The state of the Liberian economy has been the subject of increased debate and media scrutiny in light of the fast depreciation of the Liberian dollar and growing rate of unemployment. Critics have blamed the decline to systemic failure in various government structures that should drive economic reforms and productivity. Two agencies of government that have seen the hit of these criticisms are the Ministry of Finance and the Central Bank of Liberia. FrontPageAfrica sought to have an audience with the Minister of Finance to understand the various issues affecting the economy and how he intends to address them.
In an exclusive interview with FPA, Minister Amara Konneh insisted the overall economic prospects of the country were bright despite looming unemployment and the sustained depreciation of the Liberian dollar. While acknowledging that post-war economic growth was generating too little employment opportunities, he maintained the country is headed the right road as the administration works to remove two key primary binding constraints to growth and development- road and energy.
He said unemployment and inflation alone "do not suggest our economy is on the brink of implosion. To say or even imply this is stretching matters very far. First, we need to understand and appreciate where this economy was when we first took office in 2005. We had what amounted to a "zero economy" in 2004 and there was some recovery and we started growing by 2.9% in 2009. To date, we have recorded eight consecutive year of post-war growth increasing by 8.8% in 2012."
He maintained that the with potential pickup in mining and other sectors of the economy, followed by aggressive investments in energy and roads, economic boom is no doubt in sight, though jobs creation will continue to remain a serious challenge given the rate at which unemployment is rising.
He rejected critics' claims that the Sirleaf administration lacks coordinated economic policy and argued instead that the government has been pursuing and implementing a well managed and sequenced post-war economic recovery program placing emphasis on creating a secured business environment, strengthening macro-economic regimes and attracting support for infrastructure development. Minister Konneh said the PFM law has been a critical lynchpin to the administration's desire goal of strengthening the public financial sector which has been a key reference point for several of the reforms initiated. The minister also addresses perceptions that he is at odds with CBL Governor Mills Jones and his frank response to bashing from some of his Cabinet peers on the secret recordings of former Liberia Airport Authority boss, Ellen Corkrum.
Read the Full Interview:
FRONTPAGEAFRICA: Thanks Mr. Minister for affording us the opportunity to chat with you exclusively. It has been a long while. First and foremost, let's begin with your job as Minister of Finance. How has it been the last 22 months?
FINANCE MINISTER AMARA KONNEH: Thanks for the opportunity and it's a pleasure to chat with FPA. Welcome back on the newspaper. It has been a tough and busy few months since we took over as Minister of Finance. We have set our sights completely on changing the narrative from just collecting and spending resources to investing in removing the constraints to true economic development and moving in the direction of instituting the necessary reforms and taking deliberate steps and measures to drive our growth and economic development agenda forward. I have taken particular interest in ensuring scrupulous implementation of the Public Financial Management Law and its regulations. The PFM law is a critical lynchpin to our desired goal of strengthening the public financial sector and has been a key reference point for several of the reforms we have been engaged with. In this direction, we have set up the appropriate frameworks to support our fiscal goals and promote the transparent use of state money. We have succeeded to date, in linking over 19 agencies of government with the Integrated Financial Management Information System, IFMIS including the General Auditing Commission. We have strengthened and improved the existing internal controls regime and have introduced further measures to improve revenue collection, tax compliance and administration leading to about a 20 percent increase in domestic tax collection. Our budget department continues to remain opened to public request for public and expenditure information. Various measures to ensure timely and professional service delivery have been undertaken, in addition to modernizing the facilities at the Ministry of Finance. But there are still challenges and as we seek to create a single Ministry of Finance and Development Planning, we have a window through which some of these ancillary issues can be resolved.
FPA: In the last few months, you have engaged in an elaborate media outreach on the economy, stating in one of those briefings that the economy is stable and sound. But on evidence of the worsening exchange rate and high levels of unemployment, it seems the economy is heading downwards. How do you deal with these issues as Minister of Finance?
KONNEH: Good question. Yes, the exchange rate has been peaking since last December, 2012 and of course unemployment continues to rise. But these are not the only measure of economic growth and development. These two scenarios alone do not suggest our economy is on the brink of implosion. To say or even imply this, is stretching matters very far. First, we need to understand and appreciate where this economy was when we first took office in 2006. We had what amounted to a "zero economy"in 2004 and there was some recovery and we started growing by 2.9% in 2009. To date, we have recorded eight consecutive year of post-war growth increasing to 8.3% in 2012. With the moratorium on PUPs and operational delays in key concessionaire operations like China Union and Western Cluster, growth has moderated in 2013to 8.1%. With imminent uptake in these operations, growth is expected to pick up once again. So, we are moving in the right direction even though we have been exposed to the exchange rate shocks you mentioned and which I will deal with that in greater detail, the economic output is improving and the data speaks.
But while economic growth has averaged about 7.5% per year over the past few years, this growth is very constrained and has not been inclusive in terms of employment generation and this is something we have acknowledged publicly. A great deal needs to be done in order to match the public's expectation of job creation. We are creating a job demand pool of roughly 50,000 unemployed youths annually. Competing public priorities and scarce government and donor resources make it difficult to significantly impact one sector. Today, there is a clear recognition of several constraints that are limiting our ability to take full advantage of the abundance of natural resources. Critical amongst these is the overwhelming infrastructure deficit especially energy, roads, ports, and rails necessary for fully exploiting the natural resources. Until we can address these deficits and allow the private sector to thrive, by investing in infrastructure and providing the right incentives, it will be difficult to deal with the growing demand for employment opportunities, hence our emphasis on investing in core infrastructure projects like energy and roads to accelerate work in this direction.
FPA: Put it succinctly, what's going wrong with our ECONOMY?
KONNEH: Ok, to put it more simplistically, the economy is moving in the right direction, especially looking at where we were say 5 years ago. The problem is, the growth we have seen has not created opportunities for employment.
And the reason is we do not have the necessary investment activities that can absorb a good portion of the labor we have in supply, mainly cheap labor. The vast majority of young people looking for work simply want to make end meets and feed their families. They need cash based jobs. All the concession operations combined at this stage of their development cannot even absorb 5% of this job supply, as much more work is required to ensure they develop and expand, creating a job demand potential. The government itself cannot even address this problem through our bureaucracy. So, we need to create the enabling environment to stimulate growth in the economy that would in turn create job opportunities. By providing cheap electricity, access to roads and expanding our ports, we remove critical constraints to growth and provide the incentive for industries to invest in the country. Until these constraints are removed, we are not going to attract these kinds of investments.
While concessionaires have built or rehabilitated some rail lines for exporting iron ore, other sectors with higher employment generation potential, such as smallholder agriculture, timber and rubber, have not been attended to. New and improved rural feeder roads are essential for smallholders to access markets, trade across borders, and for value chain addition to develop. Drying, storage and processing facilities are also necessary for furniture makers and farmers. For example, timber exports will benefit from the Greenville port once it is fully operational (the Port of Greenville was part of the first set of Public Investments).
Electricity is critical if value addition activities are to take place in Liberia today. The high cost of power, US$0.54 per kWh (more than three times the African average), makes light manufacturing and value-addition cost-prohibitive. Nearly two decades of poor governance and conflict have also made Liberia uncompetitive in sectors that could create thousands of jobs and improve the foreign exchange earnings. Rebuilding our infrastructure is critical, but also costly, and raising domestic financing is severely limited. The first of four turbines for the Mt. Coffee Hydro Power Plant that would produce 80megawatts (MW) is being manufactured; progress is being made on all three Thermal Power Plants that will produce 38 MW by 2015, and we are accelerating our transmission and distribution program.
We are preparing procurement process for a transmission and distribution system from Paynesville to Kakata; we have mobilized resources for the transmission and transmission line from Ganta that will terminate at Kakata; we are negotiating financing now to move electricity from ELWA to RIA; and we are well advanced in bringing down electricity from Cote d'Ivoire to Nimba-Bassa-Margibi, connecting to Mt.Coffee, then off to Bomi, Cape Mount and then Sierra Leone as part of the Cote d'Ivoire, Liberia, Sierra Leone and Guinea Interconnection Project, CLSG, with the Liberia component costing over US$235 million.
FPA: Your critics say, you lack a clear strategy for dealing with the manifold issues and development challenges the country faces and they blame all these issues to poor decision making, a failure to identify and run with clear priorities and the persistent claims of corruption within the government. What do you think?
KONNEH: This is not true. This government has shown methodical progression in its development planning agenda. Though progress has been slowed, progress is being made. It is instructive to first understand, that no post-war economy develops on its national budget, especially when Liberia experienced an economic collapse of massive proportion in the history of growth economics. These are not my assertions - please look it up. Not one country! We have designed appropriate platforms to drive our development programs but it is crucial to understand and appreciate the context within which we have been navigating our recovery and development process.
The primary public policy objective of a typical post-war economy is the restoration and maintenance of peace, security, and the prevention of the renewal of war. All post-conflict societies in the immediate five-years of recovery, work to facilitate rapid socio-economic recovery, and the rebuilding of institutional framework and locus favorable to development and sustained poverty reduction. Socio-economic recovery and poverty reduction are important elements of building peace while improving peace and security reinforce economic growth. These are the constraints countries like Liberia faces and was a main preoccupation during the first term of this government. These were the challenges we had to navigate in addition with working to ensure the cancellation of our international debts.
So, as a post-conflict country, we were faced with unique sets of challenges including general economic collapse, destruction of basic infrastructure, social decay, the collapse of governance mechanisms and processes, and institutional breakdown and mal-functioning. But we cn just sit there, complain and blame each other. We must do something, and that is precisely we are doing.
In pursuit of sustained economic recovery, we endeavor to deal with the followings in a well-managed, organized and orderly manner. We have worked to create a reasonable secure environment for economic recovery by establishing presence in most parts of the country following the elections of 2005. This was a necessary precondition for attracting businesses and generating confidence, as these were critical to business decisions making, often attended by risk assessment and relatively reliable projections of economic and market trends. From there we worked to establish a macroeconomic policy regime to ensure macro-economic stability, generate some form of employment and stabilize our growth rate. In this conncetion, we promulgaled the Public Financial Management Act of 2009 and have continued to ensure full compliance to the law. Through PFM and other fiscal instruments, we have worked to identify opportunities for resource mobilization and investment in key sectors.
With these framework in place, debts have been waived and our public financial management systems improved, increased our fiscal space that now allows us to mobilize resources to rebuild public infrsatruture destroyed in our protracted conflict, an invesment ncessary to place the country on the path of sustained growth and development. That's where funds have been mobilized to support an elaborate and affordable energy program, our road networks and invetsment in our ports and ICT infrastrcuture. As part of this process, we have also worked to build our human capital through a deliberate program all across government that provides opportunity for advancement in higher education for our people. So contrary to what our opponents are saying, we have a plan that was formulated in consultation with the Liberian people. With the Agenda for Transformation, we have succeeded in doing just this. So for anyone to suggest that we have no clear strategy, that person should get acquainted with the facts.
FPA: Some critics say that corruption is responsible for the current economic hardship in Liberia.
KONNEH: Far from the truth. While I agree that there is corruption not just in government, economic Hardships are not due to perception of corruption. Many Liberians hold the view that economic constraints or hardships exist because of corruption. This is not true. The MCC constraints analysis, which has been released, shows that on the World Governance Indicators' (WGI's) perception of the control of corruption, Liberia does better than Sierra Leone, Guinea, The Gambia and Cote d'Ivoire. Only Ghana is ahead of Liberia among these four comparator countries. This finding is consistent with the passage of a battery of anti-corruption measures and the existence of anti-graft institutions such as the General Auditing Commission and the Liberia Anti-Corruption Commission since the end of conflict. Yes, some individuals who are perceived to have made away with government money were acquitted in trial, pointing to corruption in the jury system. Yes, capacity and administrative constraints in our judicial system makes difficult the process of fast tracking corruption cases. Proposals for the establishment of a special corruption court are being advanced. And yes, our government has sometimes acted slowly in prosecuting individuals accused of corruption. Despite these challenges and shortcomings, we are doing significantly better in controlling corruption than previous regimes, and this is part of what the WGI data is picking up. For example, Liberia did pass the MCC control of corruption indicator, making the country eligible to apply for U.S. Millennium Challenge Corporation's Compact Grant. All of these would not have been possible without strong progress on controlling corruption. But I would be the first to point out we need to be stronger in our anti-corruption efforts.
What is a fact and must be pointed out is that the advocacy, awareness and discussions of issues of corruption in the Liberian society are far more pronounced today than at any other time in our history. We did not have a statutorily independent auditor general in the 1970s, who published audit reports on websites. Corruption was accepted with passive resignation in the 80s and 90s. Maybe this was due to the lack of freedom in those eras, which made people afraid to criticize openly the way they do today. Today, the story is radically different. Liberia wakes up in the morning to every Tom, Dick and Harry spoiling for a corruption fight on all public radio stations and on the Internet. The appearance of many persons complaining about corruption does not make corruption more prevalent or bigger relative to previous years. It makes people who hear this complaint think that corruption is more when in fact, and as the WGI data shows, Liberia has made credible progress on controlling corruption.
FPA: Still on unemployment, how do you intend to address the unemployment situation in the short to medium term?
KONNEH: We think the unemployment situation in Liberia is not going to be resolved overnight. Within the broader economy, there remain structural issues affecting job creation. We have successfully turned the corner in the economy, in terms of reviving the traditional sectors of growth. As a result, the Liberian economy has stabilized and has made its way back to pre-war level. The sad news, however, is that the recovery is constrained and fueled by the enclave sectors where job creation is very much limited. We need industry but we won't get it without affordable electricity.
As you well know, Liberia's population increased by approximately 1.3 million between 1984 and 2008, a whopping 65% jump over the 1984 census figure. With this increase in population and no productive activities during the war years, the number of Liberians who are unemployed roughly quadrupled. Although that number is declining today, it is doing so very slowly. Most new jobs that are being created in the economy require skills that few Liberian workers have. The official unemployment number includes the thousands who are in vulnerable employment in the informal sector. When adding up all these, one begins to understand the magnitude of the unemployment challenge for a post-conflict economy on the recovery trajectory. Moreover, the size of our budget is not sufficient for the kinds of investment needed to unlock the productive sectors and capacities of the economy that can lead to significant job creation. So, we want to take some deliberate measures to clear the way for key concession operations to proceed unhindered since they hold prospects for creating jobs. We have now handled the former Bong Mines workers, and we intend to address concerns from other concessionaires to move these operations a step further. Moreover, a lot would have to be done in Liberia to match the public's expectation of job creation with the constrained economic reality. And we are exerting ourselves in these directions. Competing public priorities and scarce government and donor resources make it difficult to significantly impact one sector. Resources are scarce but we are pushing hard to generate the desired impacts in job creation and poverty reduction.
FPA: With sharp decline in our rubber, coffee, and general agriculture export sector, what is being done revive this sector and how can this contribute to the unemployment problem?
KONNEH: The price decline and demand for rubber is not solely a Liberian thing, it is global. And when we speak of economic diversification, this is a classic example. Agriculture, fisheries, and forestry represented about 36% of GDP in 2012, which should retreat slightly in the coming years as iron-ore production increases. Rubber production declined by more than 30% in 2012, due to lower international prices and reduced output due to the ageing of rubber trees. While round log production nearly doubled compared to 2011, sawn timber production fell about 25%. Timber production is expected to decline in 2013, due to the moratorium on the Private Use Permits (PUPs). The agriculture sector, while it is a large component of income and comprises about half of employment in Liberia, suffers from low productivity and largely comprises subsistence agriculture. So, we are aware of the issues and we are taking steps to turn things around. We have worked with our development partners to provide some solutions for our ageing rubber trees that are not producing good yields and poor exports from other tree crops like cocoa and coffee.
Three programs have been initiated to address this issue and they include the "Smallholder Agricultural Productivity Enhancement and Commercialization" or SAPEC program valued at $54.5 million dollar. This project is co-financed by GoL and the AfDB, including $6.4 million loan, to address our national food security strategy. It is intended to help small holder farmers.
The second project a "Small Holder Tree Crop Revitalization" or STCRSP is a $61 million project for intensification of crop production especially coffee and cocoa, value addition and market development. It will directly benefit an estimated 110,000 households in the 12 counties. The household income is expected to quadruple on successful completion of the project. Another project the "West Africa Agricultural Productivity Program (WAAPP)" is a $14.60 million project co-financed by GOL and World Bank and intended to upgrade the National Center of Specialization and improve knowledge management in agriculture. We are making these investment choices to improve the situation in the medium term to long run. I have also said that our worst enemy is distraction. We must remain discipline for development is a very slow and painful process.
FPA: Lets talk a little about the exchange rate. The rate has been moving upwards for close to a year and this has in turn resulted to reduced purchasing power for the ordinary person. Is the government working to arrest this situation and what concrete steps have been taken to stabilize the exchange rate?
KONNEH: The Liberian dollar has been under pressure in recent months, depreciating 8.2% against the US Dollar from August 2012 to October 2013. This has made the price of key commodities like rice & oil more expensive and we know this has affected mainly ordinary citizens.
This is largely due to the fact that Liberia is and remains import dependent, specifically relying upon critical imports of food staples including rice. Although exports have increased from US$150 million in 2009 to US$459.5 million in 2012, Liberia's trade deficit is still large standing at US$545 mainly as a result of increased imports. However, these imports also include the capital equipment and machinery by the concessions and road contractors, and not just the consumer goods and food items.
When an economy heavily depends on imports, a depreciating local currency can lead to inflationary pressures on general price levels. There are a number of policy options for addressing the exchange rate depreciation pressures, including, but not limited to increase local agricultural production of staple food crops and diversifying the export base. All the same, we have instituted some short term measures in conjunction with the Central Bank of Liberia to address the exchange rate situation.
FPA: This administration has attracted over US $ 16 billion in foreign direct investments, but unemployment remains very high and lot more people are questioning whether or not a fraction of this sum has been spent? What's going with these FDIs and how is the Ministry of Finance working to ensure they are fully operational and creating jobs for the country?
KONNEH: Yes, we have attracted about 16 billion in FDIs. But it is important we understand and the media educate our people, that when we sign these agreements with these monetary values, it does not mean, the government has received 16 billion dollars in a bank account. It means overall investment cost for all these programs is valued that much. The natural expectation is, and rightly so, that this investment should be felt or seen as making impact. We are yet to feel the impact because most of these investments have not gotten started in earnest. Moreover, the investments are spread over the duration of these concessions, so it is important we see how these investments can get off the ground and running.
So, as we stated earlier about import dependency, it is one of the anxiety driving people to see the fruits of concession agreements being materialized, hence theconcerns that the US$16 billion in concessions and contracts ratified by the Government of Liberia to date, are not significantly contributing to the economy.Nevertheless, we also need to understand that getting concessions signed does not necessarily mean that concessionaires begin production and exporting immediately. For example, the earlier years of a concession involve the building warehouses, installation of machinery and equipment, planting of the oil palm seedlings, and building transport and port infrastructure which were all destroyed during our protracted conflict. Only then will the concessionaires begin production and exportation of their goods, at which time taxes, royalties and related users fees will finally be realized by the Government; and employment will be generated for the Liberian people. I know we forget so soon but we destroyed everything in our country; things we need to turn the wealth we have under the ground to true wealth for the nation. We are making good progress on this front.
So, in collaboration with concessionaires, we have recently launched a concerted effort to remove key bottlenecks. These include the rehabilitation of roads, the removal of squatters & cutting onerous red-tape. These combined measures will allow the economy to continue growing at approximately between 8-12%. However, we must endeavor for that growth to be inclusive and benefit the Liberian people. In the next few years, the forestry sector should generate $50-$100m in export revenue per year, employing 10,000 people. The Mining sector will bring in $2.5 billion in additional FDIs, generating 5700 direct jobs and thousands of indirect jobs. Oil palm concessions currently employ 5,000 people & 10,000 contractors, but once fully operational they should create 80,000 jobs.
FPA: In the last few months, you succeeded in merging the Ministry of Finance and the Ministry of Planning and Economic Affairs. How has this merger helped the country's fiscal regime, aid coordination and development agenda, principal issues necessitating the merger.
KONNNEH: First of all, I alone cannot take credit for this. There are others including the Ministry of Justice, the Civil Service Agency, Governance Commission and others that all worked together on this landmark reform. Let me also say that we a new revenue authority, the Liberia Revenue Authority (LRA). The law has been passed by the legislature, signed by the President and is being printed into hand bill. Until that happens, those structures would not be operational. Nevertheless, these laws will bring synergies to the government through the avoidance of the current duplications and gaps in the functions of both the Ministries of Finance and Planning and Economic Affairs, thereby resulting in better allocation of human and financial resources and better service delivery. Once signed into handbill, the new Ministry of Finance and Development Planning will foster increased aid coordination within the government and between our development partners, as all of our aid coordination functions will now be undertaken in a centralized unit. Better aid management will increase donor confidence which should contribute to greater, more sustainable support. My goal is to increase support on budget.
Through the LRA, our revenue department would be separate from the Ministry of Finance and Development Planning and would focus more on the efficient collection of revenues, working closely with the Ministry. The rollout of these legislations would be sequenced in a smooth and orderly transition, allowing for the rationalized disposition any residual employee caseload, asset and other structural issues.
FPA: Let's address an issue that has been dominating the news in the past few months. In a series of secret-recordings by Ellen Corkrum, the former Acting Head of the Liberia Airport Authority, some of your colleagues including Musa Bility, Brownie Samukai and now Chris Massaquoi have had some pretty nasty things to say about you. Why do you thing that is? What is your relationship with those peers?
KONNNEH: I remain committed to serving the President, the Government and the people of Liberia. I have never made any decision on public finance that has not been approved by the Legislature and the Cabinet. Whatever decisions my colleague and I take at the Ministry of Finance, is intended to protect the public coffers. No decision to cut an agency allocation has been intended to enrich ourselves. We have made a commitment to ensuring the President and the administrationbegin the transformation of the Liberia economy which is struggling from all the issues I have outlined previously, including energy and road. To do that, we must complete the support of our development partners by finding the resources in our budget to support these projects. The expenditure demand for the government is US$2 billion and we have a budget of about $600 million. When you have a budget as small as ours and the demand for funds so high, there will be cuts which make people unhappy. I come under no illusion that these tough decisions we make in protecting the public coffers will win us much fans; but I believe that these choices will benefit the country in the long run. Since I took over the Ministry of Finance, the national budget has been sufficiently debated and opened for public scrutiny like never before. Additionally, I have pressured my colleagues to ensure that the necessary investments are made in popularizing the Open Budget Initiative (OBI) so that budget execution is within the public domain which has landed me in trouble and expose me to all kinds of hatred. But that's the nature of the job. This effort was intended so that the general public will have the necessary information to ask the tough questions to the right people: using transparency to improve accountability. Today, with the help of civil society, our budget and expenditure information can be accessed via mobile phone and on the web; first time in Liberia.
To close on this, I have absolutely no issues with my colleagues and whatever views they have raised in private or public is their opinion and we will continue to live up to the expectation of and the aspirations of Liberian people. I have reached this conclusion because most of decisions we make about public monies are legislative and cabinet decisions sanctioned in the budget law. If there were policy differences and colleagues were prepared to discuss these openly in Cabinet, I would have no problem. But to leave the Cabinet and engage in personal conversations that have diabolic undertone that has no basis or shred of evidence is disingenuous and scaring. I can understand why some of my colleagues are angry... we are changing the way we spend money by eliminating what we spend on ourselves to investing it in public sector investment programs that will benefit all Liberians.
FPA: Minister Konneh, many of your critics say you are driven by an ambition for the presidency. Are there any truths to those reports? Do you see yourself in the mix come 2017?
KONNEH: That's not true. While as a Liberian am entitled to vie for any public office in our country including the Presidency, I have not made any such determination and I remain committed to serving my country in my current capacity and I am thankful to President Ellen Johnson Sirleaf for giving me the opportunity.
FPA: There is a growing perception that there is a rift between the Ministry of Finance and the Central Bank of Liberia, between you and Governor Mills Jones? Are these reports true? If so don't you see it as part of the problems many see in the financial sector?
KONNEH: Not at all, completely false! Governor Jones is a big brother and a committed Liberian. We are colleagues working to achieve one goal and the relationship has been good. We have pushed consistently that the government monetary and fiscal policies should remain complementary of each other and that's the case to date. Whether there are no issues, not at all, we sometimes have disagreements - and there will be as long as there is government - and those are discussed, and resolved in the best interest of Liberia.
FPA: So, finally, what can you point to as five key achievements can you point to Minister of Finance?
KONNEH: We have done a lot of things but I am sure I want to call them achievements, as some of what we have done is to build the illustrious work of our immediate predecessor. So, on the PFM front, we have up the gear a notch to accelerate implementation of the PFM law and its core regulations. We have accelerated reforms in our tax administration by investing in automation of some of the services. We also spearheaded and drove the reform for a single Ministry of Finance and Development Planning and the creation of the Liberia Revenue Authority. To date, we have worked with cabinet colleagues to mobilize financing for major infrastructure projects, including support to our energy sector and road network. Internally, we have improved the business process at the Ministry of Finance through automation of our voucher processing system to deal with duplications that caused us millions of dollars and taking steps to decentralize our payroll system. There are lots still to be done to ensure our fiscal house is in order but we headed in the right direction.
But most importantly, we have changed the narrative on economic management. Economic growth was sustained in 2012, led by the first full year of iron ore exports, construction, and a strong performance in the service sector. Real GDP is estimated to have grown by 8.9% in 2012, and is projected to expand by 8.1% in 2013, supported by iron ore production and concession-related foreign direct investment (FDI). This outlook, however, remains vulnerable to commodity price variations, particularly for iron ore and rubber, FDI, and international aid. Consumer price inflation moderated to 6.9% in 2012, reflecting lower international food and fuel prices. Inflation is expected to slow down to 5.1% in 2013. We launched a five year development strategy, the Agenda for Transformation (AfT) to address some of the challenges Liberia faces, and the first step towards its Vision 2030 of turning Liberia into an inclusive middle-income country by 2030. The AfT will attempt to remove structural development obstacles through an estimated USD 3.2 billion program, more than half of which is planned for roads and energy. It also includes programs to improve social inclusion, particularly among the youth, and improve governance and public institutions. As a first major step, we have secured financing to rehabilitate the Mount Coffee Hydropower Plant that was completely destroyed during the war. The power plant is expected to provide about 80 megawatts of electricity to Monrovia, a substantial increase over the current 23 megawatts currently provided by high speed diesel generator. We expect generation to start at the end of 2015.
FPA: Any concluding thoughts?
KONNEH: Liberians can and must make their voices heard on all of the issues that affect them directly and indirectly. The key, however, is exercising responsibility. Piling up debating points on the economy or carrying on a battle of wit on the issues affecting our fiscal and monetary policies helps no one. Rather, we need honest and constructive criticism to the actions - both conventional and unconventional - that the Government of Liberia is taking to address our country's economic needs under very difficult and constrained circumstances. With a growing, yet fragile economy like ours, we cannot expect every intervention to achieve its intended goals - and we will always welcome a healthy debate with both our citizens and experts alike - but we must be careful not to scare off investors or create anxiety among consumers. Without criticism, no government and no country can improve and succeed - and no republic can survive. We should not view well-researched opinions on policies as mere fodder for entertainment; instead we should embrace the provocative nature of such pieces and use them as a means for a healthy policy dialogue that focuses on the issues; to use them to refine the policies that would improve our economy and rebuild our country.