In what he described as a proactive move, Gbarpolu County Senator Amara Mohamed Konneh is proposing that the Senate convenes a formal review session to assess Liberia’s investment incentive frameworks and their overall economic and fiscal impacts, to determine their effectiveness for Liberia today versus the Liberia of twenty-three years ago.
“Led by a special committee supported by the Senate consultant, this session will enable informed legislative discussions with Executive Branch stakeholders and guide necessary adjustments to ensure incentives align with our broader economic and development goals for fostering economic expansion and opportunities for Liberians,” the Senator who chairs the Senate Committee on Public Accounts and Audit, noted in another communication to Senate plenary, the second in three days.
In the wake of Liberia’s prolonged conflict, which profoundly impacted its economy over twenty-two years ago, resulting in the largest economic collapse recorded since the end of World War II, Konneh asserted that “successive administrations have adopted various investment incentive mechanisms in our laws to attract foreign direct investment and foster post-conflict recovery.”
He added: “These incentives, which include tax exemptions, royalty reductions, and special concessions, have played a pivotal role in stimulating investment, creating employment opportunities for Liberians, and bolstering key sectors such as mining, agriculture, forestry, and energy.”
However, Konneh, who is also a former Minister of Finance and Development Planning, noted that as the country continues on its development journey, emerging concerns about the perpetuity of these incentives warrant critically assessing their effectiveness, fiscal implications, and developmental impact.
“While they have facilitated capital inflows, persistent revenue performance challenges limit our capacity to finance vital public sector investments and invest in Liberians,” he noted. “Additionally, compliance issues among companies benefiting from incentives raise questions about whether these tax waivers are achieving their intended economic outcomes.”
In his view, a particular institution requiring immediate attention is the National Bureau of Concessions (NBC), which is responsible for monitoring concession agreement implementation.
While the NBC has a significant mandate to ensure compliance, transparency, and accountability, Konneh asserted that delays in conducting timely and thorough reviews and holding concessionaires accountable to their commitments in exchange for tax incentives have led to gaps in oversight, resulting in economic losses that may hinder Liberia’s fiscal sustainability and development.
To address those concerns, the PAC chair is proactively recommending that some key executive institutions be invited to provide valuable insights and strategic recommendations.
The Ministry of Finance and Development Planning (MFDP) must be invited to present detailed fiscal analyses and the budgetary implications of existing incentives; the Liberia Revenue Authority (LRA) must be requested to share the most recent Tax Expenditure Report, detailing revenue effects of tax exemptions and concessions, while the National Investment Commission (NIC) must assess the effectiveness of incentives in attracting and retaining investment.
Also suggested to form executive institutions for the review session are the National Bureau of Concessions (NBC), which will be asked to share a completed concession information sheet, outlining compliance levels and oversight efforts; and the Ministries of Mines & Energy, Agriculture, and the Forestry Development Agency, to share active and moribund mineral deposits, concessions, and forest concessions across Liberia and offer sector-specific insights into agreements’ economic and developmental impact.
“Madam Pro-Tempore and Distinguished Colleagues, we stand at a pivotal juncture in our development journey, the global economic landscape is experiencing significant and often unpredictable changes, bringing forth uncertainties related to bilateral and multilateral financial institutions, trade policies, and the overall trajectory of global capitalism,” Konneh noted.
It is in this vein, Konneh stressed, that it has become imperative for Liberia to take proactive steps to shape its economic future as a small developing nation, by leveraging its natural endowments, ensuring its investment incentives and fiscal policies are comprehensively reviewed, thoughtfully crafted, sustainable, and adaptable to the evolving circumstances.
As we approach the expiration of specific incentives currently enjoyed by companies and anticipate the potential ratification of new investments during this 55th session of the Legislature, “it is an opportune moment for us to engage in a comprehensive review of Liberia’s investment incentives.” This review, according to the former Finance Minister, will help the Legislature pinpoint areas for improvement, enhance compliance mechanisms, and optimize revenue generation, “thereby securing the vital resources necessary for our national development, especially in light of the recent reductions in financial assistance from our international partners.”
Additionally, Konneh continued, it will be essential to bolster oversight within the National Bureau of Concessions to address any compliance gaps and ensure that concession agreements align with Liberia’s long-term fiscal and development goals.
