Lessons from foreign investments in Liberia


  1. Improvement of the concession policy

The following recommendations were formulated in 1983.  Though formulated more than twenty years ago, many of them are still valid - even though nearly all foreign investors have left the country as a result of the political instability and the civil war.

The economic decline started during the administration of president Tolbert (19971-80) and accelerated during the Doe-regime (1980-90) led to complete economic chaos as a result of the civil war (1989-2003). Modern economic activities had virtually come to a standstill in the beginning of the third millenium, except for some predatory activities in the forestry sector and on the (abandoned) rubber plantations.

The actual political climate following President Sirleaf's inauguration holds the promise of a renewed interest in Liberia's economic potential. A number of foreign companies have already shown their interest in the exploitation of Liberia’s (abundant) natural resources. Among them the world’s largest steel producer, the Indian-owned Mittal Steel Corporation, as well as the new (Japanese) owners of Firestone. But also smaller firms are willing to invest in the gold and diamond mining sector, such as Diamond Fields International, the Mano River Resources Inc., and the West African Mining Company.

It is to be expected that if the political conditions continue to improve more investors will be willing to invest in Liberia. Therefore, the following recommendations may be useful in streamlining these foreign investors’ activities for the benefit of all.

  1. A uniform policy should be adopted for identical operations, based on Model Concession Agreements.

  2. The Government of Liberia should assume complete control over the nation’s natural resources.

  3. The Treasury’s intake from the concession sector should be increased.

  4. The services of legal experts should be employed in order to modernize the concession agreements and to correct omissions.

  5. Concession agreements should never include provisions which are not enforced or which are redundant.

  6. Natural resources should be exploited economically.

  7. Local lumber processing obligations and reforestation regulations should be enforced.

  8. Guidelines for future concession agreements.






Lessons from
foreign investments
in Liberia



© fpm van der kraaij