“Everybody who has lived in Liberia for the past five years will tell you there have been a lot of positive improvements. In 2012, GDP growth was 9%, which is very high. There has also been an influx of foreign investors in almost all sectors. So to me, strong economic growth is a reality in Liberia.”
So says Akwasi Aninakwah, country manager of logistics company DHL in Liberia.
Liberia experienced two civil wars between 1989 and 2003. A peace agreement led to democratic elections in 2005. The unrest had a devastating effect on the economy and left much of Liberia’s infrastructure in ruins.
These days the situation has improved significantly and hotels such as the Royal Grand and Mamba Point in the capital Monrovia are teeming with local business people and foreign investors. Airlines such as Air France, British Airways and Delta Airlines have also recently introduced flights to Liberia.
“Unfortunately there are people who think Liberia is still at war. People also think it is not a safe place. I remember when I was first sent by DHL to work in Liberia, my friends and family were saying: ‘Are you sure you want to go to Liberia?’ For me, Liberia is one of the safest places in Africa,” Aninakwah told How we made it in Africa.
He also pointed out that Liberia has a number of successful indigenous private companies that managed to survive throughout the war years. These include organisations such as the Liberia Bank for Development and Investment and Atlantic Life & General Insurance.
Many challenges remain
Despite Liberia’s improvements, business people should not lose sight of the fact that the country is still in a recovery phase.
According to Aninakwah, the impact of the civil war can be clearly seen in Liberia’s poor water and electricity supply, as well as the inadequate road network. Electricity costs are among the highest in the world and less than 5% of the population is connected to the grid. The dilapidated road network is largely impassable in the rainy season, especially outside of Monrovia.
The war also had a negative effect on education, which is why companies operating in Liberia find it difficult to source quality human resources. “Skilled labour is very difficult to come by, but it is something investors have to contend with,” said Aninakwah.
There are however, many educated Liberians returning home from abroad to take up government positions or to start their own businesses.
The World Bank report Doing Business 2013 ranked Liberia 149th of 185 countries for the overall ease of doing business, an improvement of five places from 2012. Starting a business has become easier, as reflected in the 38th ranking in 2013, following the introduction of a “one-stop shop” for business registration.
Aninakwah identified four areas of the economy which are experiencing positive growth, with ample room for additional investment.
Mining: Liberia has rich deposits of iron ore, which has attracted international mining companies such as ArcelorMittal and China Union. Much of this iron ore is exported through the port town of Buchanan. Aninakwah noted that the mining industry is also responsible for most of DHL’s business in Liberia.
Agriculture: Liberia is a major exporter of timber; the industry is responsible for a large percentage of Liberia’s export earnings. Rubber and palm oil are also two important agricultural commodities produced in Liberia. Tyre manufacturer Firestone operates the world’s largest single natural rubber plantation in Liberia, covering almost 200 square miles. Malaysian palm oil giant Sime Darby also has significant operations in Liberia.
According to Aninakwah, the mechanisation of agriculture is desperately needed and presents an opportunity for business people.
Oil: Liberia’s offshore oil industry has lured multinationals such a Chevron and ExxonMobil. Although no commercial discovery has been confirmed, African Petroleum did announce in February 2012 that it has made a “significant discovery”.
SMEs: Aninakwah says Liberia’s small and medium enterprises are expected to grow due to the fact that the country’s central bank has extended loans and grants to help them expand their businesses.