ArcelorMittal’s Major Capital Investment In Liberia By Amendment of the New MDA In Lieu Of The Damaging Politicking And Personal Interest Shadowing Its Passage.
By Julius T. Jaesen II
In recent years, policymakers have concluded that Foreign Direct Investment in countries, especially developing countries like Liberia, is needed to boost the growth in their economies. In Liberia and many developing counties in Africa, inadequate resource to finance long-term investment is a menace underpinning economic growth and development. This lack of investible funds has been a big stumbling block to economic growth – thus making it increasingly difficult for developing countries to achieve the Sustainable Development Goals (SDGs) as set by the United Nations.
Same for Liberia’s case, Foreign Direct Investment is viewed by many academics, economists, and development practitioners as a panacea and major source of getting the required funds to invest in the country and to create job opportunities for citizens.
Kofi Anni, a seasoned Ghanaian diplomat and seventh Secretary General of the United Nations, eloquently summarized this point than I would endeavor to do on the importance of Foreign Direct Investment to developing economies as follows: ‘‘With the enormous potential to create jobs, raise productivity, enhance exports and transfer technology, Foreign Direct Investment is a vital factor in the long-term economic development of developing countries.”
It cannot be contested that ArcelorMittal-Liberia’s investment in Liberia for a decade plus in no small way, has contributed immensely to the government’s job creation efforts and is now helping to improve the overall economic conditions of the country in general.
In 2005, as a country emerging from decades of economic mismanagement and 14 years of violent civil unrest, Liberia was confronted with a pandemic of unemployment – which threatened to slide the country back to its unhappy past. Many families were left without jobs to sustain themselves as many who were in the employ of the government were downsized simply because the administration wanted to run a small and inefficient government. One of such investment partners that contributed to narrowing the unemployment gap in postwar Liberia is ArcelorMittal, the world’s largest steel and mining company, through its investment of 1.6 billion dollars in the country.
Just in two years – from 2006 to 2014, ArcelorMittal-Liberia, alone created over 3,500 jobs to the country’s young population. From 2011 to 2013, the number of jobs surged to approximately 5,000 but we later saw the numbers declined due to the Ebola Virus Disease outbreak in 2013 which lasted up to 2015.
With the proposed third amendment to the Mineral Development Agreement (MDA) before the Legislature awaiting ratification to extend ArcelorMittal-Liberia’s operation in the country, there is a renew hope that massive job creation efforts and overall economic enhancement are underway.
ArcelorMittal-Liberia is poised to expanding her investment in Liberia that would witness the building of concentrator to refine the ores the company is mining – something that is a welcoming news for our country and its unemployed youth.
The expansion of this project is put at a cost of US$800 million additional investment in Liberia – making such estimated investment the largest since the inception of Weah’s led administration in January of 2018.
By the ratification of this amendment before the Legislature, we will once again as a country and people, say to the world and our development partners that we are deepening gateway to unlocking private sector investment and cherishing the role foreign investment partners like AML are playing in contributing to our country’s economic development.
If the agreement if ratified, the expansion project of AML will create additional 2,000 new jobs for Liberian youth and students. It should also be noted that aside from the creation of additional job opportunities for Liberians when the agreement is ratified, AML’s royalty and taxes she pays per annum to the government of Liberia will increase from US$45 million to US$80.
This third wave of amendment, in no small way, will see our country reap huge economic dividends – as such huge amount will bring vast relief to the constraints placed on the government’s ambitious budget and as well help in the alleviation of poverty that the Pro-Poor Agenda for Prosperity and Development – the Weah’s administration economic development, policy seeks to address.
No serious society the world over that is facing an unemployment pandemic will kiss goodbye to her single largest investment company and contributor to economic development in her country. To do so, will threaten the longevity of the administration as unemployment which would surge from such insensitivity portends looming danger for a country’s stability.
In Liberia’s postwar reconstruction, no other investment company has contributed so significantly to health, education, and other sectors of our economy like ArcelorMittal Liberia has done over a decade plus.
Allowing the politics, drumbeating and peddling of personal interests and egos of some individuals both internally and externally, will only hurt the country’s progress, forestall economic development and render over 3,000 of our citizens jobless, adding up to the unemployment rate – as affected communities where AML is operating risk losing US$3 million they receive per annum from the company, which will increase to US$3.5 million if the agreement is ratified.
By the refusal of the Legislature to ratify the extended MDA, we simply say as a nation that the company should pack and leave – taking along with them the US$200,000 they provide annually to fund the education of our youth that are sponsored abroad to acquire advanced knowledge in the natural sciences.
It is also instructive to note that by not ratifying the third amendment of the MDA, we’re saying we don’t want the US$45 million our government receives per annum as royalty and taxes from AML to fund the budget – which will like the corporate social development fund, increase to US$80 million and the many other contributions the company is making.
As the Legislature is now on an extra session to pass decisions on the national budget and the extended Mineral Development Agreement before them, it is wise that we ask that body to exercise the utmost judicial prudence by shining light on the bigger picture of the job creation and overall economic enhancement efforts the ratification of the agreement brings to our country and people. We ask that the Legislature that often refers to themselves as the people’s deputies and representatives to do the needful and ratify the new MDA.
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