Monrovia — When Richard Tolbert was tapped by then President-elect Ellen Johnson Sirleaf to head Liberia's National Investment Commission in late 2005, many friends questioned why he would leave a lucrative career on Wall Street, where he spent two decades years working for Merrill Lynch, Payne Webber and UBS, to return to a country that was devastated by 14 years of civil conflict.
Tolbert fled Liberia in 1980 after he was jailed by young soldiers who had staged a coup in which both his uncle, then-President William Tolbert, and his father Frank were killed. But he always planned to return home when conditions on the ground made that possible, he says. Interviewed in his office earlier this month, Tolbert outlined the huge strides he believes Liberia is making.
How do you rate the current situation vis-à-vis investment?
The investment climate is looking brighter day by day. During the first year, we were really getting out the message – letting the world know that we are reopen for business. We made the point over and over that Liberia is a rich country which has been poorly managed. Now we are turning that around. We're seeing significant investments coming into the country.
What are some of the latest deals?
We have had the signing of the U.S. $20 million contract for the rehabilitation of the Ducor Hotel. We have had the signing of the U.S. $30 million Liberia Enterprise Development Fund backed by Bob Johnson [founder of the Black Entertainment Television network] and OPIC [the U.S. Overseas Private Investment Corporation].
We have recently witnessed this fantastic Buchanan Renewable Energies venture, which is potentially another U.S. $20 million deal that will create hundreds of jobs just in the next few months. Earlier this year, we renegotiated the terms of a U.S. $1 billion agreement with Arcelor Mittal, the largest steel company in the world, and renegotiations with Firestone are currently taking place – two major transactions that will significantly improve benefits for Liberia. So we are seeing a real tangible flurry of investment activity.
The mining, timber and diamond areas are only just now beginning to reopen – not to mention agriculture. The National Investment Commission along with the Ministry of Agriculture has been negotiating two deals involving palm oil, which has huge potential for cosmetics and biofuel, and we are one of the few countries that can produce palm oil, which grows only within five degrees of the equator. We've got the land and the labor, and many people now want some of that land because places like Malaysia and Indonesia, which are the two biggest exporters of oil palm, are pretty much saturated for production.
In addition, with less than 300 hotel rooms in the whole country and more than 300,000 Liberians in the USA and neighboring African countries in need of homes to return to, we have a tremendous need for housing, hotels and office space. (Our Ministry of Youth and Sports recently even moved into the newly-renovated sports stadium as its temporary office.). We have 350 miles of pristine beaches and oceanfront just ripe for fisheries and tourism. The next couple of years look very exciting.
Could you say a little more about Liberia's mineral wealth and the potential for increased export earnings from natural resources?
First of all, I don't believe in any mineral curse. I think everything can be a blessing, and we are blessed with natural resources. The curse is in the management. It all depends on how you use what you've got. This is a wealthy country that has been poorly managed, as we've said many times. The president is determined to change that.
Liberia has three to four billion tons of iron ore still available for extraction. Much of it is medium grade, not the high grade (65 percent Fe) that we had a few years ago. But with the new technology and the high price of iron ore and steel today, it has become extremely valuable.
When the former Lamco Mines were put up for bid three years ago, only one group was interested. That was Mittal – two brothers who both bid for the same asset [Editor's note: this was prior to Mittal's merger with Arcelor in 2006]. In the last couple of months we have put two other iron ore assets up for bid. One was what is called the western cluster of mines in the Bomi Hills, where we had 14 major companies come in and express interest – some of the biggest players in the mining world, including BHP Billiton, CVRD out of Brazil, of course Rio Tinto. They are all here on the ground.
The old Bong Mines, which we also had thought had been depleted of extractable ore, was recently put up for bid, and nine major companies, including several from the Far East, Europe, and America, immediately expressed interest. In addition, we have potential new mining areas that people are looking into, including Wologisi, where one billion tons of iron ore are still sitting in the ground untapped.
Then we have growing interest in gold and diamonds. Just this morning there were people in my office telling me that they are prospecting for gold. There is a company that is going to be listing on the AIM market in London in the next few months, with an initial market cap of over U.S. $100 million based on its gold mining activities in Liberia. And of course Mano River Resources, a company with which I am affiliated, has also now unscrambled its gold and diamonds and says it has potential kimberlite diamond pipes with serious potential for industrial diamond mining.
What about rubber, one of the Liberia's longstanding export earners?
The price of rubber is at all-time highs, and this provides us with a great job creator. In addition to the traditional export of latex and processed rubber, we now have two new industries arising out of the rubber sector. One is the wood chip business that Buchanan Renewable Energies has launched, which will supply chips from old rubber trees to fuel plants in Europe. The second is rubber wood, which some people call 'white oak'. This beautiful wood is extremely good for furniture, and there is enormous demand for this out of the Far East. China has a U.S. $100 billion furniture market, and there are more furniture-making companies for China than you can count.
We have hundreds of thousands of acres of old rubber trees that can be used for this purpose. Firestone is building a U.S. $10 million rubber wood factory right now to process their old rubber trees, but they have a 70,000-acre plantation and can only manage to process 2,000 to 3,000 acres a year into rubber wood. In addition, there are many other plantations out there with old rubber trees that have to be cut down. So this is an industry that is coming up.
You've listed Liberia's assets, but what about infrastructure? Doesn't this present a major obstacle?
We have a whole country that needs to be rebuilt. We don't try to hide that. A major focus of the government and the president herself is rebuilding the roads and the water system and turning on the lights. Along with the 'hard' infrastructure – the highways and railways, we also are working on soft infrastructure – technology and research, skills training, social service delivery. Infrastructure is going to be a continuing priority, especially for the next couple of years. Once we have moved forward with infrastructural development, you will see business opportunities here mushroom.
But I also look at every one of these so-called impediments as an opportunity to do business, an opportunity for people to come in and invest, whether in road construction, port construction, port management or airport rehabilitation. We have four deep water ports in Liberia that are within a few hours of all the major mining areas. For extracting minerals such as iron ore, you have got to have easy access to ports and to railways. We have ports and railroads that can be rehabilitated to handle the ore.
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Also, our neighbor Guinea has been sitting on billions of tons of valuable 65 percent Fe iron ore for 30 years. They could not extract it because of the long distance from the mining areas to Conakry (the capital and port city). But Liberia's main sea ports are within easy reach of those mines, so that represents yet another economic opportunity.
What are the selling points you emphasize when you want to convince investors to give Liberia a serious look?
First, we point to the restoration of peace and stability which we have been able to do with the help of our international partners. Secondly, there is the president's personal charisma and her commitment to good governance which has turned around this country's image on the international scene and attracted these new investors. And thirdly, we have a government that is rehabilitating the infrastructure and revitalizing the economy, emphasizing the private sector. We have rewritten the investment code and revised portions of the tax code to make Liberia more attractive as an investment destination. I think there is wide agreement that this government is doing a good job.
Still, you have to admit, the problems facing Liberia are enormous.
Of course there are problems. A major one is infrastructure. As I mentioned before, the roads and lights need to be fixed and hopefully will be. Secondly, in all honesty, high unemployment produces a high degree of crime and that is a problem which we must address by creating jobs. As far as political stability is concerned, the country is on a good track.
I think it is just a question of us taking advantage of the great management team that the president has assembled to restore this country. We're led by an energetic president whom none of us can keep up with! If we continue at this pace, the Liberian people will see some of the real fruits of these endeavors in the next couple of years.
Note: Richard Tolbert was a founding shareholder and member of the AllAfrica board of directors.
