Wednesday, 20 April 2011

LIBERIA’S $US30M SNAFU

How Libyan Funded Agriculture Project Vanished into thin air; Abandoned rice project in Foyah, Lofa County at standstill, not a penny to show for it; agriculture equipment left to rot

Rodney D. Sieh, rodney.sieh@frontpageafricaonline.com; Mae Azango, FPA STAFF WRITER
Monrovia –
S
ekou Kolubah is without a job these days. Kolubah and scores of residents in Foyah District in Lofa County had their hopes raised and then dashed in the twink of an eye, abandoned, forgotten and entrenched in poverty.
These days, Kolubah, a father of four, relies on handouts to feed his family, the farm project he was depending on is no longer on the radar and $US30 million dollars later, Liberia has very little to show for some US$30 Million dollars rice development project, seen at the time the agreement was reached in 2007, as a major accomplishment to Liberia enhancing its food security.
The deal was sealed in 2007 when the Switzerland- based Libyan Investment Company, Libya Africa Investment Portfolio (LAP) in partnership with a local NGO, the Foundation for Africa Development Aid (ADA) brought into the country US$30M for rice development.

Positive signal, negative results
LAP Vice President A. Filipe Gago and ADA Chief Executive Amb. Windell Macintosh went through the modalities and formulated the legal complications leading to a full scale operation of the company in Liberia.

At the time, both Gago and Macintosh heralded the move as a sign that the rice development investment initiatives were aimed at making Liberia self sufficient in rice production, so as to avoid the importation of rice, the country's stable food.

The Libya Africa Investment Fund was created in 2006 by the Libyan government with a US$5 billion as initial investment to contribute to the Development of African countries in the areas of mining, agriculture, hotel, tourist, and telecommunications among others.

The investment of LAP has since been increased from US$5 - US$8 billion and is currently operating in 19 African countries, including Liberia. The LAP initiative was one of the first investment announced by the post-war government.
At the time of the sealing of the agreement, the project was expected to start full scale operation with the Liberian government in 2008 with over 908 field workers expected to benefit from employment. But since the signing, FrontPageAfrica has learned that initially, some 500 residents of Foyah were employed but only for a few months as many had to be laid off when the project failed to take off.
As promised at the time of signing, the Libyan group, in partnership with ADA brought in new farming machines in to the country to start the rice development project. However, four years later, a visit to Foyah by FrontPageAfrica saw most of the equipment gaining rust, with many residents idle.
Empty land, no rice production
“We never cultivated any of this big land space you see here,” says Kollie Joseph, a Foyah resident, who says his uncle was one of the first listed to work on the project.

The project was expected to draw in expertise in Agriculture from Holland, Brazil and other European Nations as well as offer training for the locals in moving the investment forward.

The  LAP/ADA rice development investment was expected to begin the first consignment of rice on the local and international market for consumption by the middle of 2008 but the project failed to take off, lowering earlier expectation that post-war Liberia was on course to growing rice and helping Liberians to do away with the concept of depending on other countries for its stable food.
Disappointingly, while Lofa is making progress in the area of agriculture, the much-touted industrialized rice farming project in Foyah District is at a standstill amid claims and counter claims of financial malpractices that made the company to run out of funds.
The US$30 million rice project supported by the Libyan Development Portfolio is a disappointment to residents of Foyah who were enthusiastic about the rice project at the time it was launched. The project provided job opportunities for more than 500 young people in the Foyah region. Today, however, Foyah residents are crying foul with many expressing regrets and disappointments over the ADA failure to live up to its expectation. The level of inactivity surrounding the ADA project in Foyah is troubling, despite the company being in possession of some of the best equipment capable of producing and exporting rice.
A FrontPageAfrica reporter who visited the ADA site near the Guinean border found the area completely abandoned. The facility contained farming equipment worth millions, guarded by a single unarmed security guard. When quizzed about the whereabouts of his employers, the guard said he had no idea and that his only concern was to protect the property in his charge. All attempts to get an official statement from an ADA representative proved futile as FrontPageAfrica was informed that the ADA office in Foyah had been closed.
Ironically, residents are baffled at how the ADA project went south. Initially, when news of the project came to light, inhabitants of the community were happy for the development. Nowadays, residents churned when the name ADA is announced.
Land controversy amid hardship
To some residents, ADA is using the power of the government through the Ministry of Agriculture, to suppress the town people and take away their land.   
In a gathering with journalists under the palava hut in November, the chief and elders of the town voice their grievances. Town chief Fallah Mbokar is angry with the ADA. He says, “They are taking our land by force and telling us that the government has instructed them to take any land they want. Because of this power they say they have from the government, ADA has come into our bush without informing us. If they wanted to use our bush, they were supposed to sit and tell us what they will do for us because we are depending on the bush for living.”
He said that when he asked the ADA workers in the nearby bush as to why they were clearing their bush without meeting them first, he was told that the big people of ADA would meet the town people later. But up till now, he said ADA had not met with them even though they had been in their bush over two weeks destroying their crops.
“If they take our entire bush and clear it, is that not killing us in another way, because we will die from hunger?  This bush is what we are depending to make our farms to survive but ADA people are taking the entire bush from us without sitting with us to come to one agreement. This bush is what we depend on to eat and send our children to school, and when they take all away from us, is that not killing us?”
He disclosed that with 1900 citizens, the entire town has only six toilets and two hand pumps and the facilities were not enough for the citizens.
“Since they are taking our bush, they should be able to open school to educate our children and clinic to treat us because the clinic we have in this town is not big to treat all of us and no medicine in the clinic. If they can’t do that for us, we don’t agree and we would want the government to step in and compelled these people to do something for us.”
Town chief Mbokar outlined the needs of his town, saying the clinic is not big enough for his people and the school they have in the town only goes to seventh grade, which means the children have to go as far as Foya to complete high school. He also said safe drinking water is a problem for them in his town.
“Two hand pumps are not enough for the people to have safe drinking water. Many people go to near by creek to get drinking water and they get sick from running stomach. The way we don’t have medicine in the clinic, we have to tote that person in hammock to the big hospital in Foya for treatment and sometimes they die before we get there because of the long distance.
The main thing that is hurting me about ADA is they have not employed any of our people but they brought workers from Monrovia and Foya.”
Old man Tamba Kendor an elder of the town interrupted the town chief when he said he is raising over 12 cows that were given to him by an NGO called Samaritan’s Purse. The cows depend on the bush to survive, but if ADA takes the entire bush from them, he said, how will his animals live?
 “I am raising these cows to help myself, because if one is bought, the money would benefit me but when the bush is taken, how will the cows survive without food? This means I will have to be eating my cows or they die of hunger and I die later when I have no land to grow food to eat.”
Walking into the bush where the ADA workers worked for the day, many workers including men and women were seen brushing and digging to level a path they said would be used for fire drill to stop fire from spreading to another town when they are ready to burn the bush.
Some workers shy from press
It was noticed that workers when approached by the media, were coached into speaking to the press. The Human resource man had a long talk with the workers in the Kissi language before allowing them to speak with journalists. When the workers finally spoke with the workers, they all said similar things of how the company was doing well for them because they were in the employ of the company.
ADA/LAP through its head Mr. Elvis Morris said his Organization has not taken any land from the Village in question but his workers were preventing a fire disaster by creating a fire drill or fire break.
 “We are preventing a fire outbreak in these Villages but we have not started operation there. The villagers are in the habit of burning farms in order to clear the farm and catch bush meat in the process but when the fire starts to spread attack their village, they would cry on ADA/LAP name because we are here.”
Mr. Morris further narrated that once ADA/LAP is not operating in an area; they won’t build hand pumps or schools because it is not their responsibility.
One of the workers whom journalists had met before going on the site, said they were not treated fairly but if they talk, the person would be fired, but he was willing to talk with journalists after working hours when he had retired for the day and gone home. But journalists could not get him after working hours due to poor network connection.
Speaking on the alleged unfair treatment of workers by ADA/LAP, Mr. Morris denied the allegation of unjust treatment but admitted to owing the employees for four months due to their financial crisis but paid the works in full when the problem was addressed.
“We don’t treat our workers unfairly; in fact, we are one of the best companies who pay its workers over a hundred U.S Dollars when big companies like Mittal Steel are paying their workers sixty U.S. Dollars.
In the wake of the standstill in Foyah, critics are pointing fingers at some of the key players involved in the deal now boiling in controversy including ADA/LAP Project Coordinator, Victor Benson, Mcintosh. For many residents of Lofa, questions are still lingering over how a project with so much promise ended up in a bust. The company in 2009 claimed it had brushed, cleared and tiled 1,700 hectares, which is 68% of its target 2500 hectares out of 10,000 hectares. But a visit to the area shows that not much work has been carried out and production level have fallen short of the projections earmarked at the start of the project.
There is also concern that the project’s ties to the Libyan government, currently battling a NATO supported insurgency, may have lead to its shutdown. The project was already in financial trouble: in 2010 it went four months without paying its workers citing a downturn in the global economy as a cause. Instability in Libya might have put it over the edge. Critics though have taken the handlers of the fund to task for failing to account for how the money was disbursed and why to date, workers are without jobs in a key district which could come in handy come election day.
Liberia to date boasts many Libyan investments including the ADA rice farm, the Ducor Hotel, Libyan Holdings and various construction projects which people worry might be in jeopardy if Ghaddaffi is ousted. A new Libyan regime would very likely change the country’s foreign policy away from supporting projects around Africa. At the very least, there would be an extensive period of confusion while the domestic political situation works itself out. This, economists say is already having a major impact on Liberian workers, and could harm the economy in the long run.




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Vulnerable And Fiscal Risks

IMF Projects Strain For Emerging, Advanced Economies

Nat Bayjay, nat.bayjay@frontpageafricaonline.com (202-445-3622)

-Washington, DC, United States

The International Monetary Fund (IMF) in its Fiscal Monitor analysis is projecting financial risks and vulnerability for advanced and emerging economies respectively.
Published twice a year to track public spending and government debt and deficits around the world, the Fiscal Monitor is one of three publications of the Fund that complements the overviews presented in its World Economic Outlook (WEO) and the Global Financial Stability Report (GFSR).
According to the Fiscal Monitor, emerging economies remain vulnerable to reversal of fortunes with rising food and fuel prices straining some low-income countries’ coffers while advanced economies need to reduce public debt.
During a press briefing on Day Two of ongoing joint IMF/World Bank Springs Meeting Tuesday being held at the Fund’s headquarters in the United States, Carlo Cottarelli, heading the Fund’s Fiscal Affairs Department told journalists during that Sub-Saharan African countries ,for instance, must seek internal resources for increased spending.
“Linking to my earlier remark, it is clear that over the medium term these countries in Sub-Saharan Africa will have to find a way of finding internal resources to finance increased spending”, Cottarelli warned.

The experienced fiscal expert advised that for these countries to achieve the Millennium Development Goals (MDG’s), the revenue to gross domestic product (GDP) ratio would increase to four percent points of the GDP.
The report projects that despite low-income countries surviving the recent financial crisis relatively well, the pace at which low-income countries reduce debts and deficits will slow by this year amid risks from rising food and fuel prices.
“Both emerging and low-income countries have to manage a delicate balancing act of addressing the social costs of high food and fuel prices, while keeping debt levels and deficits on a sustainable path”, it states.
The last edition of the IMF’s Fiscal Monitor had projected that many countries’ deficits would fall in 2011, reflecting fiscal tightening, particularly in Europe, and improved economic conditions.

The report said emerging economies’ deficits are expected to fall 1¼ percent of GDP this year but with big differences across regions.

John Lipsky, First Deputy Managing Director of the IMF during a separate briefing few hours later told journalists that one of the most important roles of the emerging economies is “increasing willingness to hold investors in their own currencies”.
Lipsky who was lecturing on ‘The Changing Role Of The IMF In The International Monetary System’ stated that the way to help countries cope with financial matters is “not just crisis solution but crisis prevention”.

For advanced economies, average deficit is expected to fall by ¾ percent of GDP to 7 percent, which represents a slower pace than projected in the November 2010 report.
With fears that Spain would follow next in line to Portugal relative to financial woes, the Fiscal Affairs Department doubts the possibility on grounds that Spain started good fiscal accounts prior to the crisis: “The policy response of the Spanish authorities has been strong and is deservedly being recognized by financial markets.”
Cottarelli and his team confirmed that the IMF has already sent its team in Portugal in response to that country’s appeal for the Fund’s intervention in its financial crisis.
For Japan whose devastating earthquake in March is said to be one of the worst in recent history, the IMF said the Asian nation requires additional government spending for immediate humanitarian needs as well as its reconstruction. Although it is too soon to estimate the fiscal costs, the country has ample funds to finance its rebuilding, the IMF said.
With its current deficit budget debate that has overtaken the world’s biggest economy, the IMF said United States will require significant deficit cuts in 2012 and 2013 to meet their commitments over the next few years.
The IMF said all countries that need to reduce their deficits must also take action to ensure that the burden of the fiscal adjustment and the benefits of the economic recovery are distributed fairly.


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‘US AFRICOM PRECONDITIONS’:

Is Liberia qualified to host headquarters?
 
Julius Kanubah, Julius.kanubah@frontpageafrica.com (+2316586240)

The debate surrounding the positioning of the US Africa Command headquarters on the Continent has reignited with the new head of the Command presently paying a visit to Liberia- a Country that has publicly declared willingness to host the program.
General Carter F. Ham landed in Liberia on Monday (April 18, 2011) to participate in a series of meetings with senior Liberian officials and US Embassy personnel. These meetings have by now been held with Gen. Ham appearing at his first and perhaps final interaction with the Liberian media before his departure.
At news conference Tuesday (April 19, 2011) at the US Public Affairs Diplomacy section, Gen. Ham gave yet the strongest indications of the basic requirements for any African nation to host the Africa Command headquarters.
Africa Command is a new US initiative with a primary function “to train and equip African militaries to ‘legitimize’ and ‘professionalize’ soldiers. AFRICO is also a piece of a broader shift in US foreign policy- a foreign policy that places an emphasis on defense above diplomacy. It is designed to fulfil the immediate special interests of the United States with little heed to the implications for the people of Africa. The official AFRICOM website further states that “United States Africa Command, in concert with other US government agencies and international partners, conducts sustained security engagement through military-to-military programs, military sponsored activities, and other military operations as directed to promote stable and secure African environment in support of US foreign policy”.
“There are two things that are important when we consider the possibility of the headquarters being stationed on the continent of Africa. First, it is important to remember as many of you do, when the Command was first formed, one of the principles was that we will not seek a large American military presence on the Continent of Africa. Africa Command headquarters is a very large presence. And, so there is some tension, and some discussion that we need to have as to whether it will be indeed appropriate to be on the Continent of Africa”, said Gen. Ham, as he outlined some of the requirements of positioning AFRICOM headquarters in Africa.
Besides these basic principles he noted “the second point frankly is simply a matter of cost. We are at a large headquarters [in Stuttgart, Germany]. We have lots of service members, family, civilian employees, and wherever we would go will be a very large foot print; a very large headquarters with housing and schools and sports field, shopping centres and all the normal things that the United States Military does when it puts a large presence some place”.
Gen. Ham was blunt to emphasize that the positioning of the AFRICOM headquarters on the Continent was ‘very very expensive’ but he however spoke of an ongoing assessment to find a possible headquarters of the Africa Command.
 “Having said all that, we are in the process now; we’ve begun the process of making that assessment of where the location should be and in some point I will hope in the next few Months I will be ready to go back to Defense Secretary [Robert] Gates with my recommendation from a Military standpoint as to where the headquarters should be located”.
Responding to an inquiry whether Liberia is ideally located to host the headquarters of the Africa Command amidst his ongoing assessment of potential Countries, Gen. Ham was not direct but he laid out some of the preconditions.
“What we will look at as we conduct this process is a large variety of factors to make out the best recommendation possible for the location of the headquarters. It will consider the geographic location and accessibility throughout the Continent. It will address security both in general and then at specific site. It will address the communication infrastructure…we are very heavily dependent on a wide variety of communication means to make sure that, that is there. We will look at quality of life, facilities for service members and their families, cost of living for example, provision of host nation health care- a wide variety of factors that will be considered. And then, on top of all that- cost. And, not surprisingly, cost will be a significant determinant as to what our final recommendation is”.
These factors as spelt out by the US AFRICOM new head place Liberia in a delicate but yet difficult and precarious position in its bid to host the American military presence in Africa. Though Liberia is considered a strategic partner of the US government, the Country is struggling to recover from years of brutal rebel war with high rate of poverty compounded with low quality of life and high cost of living, low provision of health care delivery and perhaps lack of an effective and efficient communication sector.
These are factors US Defense authorities as announced by Gen. Ham are reviewing and making serious consideration to awarding the hosting privilege of the headquarters of the Africa Command to any African nation like Liberia.
As Gen. Ham laid out these factors, the next line of inquiry shifted to US Ambassador to Liberia, Linda Thomas-Greenfield who was asked whether Liberia fits into the requirements put forth.
Ambassador Thomas-Greenfield smartly responded to the question by saying “I think I can ask you [FrontPageAfica] that question”.
Her response was an interrogation, requesting journalists to answer whether Liberia meets the requirements put forth by Gen. Ham. And, with smile and laughter during the press conference, FrontPageAfrica returned the question to Gen. Ham who stressed that “we are at the very beginning of this process. Not at the end. So, I wouldn’t want to prejudge any of this. [But], what I will tell you is, that we know one thing for certain and that one thing we know for certain is that, the Armed Forces of Liberia and military of the United States are great partners and we will continue to be great partners well into the future”.
The issue of partnership between the Armed Forces of Liberia and the US military was further emphasized when US envoy Linda Thomas-Greenfield declared that “Liberia has a very significant AFRICOM presence here with our mentors [US military & Advisors] who are working with the AFL and a very strong commitment by AFRICOM to continue to work with the Liberians”.
The visit of Gen. Ham is seen as highly important to the ongoing military cooperation between Liberia and the US but interestingly Liberia is not the only Country the US AFRICOM new head is visiting or has visited.

He has already been to South Africa, Kenya, Djibouti, Egypt and Tunisia for either private or military engagements. Gen. Ham is now due to head to Senegal- the second West African Country after Liberia and later to Mali- which will become the third regional Country of his visitation before he heads back to the AFRICOM present headquarters in Stuttgart, Germany. 
Gen. Ham who has a wealth of experience with the US army dating back from 1976 expressed the hope that the people of Liberians will expect from their Armed Forces “a well-trained, well disciplined, well led force that is subordinate to civilian control of the military, respectful of human rights and respectful of the rule of law. And, I think that’s exactly what this country will get. And, it will get a force that will be able to meet not only the security requirements of Liberia but be a valuable contributor to multinational operations into the future. It will take some time to get there. And, we are honoured and proud to be a part of the process”.

Though the debate will continue to linger whether Liberia meets the requirements to hosting the headquarters of Africa Command, it’s clear that the military engagement with the US will continue.

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AIR FRANCE RESUMS FLIGHT TODAY

Air France, one of the world’s largest carriers resumes flight today
at the Roberts International airport.


The decision of the airline to resume flight is based on the stable
business environment in the country, coupled with an excellent and
friendly aviation industry.
Air France, which started operations in 1937 flew its first flight in
1947 and is known for its excellent customer service delivery.
Last month, the Regional Director for Air France, Mr. Jack  B.  Urlus
told a news conference at the Kenedja hotel that the airline was ready
to start full operation.

“We are very pleased to start our operations once again in Liberia. We
are now coming with a brand new aircraft for Air France-320 which will
offer 208 seats in the Liberian market,” he told journalists at the
time.

In recent times, there have been other international flights flying in
Liberia airspace.
The coming of Air France has added more impetus to the aviation industry.
When some reporters visited the-Roberts International Airport (RIA) on
Tuesday, renovation work was taking place in readiness for the flight
today.

“As you know, Air France is a world class airline and their coming
here along with Delta and  other airline means a lot of work for us.
We are working on the new terminal  which will allow the airline and
other airlines to use,” a senior official  a the RIA said.

He added, “I think the coming of Air France is a good news for this
country. Not only for Liberians, but for many people around the world
who would want to do business here. So, when they start tomorrow, we
will love it and will help passengers. This will also make a good
competition. When you have competition, the  passengers benefit the
official who declined to be name said.”

“We will hopefully be like to welcome onboard the first flight on
April  20, 2011,” Mr. Urlus told reporters  during his first press
conference last month.

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MITTAL ON THE MOVE

As Mittal gets set to export first Iron Ore in 2011, Opportunities for Investment and Job Creation in Yekepa and Buchanan increase

When the Government of Liberia signed the billion concession agreement with ArcelorMittal, many Liberians were wondering what would be the economic benefit to the Liberian people and economy.

Even though the signed agreement required Mittal, for the first time in Liberian economic history, to provide “social development funds” to the three counties (Nimba, Bong and Bassa) affected by the extraction, Liberians still continue to ask for the direct benefits. As promised, Mittal provides US$3 million to these three (3) counties so that they can undertake local economic development projects based on their unique needs.

While Mittal’s investment is capital intensive and will a specified amount of direct employment, the potential for indirect jobs remains limitless. Actual mining activities and export of ores are expected to take an up swing in the coming months. As planned, Mittal is set to begin the first shipment of ore from the port of Buchanan by third quarter of 2011.

With this exportation comes several jobs and activities around which local investors can organize businesses and create more jobs.

In addition to these social development benefits, Liberia stands to reap more benefits that will enhance economic growth. It is important to note that economic growth depends on productivity and investment. It requires that existing resources be used more efficiently and that investment be made in new areas. Success in this process generates increased incomes which then fuel demand and encourage further economic growth.

When ArcelorMittal entered the scene in Liberia, the company made it clear that it believes that development of the iron ore sector can drive Liberia’s economic growth forward. Today, that belief and commitment continue to drive the company’s quest to contribute to Liberia’s economic growth.

ArcelorMittal remains committed to making the first ore shipment in the third quarter of 2011. The shipment timing is aligned with the company’s Mineral Development Agreement (MDA) deadlines as it continues to make significant construction and development work, especially the reconstruction of the major rail belt from Yekepa to the port of Buchanan.
In the past few years, the multi-million dollar mining company has made significant progress on the development of the Liberia mining project and related infrastructure improvements. The first phase of the railroad rehabilitation work has been completed and can already be used, although not yet at design speed and load.
As part of the company’s support to economic development in Liberia and the region, ArcelorMittal is actively working on a Public Private Partnership with West African Power Poll (WAPP), World Bank and the Government of Liberia to develop a transmission line that would connect Monrovia to Cote d'Ivoire via Buchanan and Yekepa where its operations are located.
The company is also prepared and is implementing a Resettlement and Relocation Plan for communities along the railway and service roads. The Plan includes building market halls to relocate markets on the rail line, installing wells and pumps to minimize people crossing the railway as well as a street theater program on road and rail safety.
Main access roads and bridges along rail have been upgraded. These roads connect the company’s port operations in Buchanan, Grand Bassa County to the mines in Yekepa, Nimba County. “Economic growth is important if businesses are to grow and prosper and ArcelorMittal fits in well,” said Patrick Sawyer, County Development Officer of Grand Bassa County.
Over time, real economic growth leads to major improvements in living standards, expanding existing markets and opening new ones. Residents along the growth corridors especially in Nimba and Grand Bassa Counties are excited and optimistic that ArcelorMittal operations in their areas will create more job opportunities for them.
“Every morning I wake up and see this brand new rail passing through my town,” Steven Vah of Bunadin, Nimba County told LRDC News during a visit to the area recently. He believes when a business enterprise like ArcelorMittal started operations in Liberia, it set objectives and strategy for the future in which economic growth is a vital factor to consider. Steve looks forward to more job opportunities for his people when the company launches full scale operations.

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