World Bank & IMF Projection of GDP Growth Hinges on the Ratification of AML’s Deal
…. More heads Expected to roll but US falls short to give clues
By Julius T. Jaesen II
MONROVIA-It is an incontestable fact that the potential of the mining sector for Liberia’s employment prospects is one of great significance. Development practitioners and economists have espoused the strong view that for every 1 percent increase in economic growth, the mining sector creates 13 times more employment than agriculture and six more times than manufacturing. This can be true about Liberia’s mining sector and also true with the ratification of the third amendment to the ArcelorMittal-Liberia Mineral Development Agreement. The passage of AML’s agreement in critical times like these where our country is in a dire economic situation will not but only represent a huge gateway to unlock the door to private sector investment support to Liberia’s socioeconomic recovery.
Liberia will indisputably need significantly higher contribution and support from the mining sector if our country must achieve its GDP growth. The World Bank and IMF in their report projected that Liberia’s GDP per capita is expected to return to the pre-COVID-19 level. However, the report also projected that GDP growth will be driven mainly by the mining sector in light of the fact that structural reforms are also expected to increase activity in agriculture and construction.
It is without a doubt that these projections of Liberia’s GDP growth is contingent on and in lieu of the ratification of the AML agreement that seeks to expand the company operations by investing an additional 1 billion dollars in Liberia. As the government struggles to meet the needs of our people, achieve the World Bank and IMF project of per capita GDP, reach its targeted revenue projection, and delivery on its policy promises to citizens, we can only hope that the government will do the needful by expeditiously ratifying the third amendment to the AML Mineral Development Agreement.
Too much time has been delayed and wasted on acting in the best interest of our country by ratifying AML’s milestone deal. Liberians home and abroad have called on the government since last year to place the country’s interest over the interest of a few when it comes to ratifying the third amendment to AML’s agreement. We must emphasize that any attempt to add up to the delay in the ratification of AML-MDA, it will only create a negative trend in the mining sector which will advertently lead to a decrease in Liberia’s GDP growth contrary to World Bank and IMF’s projection. For the government to achieve its job creation plan and meet the stated projection, we have to fast-track the growth of the mining sector is poised to spur with the AML’s agreement.
With the enormous potential to generate employment opportunities, raise productivity and increase the government’s revenue envelope, the ratification of AceclorMittal’s agreement is a vital contributing factor to our country’s economic development. It cannot be gainsaid that ArcelorMittal-Liberia’s one billion dollars investment in Liberia for a decade plus now since its operation has contributed immensely to the government’s job creation efforts and the overall health of our economy – in no small way.
In 2006, as a country emerging from decades of economic mismanagement of the resources our country is endowed with coupled with the 14 years of brutal carnage, Liberia, like many countries in Sub-Sahara, was confronted with a pandemic of unemployment – which threatened to slide the country to its troubled and dark past. Many families were left without jobs to sustain themselves as many who were in the employ of government got downsized due to former President Sirleaf’s policy to run a small and efficient public sector/government. Amid these vexing ebbs which threatened our national security and peace, ArcelorMittal, the world-largest steel giant, was one of such partners that helped considerably in narrowing the unemployment gap through its billion dollars investment in our country, especially at a time our country was still considered as an epic centre of the conflict with an unfavorable investment climate.
It can be recalled, that from 2006 to 2011, ArcelorMittal alone created over 3,500 jobs for Liberia’s idled youth. In no time, from 2011 to 2015, the number of jobs surged to approximately 5,000 but only witnessed a decline due to the Ebola epidemic in 2014. But with these projects coming from the World Bank and IMF to boost in GDP growth anchored on the ratification of the AML agreement, there is a renewed sense of hope that employment prospects are underway.