The USD$40m Game -Changer Financing Agreement For SMEs: A Candid Reflection!

On Monday, 4^th April, 2022, the World Bank and the Liberian Government, represented by the Ministries of Commerce and Industry (MoCI) and Finance and Development Planing (MFDP),singed a USD$40m Financing Agreement that is dedicated to supporting Small and Medium Enterprises in Liberia.

With respect to what is contained in the document, USD $20million of the entire amount represents an IDA grant, while the remaining USD$20million accounts for a concessional IDA credit.

The ceremnoy, held at the Ministry of Commerce and Industry at the Ministerial Complex in Congo Town has been hailed by many Liberians,especially those in the business sector as a worthy step by the Liberian Government, especially as constructive efforts continue to make Liberians active particpiants in the economy of dear country. The agreement, known and styled as the Liberia Investment, Finance and Trade Project (LIFT-P) promises to be a game changer from the look of things, if ratified by the Liberian Legislature.

Why the Financing Agreement

• It is aimed at providing a line of credit for Small and Medium Enterprises (SMEs) and to also build their capacities so as to enable them access markets over the next five years.
• The idea will ensure direct support to over 750 SMEs by providing a customized suite of services. These services, as outlined in the formal statement by World Bank Country Manager, Kwhima Nthara, include coaching, training, market linkages, investment facilitation and finance.
• From what I am flowing, the Liberian Government will also strengthen the capacity of the National Investment Commission (NIC) and the Inter-Ministerial Concession Committee as a means of attracting large investors and negotiate investment agreements in realization of the best deals for Liberia through the LIFT Project.
• The initiative will establish the Liberia Special Economic Zone Authority that will guide the activities of establishing special economic zones and industrial parks.
• The idea will also establish the Liberia Special Economic Zone Authority that will guide the activities of establishing special economic zones and industrial parks, etc.

Is it Undeserved?

We have a society in which some people believe that every bad thing that happens is caused by the government, particularly a sitting administration. At the same time when it is good, some try to discredit the efforts of the leadership that is on the ground at the time. This blame-shaping scenario has affected successful administrations of this country for many years. My opinion is informed by how issues are discussed in some sectors of our society. For instance, comments from the public; including politicians, advocates for social justice, student movements, etc.

What I'm trying to say is that there may, currently be some of us who think that the signing of the USD$40m Financing Agreement is just a miracle; a miracle from the emblematic Liberian context, where some people believe that when any good thing happens during a particular administration, especially an administration that appears not to be favored by some people, the current government at the time should not take the credit on grounds that " this thing is happening because the international community just decided to help us."

Every time I hear such comments, I wonder whether some of us are aware that there are established bench marks that every country has to satisfy before some of these worthy opportunities are afforded us.

In fact, since the occasion, I have heard comments like; "Oh, my man Parley, that this small amount business (reference to the USD$40m) the Ministry of Commerce causing noise like this?"

For me, I don't see anything like noise, but it is a matter of showing appreciation whenever constructive efforts are made by government to move Liberia ahead, whether past or present.

Some of these comments also leave me to wonder whether people are suggesting that no constructive efforts were made, especially by the current leadership that culminated in some of the constructive things our bilateral and multilateral partners are doing for us, with respect to the recent financing agreement signed between the World Bank and Liberia.

Reason for My Argument

The reason for which I am making all of these points is not to suggest that everything in Liberia is rolling on track on a 100% basis, but to simply bring would be critics' attention to the fact that the World Bank did not sign the USD$40m Financing Agreement with Liberia simply because it (World Bank) had money somewhere that it just wanted to waste.

For those who may have followed the brief statement by World Bank Country Manager, Dr. Khwima Nthara, the agreement was approved by the Board of the World Bank on 9^th February, 2022. Indeed, I sincerely concur with Dr. Nthara that this positive development is a milestone in the development partnership between the World Bank and Liberia.

"This is the first time the World Bank is providing such a significant amount of financing to support programs for improving the investment climate for the private sector," Dr. Nthara observed.

As mentioned in his statement, the initiative is in recognition of the significant progress that the Liberian Government has made in stabilizing the macro-economy over the past three years.

Still providing some clues, especially for those who may not see the initiative as worthy or so dearly deserved by us as a result of some constructive efforts, the signing of the Financing Agreement is a result of Liberia being removed from the World Bank's list of countries categorized as Fragile and Conflict-affected Situations (FCS) after an improvement in the overall rating under the World Bank's Country Policy and Institutional Assessment (CPIA).

Do you still say no constructive efforts were made for the World Bank to offer us this golden opportunity that is dedicated to boosting SMEs in Liberia?

When a country falls in the category of Fragile and Conflict-Affected Situations, it points to an unfavorable environment, to include experiencing severely disruptive conflict or conflicts.

Other factors such as conflict and violence regarding the concerned country's financial and security status form part of the characteristics of Fragile and Conflict-affected Situations.

The expression "fragile" also referrers to weakness and uncertainty, and unlikely to be in a position to resist strong pressure or attack, as experts strongly believe.

"The LIFT- P and other projects implemented by the Ministry of Commerce & Industry as well as other agencies of government will compliment government's economic recovery program and policy aimed at supporting SMEs and the general business outlook of the nation," said Minister Mawine G. Diggs.

She pledged the Commerce Ministry's commitment to full implementation of the LIFT-Project and at the same time said she was looking forward to the development of similar project to address other programs.

Country Policy and Institutional Assessment (CPIA).

Considering the benefits to be accrued by the business sector of Liberia, particularly Small and Medium Enterprises (SMEs), all eyes are not set upon the 54^th Liberian Legislature for the expeditious ratification of the USD$40m Liberia Investment, Finance and Trade Project (LIFT-P).

About the author:

Jacob is the Communications Director at the Ministry of Commerce and Industry

Member- Network of Economic Journalists in West Africa (NEJWA)

A columnist and a Certified Media Trainer

Former Vice President and Media Alert Officer (Press Union of Liberia), etc.

Contacts: 0777604576/0886560455

Email: [email protected]

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