An Investor’s Guide to Liberia
With the IMF predicting 7.5% real GDP growth this year, the world is awake to the potential of servicing Liberia’s emerging middle class. However, though foreign investors might be aware of it, tapping into this potential is another matter completely. Entering an unknown market anywhere presents difficulties, legal procedures, purchasing land and finding people you can trust are all unknown to the frontier investor.
The investors – IFU, Root Capital, Injaro Invest, Oasis Capital Ghana – while all versed in African investment were new to Liberia, aiming to identify potential investment opportunities. Assisting them on this quest were BiD Network and BSC Monrovia, who hosted the expedition from April 24 to 26, providing local knowledge as well as introductions to a network that will facilitate business dealings in the country.
The reason Liberia is such an enticing prospect for investors is that is a clean slate for business opportunities. In a country larger than the Netherlands, agriculture offers great prospects. The impediments to business also present a considerable opportunity for investors willing to offer a solution. One needs only look at the BiD Network supported venture, Coastal Marine Transport Ltd, to see the possibilities that can arise from addressing infrastructure concerns.
MSMEs: A Vehicle for Change
Liberia has identified the development of its Micro, Small & Medium Enterprises (MSMEs) sector as a critical step in its evolution. At present, investment opportunities exceeding half a million euros or more are sparse in the country. The government considers sustainable MSME development a tool to advance its infrastructure and internal services, facilitating their ability to deal with larger investments. As such the government has applied many policies that seek to nurture their MSME sector and attract investment, including a One-Time Tax Clearance Waiver and the establishment of the Liberia Innovation Fund for Entrepreneurship (LIFE), totaling (USD) $1 million. Liberian President, Ellen Johnson Sirleaf, reiterated the importance of MSMEs to Liberia’s future in her opening remarks at April’s MSME conference, stating, ‘As Liberia moves forward, on its path towards sustained economic growth, MSMEs will become the backbone of our transformation; the ones who will add value to our raw materials; the ones who will run our service sector; the ones who will provide jobs for our nation’s youth.’
Investing in the Future
Participation at Liberia’s National MSME Development conference was central to the investor tour, and offered a unique opportunity to align focus with the Government, meet local business development professionals and identify high potential investment opportunities. The three-day MSME conference, at which BiD Network and BSC Monrovia were both involved, focused on: legal and regulatory reforms; access to markets; access to finance; and building skills and knowledge.
The first day of the tour, April 24, included a meeting with the National Investment Commission (NIC). The NIC gave investors a detailed overview of the sectors, legal framework and support programs that are in place in Liberia, providing investors with a foundation on which to develop their understanding. This was followed by a meeting with Wilson Idahor, a seasoned business development professional, who offered an on the ground perspective of Liberia’s SMEs and the struggles they face.
Thursday’s busy schedule began with breakfast at the Ministry of Fruit, a thriving Liberian start-up that raised funds through Kickstarter, which hopes to introduce the world to Liberia’s coffee beans. Noting the importance of government support, breakfast was swiftly followed by a meeting with the Minister of Commerce – Axel M. Addy – and his team, the institution charged with directing Liberian policy to produce sustained and equitable economic growth.
In addition to meetings with experienced Liberian investors, such as Michael Kleinman of Humanity United, Thursday also provided an opportunity for the touring investors to meet with entrepreneurs, as well as country and industry specialists, selected specifically to the interests of the investor. IFU, the Danish fund for developing countries, visited Efficient Logistics while Oasis Capital, a Ghanaian venture capital company with experience in large expansion projects, visited the port. Injaro, who manage the West Africa Agricultural Investment Fund (“WAAIF”), met entrepreneurs from Falama Inc., a plantain flour producer, and Grain Coast and also attended the conference for a panel on Agriculture.
Throughout the trip investors were introduced to a variety of MSME actors to give as broad a conception of the investment climate in Liberia as possible. As Jerry Parks of Injaro said, ‘we are very happy with the interactions we had with Liberia’s emerging entrepreneurs, government officials and other actors in the MSME sector.’ On Friday, the final day of the tour, the investors began with a discussion about agriculture with two entrepreneurs, Bill Tolbert of Grain Coast and Stanley Slagmolen, an aspiring entrepreneur with a seed rice farm. This was followed by a presentation by Barkue Tubman – an entrepreneur and savvy business woman who shared her experiences of doing business in Liberia. The first-hand knowledge of an entrepreneur provided genuine insight into doing business in Liberia, the challenges, benefits and opportunities.
On Friday afternoon investors met with entrepreneurs in one-on-one meetings, after which IFU commented, ‘I must say it was a success and look forward to deepening our relationship with both the BiD Network and BSC Monrovia.’ A point echoed Jerry of Injaro, ‘We look forward to continued interactions with all these players and will keep you updated on our progress with them.’
The investor tour provided a relevant introduction to the country, and ensured investors know what to expect and who to contact when investing there. Meeting with both experienced SME professionals as well as government officials and policy makers gave investors an in-depth knowledge of the investment climate but also reassured them of the opportunities available in Liberia, if you’re willing to ask someone who knows. The real work for BiD Network and BSC Monrovia starts now, as we work to ensure as many identified opportunities are converted into investments. As President Sirleaf said in her opening address, ‘the road ahead is long and will require perseverance’ and this is where BiD Network and BSC Monrovia come in, aiming to make the journey down this road more comfortable, for both Liberian entrepreneurs and intrepid investors alike.