If you are an international company looking to do business in Liberia, the World Bank Doing Business report should not be the only place to look for information about Liberia’s economic status. In 2018, World Bank Doing Business Index (DBI) ranked Liberia as 172 out of 189 economies to do business in. This means that Liberia is at the bottom of the favorable countries to do business in.
However, this report does not paint the full picture of opportunities available for foreign direct investments. Considering the fact that the Liberian economy is in a recovering stage, the challenges of doing business in Liberia are no doubt enormous. However, the government is actively working to attract large investments to bridge the huge gap that exists in the domestic private sector and provide different types of incentives to ease the strain of doing business in Liberia.
Below I have compiled a list of top 10 reasons why you should consider investing in Liberia. This list was originally compiled and published by the National Investment Commission, the official investment promotion agency of the Government of Liberia.
1. Political stability:
Liberia has been politically stable for the past 12 years, holding three free, fair and transparent elections. The current President, His Excellency, Amb. George Manneh Weah, is a peace Ambassador and a proponent of change for the Liberian people. He is keen on lifting his people out of poverty and as such has zero tolerance for violence. Amb. Weah’s Pro-Poor Policy aims to create more jobs for the Liberian people and raise the economy to a middle income status. This can only be achieved by developing industries and providing incentives to help new industries function properly, thus the robust investment promotion strategy.
Also, former President, H. E. Madame Ellen Johnson-Sirleaf, won the Nobel Peace Prize in 2011. She literally set the pace for the peace that Liberia currently enjoys.
So, in case you are wondering how safe it is to do business in Liberia, this should put you at ease.
2. Supportive Tax Regime:
Liberia’s tax regime as articulated under section 16 of the Investment act of 2016 provides special fiscal and non-fiscal incentives for investments in any of the fifteen priority sectors. Those sectors include; Manufacturing or assembling of finished products for export, Agricultural – food crop cultivation and processing, Exportation of sea products, Rubber and Oil Palm cultivation and processing, Information Technology, Banking, Horticulture, Poultry, Tourism, Manufacturing/ value addition, Energy, Hospitals and medical clinics, Housing.
The government recognizes how expensive it can be to set up a new business so they are willing to provide all the necessary assistance and incentives you’ll need to get started. Just follow these steps I’ve compiled here.
3. Ease of Starting a Business:
The easiest thing to get done in Liberia is registering your business. This is one thing the World Bank Doing business index and Liberia can agree on. It takes approximately 6 days and five procedures to register a business in Liberia. The Liberian Business Registry is the one stop shop for all procedures required to register your business. So, if you do make the decision to invest, registering your business will not be a problem.
4. Minimum restriction on the repatriation of profits and no currency exchange restrictions:
Section 11 of the Investment Act of 2010 strengthens investment protection by ensuring the ability of investors to repatriate capital and profits. These may include profits and dividends (net of taxes), remittance of moneys (net of taxes) in the event of the sale or liquidation of the business, repayments of loans acquired from foreign banks, etc.
5. Prohibition against discrimination:
Subject to the Labor Law and Laws governing immigration, foreign investors, employers and workers enjoy the same rights and are subjected to the same duties and obligations as are applicable to citizens of Liberia.
6. Large untapped natural resources base:
Liberia is endowed with several rich bodies of minerals and other raw materials, including gold, diamonds, iron ore, bauxite, rubber, timber much of which have not been tapped into. Even though the country is slowly moving away from being heavily reliant on the extractive industry, there are still opportunities for both mining and manufacturing of raw minerals into finished products.
7. Low cost of labor:
Liberia has a very youthful population. The International Labor Organization estimates that about 65% of the population is below the age of 35. The cost of unskilled labor is set at US$5.00-6.00 per day. Industries requiring a large labor force for mass production or manufacturing can benefit from an economy such as Liberia’s with a highly youthful population.
8. Unsaturated local market for edibles and household products:
Considering that Liberia has been heavily reliant on the extractive industries, much of the household items being consumed are imported. About 90%of the Rice consumed annually for instance, is imported. Similarly, other household products which could be produced locally are being imported. With the government keen on transitioning from an extractive import reliant industry into a more manufacturing export oriented economy, manufacturing and value addition, especially of edibles and household items will prove to be a very profitable venture.
9. Access to Regional Markets:
As you may be aware, Liberia has a population of 4.2m people. That’s pretty small if you’re into a retail type of business. The good news is, Liberia has access to over 335 million consumers through ECOWAS. As a founding member of the Mano River Union (MRU) and ECOWAS, Liberia is positioned with great access to these markets. Moreover, the ELTS agreement provides for free trade of goods and services within these markets.
10. Access to International Markets:
Liberia is a beneficiary of EU’s Everything But Arms initiative (EBA). The EBA grants duty-free, and in most cases quota free, access to the EU market. Liberia also receives preferential treatment under the Africa Growth and Opportunity Act (AGOA), which offers the most preferential access to the U.S. market available outside the free trade agreements. Liberia also has a Trade and Investment Framework Agreement with the United States. The country also has access to the Asian and African (outside ECOWAS region) markets.
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