MONROVIA: Liberia’s Finance Minister, Samuel D. Tweah Jr. has underscored the need for the government of Liberia to implement structural reform in the country’s business sector as a means of actualizing the aims and objectives of the Liberianization Policy.
The Liberianization Policy allows for the setting aside of specific jobs and businesses exclusively for Liberian citizens as a means of ensuring their active participation in the business sector.
The Liberianization Policy elevates the debate that small businesses should be reserved for Liberians which has been grossly violated by Indians, Lebanese, Chinese and some other African compatriots with the help of some dishonest Liberians.
Speaking Tuesday on a local talk show in Monrovia, Ministry Tweah stated that the structural foundation needed to support the policy is lacking and has provided loopholes for some unscrupulous individuals to exploit.
He stressed that countries like Ghana, Ivory Coast and Nigeria are striving in this regard because of the structural foundation that was setup by their past leaders.
“Liberians will not be spectators in their own economy in Ghana, Ivory Coast the policy is booming because the structural foundations that were laid in those countries enable their citizens to participate fully,” Minister Tweah noted.
He lamented that President Weah inherited a structural deficit in the business sector, citing that the Government of Liberia is currently working hard to resolve those structural deficits that have impeded the implementation of the policy that is aimed at benefiting Liberians.
Minister Tweah added that the Government of Liberia is planning a business forum with Liberian businesses which is intended to address all the hurdles that are keeping Liberian businesses in the back.
The actual implementation of the Liberianization policy haven’t been achieved in Liberia’s business sector as foreign nationals can be seen vividly involved with the retailing sector as well as occupying positions like cashier, storekeeper etc. which is to be set aside exclusively for Liberians under the policy.
However, the US trained economist has attributed this challenge to what he referred to as “fronting”.
He unearthed that some Liberians are in the habit of unscrupulously fronting for foreign nationals where they pretend to be holding strategic positions in businesses owned by those foreign nationals.
Fronting in this context can be defined as the practice of placing indigenous who are usually completely unaware, unskilled, and semiliterate as shareholders and directors of a company or business.
“When you go to the business, the name of the business is in a Liberian name, but all the transactions are carried out by foreign nationals, and we are getting these complains “Tweah noted.
The MFDP boss pointed out that the only way such issues can be resolved is by putting in regulation that will prevent such from happening and further change the law.
He recommended that it should be mandatory for the name of a Liberian to be both on the business account as well as the bank account of the entity for businesses set aside by law for Liberians as a means of safeguarding the policy.
“We need a regulation to show that a Liberian name is on both the business account and the bank account to show that the Liberian is managing the account. This regulation is not there right now which is a structural weakness. When the auditors go to those entities where a Liberian is working with the people they collude and say no this business is a Liberian business. And the way to stop Liberian people from covering up is to go and say even though you are saying this business is for a Liberian, but I need to see the record that shows that Liberian managing the money and that’s the conversation we are having,” Minister Tweah maintained.
“We have come to realize that this fronting problem is the biggest elephant in the room because it has to do with human behavior,” he said.
Tweah emphasized that to solve such a problem, one must go intrusive into banks where institutions will start requiring businesses to report and that’s going to be the game changer.
He cited that to remove enforcement barriers, Liberians need to stop colluding with foreign nationals, citing “We need to prevent Liberians from fronting under the existing law”.
In related development, Minister Tweah disclosed that as means of implementing President Weah’s mandate of making Liberians principal actors in their own economy, the Government of Liberia started by giving Pro-poor loan to Liberian businesses.
He stated that those small business loans provided by President Weah brought a lot of Liberians into business.
“The reduction of electricity cost from US$35 to US$20 cents per kilowatts hour has helped small businesses to save on electricity thus increasing their annual income. This initiative had lower cost for Liberian businesses”.
He argued that generally, when you remove all those challenges confronting the sector, you will be able to provide that enabling environment for Liberian businesses to progress.
“We are also working to solve all of the regulatory problems. We just signed a US$40 million program with the World Bank to address and foster private sector growth. We will also work with the judiciary so that we can resolve the problem for which banks are afraid to give loans to Liberian businesses because they say people can’t pay back”.
Tweah emphasized that a lot of things have been done to improve Liberian businesses, stressing “If you say Liberians won’t be spectators in their own economy doesn’t only means giving Liberians business loan but it also means solving all of the problems that will make Liberians enter and survive in business”.
He lamented that the country hasn’t been able to address the issue of fronting for over 172 years, highlighting the need to stop Liberians from fronting against Liberians’ own interest.
“The people down waterside know who are fronting and the people who are fronting are protecting certain people, so we have to come out clean,” Minister Tweah said.
Meanwhile, the Liberian Finance Minister also identified the issue of the lack of access to finance as another major challenge Liberian businesses are faced with, citing that Liberian businesses are finding it difficult to get loans from commercial banks on grounds that the banks don’t get their money back whenever they borrow from Liberian businesses.
He disclosed plan for the holding of a business forum in Ganta, Nimba County with Liberian businesses to talk about all the challenges confronting them as a means of fostering a reform that will ensure the actualization of the Liberianization policy and their issues in the sector for the betterment of the sector and the country at large.
However, he hinted that such reform won’t be easily achieved, pointing out that it may be subject to harsh criticism from political actors who may want to score political grades at the detriment of Liberian businesses.