Towards Inclusive Growth and Economic Diversification Lib-US Trad… · Towards Inclusive Growth...
Transcript of Towards Inclusive Growth and Economic Diversification Lib-US Trad… · Towards Inclusive Growth...
Towards Inclusive Growth and
Economic Diversification
Hon. Boima S. Kamara Minister of Finance & Development Planning
January 10, 2016
Economic Outlook: Current Economic Situation
Economic Diversification: Adopting Export-Driven Industrial Policy for the 21st Century
Interventions and action plans
Current Economic Situation
5.9%
6.8%7.2%
8.2%
12.7%
6.0%
5.1%
6.1%
7.4%
8.2%8.7%
0.7%0.3%
-0.5%
3.2%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
8.3% GDP growth required to achieve
Vision 2030
Sources: MFDP, IMF Article IV & ECF Reports (revised growth estimate as of Nov. 2016: https://www.imf.org/en/News/Articles/2016/11/02/PR16479-Liberia-IMF-Staff-Completes-Combined-Fifth-Sixth-Review-Mission).
Impact of Ebola
Virus Disease
Price decline for key
exports: Iron ore,
rubber, gold etc.
UNMIL Drawdown is
peculiar to Liberia
-25.00
-20.00
-15.00
-10.00
-5.00
0.00
5.00
10.00
15.00
20.00
25.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Percent of Real GDP Growth
Liberia Ivory Coast Ghana Guinea Nigeria Sierra Leone
Source: MFDP, IMF
0%
10%
20%
30%
40%
50%
60%
70%
80%
0 100 200 300 400 500 600
Workers in Main Economic Sectors versus Average Annual Real GDP Growth by Sector, 2005-2013
Sources: IMF, Government of Liberia, Labour Force Survey (2010)
Agriculture grew 2.8% on average per year 2005-2013, but accounts
for about 50% of workforce. Manufacturing, which is also
labour-intensive, only grew 3.6%.
Liberia’s growth being driven by mining, which generates
very few jobs.
Agriculture
Commerce
Mining & Utilities
Construction
Government Transport
Manufacturing
Number of workers, thousands
Avera
ge a
nnual G
DP g
row
th,
2005-2013
Mining has historically driven growth – but not necessarily inclusive job creation
Adopting Export-Driven Industrial Policy
for the 21st Century
Support value addition in agriculture (through financing, public goods, market access)
Strategic investment, both domestic & foreign, in value chains + downstream processed goods
Operationalize LATA
Expand electricity distribution
Link creative financing for MSMEs + commercially-viable businesses
Attract more FDI in manufacturing
Support Manufacturing
Invest in Infrastructure Link farmers to the final consumer Connect businesses to the grid Urban planning and sanitation Improve land administration
C V P
C V
C
V
P P
P
P
R P
Sime Darby Oil Palm
Concession
F
A
P
R
V
F Marine Fish Hubs
Oil Palm Areas
Rubber Processing Clusters
Rice & Vegetable Hubs
Aquaculture Hubs
Prime Cocoa Areas C
A P R
R
Golden Veroleum Oil Palm Concession
P
R R
F
A
A
MOPP Oil Palm Concession
A
A
R
F
Cassava Hubs S
S
S
S
EPO Oil Palm Concession
Key value chains • Agriculture: Rice,
cocoa, oil palm • Agri processing:
Rubber processing • Aquaculture • Manufacturing
Key interventions
• Attracting strategic investors
• Creating the right enabling conditions: Regulatory frameworks, trade facilitation, business support, transport services, growth financing
• Development of the Monrovia industrial park as base for agro-processing and light manufacturing
Source: NIC, MFDP
…which complement the development of non-extractive value chains to capitalize on infrastructure improvements
Completed Primary Roads:
• Cotton Tree-Buchanan: 80km
• Kakata-Bong Mines: 35km
• Gbarnga-Ganta-Guinea Border: 68.8km
Roads to be completed by the end of 2017:
• Redlight-Gbarnga: 176km
• Ganta-Yekepa: 71.6km
• Harper-Karloken: 50km
• Marshall Road: 21.5km
Roads likely to have visible work by late 2017:
• Gbarnga-Salayea: 81km
• Karloken-Fishtown: 80km (+16km to Ivorian
border)
• Ganta-Tappita: 101km (partially
funded) Roads with concrete funding conversations:
• Zwedru-Fishtown: 118km
• Sanniquellie-Luogatuo: ca. 50km
Roads with on-going or completed feasibility studies:
• Salayea-Mendicorma: 193km (completed)
• Tappita-Zwedru: ca. 115km (on-going)
• Buchanan-Greenville-Pleebo: ca.
346km (tendering) Urban Roads (primarily in Monrovia):
• Around Monrovia: ca. 230km (by
2017)
• Voinjema: ca. 2.5km
Existing paved road
• Counties with rehabilitated farm to market roads
• Rehabilitated/Constructed water points
Mt. Coffee Hydro Plant
Monrovia Consolidation
RIA Corridor
Bomi Corridor
Cote d’Ivoire, Liberia, Sierra Leone, Guinea
(CLSG) Project
Kakata Corridor
India ExIm (Ganta,
Gbarnga, Zorzor)
HFO 3 HFO 2
Source: Presidents Delivery Unit
Road access will be complemented by more affordable and reliable electricity to reduce cost of doing business…
MONROVIA
Ports of Buchanan & Greenville
Upgrade of Equipment
Freeport of Monrovia Fuel Unloading Facility Mesurado Fishing Pier
Roberts International Airport
Airport Terminal Construction Runway Upgrade
Source: Presidents Delivery Unit
… and the rebuilding of ports will further facilitate domestic & regional trade by 2017
MONROVIA
Electrifying the country
• 700% increase in current available (15MWs to 118MW)
• Increase the number of connected homes and businesses from 32,000 to 53,000
Opening up for global business
• Improve Roberts International Airport, attracting more investors to Liberia
• Upgrade Buchanan and Greenville ports to reduce transport costs and create local
employment
Ports
Energy
Roads to
market
Education
Connecting the country
• 400 km of newly paved & rehabilitated roads
• 500km of new roads funded and already being built
• Better road maintenance and management so potholes are dealt with fast
Health
High quality teachers looking after the next generation
• Remove ‘ghost’ and untrained teachers. Only pay teachers who are actually teaching
• Assess teachers based on whether the children they teach can read and do maths
• Put a trained maths and science teacher in at least 10% of schools
Healthcare services reaching the majority of the population
• Scale up of health workforce program to provide services across the country
• Upgrade of JFK & Redemption hospitals
GoL is accelerating project delivery to ensure tangible change by 2017 & beyond
Immediate and short term interventions provides temporary relief in the business environment… No Intervention Objectives
1 Amended section 16 of the Liberia revenue code
Incentivize private sector development for local & foreign investors, especially in agriculture, agro-processing, & manufacturing & incentivize
2 Provided tax amnesty on penalty and interest payments
Provided space for businesses to expand
3 Renewed Executive Order 64
To attract additional investment in agriculture through duty exemptions on farming and agriculture equipment
4 Implementing fiscal rule prioritizing purchase of domestically milled rice
Improve competitiveness of domestic rice millers and production
5 Adopted & Implementing ECOWAS CET
Increase in Liberia’s trade volume and revenue through Liberalized trading within West Africa
Medium to long –term Fiscal interventions needed to provide sustainable support to the business environment …
No Intervention Objective
1 Financing /Guarantee to agriculture subsector
Commence value addition in rubber subsector
2 Guarantee to Liberian SMEs
To improve service delivery to GoL.
Expanding financial services and credit is cardinal to supporting new business initiatives along the value addition and supply chains …
No
Intervention Objectives
1 Launched Financial Sector Development & Implementation Plan
To deepen the financial sector, strengthen financial controls, and increase access to finance
2 Launched the Digital Financial Services (DFS) Working Group
• To encourage collaboration among the different players in accelerating the development of the DFS ecosystem in Liberia
• To provide an important
foundation for the development of digital financial services, which will modernize the financial sector and lower transaction costs, particularly in rural areas,
No Intervention Objective
3. Establishment and Modernization of Rural Financial Institutions (RFIs)
To provide basic financial services in the rural parts of the country, particularly transfer services, including payment of civil servant salaries
Access to credit …......
No Intervention Objective
1. Reduction in Reserve Requirement ratio for foreign currency (mainly USD)
To increase banks’ ability to transact in in United States Dollars.
2. Establishment of a credit reference system (CRS)
• To increase access to credit, extended the coverage, improved the scope
• And enhance the operating efficiency of
rural financial institutions in extending credit to SMEs
Set up a web-based Collateral Registry, a web-based system that allows lenders
• To all allow lenders determine any prior security interests or establish their security interests over movable assets pledged as collateral
• To help to eliminate the principal barriers
and constraints to private sector lending and access to capital
No Intervention Objective
4. Established a AML/CFT Unit within the Regulation and Supervision Department
• To ensure a safe and sound financial sector as well as to strengthen the AML/CFT Regime,
• To demonstrate the ability of an
effective AML/CFT arrangement to conform to the standards of international best practices,
• To adequately strengthen and build examiners’ expertise in the area of AML/CFT, strengthening the foundation for correspondent bank relationships
5 Periodic publication of extremely bad debtors. delinquent borrowers
To weed out bad creditors and enhance the credit worthiness of performing creditors.
Effective and Robust AML/CFT and illicit Financial Flow Remains a Top priority for Liberia Authority: Country’s Interventions
No Intervention Objective
1 Three Frameworks put in Place: A. Legal & Regulatory Framework (Enacted 7 pieces of AML/CFT
laws in 2012 Three legislations related to
terrorism and its financing has been passed by Lower House in 2016 and awaiting concurrence by Senate;
Issued 5 AML/CFT related
regulations (2013 & 2016) & 1 circular in 2016
• Combat money laundering/terrorist financing (LM/TF) and other financial crimes consistent with FATF standard
• Establish legal & regulation
instruments to combat ML/TF (criminalize ML/TF & other predicate offenses to ML,
• Deny criminals from using
proceeds of crimes, • Obligate financial institutions
to take preventative measures, • Track, penalize and minimize
illicit financial flows, etc.
No Intervention Objective
B. Institutional Framework • Established FIU 2013
• Identified law enforcement
authorities,
• Identified regulatory authorities, and other competent authorities
• Established Financial Crime Working Group (FCWG) in 2016
• Establish institutions to track, investigate, prosecute, penalize and minimize ML/CT & illicit financial flows, etc.
• To ensure coordination,
cooperation and collaboration among law enforcement agencies.
Establishment of efficient institutions remains cardinal to the fight against illicit financial flows …...
No Intervention Objective
1. C. Implementation Framework • The FIU has:
• Issued regulations,
• Commenced receiving and analysis of Suspicious Transactions Report (STRs) and Cash Transactions Reports (CTRs)
• Begun disseminating analyzed
reports to law enforcement agencies (LEAs) for further investigations
• Jointly conducted joint on-site
examination with CBL for 5 out of 9 commercial banks
• To enhance robust implementation of
AML/CFT related laws and regulations
• To deny criminals from accessing our
domestic financial system as well as regional and international financial system
2 The GoL has increased budget support to FIU To enhance the operational and technically efficiency of the FIU
Implementation of the AML/CFT framework is continuous priority of the Government of Liberia…...