THE AFRICA BAZAAR magazine
Speaking of competitiveness, African nations can become more competitive globally and gain a lot by working together on regional and intra-African trade, says Sirleaf.
Washington – Former Liberian President Ellen Johnson Sirleaf said private sector and private sector financing can have a much greater impact in low-income countries like Liberia by investing and supporting development agenda that will help the countries meet growth objectives.
“That investment will enable us to meet some of our growth agenda, thereby enabling us to take the political risks, make the necessary investments, and lessen the chance that one would have to borrow from official resources,” President Sirleaf said during a special event at the Center for Global Development in Washington, D.C.
President Sirleaf added that the private sector and private sector financing can also be the linkage that is currently missing from the official development assistance and the government agenda. She said if the private sector, for example, works with multilateral institutions like the World Bank Group and gets the bank to guarantee loans for projects such as building roads, that investment in return will not only enable Liberia to meet some of its growth agenda, it will also ensure that the government keeps debt sustainable.
“That’s a big potential that could provide, [and] encourage more private sector financing for other development,” she said. “ But right now, there is not really enough support for development from the private sector and we’re feeling that constraints right now, and this is not just in Liberia.”
President Sirleaf noted that the current lack of investments and support from the private sector often means the likelihood that small low-income countries like hers that have restructured under a debt relief program will have a higher potential of quickly exhausting their resources, thereby sending them back into more debt.
Sirleaf, who once served as deputy finance minister of Liberia years prior to being elected in 2006 as president of Liberia, -African first-elected female president, came to power shortly after the country emerged from 14 years of civil war, making her presidency crucial in reuniting and rebuilding the country, both economically and politically.
Liberia, at the end of its civil war, was a fragile, devastating country facing a lot of economic issues, including a huge debt, devastating infrastructure, dysfunctional institutions, closed society, and restrictions that emerged from years of corruption and internal conflict. There was no revenue reserve and a huge national debt was crippling the country.
Debt relief became a top priority for the former deputy finance minister and her administration. The nation’s debt in 2006 when she became president was around $5 billion.
She set out early in her presidency to work with creditors to erase the nation’s debt, get the country on a fiscal manageable program and a reconstruction agenda by renegotiating with governments and international financial institutions to grant debt relief.
The United States, under George W. Bush administration, was the first to grant a debt relief to Liberia. The incumbent Secretary of State at the time, Condoleezza Rice, signed a waiver that discharged the money it was owed. This was followed by a special grant from Germany, macroeconomic policy reform under the International Monetary Fund, including a special financing from the IMF and World Bank through the Heavily Indebted Poor Countries (HIPC) initiative.
In 2010, the country successfully completed it debt relief program, allowing the Sirleaf administration to borrow money to fund development objectives and begin reconstruction work to move the nation forward in rebuilding itself.
Though Liberia is still considered a poor country, the turnaround and improvements made by the Sirleaf administration have put the country in a much better position then it was a decade ago.
Sirleaf said one of the challenges her administration faced, once the debt relief was granted, was managing the pressure for accelerated development and keeping debt level manageable in a way that does not trade the future for the current objectives.
Analysts said the demand for accelerated development is very common in countries that are emerging or just emerged from years of devastation and civil war. If citizens’ needs are not managed properly and under an unskilled leadership, it can result in protests and government disruptions, which can lead to another internal conflict.
Sirleaf noted the pressure for accelerated development particularly is underscored in many African nations where the young and growing population’s demand for better jobs, good basic services, and wealth, is very strong. The pressure that these demands put on leadership to show results quickly, in spite of domestic constraints, can sometimes make it impossible to keep debt level manageable.
“[We] want to have housing, hospitals, roads, schools, electricity, basic services for all of our citizens…but then you begin to look and find that domestic resources have not risen to the anticipated level because the economy has not grown consistently to keep with the targets that you have established,” said Sirleaf. “For some of us who have IMF programs, it’s a constrain because we commit to ensuring that a certain amount of the debt will be concessionary to make sure we don’t get debt distressed. But trying to make sure you get the analysis right, trying to make sure you get the target right, even the timeframe you set for implementing investments and in implementing the programs never hold as you anticipated because there’s always something that comes that delays and your targets are off and you have to revisit and refine.”
She said this is an area where the private sector investors’ involvement can help in moving the country forward with its agenda by providing financing for the developments of hospitals, transportation, service deliveries, which ultimately will enable the country to move toward its reconstruction goals.
Though not massive, some private sector investments have already began trickling into Liberia. French telecom operator, Orange S.A. has been supporting Liberian government agenda through investment in internet technology to make internet more accessible and affordable to people in remote areas of Liberia. Millennium Challenge Corporation, a U.S. government foreign aid agency also has stepped in to help build major infrastructure.
Such private financing, Sirleaf said, can ensure that the government keeps debt level manageable and the new debt it contract is being used in a productive way that will generate revenue for repayments of the debt, and for servicing of the debt.
However, she cautioned that there should be checks-and-balances to this kind of relationship between the government and the private sector to prevent potential for corruption and illicit financing.
“Once the private sector gets more involved in partnership with the government, the potential for rent seeking in a wrong environment then become greater, so you have to build that caution into how far you want to push this partnership,” she said.
One way of ensuring accountability on both sides — private and public sectors, and protecting the rights of citizens is to make sure mechanisms are put in place to protect the interests of the citizens. Such mechanisms can include a written agreement that clearly states the private sector’s obligations with the governments, whether it is paying a certain amount of taxes, which will benefits the communities.
These obligations have to be met, and corporations have to file corporate taxes. The authority also has the rights to examine all the reports that are submitted. The ministers that have monetary mandates, including the legislatures, have the right to examine the operation, Sirleaf said.
“It doesn’t alway mean it is as smooth as we would want it to be, but the mechanism of accountability are put in placed,” she noted.
Talking about leadership and presidential term limit in Africa, President Sirleaf, who was recently awarded the prestigious Mo Ibrahim Leadership Prize said African leaders should abide by the constitution and respect presidential term limit.
“We are very clear on the protocol in the African Union and ECOWAS (Economic Community of West African States) that respect for the constitution is clear,” she said. “Now, there may be violators, who has sovereign rights and we may not be able to go and dispose them because they abide by the constitution, but in those cases where we can use peer pressure as we did in the case of Gambia, we are very clear to do that.”
Ms. Sirleaf, who is among a few African leaders who willingly and successfully handed over power to a new government, emphasized that most leaders on the continent “are also very clear about what sovereignty means. “Sovereignty does not give any leader of any country the right to violate the rights, particularly, of the people or constitution,” she said.
She urged governments, civil leaders and business leaders to empower and encourage the young African population on the continent to participate in civil duties that will help develop their leadership capabilities to serve their countries well.
To ensure the next generation of Liberians are prepared and trained properly in civil duties to become effective leaders in the country, Ms. Sirleaf established fellowship programs, the Scott Fellow and the President’s Young Professional program, that will help develop and enhance civil service skills in Liberian youth.
The fellowships, which are modeled after the World Bank Professional Program, take young college graduates and put them through selective competitive programs and training before embedding them into different government agencies and programs. So far, 40 young Liberians have completed the program successfully and are now working as specialists in different government agencies.
“The political people moves on, but these technical [specialists] professionals stay,” and become the guardian of the government and country.
“That programs have been very successful,,” said Sirleaf .
Sirleaf’s more than two decades of work in the public sector has been well recognized with accolades. In 2011, she was given a Nobel Peace Prize, which she jointly shared with Leymah Gbowee and Tawakkol Karman, for her non-violent work in ensuring safety for women and women’s rights to participate fully in peace building in Liberia.
One way that her administration has empowered and encouraged women to participate fully in community peace building and reconstruction is by providing quality education for their children, especially young girls .
During the 14 years of civil war, like many post conflict countries, Liberia’s educational system suffered from the many years of civil conflicts. Many of the trained, and qualified teachers left the country to seek better opportunities elsewhere, leaving volunteers-who often don’t have professional training, in charged of managing and running the schools.
Education became another priority for her administration to tackle. The challenge her administration faced was in providing quality education to children and building good schools.
Education, which obliviously is critical in the development of any country, can be the most difficult goal to achieve in post conflict and poor countries like Liberia, Sirleaf said.
In its efforts to rejuvenate the educational system from ruins, at first, her administration focused on building teacher training colleges, and tried to develop and empower teachers professionally, but it did not turnout as anticipated. So it came up with a new solution patent on Kenyan charter school programs: To take college graduates and train them properly on how to teach.
The programs, which are run by trained partners, guard the teachers in the classroom through electronic tablets. The programs also provide benefits and incentives such as free uniforms given to children to encourage families to send their children to school.
“It has worked for the past three years,” she said. “The evaluation was done that seems to suggest the value of education in those schools that were participants had indeed improved.”
Enrollments in primary schools have gone up exponentially to about 1.5 million students in schools. However, she said in spite of the improvements made, the charter school program,-like many other issues that are affected by domestic constraints, is not sustainable.
“As currently working, it’s not sustainable,” she said. “Not sustainable because it creates a desire on the part of more and more communities and schools to want the program extended to them, which is not always possible because there would not be enough teachers. There would not be enough tablets. And also, there isn’t electricity in some of these places to be able introduce this technology. So it creates a disparity in the system and that’s causing a lot of concerns.”
She said the whole system is currently being evaluated. The progress reports and findings, and conclusions will then be examined on how best to maintain and expanded the program to address the needs and demands of the people.
“We are still searching for ways to encourage retention [in schools],” she said. “Sometimes the enrollment is the easy part. We have doubled enrollments in the whole country, but retention is major, especially in an area where poverty is common.”
She said in this context, communities also have major roles to play in ensuring the efficacy of the programs by supporting the teachers, providing housing for them and making sure children go to school.
“It’s easy to not go beyond certain things,” she said. “Education, the most vital component of development, in poor countries like our, is the most difficult to achieve the goals that you have set.”
Despite these challenges, leaders should invest in providing quality education to their youth, which will allow Africa, in general, to compete effectively with the world.
Speaking of competitiveness, Sirleaf said African nations can become more competitive globally and gain a lot by working together on regional and intra-African trade.
“There’s a lot of competition on national basis to do everything that you want to do and not wanting to see opportunities elsewhere through comparative advantages through the region,” She said.
She said although each African nation is of lower market but as group of countries, they are much more like globally competitive-size markets.
She noted that each country will have to identify its own niche and where it has comparative advantage and develop it in such a manner that it can compete effectively in the regional market.
She said despite intra-competition and lack of inter-industry protections, “I still think we can have a certain level of competition through regional approach where we combine most of our efforts regionally and identify where the region can be best competitive.”
She added there is a lot of focus on intra-Africa trade and the current politics in Africa is supportive of governments thinking more regionally and trying to bring together that cooperation to be able to reduce intrusions from outsiders.
“But when it comes to being able to compete with China, India or the major manufacturing giants, I don’t see us being able to do it in the short run. Our neighbor, cost may be lower enough to attract subsidiaries, maybe for competition. But the competitions among countries that have already reached a level of development with high level of technology is something that is going to be very difficult for us, so we have to identify what we can do best for intra-Africa cooperation,” she said.
She added that while certain countries in Africa, such as South Africa, have reached high level of industrialization, they have also made efforts to establish regional trade platforms such as ECOWAS in west Africa and the Common Market for Eastern and Southern African (COMESA) system for eastern and southern African nations. These common market platforms support regional trade cooperation.
“Yes, the efforts is there. And yes, it is also constrained by each country wanting to develop as fast as it could to deliver goods and services to its population,” said Sirleaf. “There’s always the danger of big industrial countries, like South Africa, Nigeria, Kenya, that when you open up the markets, they would have all the advantages. But that push for regional cooperation, particularly in West Africa, we are beginning to see this kind of cooperation.”