28 March 2014

Liberia: Amara Warns

Finance Minister Amara Konneh is of the strong conviction that if nothing substantial is done in Liberia towards increasing the export sector, the country could be largely dependent on foreign aid. Many countries in the region have strong export base, which has led to good performance of their economies.

So, Minister Konneh does not want for Liberia to be solely dependent on aid and security related inflows.

"As you know, however, our economy experienced some difficulties in the second quarter of this fiscal year partly due to the depreciation of the Liberian Dollar against the United States Dollar. While the price of the US$ to the Liberian Dollar has stabilized, which is due in no small measure to the efforts of the Central Bank of Liberia, this decline in the value of our currency is a testament to the need to increase exports and diversify our economy and attract more foreign exchange."

" Otherwise, we will remain dependent on the large aid and security related inflows we currently receive, which are likely to fall over time; and continue to be subject to global demand and prices, because our productive base is mostly characterized by the export of primary commodities like rubber and iron ore," he said.

In the state fo the economy statement on Tuesday, in Monrovia, he said, a lot needs to be done.

He said, Liberia's real Gross Domestic Product (GDP) growth so far this fiscal year is estimated at 8.1 percent, which is just slightly lower than the 8.3 percent growth recorded in 2012. "The growth in 2013 was driven largely by increased activities in the mining sector, and this is expected to continue in the medium-term, particularly with the start of iron ore exports by China Union and the ramping up of production by Arcelor Mittal. The increase in exports in the extractive sector is a result of Liberia's stable macroeconomy, which attracts the foreign direct investment needed to generate foreign exchange and create jobs." He continued: "While our service sector has been another driving force of economic growth, it is expected to take a hit as the United Nations Mission in Liberia (UNMIL) draws down its presence in the country, and as NGO activity reaches arguably lower levels, causing a slowdown in domestic demand for services such as food, entertainment, domestic support, etc. This will, of course, have a corresponding impact on employment and a secondary effect on economic activity."

A mitigating factor is, once again, the increase in exports in the mining sector, which the Government has worked hard to ensure by removing infrastructure and bureaucratic bottlenecks that hindered our concessionaires from rolling out their operations and begin producing and exporting according to set timelines.

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