 1972 been

1/ Under the assumption of the changed responsibilities, on the basis of preliminary assessment, the three divisions of BT would at least need: two transport economist/planner, civil engineer, port specialist, financial analyst, airdrome engineer and an expert on civil aviation standards.

2/ Government has established the Revolving Fund in 1974. The Bank mission was informed by MPW that the funding of highway maintenance has been improved in the last two years, reaching about US$5.3 million in 1976 and an estimated US$6.5 million in 1977. ANNEX Page 42

under the control of the National Ports Authority and as there is some overlap of hinterlands, provision was made under the Monrovia Dredging Project (Loan 617-LBR) for a two phase port development study designed to produce a master plan for future port development. The first phase of the study (comprising analysis of shipping patterns, handling methods, preliminary port development, recommendations, and assessment of associated road and rail development requirements) was completed in 1975. However, the second phase, intended to incorporate master plan development, has been delayed primarily as a result of the need, identified by the consultants, for extensive field studies to resolve complex hydrological problems in development of Monrovia. This has resulted in a revised timetable for completion of studies that would preclude investment decisions until early 1980. At the same time, pressure from shipping companies for access to Monrovia for vessels of over 100,000 dwt tons (existing capacity limits 80,000 to 90,000 dwt tons) bringing with it important savings in shipping costs, has increased more rapidly than expected. In the meantime a decision has been made by the Liberian Government and NPA to take advantage of the availability of a low interest loan (US$5.2 million) from the Federal Republic of Germany for the development of Greenville port, outside the context of an overall review of total Liberian port requirements and ignoring the need to provide in the near future for a greater capacity to meet the potential port requirements of the Southeast. Thus consideration of the long term development of Liberian ports has unfortunately shifted from the idea of a master plan for ports. In effect, the Greenville decision was pre-emptive and major development of Monrovia is likely to be required earlier than would have been accommodated by the above study timetable. Accordingly, the World Bank has suggested to NPA that as far as the Monrovia port is concerned, the field and Phase II studies should be condensed and speeded up by incorporating a substantial amount of economic analysis in the field studies. This would enable investment decisions to be reached about one year earlier - in 1979.

116. For the other ports, investment decisions affecting Buchanan will largely follow from the outcome of LAMCO/Mifergui negotiations. For southern Liberian ports, an ongoing forestry study whose first phase was completed in November 1976, and possible development-of Putu iron ore mine about 90 miles northeast of Greenville, are the most relevant considerations. EEC is considering financing a feasibility study of port development in the Harper region. The possibility of extending the terms of reference of this study to include optimal port development for southern Liberia as a whole has recently been discussed between EEC and World Bank staff. In addition, development of the Wologisi iron ore reserves north of Monrovia close to Guinea border might require construction of a new port, because of iron ore transport alternatives as well as volume or draught limitations at Monrovia. The site under consideration is at Robertsport, about 50 miles north of Monrovia. A decision on this, however, is unlikely in the near future. Another possible future mining operation at Bie Mt., 60 miles northwest of Monrovia, is likely to use the port of Monrovia, and will certainly have implications for future development on transport infrastructure. ANNEX Page 43

117. Irrespective of these considerations there seems a strong immediate possibility of an economically justified port project at Monrovia, mainly comprising channel dredging, reclamation, extension of general cargo berths and cargo handling equipment. The prospects for further economically justified port development in southern Liberia are at present less certain both in scope and timing. Development of port facilities for Wologisi and Bie mines, will by necessity have to wait on a decision to go ahead with the exploitation of these mines, but both are expected to be part of an enclave operation in which transport facilities will be an integral part of the mining investment.

D. TRAINING AND MANPOWER

I. Manpower Issues and the Development Plan

118. The lack of adequately trained manpower, at all levels, is perhaps the single most important constraint to the economic development and diversification of the Liberian economy. Given the lead time necessary to produce the appropriate cadres in the required number and in the important sectors, it is likely that, manpower will continue to constrain economic development for some time to come. The Development Plan, however, does not adequately come to grips with the problems arising out of the current manpower situation neither in its discussion of development objectives and policies, nor in its treatment of problems of plan implementation. However, the discussion of the implementation of specific objectives at the sectoral level recognizes the great need for adequately trained personnel and training programs designed to support the implementation of the sectoral plans are mentioned.

119. On the other hand, the role of expatriates and technical assistance is clearly recognized and mentioned in practically all the sectoral development plans, particularly in connection with implementation aspects. More emphasis needs to be given to the formulation of a meaningful countrywide policy that would ensure that the transfer of knowledge was maximized. Al- though the need for the Liberianization of the workforce is recognized there is a lack of adequate emphasis on the urgent need to formulate and implement a nationwide policy in this regard. In the same way, the treatment of employment in the Plan is fragmentary. Employment is mentioned in general terms under the "Objectives and Policies" section of the Plan, but more in depth treatment of policies designed to increase the flow of information in the labor market, alleviate the unemployment problem in Monrovia, and the lack of skilled and unskilled manpower in the rural areas is lacking.

120. Unlike the shortcomings in the areas mentioned above, the problems of the educational system are treated in depth in the Plan, although the consequences of educational deficiencies on the growth of the economy and Plan implementation are not given sufficient weight. More emphasis would have to be placed on the need for an increased share of the government's expenditures to be devoted to coping with the educational and training problems. The need for manpower planning at a national level, its integration into the planning process in each sector, and the generation of the necessary data base, are issues which the Government is taking seriously, and which could thus have been treated more conspicuously throughout the Plan. ANNEX Page 44

II. Manpower Requirements for the 1974-1984 Period

121. The analysis of the demand for manpower in Liberia undertaken by the mission is based on preliminary 1974 Census Data, the National Development Plan (1976-1980) and employment surveys and studies undertaken by the Ministry of Planning and Economic Affairs. Basic data on the sectoral and occupational distribution of employment is at a preliminary stage, and will be refined and updated by the Manpower Planning Unit and the Census Unit within the Ministry of Planning and Economic Affairs. In light of this, projections are inevi- tably based on rough assumptions as to future rates of increase in sectoral productivity, replacement requirements, rates of occupational upgrading and rates of Liberianization, which, when combined with initial inadequacies in the employment data, can provide only an indicative estimate of future manpower requirements.

122. Mission estimates indicate that the average annual demand for additional workers in the modern sector, between 1974 and 1984, is about 15,600, comprising: agricultural and related workers (31%), production and related workers (27%) professional, technical and related workers (10%); sales workers (8%); clerical workers (7%); service workers (5%); administrative, managerial and related workers (2%), and other unidentifiable occupations (10%) (Table 1.5). Skilled personnel constitute 63 percent of the 4,250 additional workers needed annually in the production and related workers category (engaged in occupations requiring a certain degree of training and skill, in mining, manufacturing, construction, road maintenance, mechanical trades, and the operation of transport and other heavy equipment); the remainder of the category are unskilled laborers.

123. The projections take into account the additional manpower requirements due to the demands from economic growth (45% of total annual demand) and the replacement of existing workers (47%), as well as the needs generated by the government's policy of Liberianization (8%). The rate of growth for the modern economy for the 1974-84 period is expected to be between 4 and 5 percent, with employment growing at a little under 3%/annum (Table 1.4). This would imply the creation of about 71,000 new jobs over the period. The growth in the wage agricultural and forestry sector is expected to provide some 17,700 new jobs, (25% of the total) mainly in the unskilled laborer category. The large scale integrated rural development projects are expected to improve agricultural output and productivity, especially for small farmers, and their implementation will require large numbers of extension workers and aides. Increased exploitation of the country's forests will absorb additional personnel. The expansion of government activities, as State involvement in the economy increases, and as the health and educational systems expand, will create an additional 14,800 jobs, or 21 percent of the total. Most of these will probably be in the professional and technical categories, and clerical positions. Some 19 percent of the total, or 13,700 of the new jobs, will probably be created in the service sectors. The demand will be for clerical, sales and service personnel, as well as for professional and technical workers such as teachers, doctors and health workers. The mining industry is expected to grow slowly until the beginning of the 1980's, when large scale investments in new mines in hitherto untapped areas are due to come on stream. ANNEX Page 45

The sector is estimated to provide an additional 3,000 jobs over the 10-year period, (or 4% of the total). The construction industry is not expected to grow very much until the mining investments begin in the 1980s. About 3,000 additional jobs are expected to be created in the sector, (or 4% of the total). The expansion of the manufacturing sector due to increased processing of local raw materials, and export oriented manufactures will generate about 3,800 new positions, (5% of the total). Utilities are expected to grow slowly, and will provide some 600 additional jobs, (1% of the total). The transportation storage and communication industries are expected to expand as the country's system of roads is expanded and improved, and are expected to provide some 3,600 new jobs, (5% of the total) for the period. There will be about 10,800 new places, (16% of the total), in odd service and informal activities.

124. Manpower requirements due to attrition and Liberianization constitute 55 percent of total demand. The Government is increasing the pressure on the concessions and other private sector firms to establish schedules for the Liberianization of their workforces, and to create the training programs and scholarship schemes necessary to implement these timetables. The Ministry of Labor, Youth and Sports, and the Manpower Planning Division are both involved in monitoring the implementation of this policy. The replacement of the non-Liberians in the workforce is projected on the assumption that Liberianization will be 80 percent completed by 1994. Re- placement needs due to attrition are estimated at 3 percent of the average level of employment.

III. Manpower Development Policies

125. The government's response to the problem of providing the manpower for achieving economic growth and diversification, and the involvement of the entire country in the development effort, includes several recent initiatives.

(a) Education

- The Government's educational objectives include (i) improving the quality of education, at all levels, and (ii) reducing the geographical inequities in the educational system.

- Policies to improve the quality of education, developed with the World Bank assistance, and which have been supported through two ongoing and a recently started third education project, include:

(i) diversifying primary and secondary level curricula, and increasing the emphasis on science, technical and practical subjects, through the community schools program, the multilateral high schools, and the science and technology laboratories for secondary schools; ANNEX Page 46

(ii) increasing the supply of trained teachers at all levels, training school supervisors and strengthening supervision especially in rural areas, strengthening examinations and testing services, increasing teachers salaries and providing a rational salary structure, which is expected to include, where necessary, incentives for teachers to remain in rural areas, producing and supplying textbooks suitable and relevant to Liberia's needs, and providing for the construction and maintenance of better school buildigs;

(iii) improving the programs and equipment for technical training and practical coursework at specialized institutions and at primary and secondary schools; and

(iv) strengthening the University of Liberia by providing better physical facilities, opportunities for staff development through training and research on local problems, improving remedial services, providing better screening of entrants, and restricting the growth of new programs.

- Policies to reduce geographical inequities in the educational system by concentrating mainly on the expansion of school places in rural areas, especially under a community schools program for primary and adult education, and by providing laboratories and workshops in rural secondary schools. The rural supervisor and educational support system will be strengthened.

Training

126. The Government has recently established the National Council for Vocational and Technical Education and Training (NCVTET) with representatives from both the Government and the private sector, to coordinate and oversee the establishment of a training system that would be responsible to Liberia's needs for trained manpower. On the other hand industrial training and apprenticeship schemes will be coordinated by the Agricultural and Industrial Training Board established under the NCVTET. The Board would be responsible for (a) job analysis and occupational standards, (b) skill testing and certi- fication, (c) apprenticeship and in plant training, (d) vocational guidance, (e) development of programs and instructional materials, and (f) administration and development of vocational training institutions. The Government will establish a vocational training center in Monrovia. These vocational programs will complement the technical training provided at the multi-lateral high schools, the Monrovia secondary school system, and the Booker Washington technical education institute, soon to be reconditioned and equipped.

127. Agricultural extension worker training is currently overseen by the Ministry of Agriculture, and occurs at various locations around the country, in cooperation with the University and with agricultural research facilities. ANNEX Page 47

Requirements for extension workers for the integrated rural development projects will be met through project programs. Home economics extension workers are trained under a scheme administered by the Ministry of Agriculture, but the retention of the workers in the program is low. The Ministry of Labor operates a basic skills training camp for agricultural workers, and a residential school for rural crafts workers. Graduates from the latter institute are usually hired and given further training by the concessions. Training for the agricultural sector is presently uncoordinated and inadequate. The manpower requirements and training capabilities in the sector should be carefully studied and coordinated, under the recently established Agricultural and Industrial Training Board, in coordination with the Ministry of Agriculture (or the Agricultural Development Authority) who would be operating the programs. Training should be more responsive to administrative and development needs. Better use could be made of existing research facilities and personnel for training purposes.

128. Several Government agencies operate training programs that respond to requirements in particular ministries and sectors. Agreements with Sierra Leone have led to the establishment of training programs to meet both country's needs for skilled workers in such areas as forestry, tele- communications and customs. Training programs have been established to provide skilled workers for the utilities, road maintenance, and vehicle maintenance and driving. At a higher level, the Government is operating the Institute of Public Administration, which provides courses in administrative and managerial skills for middle level officials in governmental agencies, as well as consulting services that permit the Government to study, evaluate and improve the efficiency of its own agencies.

129. Training in the private sector is done principally by the large concessionaires who prepare people for tasks within their own productive processes. The quality of the equipment, the proximity and interaction with the productive process, and the quality of the instructors make the concession training programs the most effective in the country. Resources available through these programs, both human and material, should be used by Government in designing and implementing its own vocational training programs.

Manpower Planning

130. The Manpower Planning Division, in the Ministry of Planning and Economic Affairs, has recently engaged in preliminary surveys to determine general sectoral needs for the economy. Detailed occupational studies are planned, and the Division will be expanded and strengthened. Studies should attempt to establish measures for improvements in productivity, by occupation and industry, possibly by linking the occupational survey with the Establish- ment Survey for the National Accounts Division, where output is measured. However, the Manpower Planning Division with its proposed strengthening in human resource planning should be able to assist in the establishment of sectoral development plans which respond to the training needs, and the implementation of the Government's Liberianization policies, in order to provide a coordinated approach to the country's manpower problems. ANNEX Page 48

General

131. The structure of incentives, job classifications and compensation levels for the employees of Ministries and Government agencies is being reviewed by the Civil Service Agency, which is being strengthened with technical assistance and fellowship provided by USAID through the California State Board of Personnel. The review of the lowest occupational level, mainly clerical positions, has been completed, and the recommendations are currently being implemented within all Government ministries and agencies. This review and restructuring process, which will extend to all Government agencies, will improve the operation of the Public Administration, by permitting qualified personnel to be retained, at adequate salaries, within an orderly incentive structure and in an occupation with well defined responsibilities and privileges.

132. The role of expatriates and technical assistance, in the public and private sectors, should be carefully reviewed. In order to maximize training effects, and ensure progress in the upgrading of high level Liberian personnel, counterparts with adequate educational qualifications and work experience should be assigned to the expatriate technicians and specialists. Expatriates should not be tied exclusively to solving short-term bureaucratic problems, but should rather be one step removed from the actual implementation process, and allowed to exercise supervisory and instructional functions, and work on the long term problems in their particular field of expertise, in Liberia. Scheduled training sessions, courses and lectures by the expatriate specialists would serve to train and broaden the perspectives of the Government officials who would continue in the given occupation, and field of endeavour, once the term of the expatriate employee expires. STATISTICAL APPENDIX

TABLE NO:

1. Population, Employment and Manpower

1.1 Population and its Regional Distribution 1962-1974

1.2 Modern Sector Employment Matrix 1974

1.3 Expatriate Employment by Occupation and Country of Origin 1974

1.4 Projected Modern Sector Employment 1984

1.5 Average Annual Demand for Labor 1974-1984

1.6 Projected Modern Sector Employment Matrix 1984

2. National Accounts

2.1 G.ross Domestic Product (1967-1976) Current Prices

2.2 Gross Domestic Product (1967-1976) Constant Prices

2.3 Resources and Uses (Current Prices)

2.4 Resources and Uses (Constant Prices)

2.5 Resources and Uses (Growth Rates)

2.6 Sectoral Breakdown of Imported Machinery and Transport Equipment

2.7 Investment by Public and Private Sectors

3. Balance of Payments

3.1 Summary of the Balance of Payments 1973-1976

3.2 Value and Structure of Exports 1970-1975

3.3 Value and Structure of Imports 1970-1975

3.4 External Trade Balance by Country 1970-1975

3.5 Terms of Trade

3.6 Production and Exports of Iron Ore 1970-1976

3.7 Production and Exports of Rubber 1970-1976

3.8 Production and Exports of Logs and Lumber

3.9 Production and Imports of Rice TABLE NO:

4. External Debt

4.1 Total External Public Debt as of December 31, 1975

4.2 Historical and Projected Service Payments on External Debt

5. Public Finance

5.1 Central Government Budget 1970-1976

5.2 Central Government Revenues 1967-75

5.3 Tax Revenues 1967-1975

5.4 Functional Classification of Budgetary Expenditures 1970-1975

5.5 Functional Classifications of Budgetary and Extra Budgetary Expenditures 1970-1975

5.6 Capital Expenditures of Public Corporations 1974-1976

6. Money and Credit

6.1 National Bank of Liberia Assets and Liabilities 1974-1976

6.2 Domestic Accounts of the Commercial Banks 1972-1976

6.3 Commercial Banks Consolidated Balance Sheets 1972-1975

6.4 Deposits of Commercial Banks

6.5 Commercial Banks Credit to the Private Sector 1975-1976

6.6 Commercial Bank Loans to the Private Sector 1972-1976

6.7 LBDI Summary of Operations 1967-1975

7. Agricultural Statistics

7.1 Indicators of Dominant Farming System by County

7.2 Returns per acre and man/day from Crops

7.3 Area under Rubber Cultivation 1971-1975

7.4 Objectives and Costs of Special Projects

7.5 Purchase Prices for Locally Produced Rubber 1972-1976 TABLE NO:

7.6 LPMC Purchases of Coffee, Cocoa and Palm Kernels

7.7 Budgetary Allocations for Program of the Ministry of Agriculture

7.8 Population and Imports of Livestock

7.9 Land Cleared by AGRIMECO

7.10 Future Land Clearing of AGRIMECO

7.11 Agricultural Credit Operations 1972-1976

8. Iron Ore Mining

8.1 Total Percentage of Exports of Iron Ore

8.2 Principal Features of Liberia's Iron Ore Industry

8.3 Combined Income and Costs Data 1967-1975 and Projections 1976-1980

8.4 Individual Company Income and Cost Data 1967-1975 and Projections 1976-1980

8.5 Income and Costs of Liberian-American-Swedish Minerals Co.

8.6 Income and Costs of Liberia Bethlehem Iron Ore Mines Co.

8.7 Income and Costs of Bong Mining Co.

8.8 Income and Costs of National Iron Ore Co.

8.9 Income and Costs of Liberia Mining Co.

8.10 Long-Range Projections (1981-1990) of Liberia Iron Ore Exports

9. Prices

9.1 Monrovia Consumer Price Index 1972-1976

9.2 Monrovia Consumer Price Index - Rates of Exchange

9.3 Monthly Producer and Export Prices for Rubber 1974-1976

9.4 LPMC Producer and Export Prices

9.5 Average Consumer Prices of Selected Foods in Monrovia

9.6 LPMC Purchase and Exports Prices of Cocoa and Coffee 1972-1975 10. Transport Statistics

10.1 Investments in the Transport Sector 1972-75

10.2 Plan Investment Targets in The Transport Sector 1976-1980

10.3 Development of the Highway Network

10.4 Government Expenditures on Highways 1971-1976

10.5 Traffic Development in Ports 1970-1975

10.6 Commercial International Air Traffic

10.7 Revenues from Road User Charges. TABLE 1.1 LIBERIA: POPULATION AND ITS REGIONAL DISTRIBUTION 1962-1974

(County and Major Urban Areas)

County Area POPULATION Annual Share of Density (Urban Area) (Square. Growth Rate Population 1974 Miles' 1962 1974 1962-74 1974

No. of Persons % x Person per Square Mile Bong 3,650 131,528 194,191 3.3 12.9 53.2

(Gbarnga) ( 3,962) (8,474) (6.5)

Grand Bassa 5,075 131,840 150,926 1.1 10.0 29.7

(Buchanan) (11,909) (24,375) (6.2)

Grand Cape Mount 2,250 32,190 56,604 4.8 3.8 25.2

(Porkpa Dist.) (6,915) (20,395) (9.4)

Grand Geddi 6,575 59,275 71,825 1.7 4.8 10.9

Lofa 7,475 123,165 180,737 3.2 12.0 24.2

Maryland 1,675 62,786 91,619 3.2 6.1 54.7

(Harper) 6,095 11,715 (5.6)

Montserrado 2,550 258,821 439,997 4.5 29.3 172.5

(Monrovia) (80,992) (204,213) (8.0)

Nimba 4,650 160,743 249,702 3.8 16.6 53.7

(Yarmien .clan) (11,637) (31,938) (8.8)

Sinoe 4,350 56,095 67,599 1.6 4.5 15.5

(Greenville) (3,962) (8,474) (6.6)

Source: Ministry of Planning and Economic Affairs (MPEA) I IBERIA lAnL0 1.2 MOOERN SiCToR_ bM1OYMLKTT_ARIX (I,CtII'ArI7.N BY IIIIIJSTIY) I -_L47

tra,rrportnt In, Coowonnltv I,c Ivtini Total Agrioclt-rn. Ht,inn Ele-trlctity Tra-d, Sto ogr and no.1 rot Erploymrnt Forestry, and nu- Conotroc- ..and Re -tn,nra,,to (onsonlca- B-nein Prrol a.Ir.solCIy h Fishino QosrrytnM fact-rloR Water tint _ nd l(otl,s tion S-rvIc-r Sor-lc-n G-v roeI _ dcf In-d 0ccrpaiton

Pr,fe-clonal, 44" 870 40 )20 40 9t 10( 230 3,373, F,327 53t 12,150 TechnIcal sod .'7. 4,(),.0.74. .447. 9.71*i. 1.177. .h7. 721>/. 25.r 7657r,1 7,3R; RrIlatd Workers 67

Adoinlstrati-o, 110 240 20 40 20 120 h0 5') 130 1,460 I() 2.3W0 M.-Reriml and .1/. 1.1b .277. 3.12/. .58% .81/. .951 4.37. .96h. 5.451. .4. Pelated Workers 1'.

Clerical Work-r 1,020 1,020 60 140 80 510 260 360 1,860 3, 490 1,21(1 I,510 1.17. 4.77. .71% 12.02% 2.15L 3.3r . 4.23. 32.067. 14.2%. 14.88%. 5,457. 57.

Salen korIerr 220 270 50 - 10 11,350 407 70 130 90 690 12,Q70 .247. 1.27. .587. .277. 74,347. .64;. h.4,. .96. .33%. 3.11'. 6h. Senoice Wort.rs 480 820 20 50 50 420 1oo 190 3,020 3,400 1,010 9,F6O .5% 3.8% .247. 4.17. 1.27. 2.73% 1.6Y,/. 16.927. 23.09. 12. f8%. 4.577. 57,

Agrncoltc-al 82 747) 100 40 - 10 260 10 - 23(0 610 P70 84.877( I/ korker- 91.37 .5% .53% - .35/. 1.72% .211 - '.75'. 2.297. 3.01% 40%

Prodoctlor, Craft. 4,890 17,690 7,740 850 3,470 1,780 5,430 160 3,420( 4,3717 3,15n 53,310 2/ -nd R, Iatd on-k-.r 5.4% 81.67. 96.17 70.977. 92.377. 11.69% 88.677. 14.v7%. 26.12% 16.32% 15.83% 25% f7ccopotrnI o 8(1(1 670 80 - Ho 740 13(1 60 u3(, 6,560 14,280 24,33" UnidrntIflabIl Q9;. 3.17 . 1.1%. - 1.977. 4.74% 1.937. 5.887. 7.22;. 24.487. 64.2F/. 17. Total -nploye-et 90,700 21,680 8,n5so 1.200 3,760 15,270 6,130 1.120 13,0q0 26,8('0 22,200 210,0o10 by Sectnr 100% 1007 10% 100% 1007 100% 1007. 100I I()0. 1007. 100% I00M. .'.I'.-, .71 cm.I'yoen7 I,o .v rc,r 43'3(1/. 4/, 1/. 7 77. 37. 19. 6: I 17 I0/.Il07 Snorre (II) Pr-lImn,o.ry C0.0. of Popolatlon 1974 (2) t mp1oy,ye-t by Occc.pstioI and Ilodoatry Ill Ib 1-e , 1967-1982 tIPiLA, 1975 (3) `snuof- ct-t,n Ilndustry Illrectory", Bure- of 1Olostry, MinIstry of Ldlc-oLt and Coenr-e, Nov. 1975 (4) MIl-sloc- -tIrote-

W/8. ol till caitnoc- I h,7'(1 re.rea.ot-nP,,Ie. W'l l v,ok-ra ?1 13:. nl till -ator- (J,5411 propl.) represented skIlled -oike- sod c-, ttom.- LIBERIA: TABLE 1.3: EXPATRIATE EMPLOYMENT BY OCCUPATION AND COUNTRY OF ORIGIN, 1974

Professional Agriculture Technical Administrative Forestry Production and and and and All Related Managerial Clerical Sales Service Related Related Unidentified Occupations Workers Workers Workers Workers Workers Workers Workers Occupations

Total Modern Sector Employment in 210,000 12,150 2,350 10,510 12,920 9,560 84,870 53,310 24,330 Occupational Category

Total Expatriate 28,863 2,211 444 849 4,803 387 8,320 9,656 2.186 Employment t

Other African Countries 23,132 825 80 557 3,168 273 8,095 8,764 1,370

(Ghana) (3,622) (204) (16) (173) (674) (36) (1,372) (875) (282)

(Guinea) (13,407) (112) (10) (77) (1,647) (116) (5,080) (5,765) (600)

(Sierra Leone) (2,858) (236) (24) (188) (167) (55) (1,140) (843) (205)

Non-African Countries 5,731 1,386 364 292 1,635 114 232 892 816

(USA) (1,196) (600) (76) (98) (43) (27) (48) (91) (231)

(Lebanon) (1,851) (40) (53) (18) (1,261) (49) (21) (188) (221)

(Total Expatriate Employment) (Total Modern Sector 147. 18% 191/. 87. 377. 4'. 107/. 187. 9'L

Source: Preliminary 1974 Census Data, MPEA TABLE 1.4 - LIBERIA: PROJECTED MODERN SECTOR EMPLOYMENT IN 1984, By Sector

1974 1974-1984 Annual Required Additional % of Total Modern Sector Sectoral Growth in 1984 Workers Additional Sector Employment Growth Rate Demand for Labor Employment Required Workers Required

Modern Agriculture 90,700 3.0 1.8 108,400 17,700 25%

Mining and Quarrying 21,680 2.0 1.3 24,700 3,020 4%

Manufacturing 8,050 6.0 4.0 11,900 3,850 5%

Utilities 1,200 7.0 4.0 1,800 600 1%

Construction 3,760 10.0 6.0 6,700 2,940 4%

Trade, Restaurants 15,270 6.0 4.0 22,600 7,330 10% and Hotels

Transport, Storage 6,130 7.4 4.7 9,700 3,570 5% and Communication

Business Services 1,120 7.4 4.7 1,800 680 1%

Community, Social 13,090 6.0 3.7 18,800 5,710 8% and Personal Services

Government 26,800 4.5 4.5 41,600 14,800 21%

Activities not 22,200 6.0 4.0 32,900 10,700 16% adequately defined

Total Modern Sector 210,000 4.9 2.9 280,900 70,900 100% Employment

Sources: (1) Preliminary Census of Population, 1974, MPEA (2) National Socio-Economic Development Plan, MPEA 1976 (3) Economic Survey of Liberia, 1974, and 1975, MPEA LIBERIA: TABLE 1.5.AVERAGE ANNUAL DEMAND FOR LABOR OVER THE PERIOD 1974-1984

Total 3/ Average Yearly 1/ Yearly 2/ Yearly Man- Distribu- 4/ 1974 1984 Yearly Replacement Liberianization power Re- tion by Stock Requirements Requirements Requirements Requirements auirements Occupation

Column number (1) (2) (3) (4) (5) (6) (7)

Professional, Technical and Related Workers 12,150 21,190 900 500 90 1,490 10%

Administrative, Managerial and Related Workers 2,350 3,890 150 90 20 260 2%

Clerical Workers 10,510 16,500 600 400 30 1,030 7%

Sales Workers 12,920 19,120 620 48o 190 1,290 8%

Service Workers 9,560 14,160 460 350 20 830 5%

Agricultural Workers 5/ 84,870 102,140 1,730 2,800 340 4,870 31%

Production, Crafts and Related Workers 53,310 73,050 1,970 1,900 380 4,250 27%

Occupations Unidenti- fiable 24,330 30,850 660 840 90 1,590 10%

Total 210,000 280,900 7,090 7,360 1,160 15,610 100%

Distribution of Sources of Total Yearly Demand for Manpower 45% 47% 8% 100%

Notes - 1 L (2) - (1)_ -- 10 2/ Replacement needs were estimated at 3% of the average level of employment C ((l) + (2)) -+- 227 .03 3/ Full replacement of 80% of expatriate personnel expected in 20 yrs, from 1974 4/ (3) + (4) + (5) 5/ 8%of this category represent skilled workers (390 per year) / 63% of this category represent skilled workers (2,680 workers per year) LIBERIA TABLE 1 6 PROJECTEDMODERN SECTOR LMPLIYMENTrRTRIX (OCCUPATION bY INDUSTRY) FOR 1984

Agriculture, Mining nanula.- Electricity orestr, CocTetru-- Trade, Trnsport Ra Coasunlr and turing and ties Restaurnts Coaer-fe-t A-ctiriols Total clan, star- Sasnior and not Flatting Qsaarrning Eapinseni Water and age and _PerannaI Adequat ly by Oun- Kotelk Coerunlcsotils Sern a Defined nation

?rafnsslanal,?eshnieal and Sniated Worker 600 1.100 60 200 90 160 200 420 5,800 11,780 780 21,190 Ad,snlaraties, Manageral and -lel-dWoniar 120 360 30 70 50 200 110 100 210 2,490 '50 3,890

Clarloal Wsh-ers 1,300 1,230 130 230 170 840 460 590 2,940 6,820 1,790 16,500

Sales Wsrers 260 440 100 10 20 16.780 50 120 180 140 1,020 19,120 71 Sorolc- Worker 340 1,230 30 80 T0 630 160 310 4,340 5,280 1,490 14,160

Agritultural Worke. 98,970 110 60 _ 20 400 20 - 330 940 1,290 102,140

Praduanian, Crafts and Dalaned Workoes 9,860 20.050 11,420 1,210 6,140 2.640 8,600 240 4,890 6,790 5,210 735,09

Orkup.tlon. U.ndastlflable 750 IO 70 - 140 950 100 20 110 7,360 21,170 30,50

Tati IEspy-est by Industry 100,400 26,700 11,900 1,800 6,700 22,600 9,700 1,800 18,800 41,600 32,900 280,900 I of Tatal *lopeyInt by Industry 3n97 9t 61 17 2n 81 3t 11 71 151 11 1001 LIBERIA: TABLE 2.1: GROSS DOMESTIC PRODUCT BY SECTORAL ORIGIN ($ Million - Current Prices)

Economic Activity 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976

1. Agriculture, Forestry & Fishing 27.3 27.8 38.8 40.4 40.2 38.2 62.6 80.1 71.2 94.2 - Rubber 20.0 19.3 26.3 26.8 24.0 22.2 37.1 50.0 35.8 44.3 - Forestry 2.0 2.1 5.3 4.8 6.4 6.5 14.5 15.5 22.0 34.8 - Other 5.3 6.4 7.2 8.8 9.8 9.5 11.0 14.6 13.4 15.1 2. Mining & Quarrying 95.7 105.3 112.9 115.6 124.8 142.1 152.7 195.0 285.6 275.1 - Iron Ore 85.1 89.9 95.3 104.6 113.7 129.7 133.8 183.5 280.0 270.0 - Other 10.6 15.4 17.6 11.0 11.1 12.4 18.9 11.5 5.6 5.1

3. Manufacturing 8.9 9.3 13.0 15.2 17.1 18.0 22.6 29.3 32.5 38.0

4. Electricity & Water 4.2 4.3 5.3 5.6 5.8 7.1 5.8 6.9 * * 5. Construction 17.5 12.4 13.9 16.2 14.4 17.6 15.0 18.0 24.0 26.4 6. Wholesale & Retail Trade, Hotels and Restaurants 33.0 37.2 39.0 42.6 45.6 49.4 53.3 70.6 * * 7. Transport, Storage and Communication 26.7 29.6 31.6 31.8 34.7 36.3 39.3 53.2 * * 8. Financial Institutions, Real Estate & Business Services 17.8 19.7 22.8 23.7 24.7 27.3 34.7 38.3 * * 9. Community, Social & Personal Services 9.3 10.5 11.1 12.4 11.6 13.0 14.3 17.4 * *

10. Producers of Government Services 21.0 22.8 24.9 23.0 27.0 26.7 31.2 36.0 43.5 51.0

11. Imputed Bank Charges -2.0 -2.6 -3.5 -3.4 -3.4 -3.5 -4.2 -5.1 * * 12. Monetary GDP (at factor cost) 259.4 276.9 309.8 323.1 342.5 372.2 427.3 539.7 662.0 732.7

13. Traditional Economy 46.3 47.3 49.7 56.2 57.5 60.1 78.2 111.4 125.4 130.0 14. Total GDP (F.C.) 305.7 324.2 359.5 379.3 400.0 432.3 505.5 651.1 787.4 862.7

15. Indirect Taxes (net) 23.8 27.0 27.4 28.5 30.0 33.7 39.4 47.5 49.8 60.0 16. Tozal GDP (m.p.) 329.5 351.2 386.9 407.8 430.0 466.0 544.9 698.6 837.2 922.7

Source: Ministry of Planning & Economic Affairs

1/ Preliminary * Break down n.a. LIBERIA: TABLE 2.2: GROSS DOMESTIC PRODUCT BY SECTORAL ORIGIN (Conptjnt3s971 ($ o

Economic Activity 1967 1968 1969 1970 1971 1972 1973 1974 1975k! 1976 1/

1. Agriculture, Forestry & Fishing 24.9 27.5 31.6 36.2 40.2 40.0 45.9 43.6 40.5 44.9 - Rubber 18.1 18.8 19.9 23.0 24.0 24.1 25.3 26.0 24.2 24.2 - Forestry 0.9 1.7 3.9 4.1 6.4 6.4 9.8 7.6 7.6 10.7 - Other 5.9 7.0 7.8 9.1 9.8 9.5 10.8 10.0 8.7 10.0

2. Mining & Quarrying 98.5 101.8 114.6 121.1 124.7 130.8 131.5 132.0 115.1 110.0 - Iron ore 89.9 91.1 101.9 109.3 113.7 117.6 119.2 122.5 109.0 105.0 - Other 8.6 10.7 12.7 11.8 11.0 13.2 12.3 9.5 6.1 5.0

3. Manufacturing 10.0 10.6 13.3 15.7 17.1 18.2 20.8 20.2 20.0 20-0

4. Electricity & Water 3.2 3.7 4.4 4.9 5.8 6.4 6.7 6.9 * *

5. Construction 18.5 12.8 13.6 15.2 14.4 15.0 12.8 15.0 20.0 20.6

6. Trade, Hotels & Restaurants 35.3 39.7 37.3 40.4 45.7 48.5 52.0 52.0 * *

7. Transport, Storage & Communication 28.3 31.4 33.9 32.7 34.8 36.5 39.3 44.7 * *

8. Financial Institutions, Real Estate & Business Services 19.8 21.3 23.3 24.1 24.7 25.0 28.8 27.1 * *

9. Community, Social & Persor.a] Services 9.8 10.8 11.4 12.5 11.6 12.8 10.6 1.4.4 * *

10. Producer of Government Services 20.8 22.2 23.7 25.2 27.0 24.2 24.5 27.0 29.0 30.5

11. Imputed Bank Charges -2.0 -2.6 -3.3 -3.3 -3.4 -3.4 -4.1 -3.8 * *

12. Monetary GDP (At factor cost) 267.1 279.2 303.6 324.7 342.5 354.0 368.8 379.1 375.0 389.0 13. Traditional Economy 48.9 51.0 53.2 55.3 57.5 58.9 60.8 68.8 68.0 vC'.C 14. Total GDP (f.c.) 316.0 330.2 356.8 380.1 400.0 412.9 429.6 447.9 443.0 454.0

15. Indirect Taxes (net) 25.8 27.9 27.4 3G.2 30.0 32.6 33.1 32.3 27.8 31.4 16. Total GDP (m.p.) 341.8 358.1 384.2 410.3 430.0 445.5 462.7 480.2 470.8 485.4

Source: Ministry of Planning & Economic Affairs

1/ Preliminary

* Break down n.a. LIBERIA: TABLE 2.3: RESOURCES AND USES ($ Million - Current Prices)

1967 1968 1969 1970 1971 1972 1973 1974 1975

GDP (m.p.) 329.5 351.2 386.9 407.1 429.9 465.9 544.9 698.6 837.2 Factor Payments Abroad -73.6 -72.5 -74.4 -90.2 -80.1 -93.0 -116.7 -146.3 -174.4 GNP (m.p.) 256.0 278.7 312.5 316.9 349.8 372.9 428.2 552.3 662.8 Net Import of Goods & Services +37.9 -25.2 -55.9 +22.3 +15.7 +23.0 +13.5 +55.2 +125.6 TOTAL RESOURCES 233.9 253.5 256.6 339.2 365.5 395.9 441.7 607.5 788.9

Gross Domestic Investments 76.1 55.6 63.3 80.0 75.7 91.2 100.5 127.8 192.0 - Public 36.8 26.6 48.7 - Private 63.7 101.2 143.3

Consumption 217.8 197.9 193.3 259.2 289.8 304.7 341.2 479.6 596.4 - Public 41.4 42.5 45.3 45.1 53.1 55.4 61.6 74.5 76.2 - Private 176.4 155.4 148.0 214.1 236.7 249.3 279.6 405.1 520.2

TOTAL EXPENDITURES 293.9 253.5 256.6 339.2 365.5 395.9 441.7 607.5 788.4

Memo Items ,Domestic Savings 111.7 153.3 193.6 147.9 140.1 161.2 203.7 219.0 240.8 National Savings Li 38.2 80.8 119.2 57.7 60.0 68.2 87.0 72.6 66.4

I/GDP (%) 23.1 15.8 16.4 19.7 18.6 19.6 18.4 18.3 22.9 SD/'GDP (%) 33.9 43.6 50.0 36.3 32.6 34.6 34.6 31.4 28.8

I/GNP (%) 29.7 19.9 20.3 25.2 21.6 24.5 23.4 23.1 29.0 SN/GNP (%) 14.9 29.0 38.1 18.2 17.2 18.3 20.3 13.1 10.0

Source: Liberian Authorities and Y4ssion Adjustments

1/ Defined as: GNP-Consumption. Does not include unrequited transfers from abroad. LIBERIA: TABLE 2.4: RESOURCES AND USES (Constant 1971 prices) M

1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1/]

GDP (m.p.) 341.8 358.1 384.2 410.3 430.0 445.5 462.7 480.2 470.8 485.4 Factor Pym. Ab. -85.0 -84.5 -83.4 -95.9 -80.1 -83.1 -91.2 -77.8 -85.5 -68.8 GNP (m.p.) 256.8 273.6 300.8 314.4 349.9 362.4 371.5 402.4 385.3 416.6 Net Import of Goods & Services +55.8 +34.8 +26.3 +22.1 +15.7 -26.0 -17.9 -38.9 +61.6 (+55.0)

TOTAL RESOURCES 312.6 308.4 327.1 336.5 365.6 336.4 353.6 363.5 446.9 471.6

Gross Domestic Investment 80.2 58.2 66.5 80.7 75.7 78.9 79.3 89.0 113.8 117.3

Consumption 232.4 250.2 260.6 255.8 289.9 257.5 274.3 274.5 333.1 354.3 - Public 41.0 41.3 43.1 49.6 53.1 50.4 48.5 53.4 50.8 46.4 - Private 191.4 208.9 217.5 206.2 236.8 207.1 225.8 220.7 282.3 307.9

TOTAL EXPENDITURES 312.6 308.4 327.1 336.5 365.6 336.4 353.6 363.5 446.9 471.6

Memo Items:

I/GDP 23.5 16.3 17.3 19.7 17.6 17.7 17.1 18.5 24.2 24.2

Source: Liberian Authorities and Mission Adjustments 1 / Mission Estimates LIBERIA: TABLE 2.5: RESOURCES AND USES - GROWTH RA;RSCONSTANT 1971 ($ Million)

1967- 1970- 1967 1968 1969 1970 1971 1972 1973 1974 1975 1970 1974 1975 knnual Avera . Annual GDP (m.p.) 341.8 358.1 384.2 410.3 430.0 445.5 462.7 480.2 470.8 6.4 4.1 - 1.8 Imports (inc. NFS) 168.5 159.6 173.0 187.2 187.4 182.9 188.1 168.1 174.0 3.6 -2.6 3.5 Exports (inc. NFS) 197.7 209.3 230.1 261.0 251.8 274.8 297.2 284.8 197.9 9.7 -2.2 -30.5

TOTAL RESOURCES 312.6 308.4 327.1 336.5 365.6 336.4 353.6 363.5 446.9 2.5 2.0 22.9

Gross Domestic Investment 80.2 58.2 66.5 80.7 75.7 78.9 79.3 89.0 113.8 0.2 2.5 27.9

Consumption 232.4 250.2 260.6 255.8 289.9 257.5 274.3 274.5 333.1 3.3 1.8 21.4 - Public 41.0 41.3 43.1 49.6 53.1 50.4 48.5 53.4 50.8 6.6 1.9 -4.9 - Private 191.4 208.9 217.5 206.2 236.8 207.1 225.8 220.7 282.3 2.5 1.7 27.9

TOTAL EXPENDITURES 312.6 308.4 327.1 336.5 365.6 336.4 353.6 363.5 446.9

Memo Items:

I/GDP 23.5 16.3 17.3 19.7 17.6 17.7 17.1 18.5 24.2 M

Source: Liberian Authorities and Mission Adjustments 1/ Annual averages. - 11 -

LIBERIA: TABLE 2.6 Sectoral Breakdown of Imported Machinery and Transport Equipment

($'000. In Current Prices)

1973 1974 1975

1. AGRICULTURE 980.1 5980.3 4289.9

2. MINING, ROAD CONSTRUCTION & LAND DEVELOP. 21244.5 22727.2 36111.6

2.1 Mining 6619.2 7678.2 9576.0 2.2 Road Construction & Land Develop. 4634.9 3935.6 6003.1 2.3 Parts 9990.4 11113.4 20532.5

3. MANUFACTURING 11679.4 9985.3 13764.3

3.1 Food Processing 313.4 681.5 2242.7 3.2 Textiles & Leather 126.1 314.0 318.9 3.3 Wood Processing _ _ _ 3.4 Paper, Printing & Publishing 79.4 180.9 116.2 3.5 Rubber Processing 25.6 87.3 272.7 3.6 Non-Metalic Mineral Processing 88.3 100.9 377.0 3.7 Metal Processing 11046.6 8620.7 10436.8

4. ENERGY 5339.2 6224.7 8224.1

5. CONSTRUCTION 1/ 1830.1 2426.2 2370.4

6. TRANSPORTATION 21375.8 30257.5 38547.1

6.1 Passenger Cars 2/ 5874.6 7007.1 8127.8 6.2 Busses 392.5 879.0 1016.1 6.3 Trucks 5621.1 9449.3 13807.4 6.4 Other 4165.4 6501.1 5037.9 6.5 Parts 5322.2 6421.0 10557.9

7. COMMUNICATION 941.7 920.4 4295.5

8. HEALTH 126.5 171.7 193.7

9. OTHER 1106.2 1800.1 1396.4

TOTAL 64623.5 80493.4 109193.0 TOTAL (Discluding Passenger Cars) 58748.9 73486.3 101065.2

Source: Mission's Estimates 1/ Other than road construction 2/ Can be treated as "durable consumer goods" LIBERIA: TABLE 2.7 INVESTMENTS BY PUBLIC AND PRIVATE SECTORS I/

(Current Prices - $ Million)

1973 1974 1975 1976

PUBLIC INVESTMENTS 36.8 26.6 48.7 79.4

I. CENTRAL GOVERNMENT 16.0 14.1 29.5 39.0

1) Budgetary Total 9.7 11.9 20.4 31.6 less: Transfers to Public Corp. -0.4 -1.1 -3.5 -12.0

2) Extra Budgetary 9.7 4.6 18.2 39.0 less: Transfers to Public Corp. -3.0 -1.3 -5.6 -19.6

II. PUBLIC CORPORATIONS 20.8 12.5 19.2 40.4

Own Resources 2.6 3.0 1.6 1.5 plus: Budgetary transfers 0.4 1.1 3.5 12.0 plus: Extra budgetary Tran 3.0 1.3 5.6 19.6 Other 15.2 7.1 8.5 7.3

PRIVATE INVESTMENTS 63.7 101.2 143.3 (135.6)

TOTAL (1) 100.5 127.8 192.0 215.0

Source: Ministry of Planning and Economic Affairs and Mission adjustments.

1/ Including investments in Traditional Economy LIBERIA: TABLE 3.1: SUMMARY BALANCE OF PAYMENTS

($ Million)

1973 1974 1975 1976

I. Export of Goods and NFS. 329.9 407.2 403.7 485.0 1 - Goods 324.0 400.3 394.4 475.0 2 - Non Factor Services 5.9 6.9 9.3 10.0

II. Imports of Goods and NFS -226.7 -316.1 -354.9 400.0 3 - Goods -.193.5 -289.4 -331.2 -376.0 4 - Non Factor Services -33.2 -26.7 -23.7 -24.0

TRADE BALANCE 130.5 110.9 63.2 99.0 RESOURCE BALANCE 103.2 91.1 48.8 85.0

III. Factor Services 5 - Factor Payments -92.0 -120.0 -145.0 -140.0 6 - Workers' Remittances -20.0 -22.0 -24.5 -25.0 7 - Interest Payments -4.7 -4.3 -4.9 -5.0

IV. Unrequited Transfers 8 - Grants to Public Sector 11.0 12.3 11.3 14.0 9 - Grants to Private Sector 2.7 2.6 2.8 2.6 10 - Maritime Revenues 8.6 9.9 16.5 15.0

CURRENT ACCOUNT BALANCE 8.8 -30.4 -95.0 -53.4

11 - Direct Foreign Investment 49.0 45.0 20.4 20.0 12 - Government Borrowing 8.2 5.1 18.0 45.0 13 - Debt Amortization -12.8 -17.4 -16.3 -18.0

CAPITAL ACCOUNT 44.4 32.7 22.1 47.0

IMF Net -0.9 -1.1 -0.5 -- Gov. with Bank abroad -1.9 0.1 -- -- Errors and Omissions(+decrease) -50.4 -1.2 73.4 6.4

Source: Ministry of Planning and Economic Affairs. 1/ Provisional Estimates of Liberian Government. LIBERIA: TABLE 3.2: - VALUE AND STRUCTURE OF EXPORTS, 1970 - 75

Export Items 1970 11971 1972 1973 1974 1975 1970 1971 1972 1973 1974 1975

($ Million) (In percent)

Iron-ore 150.7 160.6 182.7 196.7 262.2 293.6 63.9 65.1 67.7 60.7 65.5 74.4 Lump (53.8) (40.3) (46.7) (54.0) (68.8) (56.0) (22.8) (16.4) (17.3) (16.7) (17.2) (14.2) Fines (40.8) (54.8) (53.4) (52.2) (74.8) (86.8) (17.3) (22.2) (19.8) (16.1) (18.7) (22.0) Pellets (19.7) (35.3) (54.8) (53.1) (75.6) (94.8) (8.4) (14,3) (20.3) (16.4) (18.9) (24.0) Concentrates (36.4) (30.2) (27.8) (37.4) (43,0) (56.0) (15.4) (12.2) (10.3) (11;5) (10.7) (14.2)

Rubber 36.2 32.5 29.0 42.9 64.5 46.2 15.3 13.2 10.7 13.2 16.1 11.7 Latex (18.7 (16,1) (15.7) (15.8) (28.9) (20.1) (7.9) (6,5) (5.8)' (4.9) (7.2) (5.1) Crepe (17.5) (16.4) (13.3) (27.1) (35.6) (26.1) (7.4) (6.7) (4.9) (8.4) (8.9) (6.6) Diamonds 27.9 28.2 31.7 49.3' 29.9 18.4 11,8 11.4 11.7 15.2 7.5 4.7 Logs and Lumber 5.8 8.0 8.2 16.6 17.6 12.8 2.5 3.2 3.0 5.1 4.4 3.2 Coffee 3.3 4.0 4.6 5.1 4.0 4.5 1.4 1.6 1.7 1.6 1.0 1.1 Cocoa 1.0 1.3 1.5 1.9 4.3 4.4 0.4 0.5 0.6 0.6 1.1 1.1 Palm Products 2.0 2.2 1.5 2.6 8.5 3.2 0.8 0.9 0.6 0.8 2.1 0.8 Palm Kernels (2.0) (2.2) (0.4) (0.2) (0,1) ( -) Palm Kernel Oil ( - ) ( - ) (0.8) (1.7) (6.9) (2.3) Expeller cake ( - ) ( - ) (0.3) (0.6) (1.2) (0.5) Palm Oil ( - ) ( - ) ( - ) (0.1) (0.3). (0.4)

Sawn Timber 0.1 0.1 -- - 1.8 1/ 1/ - - - 0.5 Other Domestic *Exports 3.1 2.7 4.5 3.4 3.6 3.6 1.4 1.1 1.7 1.0 0.9 0.9 Re-exports 5.8 7.0 6.1 5.5 5.6 5.9 2.5 2.8 2.3 1.7 1.4 1.5 Total Exports, f.o.b. f.o.b. 235.9 246.6 269.8 324.0 400.0 394.4 100.0 100.0 100.0 100.0 100.0 100.0

Source: Ministry of Planning and Economic Affairs, External Trade of Liberia: Exports, various issues, and Economic Survey of Liberia 1975 1/ Negligible LIBERIA: TABLE 3.3- VALUE AND STRUCTURE OF IMPORTS, 1970 - 75

Commodity Group 1970 1971 1972 1973 1974 1975 1970 1971 1972 1973 1974 1975

($ Million) (In percent) 0. Food and Live Animals 21.4 24.4 25.5 30.2 38.4 38.6 14.2 15.0 14.3 15.6 13.3 11.7 1. Beverages and Tobacco 3.2 4.5 3.8 4.1 4.7 6.2 2.1 2.8 2.0 2.2 1.6 1.9 2. Crude Materials, inedible 1.8 1.7 1.7 1.6 2.1 3.0 1.2 1.0 1.0 0.8 0.7 0.9 3. Mineral Fuels, lubricants, etc. 9.5 11.8 12.0 14.7 56.4 48.3 6.3 7.3 6.7 7.6 19.6 14.6 4. Animal and Vegetable Oils 0.7 0.9 1.1 1.2 2.4 1.0 0.5 0.6 0.6 0.6 0.8 0.3 5. Chemicals and Related Materials 9.7 11.6 9.9 12.8 18.5 22.0 6.4 7.1 5.5 6.6 6.4 6.6 6. Manufactured Goods, by Material 37.9 35.2 40.6 39.0 54.4 70.2 25.3 21.7 22.8 20.2 18.7 21.2 7. Machinery and Transport Equipment 50.1 54.2 63.4 68.8 85.4 115.7 33.5 33.4 35.5 35.6 29.7 34.9 8. Miscellaneous Manufactured Articles 12.7 15.4 18.3 18.6 23.4 22.0 8.5 9.5 10.2 9.6 8.1 6.6 9. Miscellaneous Commodities and Transactions, n.e.s. 2.7 2.6 2.4 2.4 2.8 4.1 1.8 1.6 1.3 1.2 1.0 1.2 TOTAL IMPORTS, c.i.f. 149.7 162.4 178.7 193.5 288.4 331.2 100.0 100.0 100.0 100.0 100.0 100.0

Source: Ministry of Planning and Economic Affairs, External Trade of Liberia:

Imports ( various issues) and Economic Survey of Liberia, 1975 LIBERIA: TABLE 3.4: EXTERNAL TRADE BALANCE BY COUNTRY

($ Million)

1970 1971 1972 1973 1974 1975

ALL COUNTRIES 86.2 89.2 91.1 130.5 110.8 63.2

USA 3.1 -1.8 -3.7 11.9 11.8 17.3

F.R. GERMANY 16.7 25.8 21.8 31.8 48.9 51.9

UNITED KINGDOM 7.8 -4.4 -8.6 -8.3 -16.8 -23.3

NETHERLANDS 18.4 23.6 26.3 34.3 39.8 26.8

FRANCE 10.6 8.0 8.9 11.9 22.0 21.6

BELGIUM 26.9 24.2 32.5 51.9 37.8 25.3

JAPAN 3.9 11.6 4.8 3.8 -5.8 -9.3

ITALY 18.4 25.3 39.7 34.3 43.4 47.5

SWEDEN -4.2 -5.0 -7.2 -9.5 -16.7 -13.3

OTHER -15.4 -23.1 -23.4 -31.5 -53.6 -81.3

Source: Ministry of Planning and Economic Affairs LIBERIA: TABLE 3.5: TERMS OF TRADE

Export Price Index Import Price Index Terms of Trade

1971 100 100 100 1972 100 112 89 1973 111 128 87 1974 143 188 76 1975 204 204 100 1976 208 247 84 (Provisional)

Source: Ministry of Planning and Economic Affairs LIBERIA: TABLE 3.6: PRODUCTION AND EXPORTS OF IRON ORE

PRODUCTION EXPORTS

Pellets Others Total Quantityl' Value-! Unit Price-3

1970 1.8 21.6 23.4 23.3 150.7 6.47 1971 1.9 20.9 22.8 20.9 160.6 7.68 1972 4.0 18.4 22.4 22.6 182.7 8.08 1973 4.3 18.9 23.2 25.2 196.7 7.81 1974 4.1 20.7 24.8 25.2 262.2 10.40 1975 4.2 17.4 21.6 18.1 293.6 16.22 1976 4.4 16.6 21.0 16.24/ 263.0.i/ 16.23.4/

I 5.2 79.9 15.37 II 4.9 80.1 16.35 III 6.1 103.0 16.89

Source: Ministry of Finance, Concession Secretariat and External Trade of Liberia - Exports (various issues)

1/ Long tons, million

2/ $ Million

3/ By September 1976.

4/ Preliminary LIBERIA: TABLE 3.7: PRODUCTION AND EXPORTS OF RUBBER

PRODUCTION 1/ EXPORTS

Concessions Liberian Total Quantity.- Value2/ Unit Price_3

1970 118.7 53.4 172.1 183.9 36.2 19.7 1971 123.4 57.6 181.0 186.5 32.5 17.4 1972 132.2 48.1 180.3 182.9 29.0 15.9 1973 128.6 59.1 188.7 188.9 42.9 22.8 1974 124.9 69.8 194.7 190.1 64.5 33.9 1975 128.1 53.4 181.5 178.3 46.2 25.9 1976 136.0-i 4 5 .0 4/ 181.0 4/ 118.05/ 37.75/ 31.95/

I 45.0 13.0 18.8 II 31.6 10.3 32.6 III 41.4 14.4 34.8

Source: Liberian Authorities and External Trade of Liberia. Exports, various issues.

1/ Million pounds

2/ $ Million

3/ J per pound

4/ Provisional

5/ By September 1976 LIBERIA: TABLE 3.8: PRODUCTION AND EXPORTS OF LOGS AND LUMBER

PRODUCTIONi 1 EXPORTS (Logs) Quantityl! Quantity3j Value3/ Unit Price4/

1970 220.5 188.4 65095 5.8 88 1971 319.2 251.2 86800 8.0 92 1972 402.4 269.2 93048 8.2 87 1973 524.3 304.1 105087 16.6 158 1974 406.3 232.5 80348 17.6 219 1975 456.8 122.3 42274 12.8 303 1976 (643.0)Est. 248.7 8594t5./ 25.85/ 301.5

I 28613 8.2 286.6 II 20290 9.8 483.0 III 37038 8.0 216.0

Source: External Trade of Liberia: Exports (various issues) and Estimates of Domestic Product at Current and Constant 1971 Prices.

1/ Thousand cubic meters 2/ Thousand board feet 3/ $ Million 4/ $ per 100 board feet 5/ By September 1976. LIBERIA: TABLE 3.9: PRODUCTION AND IMPORTS OF RICE

PRODUCTION IMPORTS

Quantityl/ Producer Price2/ Quantityl/ Value3/ Unit Price2/ For Paddy

1970 n.a. _ 108.0 9.7 9.0 1971 n.a. - 119.4 10.9 8.3 1972 n.a. 5.0 90.6 7.6 8.4 1973 n.a. 7.0 101.5 12.3 12.1 1974 395.0 7.0 76.1 15.8 20.8 1975 362.4 10.0 67.6 13.6 20.1 1976 - 12.0 - - -

Source: External Trade of Liberia: Imports various issues, Economic Survey of Liberia, 1975 and IBRD Report No. 426a-LBR.

1/ Million pounds 2/ d per pound 3/ $ million LIBERIA: TABLE 4.1

EXTERNAL PUBLIC DEBT CUTSTANCING INCLUDIkG UNOISBURSED AS OF DEC. 31, 1975

CEBT REPAYABLE IN FOREIGN CURRENCY ANO GOODS (IN THOUSANDS UF U.S. DOLLARS)

D E B T O U T S T A N D I N G TYPE CF LREDITCR ------… ChEDITOh CCUNTRY DISBURSED :UNDISBURSEDO TOTAL I ------SUPPLIERS CREDITS ISRAEL 571 571 ITALY 49428 _ 4.428 NORWAY - 3,000 3,000 SWEDEN l06 - 106 SWITZERLANC 1,400 - 1400 UNITEU STATES 1,194 - 1,194 TUTAL SUPPLIERS CREDITS 7,699 3,000 10,699 PRIVATE BANK CREDITS UNITED KINGDOM 2,944 2,722 5,666 UNITED STATES 1,266 - 1,2"6 TOTAL PRIVATE BANK CREDITS 49210 2,722 6,93Z

OTHER PRIVATE DEBT SWITZEKLANC 862 - 862 TOTAL OTHER PRIVATE DEBT 862 - 662

MULTILATERAL LCANS AFRICAN DEV. BANK 3,429 8,641 12,070 I1RD 22,195 34,845 57,040 IDA 49722 12,278 1T,OOO SAFA (SP AR FUND AFP 3,600 - 3.600 TOTAL MULTILATERAL LGANS 33,946 55,764 89,710

BILATERAL LOANS CHINA, REPUBLIC OF 2,794 6,006 8,800 CHINA,PEOPLES REP.OF 1,000 - 1.000 GERMANY, FEO.REP. OF 18,042 8,463 26,505 ITALY 12,000 - 12,000 JAPAN - 6,000 6,000 UNItED KINGDOM 1,147 - 1,147 UNITED STATES 87,712 22,983 110.695 TOTAL BILATERAL LCANS 122.695 439452 166.147 TOTAL EXTERNAL PUBLIC DEBT 169,412 104,938 274,350

NOTES: (11 ONLY DEBTS WITH AN ORIGINAL CR EXTENDED MATURITY OF OVER ONE YEAR ARE INCLUDED IN THIS TA8LE.

EXTE.AL DEBT MVISION EaDC C ANALYSIB & PBJCIG DEPAM3I MARCH 31, 1977 LIBERIA: TABLE 4.2

SERVICE PAYMENTS, CCIFFITMENTS, DISBURSEMENTS AND CUTSTANDING AMOUNTS OF EXTERNAL PUBLIC DEBT

PROJECTIOhS BASEC CN DEET OUTSTANCING INCLUDING UND0SBJRSED AS OF DEC. 31, 1975

DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS (IN THOUSANDS OF U.S. DOLLARS) TOTAL YEAR : DEBT OUTSTANCING AT : T R A N S A C T I 0 N S 0 U R I N G P E R I 0 D : THER CHANGES : BEGINNING OF PERIOD :

DISBUPSED : INCLUDING COPMIT- : DISBURSE- S E P V I C E P A Y M E N T S CANCEL- : ADJUST- ONLY :UNDISBURSED: MENTS : MENTS :------:------: LATIONS s MENT * PRINCIPAL : INTEREST : TOTAL :(1) : (2) : (3) (4) (5 : (6) (7) 8) : (9)

1971 155,833 176,093 4,717 9,330 10,741 5,769 16,510 281 2,192 1972 156,474 171,980 20,046 10,465 11,733 4,708 16,441 49 352 1973 155,565 180,596 23,056 8,094 11,904 5,196 17,100 239 3,580 1974 155,126 195,089 27,722 9,144 14i,446 4,893 19,339 47 3,087 1975 152,132 211,405 82,201 31,911 15,779 4,946 20,72S 1 -3,476 1976 169,412 274,350

t * * * * * THE FCLLCWING FIGURES ARE PROJECTED * * * * * *

1976 169,412 27A,350 - 31,736 13,949 6,161 20,110 1977 187,200 260,402 - 24,708 14,597 6,788 21,385 197S 197,313 245,808 - 18,908 11,462 7,167 18,629 197Sy 204,760 234,346 - 13,252 9,869 7,412 17,281 1980 2C8,141 224,474 - 8,735 10,577 7,489 18,066 19dl 206,302 213,B99 - 4,663 11,017 7,359 18,376 19L2 199,945 202,881 - 1,707 9,955 7,048 17,003 1983 191,657 192,926 - 757 10,646 6,838 17,484 1984 181,8O4 182,276 - 340 11,293 6,383 17,676 1985 170,853 170,985 - 112 11,655 5,939 17,594 1986 159,310 159,330 - 19 11,587 5,460 17,047 1987 147,738 L47,739 - 1 11,173 4,939 16.112 1988 136,565 136,565 - - 9,925 4,470 14,395 1989 126,640 126,640 - - 9,906 4,061 13,967 1990 116,729 116,729 - - 7,640 3,681 11,321 - 1951 109,089 lO9,C89 - - 6,846 3,410 10,256 1992 102,240 102,240 - - 6,955 3,165 10,120 1S93 95,282 95,282 - - 7,094 2,914 10,008 1994 d8,190 88,190 - - 7,301 2,652 9,953 L995 80,891 80,891 - - 7,619 2,372 9,991

NOTF: INCT.UDFS SFFfICF ON ALl, DFBT LISTED IN TABLE I PREPATFD MARCI] 31, 1977.

* Thl8 CrLUMN SHOWS THE ACLUNT CF ARIThMETIC IMBALANCE IN THE AMOLJNT OUTSTANDING INCLUDING UNOISOURSED FROM ONE YLAk Tt THE lEXr. THE PCST CCMMCN CALSES OF IMBALANCES ARE CHANGES IN EXCHANGE RATES AND TRANSFER OF DEBTS FROi- OrE CATLGCDY Tr8 ANCTHER IN TI-E TABLE. LIBERIA: TABLE 5.1: THE CENTRAL GOVERNMENT BUDGET

($ Million)

1970 1971 1972 1973 1974 1975 197J' 1976/77 ______B u d g e t

1. Budgetary Revenues 66.5 69.9 78.1 89.8 108.6 125.3 151.0 155.6

2. Current Budget 47.6 50.9 52.8 61.4 74.2 78.1 88.2 97.6

CURRENT BUDGET SURPLUS 18.9 19.0 25.3 28.4 34.4 47.2 62.8 58.0

3. Development Budget 6.9 6.9 7.4 11.1 15.0 24.0 33.8 39.0

BUDGETARY SURPLUS 1/ 12.0 12.1 17.9 17.3 19.4 23.2 29.0 19.0

4. Extra Budgetary Expenditures 16.5 18.3 19.5 19.2 15.3 27.5 59.0 --

5. OVERALL DEFICIT -4.5 -6.2 -1.6 -1.9 4.1 -4.3 -30.0 __

6. FINANCING OF DEFICIT

- Foreign Grants 10.8 13.3 11.3 11.0 12.3 11.3 14.0 __ - Foreign Loans (Borrowings) 5.7 5.0 8.2 8.2 5.1 18.0 45.0 __ (Amortization) -9.1 -11.2 -14.2 -12.8 -17.4 -16.3 -18.0 __ - IMF (net) -0.9 1.6 0.1 -0.9 -1.1 -0.5 -- __ - Other -2.0 -2.5 -3.8 -3.6 -3.0 -8.2 +11.0 __

Memo Items:

1. Public Debt Servicing 20.6 20.6 20.7 21.8 22.9 21.7 25.6 2. Debt Servicing/Budgetary Revenues (%) 31.0 29.6 26.5 24.3 21.1 17.3 17.0

Source: Ministry of Planning and Economic Affairs. 1/ Before debt amortization 2/ Preliminary estimates LIBERIA: TABLE 5.2: CENTRAL GOVERNMENT REVENUES )

1967 1968 1969 1970 1971 1972 1973 1974 1975 Jan-Oct 1976

1. Taxes on Income & Profit 18.0 19.1 24.5 25.7 26.9 27.6 31.5 41.5 46.9 43.2 54.2 -Iron-Ore Profit Sharing 10.2 9.4 12.1 13.0 12.2 13.6 14.0 13.9 16.3 15.5 24.5 -Corporation Tax -- __ __ 6.9 7.1 5.3 7.7 13.5 12.7 12.1 12.0 -Austerity Tax 1.2 2.5 3.3 3.5 3.5 4.3 4.7 5.7 7.0 6.5 6.9 -Other -- __ __ 2.3 4.1 4.4 5.1 8.4 10.9 9.1 10.8 2. Taxes on Property 1.2 1.1 0.9 1.2 1.1 1.3 1.4 1.5 2.0 1.6 1.9 3. Taxes on Domestic Transc. 0.9 1.7 2.7 3.3 3.8 5.1 7.6 7._8 8.0 _7.2 7.8 4. Taxes on Foreign Trade 18.5 17.8 19.8 20.7 22.1 23.5 24.9 33.0 33.8 27.2 33.5 - Import Duty 17.6 16.5 18.3 18.1 19.6 20.7 20.7 27.4 28.2 23.0 28.2 5. Other Taxes 3.6 4.1 3.8 4.5 3.9 4.9 6.0 5.6 6.0 4.6 6.8

TOTAL TAXES 42.4 43.9 51.7 55.5 57.8 62.4 71.4 89.4 96.7 83.8 104.2

6. Maritime Revenues 3.5 3.8 4.2 5.0 6.1 7.2 8.6 9.9 16.5 12.0 12.0 7. Non-Tax Revenues 2.9 4.1 5.8 6.0 5.6 8.5 9.8 9.3 12.1 6.6 7.2

TOTAL REVENUES 43.8 51.8 61.7 66.5 69.5 78.1 89.8 108.6 125.3 102.4 123.4

Memo Items:

1) Tax Rev./Monetary GDP* 16.4 15.9 16.7 17.2 16.9 16.8 16.7 16.6 14.6

2) % increase in Tax Revenues 8.2 3.5 17.8 7.4 4.1 8.0 14.4 25.2 8.2

3) % Increase in Monetary GDP* 6.6 6.8 11.9 4.3 6.0 8.7 14.8 26.3 22.7

4) Iron Ore Pr.Sh/Iron-Ore net Output 12.0 10.4 12.7 12.4 10.7 10.5 10.5 7.6 5.8

5) Import Duties/Import of Goods 14.0 15.2 15.9 12.1 12.1 11.6 10.7 9.5 8.5

* At factor cost. LIBERIA: TABLE 5.3: TAX REVENUES

($ Million)

1967 1968 1969 1970 1971 1972 1973 1974 1975

I) DIRECT TAXES

1. Taxes on Income & Profit 42.5 43.5 47.4 46.3 46.5 44.2 44.1 46.4 48.5

- Iron ore Pr. Sharing 24.1 21.4 23.4 23.4 21.1 21.8 19.6 15.5 16.9 - Corporation Tax - - - 12.4 12.3 8.5 10.8 15.1 13.1 - Austerity Tax 2.8 5.7 6.4 6.3 6.1 6.9 6.6 6.4 7.2 - Other - - - 4.2 7.0 7.0 7.1 9.4 11.3

II) INDIRECT TAXES

2. Taxes on Property 2.8 2.5 1.7 2.2 1.9 2.1 2.0 1.7 2.1

3. Taxes on Domestic Transact. 2.1 3.9 5.2 5.9 6.6 8.2 10.6 8.7 8.3

4. Taxes on Foreign Trade 43.6 40.6 38.3 37.3 38.2 37.7 34.9 36.9 34.9

- Import Duty 42.2 37.6 35.4 32.6 33.9 33.2 29.0 30.7 29.2

5. Other Taxes 8.5 9.3 7.4 8.1 6.8 7.8 8.4 6.3 6.2

TOTAL TAXES 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Memo Items:

Taxes/Budgetary Revenues 86.9 84.7 83.8 83.6 83.2 79.9 79.5 82.3 77.1 LIBERIA: TABLE 5.4: FUNCTIONAL CLASSIFICATION OF BUDGETARY EXPENDITURE 1970-1975

($ Million)

Expenditure Items 1970 1971 1972 1973 1974 1975 June June August August 1975 1976 1975 1976

TOTAL 68.7 72.4 75.9 89.5 107.7 118.8 53.3 71.5 69.8 88.9

General Services 21.9 24.3 26.5 33.0 35.6 39.2 20.5 25.2 25.9 30.4 Administration 10.2 11.3 15.1 20.8 22.9 25.0 Foreign Affairs 3.9 4.2 3.6 3.8 3.9 4.4 Public order and safety 3.4 4.1 3.7 4.0 4.6 4.9 Defense 3.7 4.3 3.8 3.7 3.7 4.5 Other 0.7 0.4 0.3 0.7 0.5 0.4

Social & Community Services 14.1 15.3 16.2 20.8 24.0 28.5 13.0 16.1 18.4 22.2 Education 7.5 8.9 9.3 11.3 11.9 14.8 7.2 8.1 10.0 11.8 Public Health 3.6 3.8 4.7 5.6 6.9 8.6 4.0 5.4 5.8 7.3 Other 3.0 2.6 2.2 3.9 5.2 5.1 1.8 2.6 2.6 3.1

Economic Services 9.7 9.7 8.5 9.4 16.1 23.0 10.6 11.1 14.9 15.4 Agriculture 1.3 1.9 2.3 3.6 5.5 5.6 4.8 4.3 7.0 4.8 Transport & Communications 4.7 4.0 3.6 1.1 0.9 Industry 1/ 0.2 0.9 1.2 1.2 3.7 17.4 5.8 6.8 7.9 10.6 Other 3.5 2.9 1.4 3.5 6.0

Debt Services 20.6 20.6 20.7 21.8 22.9 21.7 6.4 12.8 6.8 13.9

Unallocated 2/ 2.4 2.5 4.0 4.5 9.1 6.4 2.8 6.3 3.8 7.0

Source: Ministry of Planning and Economic Affairs and Economic Survey of Liberia, 1975

1/ Mining, manufacturing, energy and construction 2/ Includes domestic expropriation claims and contingent reserves LIBERIA: TABLE 5.5: FUNCTIONAL CLASSIFICATION OF BUDGETARY AND EXTRA BUDGETARY EXPENDITURE

($ millions)

1970 1971 1972 1973 1974 1975

TOTAL 85.2 90.7 95.4 108.7 125.1 148.1

General Services 24.3 24.5 26.5 33.0 35.6 39.2 Administration 11.4 11.5 15.1 20.8 22.9 25.0 Foreign Affairs 3.9 4.2 3.6 3.8 3.9 4.4 Public Order and Safety 3.6 4.1 3.7 4.0 4.6 4.9 Defense 3.7 4.3 3.8 3.7 3.7 4.5 Other 1.7 0.4 0.3 0.7 0.5 0.4

Social & Community Services 22.6 26.1 22.1 26.5 29.3 33.2 Education 10.6 11.8 12.4 14.9 15.8 17.6 Public Health 4.8 8.0 7.5 7.7 8.3 10.0 Other 7.2 6.3 2.2 3.9 5.2 5.6

Economic Services 15.3 17.0 22.1 22.9 28.2 47.6 Agriculture 2.5 3.4 5.5 6.5 8.6 12.8 Transport and Communications 7.7 8.3 7.4 2.8 4.9 Industry 1/ 0.3 2.0 1.2 8.6 3.7 34.8 Other 4.8 3.2 8.0 5.0 11.0

Debt Services 20.6 20.6 20.7 21.8 22.9 21.7

Unallocated 2.4 2.5 4.0 4.5 9.1 6.4

Source: Economic Survey of Liberia, 1975

1/ Mining, manufacturing, construction and electric power. LIBERIA: TABLE 5.6: CAPITAL EXPENDITURES OF PUBLIC CORPORATIONS

($000)

1974 1975 1976 1/

1. Agriculture 1770 1677 4150 LPMC 406 493 1000 AGRIMECO 1364 1184 3150

2. Manufacturing 4076 8845 14777 LRPC 659 827 843 LIBSUCO 3416 8018 13934

3. Energy 2254 3084 8100 LEC 2254 3084 8100

4. Transportation 3426 3364 5258 NPA 1710 2100 2426 Air Liberia 1657 1108 910 RIA 59 79 1922 LEW _ 77 -

5. Communication 627 1056 5504 LTC 604 961 5290 LBC 23 95 214

6. Other Services 337 1183 2404 LWSC 277 496 2122 LDC 41 125 191 LHI 19 562 108 NHA - _ _ LIFZA - - 155

TOTAL ...... 12489 19203 40365

Source: Liberian Authorities and Mission Adjustments 1/ Preliminary estimates LIBERIA: Table 6.1 - National Bank of Liberia Assets and Liabilities, 1974-1976 Ifr, C M- X 74 n, - -

1974 1975 1976 1/ July Sept. Dec. March June Sept. Dec. March June Sept.

ASSETS 29.60 36.02 35.39 46.29 43.31 44.59 39.86 41.45 51.75 53.09 External Assets (net) 8.26 11.30 11.84 19.90 16.68 16.87 13.90 16.57 23.31 20.95 External Assets (8.26) (11.30) (11.87) (19.94) (16.71) (16.89) (13.93) (16.66) (23.34) (24.37) US currency (2.16) (1.58) (2.49) (1.57) (2.22) (2.40) (0.95) (4.20) (3.24) (4.32) Balances with banks abroad (2.27) (5.89) (5.49) (14.48) (10.94) (9,.28) (7.50) (4.05) (10.48) (15.86) Holdings of SDR's (3.83) (3.83) (3.89) (3.89) (3.55) (3.55) (3.39) (4.48) (4.19) IMF Gold Tranche (4.19) (-) (-) (-) (-) (-) (1.66) (2.09) (3.93) (5.43) External Liabilities (-) (-) (-) 0.03 0.04 0.03 0.02 0.03 0.09 0.03 3.42 Balances with Banks 0.74 3.67 2.69 5.14 3.23 4.75 3.90 2.59 4.42 4.27 GOL Securities 20.26 20.26 20.26 20.36 20.98 20.94 19.99 20.07 20.23 24.57 Advances - 0.20 - 0.20 0.03 0.03 0.88 0.47 1.48 0.49 GOL (- (- (-H------Banks () (0.20) (-) (- (- (-H- - - - Others (-) (-) (-) (0.20) (0.03) (0.03) (0.88) (0.47) (1.48) (0.49) Other Assets 0.34 0.59 0.60 0.87 2.39 2.00 1.19 1.75 2.32 2.81 LIABILITIES 29.60 36.02 35.39 46.29 43.31 44.59 39.86 41.45 51.75 53.09 Paid-up capital 4.75 4.75 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 General Reserve - - 0.01 0.01 0.01 0.01 0.32 0.32 0.08 0.08 Liberian coins in circulation 8.58 8.63 8.80 8.87 8.91 8.95 8.41 8.50 8.52 8.53 Deposits 4.72 10.86 9.44 19.97 16.16 15.63 11.53 11.26 19.95 26.01 GOL - (6.00) (5.84) (15.43) (10.28) (11.16) (6.81) (6.15) (10.05) (19.11) Banks (4.02) (3.43) (3.17) (3.36) (4.19) (3.90) (4.40) (4.80) (6.97) (5.63) Other (0.70) (1.43) (0.43) (1.18) (1.69) (0.57) (0.32) (0.31) (2.93) (1.27) Allocation of SDRs 11.50 11.50 11.68 11.68 11.68 11.68 11.17 11.17 11.17 11.17 Other Liabilities 0.05 0.29 0.46 0.76 1.55 3.32 3.43 5.20 7.03 2.03

Source: National Bank of Liberia

1/ The National Bank commenced its operation in July 1974. LIBERIA: Table 6.2 : Domestic Accounts of the Commercial Banks, 1972-1976 (Million US $)

1975 1976 1972 1973 1974 1975 September September

GOVERNMENT (net) 5.49 1.47 1.10 -1.95 -0.30 0.47

Long-term debt 6.15 4.39 2.42 1.41 2.03 1.35 Other Claims 10.77 3.43 1.37 0.71 0.69 - Securities 0.50 0.44 0.17 0.13 0.13 0.12 Deposits -11.93 -6.79 -2.86 -4.20 -3.15 -1.00

PUBLIC CORPORATIONS (net) -6.18 -6.21 -5.70 -6.87 -5.63 -10.21

Loans and Overdrafts 0.03 0.80 0.84 1.79 1.57 1.02 Deposits -6.21 -7.01 -6.54 -8.66 -7.20 -11.23

FINANCIAL INSTITUTIONS (net) n.a n.a - -2.93 -3.11 -4.83

Loans n.a n.a - - - 0.50 Deposits n.a n.a - -2.93 -3.11 -5.13

PRIVATE SECTOR (net) 2.62 1.15 10.27 19.57 18.02 3.31

Loans and Overdrafts 46.50 52.46 70.93 74.96 77.91 77.62 Investments in shares and 0.83 1.02 1.74 1.80 1.81 2.21 debentures Deposits -44.71 -52.33 -62.40 -57.19 -61.70 -76.52 1/ NATIONAL BANK (net) .. .. 0.63 1.81 -0.21 3.77

Deposits with the National Bank .. .. 3.17 4.21 3.81 6.87 Borrowings from the National Bank *. .. -2.54 -2.40 -4.02 -3.10

1/ National Bank of Liberia commenced its operations in July 1974. LIBERIA:Table 6.3 Commercial Banks Consolidated Balance Sheets 1972-1975 (Million US $)

1972 1973 1974 1975

FOREIGN ASSETS (NET) -4.48 2.43 -3.76 -7.87

Foreign Assets 11.83 16.81 23.48 17.16 Cash on Hand (1.46) (3.25) (3.55) (3.82) Claims on Banks Abroad (8.84) (12.09) (19.70 (12.89) Credits to Non-residents (0.89) (0.92) (-) (-) Other (0.64) (0.55) (0.23) (0.45) Foreign Liabilities -16.31 -14.38 -27.24 -25.03 Liabilities to Banks Abroad (-10.91) (-12.69) (-25.99) (-21.05) Non-resident Deposits (-5.40) (-1.69) (-1.25) (- 3.98)

DOMESTIC ASSETS 67.95 77.70 101.90 113.78

Reserves 2.05 2.51 3.49 4.65 Cash in Hand: Coins (0.73) (1.06) (0.32) (0.44) Balances with Bank of Monrovia (1.32) (1.45) (-) () Balances with National Bank (-) (-) (3.17) (4.21)

Claims on Government (Net) 5.49 1.47 1.10 -1.95 Scheduled Debt (6.15) (4.39) (2.42) (1.41) Other Claims (10.77) (3.43) (1.37) (0.71) Securities (0.50) (0.44) (0.17) (0.13) Deposits (-11.93) (-6.79) (-2.86) (-4.20)

Claims on Private Sector 47.33 53.48 72.67 76.76 Loans and Overdrafts (46.50) (52.46) (70.93) (74.96) Investment in Shares and Debentures (0.83) (1.02) (1.74) (1.80)

Claims on Public Corporations 0.03 0.80 0.84 1.79 Loans and Overdrafts (0.03) (0.80) (0.84) (1.79) 1/ Interbank Assets 2.06 2.00 1.83 2.70 Other Assets 10.99 17.44 21.97 29.83

DOMESTIC LIABILITIES 63.47 80.13 98.14 105.91 Deposits of the Private Sector 44.71 52.33 62.40 57.19 Demand Deposits (21.46) (28.73) (37.22) (29.54) Time and Savings Deposits (23.25) (23.60) (25.18) (27.65) Deposits of Public Corporation 6.21 7.01 6.54 8.66 Interbank Deposits i 1.79 3.03 4.52 7.90 Capital Accounts 4.86 8.45 8.89 5.76 Other Laibilities 5.90 9.31 15.79 26.40

1/ Includes financial institutions. LIBERIA: Table 6.4 Deposits in the Commercial Banks (II C Mi1 j 1- .

1975 1976 1972 1973 1974 March June Sept. December March June Sept.

Personal Deposits 22.81 20.40 25.10 27.49 27.02 26.88 30.11 32.16 31.79 33.10

-Demand 5.93 5.69 7.43 8.66 6.53 5.85 7.83 8.76 7.48 7.87

-Time 3.48 4.19 3.80 3.84 4.37 4.55 4.84 5.00 -Savings < 16.88 14.71 14.19 14.64 16.69 17.19 17.91 18.85 19.47 20.23 Corporate Deposits 21.88 33.13 37.29 31.49 30.48 34.61 27.08 36.36 37.73 43.44

-DeCoand 15.22 33.13 37.29 31.49 30.48 34.81 27.08 36.36 37.73 43.44

-Time / 5.60 3.32 3.30 5.84 4.25 4.64 5.17 7.21 < 5.20 6.21 -Savings 4.26 4.16 5.86 3.89 4.04 4.32 5.75 6.98

Publ:c Cor. Deposits 6.21 7.01 6.54 7.43 9.19 7.20 8.66 10.52 9.85 11.23

-Dem.and 1.01 0.80 1.57 2.54 2.55 2.49 3.77 5.00 3.12 1.97

-Tire 5 4.26 4.16 5.86 3.89 4.04 4.32 5.75 6.98

-Savings \ 0.71 0.73 0.78 0.82 0.85 1.20 0.98 2.28 lotal Resident Deposits 50.60 60.54 68.93 66.41 66.69 68.89 65.85 79.04 79.37 87.77

-Demand 22.16 28.69 36.78 38.28 34.86 36.14 33.31 44.36 42.01 44.71

-11me 13.34 11.67 12.96 13.57 12.66 13.51 15.76 19.19 28.44 31.85 -Savings < 16.S1 16.46 18.87 19.18 19.88 21.17 21.60 23.87

Go.vernment Deposits 11.94 5.39 2.86 2.68 3.23 3.15 4.20 3.90 1.01 1.S0

Non-resident Depcsits 5.40 i.69 1.25 2.31 2.95 2.92 3.98 3.02 3.00 2.88

TOTAL DEPOSITS 68.24 67.82 73.04 71.40 72.23 74.96 74.03 85.96 83.38 91.65

Source: MPEA and The National Bank of Liberia LIBERIA: Table 6.5 : Commercial Banks' Credits and Overdrafts to Private Sector, 1975-76

Sector December 1975 March 1976 June 1976 September 1976

Number Million % Number Million % Number Million % Number Million %

Commerce 550 43.25 56.3 620 50.22 58.8 647 47.93 58.2 618 46.42 59.0

Agricutlure 221 15.26 19.9 223 13.33 15.6 233 15.16 18.4 238 15.14 19.2

-Forestry (22) (2.00) (2.6) (22) (1.50) 1.8 (35) (2.29) (2.8) (32) (1.95) (2.5)

-Rubber (99) (11.24) (14.7) (99) (11.21) (13.1) (98) (11.66) (14.1) (101) (10.88) (13.8)

-Others (100) (2.02) (2.6) (182) (0.62) (0.7) (100) (1.27) (1.5) (105) (2.31) (2.9)

Personal 4,086 8.61 11.2 4,148 10.15 12.0 4,083 8.80 10.7 4,089 8.89 11.3

Construction 232 3.42 4.5 244 4.20 4.9 245 3.30 2.8 247 2.97 3.8

Transportation 40 0.89 1.2 51 1.30 1.5 56 1.56 1.9 54 1.42 1.8

Manufacturing 14 0.91 1.3 14 1.11 1.3 15 1.40 1.7 14 0.89 1.1

Mining 1 2.95 3.8 3 2.58 3.0 2 2.51 3.0 1 1.87 2.4

-Iron Ore (1) (2.95) (3.8) (3) (2.58) (3.0) (2) (2.51) (3.0) (1) (1.87) (2.4)

-Others(-(- (-(-(-(- (-(-(-(-() ()

Others 430 1.47 1.9 394 2.47 2.9 516 1.82 2.2 476 1.06 1.4

TOTAL 5,578 76.76 100.0 5,697 85.36 100.0 5,797 82.40 100.0 5,737 78.65 100.0

Source: National Bank of Liberia LIBERIA: Table6,6- Commercial Banks' Loans and Overdrafts to Private Sector, 1972-1975

Sector 1972 1973 1974 1975 $ million % Ch 1/ $ million % C $ million % 7 $ million % 7 Change-l Change Change $mlin %Change

Commerce 27.50 58.0 31.6 24.78 45.7 - 9.9 35.87 50.0 44.8 43.25 56.3 20.6

Agriculture 5.07 10.7 60.4 13.21 24.4 160.4 16.35 22.8 23.8 15.26 19.9 -6.7

Personal 5.98 12.6 9.3 8.02 14.8 34.1 8.07 11.2 0.6 8.61 11.2 7.4 Construction 3.17 6.7 40.9 2.82 5.2 -11.0 4.10 5.7 45.4 3.42 4.5 -16.6

Transportation 0.53 1.1 112.0 1.73 3.2 226.4 2.33 3.3 34.7 0.89 1.2 -61.8

Manufacturing 1.40 3.0 -37.8 1.47 2.7 5.0 2.19 3.1 49.0 0.91 1.2 -58.4

Mining 0.88 1.9 2050.0 0.68 1.3 -22.7 0.88 3.4 29.4 2.95 3.8 235.2

Others 2.89 6.0 -42.9 1.47 2.7 -49.1 1.97 2.7 34.0 1.47 1.9 -25.4

TOTAL 47.42 100.0 20.4 54.18 100.0 14.2 71.77 100.0 32.5 76.76 100.0 7.0

Source: National Bank of Liberia

1/ % Change from the previous year. LIBERIA: Table 6.7: Summary of Operations, Liberian Bank for Development and Investment, 1967-1975 (as of December 31, 1975)

Loans Equity Total No Amount No Amount No Amount (US$'000) (US$'000) (US$'000)

1967-1972 Approvals 69 2,653 5 234 55 2,887 Commitments 50 1,391 5 234 55 1,625 Disbursements 57 2,177 5 168 62 2,345 1973 Approvals 34 1,216 3 111 37 1,327 Commitments 38 885 2 51 40 936 Disbursements 36 476 0 0 36 476 1974 Approvals 53 4,523 2 72 44 3,072 Commitments 49 3,120 1 30 39 3,756 Disbursements 47 2,447 2 65 55 3,959

1975 Approvals 42 3,000 2 72 44 3,072 Commitments 38 3,726 1 30 39 3,756 Disbursements 53 3,894 2 65 55 3,959 1967-1975 Approvals JOQ 9,989 14 688 212 10,677 Comm7i tmen ts 175 9,122 12 5R6 187 9,707 Disbursements 193 8,994 12 530 205 9,524

Source: LBDI and IBRD/DFCD Table 7.1 LIBERIA - INDICATORS OF DOMINANT FARMING SYSTEMS BY COUNTY

County Agricultural Households 1Ttal pk Percent Growing ______Rice Cassava Coffee Cocoa Sugarcane Palm Oil 1j Bong 26.5 94 a9 14 19 22 E0 Grand Basso 16.0 84 71 10 19 22 37 Cape Mount 6.4 81 ?0 30 9 9 25 Grand Gedeh 10.0 93 62 7 39 2 41 Lofa 23.8 90 19 49 36 20 51 Maryland 8.9 92 57 4 25 15 29 Montserado IS.6 79 43 4 9 20 51 Nimba 32.6 94 82 51 2) 14 40 Sinoe 8.8 92 77 3 8 8 43

Total 149.6 99 8D 25 21 16 45

...... S. . S . flUD= .*...... D.. S... =l......

l Hbuseholds making palm oil ; fruits mostly collected from wild trees. Eource : Agricultural Census and National Rice Production Estimates 1975. Table 7.2: LIBERIA - RETURNS PER ACRE AND MAN DAY FROM CROPS

Upland Rice Swamp Rice Coffee Cocoa Unit Trad. Improved Improved 1/ Trad. Improved Trad. Improved Rubber 4/

Output

Yield lb.acre 1,000 1,600 2,800 300 1,000 300 800

Price per lb - cts 12 12 12 38 38 30 30 5/ Value of Production $ 120 192 336 114 380 90 240 1825/

Expenditure

Seed $ 1.0 1.60 1.60 - - - -

Planting, Land.Dev.' " - - 4.0 5.0 6.0 5.0 6.0 18.0

Fertilizer " - 30.0 30.0 7.5 35.6 - 1.0

Chemicals, spraying - - 1.0 - 2.5 6.0 6.0

Land Tools, Bags " 7.0 7.0 10.0 3.0 4.0 3.0 4.0

Threshing - - 16.0 - - - -

Total 8.0 38.60 62.60 15.5 48.1 14.0 17.0 18.0

Income

Net income per acre 112 153.4 273.4 98.5 331.9 76 223.0 182

No. of days worked 56 60 105 40 82 23 35 50

Net Income per day 2.0 2.55 2.60 2.45 4.05 3.30 6.37 3.64

1/ Rainfed One crop 2/ Present producer prices 3/ Amortized over productived live of plantations 4/ 50 acre farm, replanted 5/ Average of 30 years

Source: Mission's estimates TABLE 7.3: LIBERIA: AREA UNDER RUBBER CULTIVATED 1971-1975

Year Concession Farms Liberian Farms All Farms

Tapped Untapped Total Tapped Untapped Total Tapped Untapped Total ----- 000 acres -----

1971 99.3 37.7 137.0 86.0 63.3 149.3 185.3 101.0 286.3

1972 97.1 43.3 140.4 88.0 62.8 150.8 185.1 106.1 291.2

1973 97.1 41.7 138.8 92.0 60.3 152.4 189.1 102.0 291.1

1974 102.3 41.0 144.8 93.0 60.0 153.8 195.3 101.0 296.3

1975 99.7 42.0 141.7 94.0 61.5 155.5 193.7 103.5 297.2

Source: Liberian Rubber Planters Association LIBERIA: TABLE 7.4 OBJECTIVES AND COSTS OF SPECIAL PROJECTS

Name County Land Development (acres) Costa Remarks

Oblective Cleared to date Cultiv. to date Expand. Budget Alloc.

Upland Swamp Upland Swamp Tree Rainfed Swamp to date Alloct 4 Year Crops Rltce Rice - 76/ 77- Plan

------______------______-- -Cro-s--ice-Rice------A------_--- _---_( ------n------

a) Special Prolects

Carwula Ton.be Grd Cape 11t. 200 280 260 198 100 495 69.2 315 Poasibie vegetable product Foys Lofa 8,000 4,100 1,437 1,340 1,099 1,200 2,823 133.4 668 Kpatawee Bong 1,961 239 1,961 239 623 34 845 44.1 356 Land partly unsuitable

Cbedin Nimba 1,090 820 150 170 60 90 170 20 50.8 202 Zleh Town Grd Cedeh 2,250 500 2,250 250 676 150 491 48.9 220

Total Spectal Projects 13,521 5,939 6,058 2,197 2,458 90 1, 654-/ 4,674 346.4 1,761

b) "Ilndependance' 2,000 500.0 2,000 Projects (Each year)

c) Rice Corporat.

Saye Dube Grd Cedeh 2,150 225 100 346.0 9,000 Cestos Grd Gd/Ntmba 15,000

Total Rice Corporation 17,150 100 346 11,000

d) Expanded Rice 1,500 193.7 436 Program

e) Integrated Projects (Objective) (Total)

Lofs 12,750 14,000 4,750 17,000 985.6 Bong 11,250 14,375 4,125 20,300

Total Integrated Projects 24,000 28,375 8,875 37,300

1/ Without tree crops progrem. 2/ Target 3,000 acree end 1976. Table 7.5: LIBERIA - PURCHASE PRICES FOR LOCALLY PRODUCED RUBBER 1972-76

(cents per pound)

1/ Specificatioq Non-Specification Year Latex CoaRu um-2j CoaRulum

1972 l.half 13.2 7.8 7.0

2.half 13.0 8.7 7.8

1973 l.half 14.2 16.4 15.8

2.half 29.6 27.0 24.3

1974 l.half 36.9 31.8 28.5

2.half 27.9 18.4 16.7

1975 1.half 19.1 14.7 12.8

2.half 21.4 15.6 15.1

1976 l.half 22.7 20.8 18.7

2.half 25.3 22.3 19.3

(5 months)

1/ Applicable for a few large producers with contracts for supply to concessions only. 2/ 40% dried rubber.

Source: Rubber Planters Association TABLE 7.6: LIBERIA: LPMC PURCHASES OF COFFEE, COCOA, AND PALM KERNELS …------(tons) ------…------

Year Coffee Cocoa Palm Kernels Palm Oil Expeller Cake 1/ (clean) (dry beans) (dry kernels)

1971/72 4,100 2,632 11,568 2,992 3,641

1972/73 4,635 2,290 11,786 4,987 5,923

1973/74 3,635 3,165 15,486 6,743 7.458

1974/75 3,950 2,730 13,797 5,811 6,739

1975/76 4,320 2,772 12,399 5,168 6,118

1/ Production

Source: LPMC Table 7.7: LIBERIA: BUDGETARY ALLOCATIONS FOR PROGRAMS OF THE MINISTRY OF AGRICULTURE

(1975 estimates)

Item/Program $'000 %

General Administration 921.7 9.1

General Services (mostly rice extension) 660.7 6.5

Expanded Rice Program 193.7 1.9

Special Rice Projects 346.4 3.4

"Independence Projects" 500.0 4.9

Integrated Projects 985.6 8.9

Tree Crop Development 1,000.0 10.0

Cooperative Development 225.4 2.2

Input Supply 150.0 1.5

Credit 117.0 1.2

Land clearing 2,883.1 25.8

Research 388.4 3.8

Training 8.9 .1

Livestock 203.3 2.0

Forestry 1,005.6 10.0

Fisheries 29.0 2.0

Total Budget 10,294.9 100.0

Source: Ministry of Planning TABLE 7.8: LIBERIA: POPULATION AND IMPORTS LIVESTOCK

a) Livestock Population

Type of Livestock Number in the Percent of Holdings Country raising

Cattle 25,000 2

Pigs 38,000 )

Sheep 48,000 ) 10

Goats 133,000 )

Chicken 2,000,000 10

b) Imports

Year Live Animals - Meat Total Value Cattle Sheep Goats Chicken Total of which ($ million) ('000 heads) cattle (tons)

1972 10.1 4.4 1.2 7.8 607 298 1.8

1973 12.7 5.7 1.8 1.9 523 271 2.0

1974 11.6 6.1 1.0 2.2 530 265 2.1

1975 9.2 1.7 - - 441 239 2.1

Source: Ministry of Planning, External Trade of Liberia TABLE 7.9: LIBERIA: LAND CLEARED BY AGRIMECO

Country Project 1972/73 1974 1975 Total Upland Swamn Upland Swamp Upland Swamp Upland Swamp

Lofa Foya 3,900 120 1,000 80 600 420 5,500 620

Grand Gedeh Zlehtown 1,000 - 2,000 - 600 120 3,600 120

Bong Kpalawee - - 1,000 - 1,200 - 2,200 -

Cape Mount Gbarwula/ Tombe 500 - 100 400 - - 600 400

Maryland Libusco - - 1,200 - 1,800 - 3,000 -

Others 1,000 - 700 - - - 1,700 -

TOTAL 6,400 120 6,000 480 4,200 54(0 16,600 1,140

Source: AGRIMECO TABLE 7.10 - LIBERIA: FUTURE LAND CLEARING OF AGRIMECO (Acres)

Estimated Rate 1976/77 1977/78 1978/79 1979/80 Total Estimated Costs ($/acre) (Mill $)

Oilpalm Estates 938/230 2,500 6,000 8,500 8,100 25,100 7.5

Coconuts 230 - 485 485 480 1,450 .3

Independence Projects 270 2,000 2,000 _ 2,000 6,000 1.6

Swamp Rice 1,500 1,056 1,325 6,995 7,570 16,946 1' 25.4

Sugar Estate 345 2,000 1,600 - - 3,600 1.2

Total 7,556 11,410 15,980 18,150 53,096 36.0

1/ Of which 706 extension of ongoing special projects

Source: AGRIMECO Table 7.11: LIBERIA - AGRICULTURAL CREDIT OPERATIONS (Amowit $'000)

Purpose 1972 1973 1974 1975 1976 Total % Rice 38.45 4.32 2633.48 1764.12 979.07 5419.44 96 Tree Crops 42.00 - 5.52 - 16.74 64.26 1

Vegetables - - .12 5.97 - 6.09 Livestock - 137.14 34.44 2.09 15.43 189.10 3

Total 80.45 141.46 2673.56 1772.18 1011.24 5678.89 100

of which short term (1-2 years) (fertilizer, hand tools for rice and vegetables) 165.21 3 medium term (2-5 years) (clearing, land preparation, pasture establishment for livestock) 222.78 4

long term (-15 years) (swamp rice, and plantation establishment for rubber, coffee, cocoa) 5290.90 93

Repayments 1.41 1.09 109.36 20.41 199.35 331.62

Sourcc : Ministry of Agriculture LIBERIA: TABLE 8.1

TOTAL PERCENTAGE OF EXPORTS OF IRON ORES BY COUNTRIES

(lst January to 30th November, 1975)

Countries of Tonnages Fines Destination % % Lumps % Pellets %

Germany 4,121,502 25 2,869,267 28 15,660 1 1,236,575 41

Italy 2,663,709 16 2,076,007 20 nil nil 587,702 19

Holland 2,446,609 15 1,452,779 14 993,830 31 nil nil

USA 1,821,260 11 118,720 1 1,139,330 35 563,210 18

France 1,676,018 10 1,511,878 14 164,140 5 nil nil

Belgium 1,114,236 7 660,116 6 187,750 6 266,370 9

Spain 549,380 3 181,760 2 nil nil 367,620 12

Japan 539,080 3 539,080 5 nil nil nil nil

England 512,016 3 512,016 5 nil nil nil nil

Sweden 280,450 2 nil nil 253,650 8 26,800 1

Czechoslovakia 273,630 1 136,790 1 136,840 4 nil nil

Canada 243,070 1 nil nil 243,070 7 nil nil

Yugoslavia 271,780 1 212,690 2 59,090 2 nil nil

Romania 93,800 1 49,330 1 44,470 1 nil nil

Poland 27,370 1 27,370 1 nil nil nil nil

Totals 16,633,910 100 10,347,803 100 3,237,830 100 3,048,277 100

Source: Annual Report of the Ministrv of Land and Mines. 1976

Date of original 1946 1958 1958 1953 agreement LIBERIA TABLE 8.2 PRINCIP Li, FEATURES OF LIBERIA'S IRON OR, INDUSTRY

Company closed in marcnh _ 0 years 75 years Item Liberia Mining Co Na ional Iron Ore Co Bong Mining Co Liber MinAria,1tn- Liberian Iron andf_nrti,,m n : I L) (LAMCO JV) (LISCO) _ _ . _ Republic SteeL Corp GOL (50%'AMCOV) GOL '50%) L BETH (25%) own d 100% AMAX a (59.18) M (1%) Consortium Liberia b1 Bethlehem Stee1 Corp (51%) OWnership Private inves ors Liberia Enterprises and insider L MCO (75%) owne 50% by Liberi Location N of mi e Bom Hills,i 65 2 km Bong Rar mtdo "5% ENimba County, 300 G ieConsitminW t 5 (d bkong, - N of onroia NW ofMonrov a N of Mo rova EEfMnia aOM on n v !5nLfIyna ivat Date of origingT7- I~~~~~~~~~~~~~~nreLt Pi a Date of origin 1 1946 1958 1! 58 1953 1967 None None agreement Tatal assets, I S milli-i1 -4 81 million_ LIBETH $62 m llion De ,ember.19 5U mli 3 Ui LAMCO- 24mThi~

Tenure = MAr-hompany 19.77 oed in 70 years 70 ears 75 years 70 years None NoneN______

Republic Steel Corp GO (50%) GOL (5 LIBETH (25%) owned 100% AMAX and Japanese Gro p NIOC (50%) BMC carryin out *.;g'F4 1,8,l LMC (15%) Consort m Liberia by Bethlehem Steel Corp (51%) LMC (50%) exploration Ownership F Nate-2A vestors Lib nria Enterpl" and Fin der lIfp (75%) owned 0% by Libqi9ar5American Cor (under negoi9p3,n) O (ItGdIiction Lt (35%) Consort m (50%) GOL and 50% by Lib rian (48.9%) Iron Ore Ltd Private investors (0. 5) Awaiti%I

Total assets,118 mil in LIBETH $62 mi lion decisic December 1975 $38'~~million $181 million LAMCO- $204 mil.ion- produc1 ______i n m i d 10 mil- First year EEtimatej4 5 jpro- 94mi of production d ction in 1976, 19V2l milli n 965 3.0 i illion 1963 6 4 million 9.. millio t Dnes Awa it ing "s tart-up" Awaiting completion Awaiting co ion tcnnes ~~~~~~~~~~~~~~~~~~~decision.Earliest of negotiation of exploratLon. ______production possible in mid-1982 at possibleEarliest mid-1981production possibleEarliest inpr mid-1984duction ______. 10 million tpa at 2 million tpa at either 4 million Estimated pro- 8i milliln 6.4 llion li mIllioo duction in 197 , Eg tiM2ftL-di] 1thl 30mlin64ilo . ilo tonnes si les in 1976 $32 million $23 iillion $128 million $161 millioi

Etimated tota' Eg tiM%?d,ftineab e 442 million + 6 sales in 1976 rrni serves, of $23 millnmi 71 million 000 mill on 30C i 76, - _ low-g adc oreeore_ _ low grade taco -Ite-a t- I Estimated mine ble 155 million + 442 millio- + 686 million + 113 million + reserves, end r_ mLAIV _ ,u miLL±on *T1 .V S_00 4 401eill-vmo mitl _ 1976, tonnes 19 v grade ore low rac i e* at BalaeisiL low ade taconitt" ______Profit shari g" - OL rece yesw dvden s "Pro it sharing" - LBT-Ntpoits "Profil "Profit shar_n 50% of net di tion its 51 ) share- 50 %f fectnet distri- s to 5 i,icome tax of net "Profit sharing"- on i sProit S ibo%inc;B - Ne h P i 50 L s " pr b Ta rbdI ds;-tl ho ding in lieu of buted p flttlsea in cr=eOtta*iDca i3g'/-$ sai.es 2riWemu* 50 WsolcQvtss9ddstr bblstedonce sewwen E Tax or profit- sh ring arrangeme it er income taxation whc sales revenue 50% of net distrib t.i ian4;6 ale ah v ent U$ em / (AXt -MIntor 4oK$ *RL,en W sharingent arnang ~~~~~~~~~~~~whichevr is greater profits or 49~/$ sale ma m e revenue, whichever is and 40/$ sales after tT venue, whichev -r is and 4;/ greater years), whichever is g eater years , greater great ex

* No plans for exploitation at present

LIBERIA: TABLE 8.3 COMBINED LACO., LIBETH. BMC. LMC AND NIOC INCOME AND COST DATA FOR THE PERIOD 1067 TO 1975 WITH PROJECTIONS FROM 1976 TO 1980

Item 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

Shipments*, 106 tons 17.53 19.73 22.12 23.38 20.79 23.33 25.52 25.20 18.34 20.89 22.11 22.90 23.47 23.77

Average price, $/ton 6.64 6.41 6.51 6.98 7.55 7.82 8.00 10.52 15.79 16.43 17.27 18.97 19.84 20.69

Sales income, 106 5 116.42 126.52 144.09 163.31 157.06 182.43 204.08 265.22 289.51 343.14 381.92 434.34 465.56 491.82

Operating, administranion 53.80 60.34 71.43 76.39 86.37 93.42 112.45 154.79 173.96 194.90 236.97 285.63 333.03 365.23 and selling costs, 10 8

depreciation, 106 20.79 24.95 28.16 30.34 30.32 31.36 33.30 33.39 37.32 40.10 53.92 60.98 63.47 66.41

Depletion allowance, 106 $ - - - 0.90 1.08 1.58 2.82 4.05 3.41 4.35 5.42 5.58 5.96 7.93

Other costs 6 (1.24) (1.72) 0.81 (0.99) (4.27) 3.63 7.99 9.28 (13.58) 15.26 (3.00) (0.50) (0.50) (0.50) (income), 10 S

Total costs, 10 S 73.35 83.57 100.40 106.64 113.50 129.99 156.56 201.51 201.11 254.61 293.31 351.69 401.96 439.07

Earnings before interest 43.07 42.95 43.69 56.67 43.56 52.44 47.52 63.71 88.40 88.53 88.61 82.65 63.60 52.75 and GOL take, 10~ $

6 Interest, 10 $ 17.95 20.05 20.11 21.04 22.45 22.07 20.57 19.58 15.11 13.94 24.38 29.73 30.54 31.25

take,roft before GOL 25.12 22.90 23.58 35.63 21.11 30.37 26.95 44.13 73.29 74.59 64.23 52.92 33.06 21.50

6 GOL take, 10 $ 10.05 9.95 11.84 13.87 11.39 13.09 13.27 15.85 18.25 29.30 28.08 23.85 16.46 19.74

dividends , 10 $ 15.07 12.95 11.74 21.76 9.72 17.28 13.68 28.28 55.04 45.29 36.15 29.07 16.60 1.76

GOL take as a percentage 8.6 7.9 8.2 8.5 7.3 7.2 6.5 6.0 6.3 8.5 4.0 of sales income 7.4 5.5 3.5

GOL take as beapore intaeret 23. 3 23.2 27.1 24.5 26.1 25.0 27.9 24.9 20.6 33.1 31.7 28.9 25.9 37.4

GOL take as a percentage 40.0 43.4 50.2 38.9 54.0 43.1 49.2 35.9 24.9 39.3 43.7 45.1 49.8 91.8 of net profit

*No figures available for BMC 1967 to 1969 or NIOC 1970 to 1971. Estimates from production and sales tonnages have been used. LIBERIA: TABLE 8.4

LIBERIAN IRON ORE INDUSTRY

INCOME AND COST DATA FOR 1967 TO 1975 WITH PROJECrIONS FROM 1976 TO 1980

1967 to 1975 (Actual) 1976 to 1980 (Projected) Item-

LANCO LIBETH BBC NIOC LMC Total LAMCO LIBETH BMC NIOC LMC+ Total

Shipments, 106 tons 72.69 23.01 46.88 *31.04 22.32 195.94 41.62 15.71 36.18 17.19 2.44 113.14

Average price, $/ton 8.55 9.18 9.57 5.72 8.51 8.41 19.22 16.92 23.53 9.43 15.25 18.71

Sales income, 10 S 621.15 211.12 448.85 177.57 189.95 1,648.64 800.12 265.89 851.45 162.12 37.20 2,116.78

Operating, administ ration 270.19 81.70 266.10 144.46 120.50 882.95 513.22 165.79 596.89 114.21 25.65 1,415.76 and selling costs, 106 $

Amortesation and6 107.22 35.35 85.76 23.22 18.38 269.93 111.50 22.50 126.52 22.94 1.42 284.88

Depletion allowance, - 13.84 - - - 13.84 - 29.24 - - - 29.24

_ Other costs 6 19.97 - (14.92) (2.37) (2.77) (0.09) 3.10 - 10.40 - (2.74) 10.76

6income),

Total costs, 10 6 397.38 130.89 336.94 165.31 136.11 1,166.63 627.82 217.53 733.81 137.15 24.33 1,740.64

Earnings before interest 223.77 80.23 111.91 12.26 53.84 482.01 172.30 48.36 117.64 24.97 12.87 376.14 and GOL take, 106 $

Interest, 106 S 78.85 25.13 66.50 8.45 - 178.93 37.00 15.00 71.20 6.64 - 129.84

Net profit before GOL 144.92 55.10 45.41 3.81 53.84 303.08 135.30 33.36 46.44 18.33 12.87 246.30 take, 106

GOL take, 10 6 49.11 24.97 15.06 1.38 27.04 117.56 64.41 16.68 27.56 3.47 5 31 117.43

Reserves and foreign 95.81 30.13 30.35 2.43 26.80 185.52 70.89 16.68 18.88 14.86 7.56 128.87 dividends, 106 $

GOL take as a percentage 7.9 11.8 3.4 0.8 14.2 7.1 8.1 6.3 3.2 2.1 14.3 5.5 of sales income

GOL take as a percentage 21.9 31.1 13.5 11.3 50.2 24.4 37.4 34.5 23.4 13.9 41.3 31.2 of earnings before interest

GOL take as a percentage 33.9 45.3 33.2 36.2 50.2 38.8 47.6 50.0 59.3 18.9 41.3 47.7 of net profit

GOL take per ton 0.68 1.09 0.32 0.04 1.21 0.60 1.55 1.06 0.76 0.20 2.18 1.04 shipped, S

Mine closes in March, 1977.

Shipment tonnages are not available for BMC, LMC and LAMCO for the years 1967 to 1969 and NIOC for the years 1967 to 1971 therefore production tonnages have been used. LIBERIA: TABLE 8.5

LIBERIN AMERICAN-SWEDISH MINERALS COMPANY

INCOME AND COST DATA FOR 1967 TO 1975 WITH PROJECTIONS FROM 1976 TO 1980

Item 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1976 1979 1980

Shipments, 106 tonnes

Run of mine 5.23 1.21 1.23 0.89 0.03 - 0.42 0.29 0.18 0.06 - - - -

Washed lumps 0.09 2.22 3.09 3.36 2.56 2.42 3.24 3.52 1.59 1.85 3.55 4.07 4.60 4.60

Washed fines 0.15 2.69 3.30 3.45 4.12 4.82 4.18 4.57 4.00 3.67 3.28 3.20 2.97 2.07

Pellets - 0.86 1.24 1.25 0.99 1.69 1.34 1.38 1.09 1.30 1.45 1.65 1.65 1.65

Total *5.47 *6.98 *8.86 8.95 7.70 8.93 9.18 9.76 6.86 6.88 8.28 8.92 9.22 8.32

Average price, S/ton 6.27 6.25 6.40 7.55 7.44 7.80 7.95 10.84 16.51 17.59 17.91 18.99 19.94 21.35

Sales income, 10 6 34.29 43.63 56.71 67.53 57.27 69.64 73.01 105.83 113.24 121.00 148.28 169.43 183.81 177.60

Operating, administration 1125 15.54 21.47 24.83 25.52 27.52 33.83 49.78 60.45 55.70 79.60 103.00 133.44 141.48 and selling costs, 106 * 1

6 depreciation, 1a S 7.34 9.41 12.17 13.25 12.65 12.02 12.11 13.00 15.27 17.00 20.00 23.25 24.50 26.75

Other costs 6 - (income), 10$ _ 4.64 - (0.41) 4.77 5.27 8.39 (2.69) 3.10 - - - -

Total costs, 106 S 18.59 24.95 38.28 38.08 37.76 44.31 51.21 71.17 73.03 75.80 99.60 126.25 157.94 168.23

and GOL takefre 06nterest 15.70 18.68 18.43 29.45 19.51 25.33 21.80 34.66 40.21 45.20 48.68 43.18 25.87 9.37

Interest, 106 5 8.98 10.87 10.81 10.30 9.92 9.26 8.72 6.33 3.66 3.10 5.10 7.35 9.60 11.85

Net profit before GOL 6.72 7.81 7.62 19.15 9.59 16.07 13.08 28.33 36.55 42.10 43.58 35.83 16.27 (2.48) take, 10 $

GOL take, 106 S 3.02 3.70 4.81 6.71 5.00 6.03 5.51 6.83 7.50 17.80 17.43 14.73 7.35 7.10

GOL take as a percentage 8.8 8.5 8.5 9.9 8.7 8.7 7.5 6.5 6.6 14.7 11.8 8.7 4.0 4.0 of sales income

GOL take as a percentage of earninpsbefore interest 19.2 19.8 26.1 22.8 25.6 23.8 25.3 19.7 18.7 39.4 35.8 34.1 28.4 75.8

GOL take as a percentage 44.9 47.4 63.1 35.0 52.1 37.5 42.1 24.1 20.5 42.3 of net profit 40.0 41.1 45.2 -

Plroduction figures LIBERIA: TABLE 8.6 LIBERIAN BETHLEHEM IRON MINES COMPANY

INCOME AND COST DATA FOR 1967 TO 1975 WITH PROJECTIONS FROM 1976 TO 1980

Item 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

Shipments, 10 tonnes

Run of mine 2.44 0.79 - - - - 0.07 0.10 0.05 0.04 - - - -

Washed lump - 0.31 1.18 0.62 0.76 1.10 1.49 1.00 0.91 0.75 0.45 0.53 - -

Washed fines - 0.83 1.18 1.19 1.09 0.73 1.62 1.63 0.29 1.23 2.05 2.20 2.53 3.43

Pellets - 0.36 0.27 0.52 0.48 0.53 0.37 0.44 0.66 0.50 0.55 0.35 0.55 0.55

Total 2.44 2.29 2.63 2.33 2.33 2.36 3.55 3.17 1.91 2.52 3.05 3.08 3.08 3.98

Average price, $/tonne 7.72 7.55 7.36 7.77 8.23 8.67 8.30 11.07 17.43 15.70 16.15 16.47 17.60 18.12

Sales income, 10 $ 18.84 17.30 19.36 18.11 19.18 20.47 29.48 35.09 33.29 39.57 49.26 50.73 54.20 72.13

and selling costs, 1t $ 4.75 5.12 6.04 6.50 7.68 8.10 11.66 15.79 16.06 24.37 28.55 31.71 34.25 46.91

Amortisation and6 3.72 3.96 4.46 4.01 3.88 3.84 5.01 3.57 2.90 3.00 3.75 4.50 5.25 6.00 depreciation, 10 $

Depletion allowance, 106 $ - - - 0.90 1.08 1.58 2.82 4.05 3.41 4.35 5.42 5.58 5.96 7.93

Other costs 6 (income), 10 S

Total costs, 106 8.47 9.08 10.50 11.41 12.64 13.52 19.49 23.41 22.37 31.72 37.72 41.79 45.46 60.84

Earnings before interest and GOL take, 106i r 10.37 8.22 8.86 6.70 6.54 6.95 9.99 11.68 10.92 7.85 11.54 8.94 8.74 11.29

Interest, 106 S 3.04 3.52 3.50 3.40 3.33 3.15 1.89 1.94 1.36 1.50 2.25 3.00 3.75 4.50

Net profAt before GOL 7.33 4.70 5.36 3.30 3.21 3.80 8.10 9.74 9.56 6.35 9.29 5.94 4.99 6.79

GOL take, 10 6 2.45 1.76 2.01 1.60 1.60 1.90 4.00 4.87 4.78 3.18 4.64 2.97 2.50 3.39

GOL take as a percentage 13.0 10.2 10.4 8.8 8.3 9.3 13.6 13.9 14.4 8.0 9.4 5.9 4.6 4.7 of sales income

GOL take as a percentage 23.6 21.4 22.7 23.9 24.5 27.3 40.0 41.7 43.8 40.5 40.2 33.2 28.6 30.0 of earnings before interest

GOL take as a percentage 33.4 37.4 37.5 48.5 49.8 50.0 49.4 50.0 50.0 50.1 49.9 50.0 50.1 49.9 of net profit LIBERIA: TABLE 8.7

BONG MINING COMPANY

INCOME AND COST DATA FOR 1967 TO 1975 WITH PROJECTIONS FROM 1976 TO 1980

Iten 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

Shipments, 106 tonnes

(concentrate) 3.41 4.22 4.46 5.40 3.60 3.42 4.59 4.31 3.76 3.58 3.83 2.70 2.70 2.70 Pellets - - - - 1.22 2.07 2.31 2.40 1.71 2.82 3.45 4.80 4.80 4.80

Total 3.41 4.22 4.46 S.40 4.82 5.49 6.90 6.71 5.47 6.40 7.28 7.50 7.50 7.50

Average price, s/tenne

Sinter feed N/A N/A N/A N N/AIA N/A N/A 8.71 13.90 13.70 13.80 14.49 15.21 15.98 Pellets _ _ _ _ N/A N/A N/A 18.24 28.78 27.86 28.32 29.74 31.22 32.78

Total N/A N/A N/A 6.52 8.26 9.19 9.24 12.32 18.55 19 94 20.68 24.25 25.46 26.73

Sales income. 106 S 22.75 26.65 25.99 35.23 39.82 50.48 63.79 82.68 101.46 127.60 150.56 181.88 190.92 200.49

Operating, administration 11.67 13.52 14.44 17.75 25.28 27.49 35.53 53.94 66.48 75.20 and selling costs, 106 $ 106.14 128.39 139.41 147.75

Adortisation a1d6 5.32 6.68 6.67 7.88 8.74 10.63 12.13 12.58 15.13 15.60 25.60 28.40 28.62 28.30

Other.cos ts6 (0.24) (0.55) (2.39) 0.10 (3.27) (0.66) 3.04 0.72 (11.67) 12.40 (0.50) (0.50) (0.50) (0.50) (income), 10" S

Total costs, 10 $ 16.75 19.65 18.72 25.73 30.75 37.46 50.70 67.24 69.94 103.20 131.24 156.29 167.53 175.55

Earnings before interest 6.00 7.00 7.27 9.50 9.07 13.02 13.09 15.44 31.52 24.40 19.32 25.59 23.39 24.94 and 'GOL take, 106 $

Interest, 106 $ 4.72 4.64 4.92 6.68 8.64 8.85 9.02 10.19 8.84 8.20 15.20 17.90 16.00 13.90

Net,profit before GOL take, 106 5 1.28 2.36 2.35 2.82 0.43 4.17 4.07 5.25 22.68 16.20 4.12 7.69 7.39 11.04

GOL take, 10 S 0.81 1.16 1.16 1.39 1.19 1.67 2.01 2.63 3.04 3.83 4.52 5.46 5.73 8.02

0o0 of salestake incomes a percentage 3.6 4.4 4.5 3.9 3.0 3.3 3.2 3.2 3.0 3.0 3.0 3.0 3.0 4.0

GOL take as aefore interest 13 5 16.6 16.0 14.6 13.1 12.8 15.4 17.0 9.6 15.7 23 4 21 3 24.5 32.2

GOL take as a percentage 63.3 49.2 49.4 49.3 276.7 40.0 49.4 50 1 13.4 23.6 109.7 71.0 of net profit 77.5 72.6

Producilon figures. LIBERIA: TABLE 8.8

NATIONAL IRON ORE COMPANY

INCOME AND COST DATA FOR 1967 TO 1975 WITH PROJECTIONS FROM 1976 TO 1980

Item 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

Shipments, 10 tons

Blast ------0.18 0.30 - - - - Washed lumps 1.38 1.29 1.37 NA NA 0.94 0.84 0.80 0.03 - - - - _

Washed fines 1.99 2.19 2.00 NA NA 2.98 2.46 2.18 2.19 2.40 - - - - Siliceous fines ------0.51 0.26 0.30 - - - -

Total *3.37 *3.48 *3.37 3.96 3.49 3.92 3.30 3.49 2.66 3.00 3.15 3.40 3.67 3.97

Average price, $/ton 5.99 5.58 6.52 NA NA 4.90 5.06 5.72 7.24 7.69 9.05 9.50 9.98 10.48

Sales income, 106 $ 20.18 19.41 21.98 20.87 19.99 19.20 16.70 19.98 19.26 23.08 28.51 32.30 36.63 41.60

and selling costs, 106 5 15.02 14.51 17.45 15.53 15.54 16.58 15.41 17.88 16.54 17.89 18.77 22.53 25.93 29.09

Amortisation and 6 depreciation, 10 $ 2.52 2.60 2.56 2.88 2.79 2.72 2.09 2.57 2.49 3.08 4.57 4.83 5.10 5.36

(ncome), sts06 (0.50) (0.44) (0.42) (0.51) (0.15) (0.24) (0.08) 0.04 (0.07) - - - - -

Total costs, 10 $ 17.04 16.67 19.59 17.90 18.18 19.06 17.42 20.49 18.96 20.97 23.34 27.36 31.03 34.45

andEarnings GOL take,before 100 nterest$ 3.14 2.74 2.39 2.97 1.81 0.14 (0.72) (0.51) 0.30 2.11 5.17 4.94 5.60 7.15

Interest, 10 6 1.21 1.02 0.88 0.66 0.56 0.81 0.94 1.12 1.25 1.14 1.83 1.48 1.19 1.00

Net profit before GOL 1.93 1.72 1.51 2.31 1.25 (0.67) (1.66) (1.63) (0.95) 0.97 3.34 3.46 4.41 6.15 take, 106 $

GOL take 6 0.15 0.32 0.31 0.30 0.30 - - - - - 0.67 0.69 0.88 1.23 (dividends), 10 $

GOL take as a percentage 0.7 1.6 1.4 1.4 1.5 - - - - - 2.4 2.] 2.4 3.0 of sales income

GOL take as a percentage 4.8 11.7 13.0 10.1 16.6 of earnings before interest - - - - - 13.0 14.0 15.7 17.2

GOL take as a percentage 7.8 18.6 20.5 13,0 24.0 - - - - - 20.1 19.9 20.0 20.0 of net profit

*Production figcuies LIBERIA: TABLE 8.9

LIBERIA MINING COMPANY

INCOME AND COST DATA FOR 1967 TO 1975 WITH PROJECTIONS FROM 1976 TO 1977

Item 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977

Shipments, 106 tonnes

Washed lumps 0.93 0.93 0.98 1.06 0.73 1.15 0.81 0.89 0.56 0.89 0.14

Washed fines 0.95 0.84 0.92 0.89 0.84 0.78 0.86 0.58 0.43 0.63 0.09

Concentrate 0.96 0.99 0.90 0.79 0.88 0.70 0.92 C.6C 0.45 0.57 0.12

Total *2.84 *2.76 *2.80 2.74 2.45 2.63 2.59 2.07 1.44 2.09 0.35

Average price, $/ton 7.17 7.08 7.16 7.87 8.49 8.61 8.15 10.45 15.46 15.26 15.17

Sales income, 106 $ 20.36 19.53 20.05 21.57 20.80 22.64 21.10 21.64 22.26 31.89 5.31

Operating, administr tion and selling costs,10 $ 11.11 11.65 12.03 11.78 12.35 13.73 16.02 17.40 14.43 21.74 3.91

Amortisation and depreciation, 106 $ 1.89 2.30 2.30 2.32 2.26 2.15 1.96 1.67 1.53 1.42 -

Other costs 6 (income), 10 $ (0.50) (0.73) (1.02) (0.58) (0.44) (0.24) (0.24) 0.13 0.85 (0.24) (2.50)

Total costs, 106 $ 12.50 13.22 13.31 13.52 14.17 15.64 17.74 19.20 16.81 22.92 1.41

Earnings before interest and GOL take, 106 $ 7.86 6.31 6.74 8.05 6.63 7.00 3.36 X2 .4 4 5.45 8.97 3.90

Interest, 106 $ ------

Net profit before GOL take, 106 $ 7.86 6.31 6.74 8.05 6.63 7.00 3.36 2.44 5.45 8.97 3.90

GOL take, 106 $ 3.62 3.01 3.55 3.87 3.30 3.49 1.75 1.52 2.93 4.49 0.82 GOL take as a percentage of sales income 17.8 15.4 17.7 17.9 15.9 15.4 8.3 7.0 13.2 14.1 - GOL take as a percentage of earnings before interest 46.1 47.7 52.7 48.1 49.8 49.9 52.1 62.3 53.8 50.1 -

GOL take as a percentage of net profit 46.1 47.7 52.7 48.1 49.8 49.9 52.1 62.3 53.8 50.1 -

* Production figures x This figure is 2.88 in 197C/74 cost summary sheet supplied by Concessions Secretariat.

1975 figures relate to sales not shipments. 1977 percentages not calculated as mine closes in March, 1977. LIBERIA: TABLE 8.10

I.IBERIA'S IRON CRE EXPORTS

I.ON(, RANGE PROJECTIONS - 1981-1990

(10 c-,st.int Dcb-mbvx 1976 US$)

Ite- 1981 1982 1983 1984 19H5 1986 1987 1988 1989 1990 Resa,k,

Lamco IV

Ship.ents, 10 t-us 12 0 12 C 1 0 12 0 1? 0 12.0 12.0 12.0 12.0 12.0

Sales incone 204 204 204 204 204 204 204 204 204 204 8Ae of sales incoSe

GOL take 16 3 16 3 16 3 16 3 16.3 16.3 16.3 16.3 16.3 16.3

Bonc hIn1c9 Co

Ship.ents, 10 tonnes 7 5 7.5 7 5 7 5 7.5 7.5 7.5 7.5 7.5 7.5 Sales inco.e ISoSales 150ISOjocose ISO150150 15SO150 ISOl151' 150ISO 150ISO 15o120 150ISO 150ISO ~~3.3Aerage5% of pricesalIes - income$20/tonne, GOL take - GOL take 5.3 5.3 5.3 5 3 5.3 5.3 5.3 5.3 5.3 5.3

National Iron Cre Co

Shipments, 10 tons 4.C 4.0 4 0 4 C 4 0 4.0 4.0 4.0 4.0 4.0

Sales income 36 36 36 36 36 36 36 36 36 36 2%Average.price,- of sales iocose $9/ton, OL lake-

GOL take 0 7 0.7 0.7 0.7 0 7 0.7 0.7 0.7 0.7 0.7

Bie Mountain

Shipsents, 10 tons 0.45 1.34 1.79 1.79 1.79 1.79 1.79 1.79 1.79 1.79 Case S0-3 (A.D. Little - 1976) Average price - $23.60/ton, GOL tak, - Sales income 10.6 31.6 42.2 41.2 42 2 42.2 42.2 42.2 42.2 42.2 variable, stabilizing at 11.6% of sales j.ooe fros 1986 onwards GOL take - 1.1 3.8 4 5 4.5 5.0 5.0 5.0 5.0 5.0

Wologisi (LISCO)

Shipments, 106 tonnes - 1.0 6 3 10.0 10 0 10.0 10.0 10.0 10.0 10.0 Case 3 (Canadian Bechtel In. - 1975) Average price - $33/tonne, GOL take - Sales income - 33 208 330 330 330 330 330 330 330 variable, stabilizing at 2% of sales income from 1988 onwards GOL take - - 2.1 3.3 3.3 3.3 3.3 6.6 6.6 6.6 (royalty only)

Putu

Shipments, 10 tons - - - 2.0 6.0 6.0 8.0 8.0 8.0 8.0

Sales Income - - - 66 0 196 264 264 264 264 264 Average price $33/ton, GOL take

GOL take - - - 1.3 4.0 5.3 5.3 5.3 5.3 5.3

Guinea - Niba

Shipments, 10 tons - - - - 2.5 7.5 10.0 10.0 10.0 10.0

1 5 15/ton, GOL take - Sales income - - - - 0.4 1.1 1.5 1.5 1.5 56/Track ton fee - GOL take - - - - 0.1 0.4 0.5 0.5 0.5 0.5

Totals

Shipments, 10 tons 23.95 26.24 31.79 37.29 43.79 50.79 53.29 53.29 53.29 53.29

Sales incose 400.6 454 6 640.2 828.2 960.2 1,027.3 1,027.7 1,027.7 1,027.7 1,027.7

GOL take 22.3 23.4 28.2 31.4 34.2 36.3 36.4 39.7 39.7 39 7

GOL take as a percentage of sales income 5.6 5 2 4.4 3.8 3 6 3.5 3 5 3.9 3 9 3 q

GOL take per ton shipped, $ 0.93 0.89 0 89 0 84 0.78 0.71 C Gs O.74 0.74 0 74 LIBERIA: TABLE 9.1: MONROVIA: CONSUMER PRICE INDEX (MCPI), 1972-1976 (SeDtember-November 1964=100)

ITE4 % 1972 1973 1974 1975 1975 1976 Weight I II III IV I .1 III

All Items 100.0 131.0 156.6 187.1 212.5 208.6 209.9 217.3 214.2 217.8 224.7 227.8

Food 34.3 109.0 141.9 179.4 207.0 201.5 205.5 214.3 206.9 201.8 206.0 208.4

Tobacco and Teverages 5.7 130.7 135.0 146.4 163.9 160.9 163.0 165.3 166.2 166.3 185.3 189.0

Fu:e'. and Light 5.0 103.0 115.6 151.3 160.7 160.5 158.0 158.5 165.6 183.5 183.5 183.5

Clothing 13.8 146.3 164.7 200.6 241.7 295.9 236.9 250.0 244.9 272.8 281.8 281.6

Furniture 6.1 130.8 145.8 167.5 195.2 191.9 194.3 194.4 200.2 211.2 2(9.0 208.2

Pcrsonal Care 11.4 211.6 223.7 279.0 300.7 297.5 298.3 303.2 303.7 295.1 321.4 .26.4

Rent 14.9 127.7 162.5 163.1 176.5 171.6 171.6 181.4 181.4 185.6 185.6 190.7

Mlisc. 8., 109.9 147.1 178.6 206.1 210.4 204.6 208.7 200.5 206.2 209.1 218.0

dPlaning_ource:MinistrandEconomiAffair

Source: Ministry op Planning and Economic Affairs LIBERIA: TABLE 9.2: RATES OF CHANGE - MONROVIA CONSUMER PRICE INDEX ( % Changes)

1/ 17 ITEM Annual Rates of Increase 1975 1976_ 1972 1973 1974 1975 I II III IV I II III

All Items 3.9 19.5 19.5 13.6 20.1 16.5 10.9 7.5 4.5 7.3 4.8

Food - 30.2 26.4 15.4 22.2 18.4 11.7 10.4 0.1 0.2 -2.8

ITobacco and Leverages -o.6 3.3 8.4 11.9 17.1 12.1 9.8 9.1 3.4 12.1 14.3

Fueland Light -1.2 12.3 30.9 6.2 23.4 1.0 -1.1 4.0 14.3 16.1 16.1

Clothing 8.1 12.6 21.8 20.5 59.4 24.6 21.7 10.7 -7.8 18.9 12.6

Furniture 6.5 11.5 14.9 16.5 22.9 18.9 16.3 9.2 10.0 7.6 7.1

Personal Care -9.4 5.7 24:9 7.8- 13.5 12.9 3.3 2.5 -0.8 .7-7 7.7

Rent 9.3 27.3 0.4 8.2 8.2 8.2 8.3 8.3 8.2 8.2 5.1

Misc. -2.0 33.8 21.4 15.4 31.3 26.8 lo.4 -1.7 -2.0 2.2 4.5

1/ Rates of increase over the same quarter of theprevious year. LIBERIA: TABLE 9.3: MONTHLY PRODUCERS' AND EXPORT PRICES FOR RUBBER 1974-1976 ( In cents per pound)

Purchase Prices Export lPrjcp Latex Specification NoLLspecification RSS Nc,.! lijce Coagulurn Co.agulum Singa'por- f.u.b.

1974 Janu;:rv 39.3 36.3 30.9 49.0 Febru.rl 42.9 39.9 33.8 46.4 Marcis 38.9 35.9 30.7 42.5 April 36.5 33.5 28.1 38.2 May 31.4 28.4 23.5 38.3 June 32.4 28.7 24.1 33.0 July 29.9 24.3 28.5 30.1 August 32.5 20.8 28.5 29.9 September 31.6 20.9 17.3 26.9 October 28.4 16.1 13.9 25.8 November 25.4 16.2 13.7 20.3 Decerber 19.5 12.1 9.6 24.1

1975 January 18.1 14.5 11.1 24.8 Febru.L y 18.3 14.3 11.1 25.4 M1arch 19.4 15.5 11.7 25.2 April 19.4 15.0 14.5 24.4 May 19.7 14.6 14.3 24.5 June 20.1 15.1 14.5 25.9 July 20.6 16.0 14.9 26.8 August 20.6 16.0 16.8 26.8 September 21.6 16.9 16.0 25.5 October 21.8 15.9 15.1 24.7 November 22.0 14.7 13.5 25.6 DecewLber 22.1 15.1 -14.1 28.4

1976 January 22.7 17.4 16.0 29.3 February 23.1 19.2 17.7 32.4 March 22.2 20.1 18.5 33.0 April 22.3 22.2 19.8 3U.4 May 22.5 22.2 19.9 38.2 June 23.2 23.7 21.3 34.4 July 24.4 25.1 21.8 38.2 August 24.3 22.6 19.4 38.2 September 24.4 21.6 18.2 36.3

Source: Rubber Planters Association Table 9.4: LIBERIA - LIBERIA PRODUCE MARKETING CORPORATION PRODUCER AND EXPORT PRICES

(US$/long ton)

Year Coffee Cocoa Palm Kernel Oil Export Producer % Export Producer % Export Producer %

1971/72 854 470 55 471 336 71 124 92 74

1972/73 985 560 57 615 403 65 - 87 -

1973/74 1020 560 55 1028 582 57 261 157 60

1974/75 1257 688 55 1545 722 46 336 - -

1975/76 2486 4278

Source: LPMC TABLE 9.5 - LIBERIA: AVERAGE CONSUMER PRICES OF SELECTED FOODS IN MONROVIA 1971-1976 (cts) a) Actual Prices

__l l l --l - Percent Average Product Unit Weight 1971 1972 1973 1974 1975 | 1976 1971 Annual Increase ;______I______I__ = 100 %

Cassava pile 2b 3.9 3.2 | 5.0 7.4 6.5 6.6 166 14

Rice 2b 2b 13.9 12.9 20.1 24.9 24.3 24.2 174 14

Plantains pile 2b 8.2 8.0 9.9 11.9 16.4 15.4 188 15

Sweet Potatoes of 2b 8.5 7.3 10.8 12.2 13.3 13.0 153 11

Cabbage 2b 38.3 44.7 44.5 48.7 55.3 62.4 153 10

Green Pepper 2b 28.4 29.2 28.7 39.7 55. 47.2 166 13

Palm Oil bottl 12oz 18.2 19.5 22.0 27.7 30.5 34.9 192 14

Sole Fish pile 2b 17.6 20.9 20.0 33.4 40.2 42.4 240 21

Beef Steak 2b 2b 75.0 75.0 88.0 10.0 14.50 150.0 200 16

Chicken live No 2b 79.7 86.3 98.2 123.1 137.3 133.4 168 11

Eggs No 3oz 10.0 10.0 10.0 10.0 11.7 12.1 121 3 b) Price Indices

All Consumer Goods 100 104 124 148 150

Good 100 100 129 164 190 LIBERIA: TABLE 9.6: LIBERIAN PRODUCE MARKETING CORPORATION'S PURCHASE AND EXPORT PRICES OF COCOA AND COFFEE >1972-1975

(I i 0~~~~~~~~~~~~~~~~~(c o( Pluretl... LE.p Lt ( i . b . ) rl;l c 1a.se Export (J .o.l . )

1 974 Jantarvy 25 50 26 3 6 4.8 I ebru;:i , 25 52 26 Marci 30 55 26 50 Apl-J 30 ,n 26 - Nay 3' 50 26 85 J une 30 6] 26 77 JlJ Y 30 56 26 - Augiwt 30 58 36 - Septl)cwer 30 47 36 Octo(i r . 3o 49 36 74 Novcmbe r 30 - 36 73 Decemrl,l i 30 46 36 71

1915 .1J,1LVu: r y 30 t5 - 69 Fcbru.:i v - 45 36 89 Ift rcll 30 43 36 33 Ap'.il 30 43 36 62 35 May 30 43 36 June 30 44 36 40 July 30 46 30 - Augtus L 30 66 - - Scptei,be r 30 72 - 57 Octol r :38 68 - 191 November 38 - 25 247 December 38 166 / 27½ Grade 1 199 26!, (rade II < 25 FAQ/ 1976 Jaiuary 38 1 42 " 161 FebruaQTy 38 87 " 156 March 38 132 Apr.l] 38 117 May 40 - June 40 84 " 174 July 40 107 August 40 98 Septen.ber 40 iu.a /50 Grade I n.a October 40 n.ai 47T; Grade IIrn.a November 40 n.a. <45 FAQ - n.a

Source: Economic Survey of Liberia 1975, NIEA and LPMC

1/ FAQ: falir averaide quajlity cocoo ztliicl, accounIts for rmore thin( 65Z of the purclhlo( Table 10.1: LIBERIA - INVSTHENTS IN TRANSPORT SECTOR (In '000 $)

A. Actual Investments in 1972-1975

1972 1973 1974 1975

1. Roads

Construction P 2,610 186 4,026 3,798 G 708 1,050 738 1,870 Other 1/ 48 2,213 2.335 1.845

Total 3,366 3,449 7,099 7,513

2. Airports

F 1,900 762 596 1,730

3. Ports

F 220 - 130 260 G - 20 -

Total 220 - 150 260

Grand Total 5,486 4,211 7,845 9.530

B. Investments Envisaged in 1976-1980 Plan

Projects AM Projects Bg/ Total

1. Koads

Construction F 40,040 53,020 93,060 G 11,390 18,430 29,820 OtherY/ F 11,190 510 11,700 G 4,370 1,965 6,335

66,990 73,925 140,915

2. Ports F 5,200 - 5,200 G 3,650 3.650

8,850 8,850

3. Airports P G 3,250 - 3,250

Grand Total 79,090 73,925 153,015

-Foreign (56,430) (53,530) (109,960) Governmett t22,660) (20,395) ( 43,055)

F - Foreign sources of investments. G - Government investments 1/ Investments in road maintenance equipmentand spare parts, street reconstruction, studies, etc. 2/ Original Plan figures were adjusted mainly because of revised cost estimates and changed road design standards. 3/ Projects completed'in 1976 or underway. 4I Execution of some projects in the gorup is expected to start soon; the other do not have financing secured and it is uncertain whether they will be realized in the planned period.

Source: Ministry of Planning and Economic Affairs, December 1976. Table 10.2: LIBERIA - INVESTMENTS IN TRANSPORT SECTOR IN 1976-1980 PLAN

(in US$'OOO)

1/2' Estimated CostJ' Project-Y Source of Financing' Local Foreign Total

A. Roads

1. UN-Drive (5.4 mi) World Bank 1,775 4,140 5,915 2. Johnson Str. Bridge (1,400 feet) World Bank 1,33.8 5,350 6,688 3. Totota-Ganta (83 mi) World Bank/ADB 3,300 13,000 16,300 4. Feeder Roads (150 mi) World Bank 635 1,400 2,035 5. Construction Supervision (1-3) World Bank 426 2,049 2,475 6. Monrovia Streets Italian Aid 5,354 8,500 13,854 7. Buchanan-Rivercess (30 mi) Government 740 2,240 2,980 8. Saglepie-Bahn-Sanniquellie (56 mi) USAID 424 1,515 1,939 9. Pleebo-Barclayville (48 mi) USAID 356 1,845 2,201 10. Road Maintenance Program World Bank/USAID/FRG 280 10,620 10,900 11. Paynesville-Robertsfield (28 mi) World Bank 2,000 2,500 4,500 12. Tubman-Bridge-Bomi Hills (37 mi) ADB/ ? 2,760 7,400 10,160 13. Paynesville-lotota (71 n.i) World Bank 5,000 6,500 11,500 14. UN Drive-Mt. Coffee (15 mi) 2,230 4,000 6,230 15. Ganta-Sanniquellie (25 mi) 1,457 5,160 6,617 16. Ganta-Tapeta (65 mi) 2,925 11,700 14,625 17. Brewerville-Kolahun (185 mi) USAID 4,170 7,650 11,E20 18. Timbo-River Bridge USAID 150 350 S00 19. Tartuke-Karloke (38 mi) EEC 0 4,700 4,700 20. Feeder Roads (120 mi) USAID 226 1.591 1,817

Studies (Subtotal) (35,546) (102,210) (137,756)

21. Ganta-Saniquellie) World Bank ) 40 240 280 22. Ganta-Tap ta ) ) 23. UN Drive-Mt. Coffee World Bank 10 50 60 24. Tapeta-Zwedru-Harper 100 600 700 25. Gbarnga-Kolahun_/ 100 600 700 26. Zwedru-Greenville 10 190 200 27. Monrovia Urban Development World Bank 28 170 , 198 28. Buchanan-Ganta ) 29. Gbotota-Tapeta 306 575 875 30. Transport Planning World Bank 21 125 146

Total 36,155 104,760 140,915

B. Ports

1. Greenville Expansion FRG 2,150 5,200 7,350 2. Monrovia Improvements Government 1,500 0 1,500

Total 3,650 5,200 8,850

C. Air Transport

1. Robertsfield International Government 2,850 0 2,850 2. Secondary Airfields Government 400 0 400

Total 3,250 0 3,250

GRAND TOTAL' 43_055 _ 109,960 153,015

1/ The list of projects has been slightly amended from the original Plan list from March 1976; road projects Nos. 1-10 are completed in 1976 or are underway. 2/ External aid has not yet been secured for all the listed projects; in most cases external aid is expected to cover the specified foreign share of costs. 3/ Cost estimates for road construction projects have been adjusted mainly due to price increase and changed design standards. 4/ Is expected to be included in the upcoming Fourth Highway Project.

Source: linistry of Planning and Economic Affairs, Ministry of Public Works, December 1976. Table 10.3: LIBERIA - DEVELOPMXNT OF THE HIGHWAY NETWORK

(Miles)

1964 1971 1974 1976

A. PUBLIC ROADS

PRIMARY ROADS

Asphalt Surfacing 160 203 208 224 Laterite Surfacing 650 941 968 972 810 1,144 1,176 1,196

SECONDARY ROADS

Laterite Surfacing 330 487 707 733 Dry-weather Roads 610 1,270 1,265 1,281 940 1,757 1,972 2,014

Subtotal A 1,750 2,901 3,148 3,210

B. PRIVATE ROADS'

Ashphalt Surfacing 30 86 86 90 Laterite Surfacing 500 1,184 1,308 1,304

Subtotal B 530 1,270 1,394 1,394

TOTAL 2,280 4,170 4,542 4,604

1/ Concession roads as part of enclave operations (iron ore, timber, rubber)

Source: SAUTI Report 1971; MPW Planning and Programming Division 1976. Table 10.4 Liberia Government Expenditures on Highways, 1971-761/ (in US$ '000)

Total Maintenance Recurrent Maintenance Expenditures Expenditures -/

Personnel Operations Total

1971 875 689 1,564 2,607

1972 899 973 1,872 2,983

1973 620 2/ 716 1,336 2,951

1974 310 1,822 2,132 3,185

1975 358 2,246 2,604 8,019

1976 428 4,882 5,310 10,974

1/ Calendar years

2/ Reduction in recurrent operations due to transfer of staff to General * Service Administration

3/ Including foreign assistance

Source: Ministry of Public Works, Planning and Programming Bureau, July 1977 Table 10.5: LIBERIA - TRAFFIC DEVELOPMENT IN PORTS 1970-75 (in Long tons)

1970 1971 1972 1973 1974 1975

Monrovia

Total 13,194 12,410 12,370 13,744 13,312 11,082 (Iron Ore) 12,092 10,867 11,145 12,515 11,914 9,569 (Petroleum) 437 510 600 488 562 595 Buchanan

Total 11,278 10,340 11,608 12,956 13,104 8,957 (Iron Ore) 11,020 10,032 11,325 12,580 12,775 8,616 (Petroleum) 131 157 148 165 104 147

Greenville

Total 124 166 161 204 123 .153 (Logs) 97 126 156 190 112 140

Harper

Total 60 54 38 54 37 35 (Logs) 25 26 23 24 22 7

Source: Economic Survey of Liberia for 1975; National Port Authority, December 1976. l/ Table 10.6: LIBERIA - COMERCIAL INTERNATIONAL AIR TRAFFIC 1971-1975

Item 1971 1972 1973 1974 1975

Number of Passengers:

Disembarking 28,133 24,973 27,488 27,223 33,097

Embarking 23,664 28,679 31,265 31,047 37,288

Cargo: (kg)

Exported 295,921 315,994 465,823 209,021 931,071

Imported 1,449,929 1,260,275 1,473,641 1,459,323 1,696,557

Mail: (kg)

Exported 53,434 56,015 53,047 77,225 95,115

Imported 120,477 138,915 190,500 167,698 179,266

l/ At Monrovia International Airport; data for domestic air traific are not available.

Source: Bureau of Civil Aviation, Ministry of Commerce, Industry and Transportation, December 1976 Table 10.7: LIBERIA - REVENUES FROM ROAD USER CHARGES (US$'000)

Import Duties Vehicle Taxes on on Vehicles Licensing and fuel & Sparp Parts Registration TOTAL

1971 2,057 5,243 781 8,081

1972 1,682 4,906 985 7,573

1973 1,538 5,045 1,684 8,267

1974 1,861 2,027 1,762 5,650

1975 1,923 3,533 1,897 7,353

19761/ 2,282 3,200 2,256 7,738

1/ Preliminary figures of the Ministry of Finance

Source: Annual Reports, 1970-75, Ministry of Finance.