Liberia-Netherlands Business & Investment Dialogue

C. Cecil Dennis AuditoriumMinistry of Foreign Affairs

Monrovia, Liberia

July 6, 2015

Towards Stability, Recovery and Transformation for Inclusive Growth

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Liberia’s Trade Profile Economic Stabilization and Recovery Plan Liberia-Netherlands Trade Trade Liberia Invest Liberia

Agenda

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Liberia’s Trade Profile

HOW ARE WE DOING

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WHAT THE NUMBERS SAY

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GDP/Capita per Productive Sectors

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What are we trading? Imports

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What are we trading? Exports

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Rubber• Fires

tone• LAC• SRC• Oth

ers

Oil Palm• Sim

e Darby

• GVL• Othe

rs

Cassava• No

ne

Fisheries• No

ne

Cocoa• No

ne

Rubber Wood• Fire

stone

How are we doing with our Export Strategy for large scale production? -(Industrial Investors)

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Who’s Financing Our Trade? Private Sector Credit to the Sectors

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Economic Stabilization and

Recovery PlanTowards Recovery and Transformation for

Inclusive Growth

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Ebola had a severe Socio-Economic Impact

8.3% GDP Growth required to achieve Vision 2030

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Liberia Real GDP Growth Rate (2006-2015)

Five year Agenda for Transformation underway since 2012

Fiscal restrictions imposed to manage impact of increased expenditure

Stabilized the exchange rate, enhanced banking sector liquidity

Paid civil servant salaries on time; accelerated goods & service spending

Avoid shortage of essential commodities

Over $58 million disbursed to public investment and recovery in 14/15

Reopening borders and lobby for return of flights

Immediate cash transfers with the support of our Development Partners

Gov’t acted quickly & decisively to mitigate immediate effects of crisis

Revised projections for 2015 GDP Growth are 0.9% (IMF) – 3.0 % (World Bank)

Total financing Gap

Support for public finances, improved finance execution and governance including de-concentration

- Major Health Investment Plan- Education sector priorities- WASH services- Social protection- GoL plan for UNMIL transition

Economic Stabilization & Recovery Plan

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Revitalize and diversify growth, targeting agribusiness export sectors

Enable delivery of critical transport and energy infrastructure projects

Strategy 1: Recovering Output & Growth

Strategy 2: Strengthening Resilience and Reducing Vulnerability

Strategy 3: Strengthening Public Finances and Ensuring Service Delivery

$298 M $289 M$225 M

$812 M

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Revitalize and diversify growth, and address vulnerable employment

Enable delivery of critical infrastructure projects

Strategy 1: Recovering Output & Growth

Target Agro-processing in key sectors

Increase private sector finance for agribusinesses and farmers

Value chain coordination: cocoa, rubber, oil palm, fish/aqua.

Targeted investment in these value chains & agro-processing

Labor and supplier skills aligned to growth sectors

Finance cost overruns from EVD on priority infrastructure

(e.g. Mt Coffee) Road Maintenance Fund, Low-income housing

ESRP: 3 Strategic Intervention Areas (2015-2017)

- Major Health Investment Plan- Education sector priorities- WASH services- Social protection- GoL plan for UNMIL transition

ESRP: 3 Strategic Intervention Areas (2015-2017)

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Revitalize and diversify growth, and address vulnerable employment

Enable delivery of critical infrastructure projects

Strategy 1: Recovering Output & Growth

Strategy 2: Strengthening Resilience and Reducing Vulnerability

Health Investment Plan: to improve and extend existing infrastructure and build fit for purpose Health workforce, including private investment in affordable high quality health services

Education: train and recruit teachers, improve quality of vocational education, strengthen county management structures, including private investment in affordable high quality education services

Increase WASH services for Ebola recovery and prevention including 100 boreholes into communities, health centres and schools, and a WASH regional centre

Increase coverage of social cash transfers to at least 50,000 households, sustain foster care grant and develop National Emergency Response Capability

Security: implement GoL Plan for UNMIL Transition

Support for public finances, improved finance execution and governance including de-concentration- Major Health Investment

Plan- Education sector priorities- WASH services- Social protection- GoL plan for UNMIL transition

ESRP: 3 Strategic Intervention Areas (2015-2017)

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Revitalize and diversify growth, and address vulnerable employment

Enable delivery of critical infrastructure projects

Strategy 1: Recovering Output & Growth

Strategy 2: Strengthening Resilience and Reducing Vulnerability

Strategy 3: Strengthening Public Finances and Ensuring Service Delivery

Government revenues are suffering twin shock of EVD crisis and global commodity prices

Improving expenditure compliance processes and Budget execution

Civil service reform and Decentralization

Liberia-Netherlands Trade

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Liberia-Netherlands Trade

2012 2013 2014$0$10$20$30$40$50

Liberia Total Imports from and Exports to Netherlands, $ million

ImportsExports

Sources: Asycuda and www.trademap.org

Source: Asycuda

Cocoa Techically Specified Rubber Cranes$0$2$4$6$8

$10$12$14$16$18

Liberia Top Exports to Netherlands, $ million 2014

Source: Trademap.org

Trade Liberia

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Acceding to WTO in December 2015 Joining regional customs union, ECOWAS Common External Tariff (CET). Liberia’s trade-weighted average tariff is the lowest in West Africa at 6.3% (IGC, 2014) Liberia has trade agreements providing duty-free quota-free access to the EU, USA and China, as an

LDC, and is working with other ECOWAS states on the EPA with the EU. Trade Facilitation Forum works with private sector to reduce non-tariff barriers to trade 

Liberia’s Industrial Policy: Focus on diversifying the economy by moving away from mining towards commercializing agriculture, developing agro-processing & kick-starting manufacturing of cocoa, oil palm, rubber & fish & other products

National Export Strategy: supports export diversity by focusing on development of agriculture value chains & their downstream products (cocoa, rubber processing, oil palm, aquaculture, fisheries)

Liberia also has opportunities in natural resources: forestry (incl. rubber wood, oil palm & timber products such as furniture & bio-energy) & minerals (inc. iron ore, gold, diamonds)

Liberia’s Trade & Industrial Policy

Invest Liberia

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Liberia’s Profit Tax Rate is 25% or 2% on turnover. No capital controls, so any capital brought in to Liberia can easily be expatriated. 30% incentive deduction allowed on up to 100% of the qualifying cost of equipment & machinery for

investors over $1m. Such investors can also obtain a tax deduction of 10% off cost of building & fixtures used in

manufacturing process that produced finished products having 60% local raw material. Investments exceeding $10 million automatically incentivized. Investments in economically deprived zones or those generating more than 100 direct jobs qualify for

additional incentives of up to 12.5% & a further 10% respectively.

Incentives available for: Tourism, Manufacturing, Energy, Hospitals & clinics; Housing, Transportation; IT, Banking,

Agriculture, Fisheries, Agro-Processing

Tax Regime & Investment Incentives

Long standing history in rubber production Potential to produce dry rubber products such as door mats, boots, bushels and gloves 63,000t produced in 2013, potential expansion to 325,000t Over 200,000 ha of arable land available: 55% of rubber from small farmers; 45% from concessions Large unexploited ECOWAS market for ribbed smoked sheets, crepe & rubber products

Priority Sector: Rubber Processing

Cocoa sector in Cote D’Ivoire, Ghana & Nigeria is saturated: Liberia is the next frontier 90% of cocoa bought by informal traders i.e. potential for investors to improve yields & quality Investor-friendly regulatory framework for cocoa being developed Cocoa yield = 200 kg/ha; potential to increase to 1,000kg/ha Global demand increasing by 6% per year & is worth $4bn. Market for cocoa butter & powder in Liberia is growing by 4% & 2% on average per year.

Priority Sector: Cocoa

AQUACULTURE

• Abundance of renewable water sources providing year-long water availability inc. Lake Piso & Mt. Coffee reservoir

• Optimal natural water temperature for aquaculture (27 degrees)

• Can produce 330,000 mt of inland fish (current production only 2,500 mt)

• Domestic market unsaturated, particularly up-country plus large regional market

• Large, untapped business opportunity – particularly as there is currently no competition. MARINE FISH

• With impending completion of Mount Coffee, soon cheaper to process fish in Liberia than in Nigeria, Senegal or Cote D’Ivoire.

• Liberia’s coastline & continental shelf offers 20,000 sq. km of fishing ground

• Only 7,300 mt of marine fish currently produced locally, while consumption lies at 23,800 mt per year

• Gov’t investing in fish landing, storage & processing infrastructure in Robertsport & Monrovia

• Gov’t streamlining tax regime & regulations in sector

Priority Sector: Aquaculture/Fish

Liberia natural home of oil palm. Produced 176,000 mt 2013 – little of which was processed at a high standard Large un-tapped ECOWAS market in cooking oil, cosmetics, animal feed, fertilizer, biofuels. 4 large investors including world leaders Sime Darby & Golden Veroleum Scope for investors in outgrower schemes linked to large concessions Most independent smallholder farm in northern and western, parts of country

Priority Sector: Oil Palm

Liberia’s Plan for Oil Palm Value Chain

Liberia ideal for investment in horticulture inputs, production, aggregation, packaging & processing. Rainfall of 2,391 mm p.a., compared to 1,348 mm in Ghana or 730 mm in Kenya. Large & growing domestic market, access to ECOWAS market & sea access to EU & US markets. In 2013 Liberia produced 291,000 mt worth of fruit & vegetables. It imported 14,300 mt Liberia horticulture market alone is worth $103 million per year Highest potential: tomatoes, pineapples, mangoes, plantain, banana, sweet potatoes and chilli pepper

(high Scoville Index) Liberia has direct flight access to Brussels, Casablanca, Abidjan and Nairobi

Priority Sector: Horticulture

AGRICULTURE FINANCING◦ Agriculture and Value Chain Financing

ENERGY◦ Current concessions demand over 700MW in energy◦ Hydropower to access huge potential of Liberia’s waterways◦ Mount Coffee hydro power generation- transmission and distribution of power lines◦ Investment in Oil Refinery based on the LPRC’s master plan◦ Investment in renewable energy (solar, biofuels from oil palm and rubber wood)

TRANSPORT◦ Agricultural transport services linking prime growing areas to Monrovia and ports. ◦ New paved road to Nimba almost complete, travel time down to 4 hours.◦ Coastal & Inland Water Transport – 6 major waterways, also in Monrovia◦ Seaport Infrastructure Development: ports of Buchanan, Greenville & Harper

TOURISM ◦ Surf and Fishing Tourism in Robertsport and Lake Piso in Grand Cape Mount County◦ Eco-tourism based on natural rainforest (Sapo National Park), inland waterways & waterfalls◦ Rehabilitation of Hotel Africa and Old Ducor Palace

Other Investment Sectors

Invest Liberia-Manufacturing: Rubberwood Furniture Manufacturing

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Invest Liberia-Infrastructure: Port of Buchanan

http://npaliberia.com/operations/buchanan/

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Invest Liberia-Infrastructure: Port of Monrovia

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Invest Liberia – Transportation:-land Water Transport:

Montserrado Bay – Dredging/Cleaning – 6 major water ways

Water Taxi – Montserrado Bay

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Invest Liberia – Transportation: Trucking

Dump Trucks Flatbed Trucks

THANK YOU

www.investliberia.gov.lrwww.moci.gov.lrwww.mfdp.gov.lr

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