Another Concerning Flashpoint Over HPX Deal -The Shadow Over HPX’s Liberty Corridor: Questions of Transparency and Integrity

MONROVIA – Investment is a crucial pillar of Liberia’s economic growth, promising job creation and broader economic benefits. Any major investment, particularly one with the potential to address the country’s pressing unemployment crisis, should be welcomed. When High Power Exploration (HPX) announced its $5 billion investment plan in 2024, it was met with enthusiasm, coinciding with the early days of a new government. However, closer scrutiny of the individuals and business interests behind this project raises critical concerns about the credibility of Liberia’s investment climate and the integrity of large-scale infrastructure deals.

At the center of these concerns is Robert Gumede, a South African businessman with documented involvement in controversial procurement deals, and his connection to Robert Friedland and Peter Pham—two key figures behind HPX’s Liberty Corridor project.

Gumede’s Legal Battles in South Africa

Gumede, through his company Guma Group, has been entangled in a legal battle with South Africa’s Special Investigating Unit (SIU). The SIU has filed a case at the Special Tribunal seeking to reclaim R390 million from him over an allegedly fraudulent and inflated personal protective equipment (PPE) contract awarded during the COVID-19 pandemic.

The contract, originally worth R600 million, was awarded to Red Roses Africa (operating as Mainstreet 699), a company tied to Gumede through his nephew and business associate, Blessing Qwabe. The SIU alleges that Gumede manipulated procurement processes to secure this deal with the South African Police Service (SAPS), leading to an “unlawful overcharge” that cost taxpayers millions.

The Allegations Against Gumede

The SIU’s case, bolstered by investigative reporting from Daily Maverick, outlines multiple irregularities in the contract:

• False Promises of Direct Imports: Gumede assured authorities that the PPE would be imported via a specially chartered Airbus from China—an aircraft that never materialized.
• Local Resale at Inflated Prices: Instead of importing supplies, Red Roses allegedly purchased sanitizers and masks from local retailers such as Dis-Chem and resold them to SAPS at exorbitant markups—one product saw a 370% price increase.
• Failure to Deliver Full Orders: The company was contracted to supply 12 million masks and 90,000 units of sanitizer but allegedly only delivered a fraction of that.
• Substandard Products: Some sanitizers were found to contain less than 70% alcohol content, failing quality checks.

Furthermore, financial records suggest that large sums of money were funneled through a network of companies linked to Gumede. The SIU affidavit describes this as a deliberate scheme to enrich individuals without delivering value to the government. Despite having four months to formally respond, Gumede and Qwabe have instead attacked the case as “baseless” while avoiding sworn affidavits to counter the allegations.

Gumede’s Role in the Liberty Corridor Project

Beyond the corruption allegations in South Africa, Gumede is now emerging as a key player in the HPX-led Liberty Corridor project, a proposed multi-billion-dollar railway and port development aimed at exporting Guinean iron ore through Buchanan, Liberia.

The project, estimated between $3 billion and $5 billion, is being positioned as a transformative infrastructure initiative that will enable mineral development and boost regional economies. HPX and Guma Africa Group have already signaled their intent to negotiate exclusive rights with the Government of Liberia to develop, finance, and operate the Liberty Corridor.

However, Gumede’s history of procurement-related controversies casts a shadow over the transparency and legitimacy of this venture. His past dealings raise urgent questions:

• Can Liberia afford to engage with an individual entangled in legal battles over financial misconduct?
• What safeguards exist to prevent the same procurement manipulation alleged in South Africa from occurring in Liberia?
• What role do Robert Friedland and Peter Pham play in legitimizing a deal that involves someone under corruption scrutiny?

A Risk to Liberia’s Investment Credibility

Both Friedland and Pham have aggressively marketed HPX’s vision, emphasizing its potential to reshape Liberia’s infrastructure landscape. However, Gumede’s involvement threatens to undermine confidence in the project. His past dealings suggest a pattern of political influence and procurement irregularities that could invite deeper scrutiny from investors, civil society, and regulatory bodies.

In South Africa, Gumede’s political influence within the ruling African National Congress (ANC) has led to allegations of high-level lobbying to dismiss the SIU case. The SIU’s affidavit makes a damning assertion:

“These respondents, through their insatiable greed, have directly or indirectly caused unnecessary deaths of frontline police officers and have certainly resulted in the theft of SAPS funds.”

While Gumede dismisses these allegations as politically motivated, his reluctance to provide sworn affidavits only raises further doubts.

As Liberia navigates its economic future, decisions about infrastructure investments must be guided by transparency and accountability. The HPX Liberty Corridor has been sold as a game-changer, but without clear due diligence on key figures like Gumede, it risks becoming another high-stakes deal shrouded in controversy.

If Liberia is to maintain its credibility as a viable destination for ethical investment, it must demand full disclosure and stringent oversight in all major infrastructure projects.