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Liberia could hit double-digit growth this year - finmin
by Tosin Sulaiman
Reuters Translate This Article
18 September 2012
LONDON (Reuters) - Liberia's economic growth could reach double digits this year as its iron ore and rubber industries ramp up production and services and construction sectors expand, but it may be years before ordinary Liberians benefit, its finance minister said.
The war-scarred West African nation is also planning to introduce Treasury bills and is laying the groundwork for a sovereign wealth fund should its offshore oil deposits prove commercially viable, Amara Konneh told Reuters.
Liberia is rebuilding after 14 years of conflict that ended in 2003, leaving its infrastructure in ruins and its 4 million people mired in poverty. Experts say it may be on the cusp of rapid resource-driven growth.
Konneh said the government could beat its official economic growth target of 8.8 percent this year due to an increase in iron ore exports and rubber production as well as the expansion of the construction and services sectors.
'We believe that these two sectors will help us achieve double digit growth by the end of this year. 'It could be 10 to 12 percent. That's what we're targeting,' said Konneh, speaking late last week on the sidelines of a conference in London.
The economy grew 6.9 percent in 2011, helped by the onset of the country's first iron ore production since the war.
'There's construction happening all over the country,' said Konneh, who was a refugee in Guinea and the United States during the war. 'In the city, people are rebuilding their homes and that's also driving the economy.'
After nearly a decade of peace, investors are starting to pour in to Liberia's resources sectors, eager to snap up promising oil, iron ore, and agricultural licenses. But there are questions over the country's ability to properly manage these sectors after a spate of corruption scandals.
Global Witness said in August that Liberia's forestry department had given a quarter of the nation's land to logging firms over the past two years in a flurry of shady deals now being investigated by the government.
The government of President Ellen Johnson Sirleaf has also come under fire over allegations that legislators routinely accepted bribes in exchange for approving oil and minerals licenses. Johnson Sirleaf has said she is determined to stamp out government graft.
JOBS ON THE HORIZON
Konneh said that, in an effort to build up Liberia's financial markets, the government plans to introduce Treasury bills by the end of this fiscal year, followed eventually by bonds and a stock market.
'The T-bill introduction is going to be a milestone in the process of developing our financial markets,' he said. 'We're working closely with the central bank.'
But despite Liberia's economic progress, it will take another five years before there is a significant reduction in an unemployment rate of about 80 percent, Konneh said.
Most new jobs are likely to be created in manufacturing, he added, and the government plans to reinforce the sector by expanding the availability of electricity and by introducing incentives to investment.
'The mining companies are creating jobs but the jobs are being created slowly,' he said. 'It's manufacturing that's going to create the jobs. We're focusing on attracting manufacturing companies in Liberia with good incentives.'
Konneh said the government hoped to avoid the fate of other oil producers on the continent by ensuring that the discovery of oil does not lead to a neglect of other sectors of the economy.
Energy companies Anadarko and African Petroleum Corp announced offshore oil discoveries in 2011 and earlier this year, though it remains unclear if they are commercially viable.
Konneh said the government is looking to set up a sovereign wealth fund to manage any oil revenues and is receiving advice and assistance from Norway.
'For the oil revenue, we really would like to hold a substantial amount of that in a sovereign wealth fund for future generations,' he said. 'As a government we've advocated for it and the concept is being developed with support from Norway.'
Konneh said his experience growing up in poverty and losing family members to the war makes the task of improving living conditions for Liberians more urgent for him.
One of eight children, he spent his childhood helping his father farm and only started formal education at the age of 11.
'I appreciate what the majority of Liberians are going through,' he said.
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