Many business people if not all have complained about difficulties starting or remaining a business, big or small, in Liberia. Some decried high taxes or tariffs while others speak of lack of loan opportunities or high interests on loans. Still there are some who complain about the legal environment while some lament lack of investment incentives. These conditions have stagnated or annihilated many business or have prevented others from investing, thus suppressing the growth of the economy. The Government has seen the problem and its impact and therefore constituted a committee to do a study. The committee will subsequently report to Cabinet for actions that will further liberalize the Liberian business climate and bolster the economy. Continuing its brainstorming and study, the committee set up by President George M. Weah in last Cabinet Meeting has chosen to convene in the northern city of Ganta, Nimba County. The Analyst reports.
As part of its mandate to explore evolving challenges and prospects of Liberia business environment and develop doable plans and strategies towards improvements, the Business Climate Working Group will on the 1st and 2nd of February 2019, host another round of meeting in Gompa City, Nimba County. Under the theme “Resolving Constraints”, the two-day forum will look at three of the World Bank Doing Business Indicators: Getting Credit, Resolving Insolvency and Enforcing Contracts.
The Chair of the Business Climate Working Group, Finance and Development Planning Minister Hon. Samuel D. Tweah Jr. noted that the meeting will draw on the experiences of experts in the field of banking and finance, law, public policy and other professions. He said that there was a need to understand some of the challenges that prevent the business community from accessing finance, repayment of loan by debtors and the slow processes involved with the court system in the Country.
The latest World Bank Doing Business Report noted that it takes on average three years to file a complaint and get redress in an insolvency case. The cost required to recover a debt also appeared to be burdensome for creditors due to the high cost of different forms of legal fees which among others include attorneys’ fees, administrators’ fees amongst others. The availability of data on borrowers as well as other firms are not easily accessible thereby making it difficult for lending agency to conduct due diligence. The fragility or softness of the law on foreclosure, collateral and disposal of debtors’ asset need to be further explored.
The report also asserted that the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending needed to be looked at with a legal and public policy eye so as to engender a business-friendly climate in the Country. A reviewed of the report noted that it takes on average 1300 days to enforce a contract ranging from the filing of a complaint to a final ruling by the Supreme Court. Some of the factor responsible for the prolong delay can be attributed to the lack of automation system as well as publication of judgment and case management.
Minster Tweah noted that the expected outcomes of the two-day meeting which will bring members of the three branches of government will focus on finding solutions to these challenges and not restating the already existing problems. “We are hopeful that with the assembly of legal experts, the business community, bankers as well as members of the donor community including the World Bank, UNDP, SIDA, USAID and others, this meeting will be a success”.
It can be noted that in October 2018, President George Manneh Weah constituted the Business Climate Working Group for the purpose of identifying and resolving some of the challenges inhibiting a business-friendly environment in the Country. Since then, the group has held several high levels and technical meetings to identify ‘quick wins’ to some of these constraints.
With high level officials of government including ministers and directors of affected institutions, the Speaker and President Pro Tempore of the Legislature, the Chief Justice, lawyers, bankers, the media and civil society, the private sector including the Liberia Business Association, the Liberia Chamber of Commerce, Patriotic Entrepreneurs of Liberia (PATEL), it is expected that the outcome will set the stage for improving the country’s ranking in the World Business Report. Not only with that, but will also engender a business-friendly climate that will attract both domestic and foreign investments to Liberia.