Monrovia — The United States State Department has released its 2022 Investment Climate Statements on Liberia which emphasizes that “pervasive government corruption constrains investment and development.”
The Report notes that Liberia offers opportunities for investment, especially in natural resources such as mining, agriculture, fishing, and forestry, but also in more specialized sectors such as energy, telecommunications, tourism, and financial services. However, low human development indicators, expensive and unreliable electricity, poor roads, a lack of reliable internet access, and corruption are hampering investments.
Shedding light on corruption in Liberia, the Investment Climate Report referenced the 2021 Transparency International’s 2021 Corruption Perceptions Index, where Liberia ranked 136 out of 180 countries. This has also led to low public trust in the banking sector and seasonal currency shortages result in most cash being held outside of banks.
The Report acknowledges that to remedy this, the Central Bank of Liberia (CBL) in 2021 initiated a plan to print and circulate additional currency. The new printing and minting will provide 48 billion Liberian dollars through 2024. The CBL and commercial banks have also successfully pushed the adoption of mobile money, which Liberians access through their mobile phones to make everyday purchases and pay bills. However, the government has yet to activate the “national switch,” meaning banking instruments like ATMs and mobile money accounts remain unintegrated and are not interoperable.
The Report laments that though there are strong laws against corruption, the government does not implement those laws effectively and consistently.
“Foreign investors generally report that corruption is most pervasive in government procurement, contract and concession awards, customs and taxation systems, regulatory systems, performance requirements, and government payments systems. Multinational firms often report paying fees not stipulated in investment agreements. Private companies do not have generally agreed and structured internal controls, ethics, or compliance programs to detect and prevent bribery of public officials. No laws explicitly protect NGOs that investigate corruption,” the report states.
According to the report, Liberia is a signatory to the Economic Community of West African States (ECOWAS) Protocol on the Fight against Corruption, the African Union Convention on Preventing and Combating Corruption (AUCPCC), and the UN Convention against Corruption (UNCAC), but Liberia’s association with these conventions has done little to reduce rampant government corruption.
The State Department Report further states that despite these numerous challenges, Liberia is rich in natural resources. It has large expanses of potentially productive agricultural land and abundant rainfall to sustain agribusinesses. Its rich mineral resources offer significant potential to investors in extractive industries.
Several large international concessionaires have invested successfully in agriculture and mining, though negotiating these agreements with the government often proves to be a lengthy and byzantine struggle. The fishing industry, long dormant compared to pre-war levels, is making improvements that should make it more attractive for investment.