Program to support trade institutions launched in Liberia, a big push for sustainable growth

11/11/2013
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The African Development Bank (AfDB) and the Government of Liberia, represented by the Ministry of Commerce and Industry (MoCI), on November 5, 2013 in Monrovia, launched the “Programme of Assistance to Trade Support Institutions in Liberia” (PATSIL), to push the country’s agenda for sustainable growth and regional integration through trade.

This comes barely a week after the eighth African Economic Conference concluded in Johannesburg with intense discussions focusing on facilitation of trade; the mobility of people, goods and services; political will and government leadership in harmonizing macroeconomic policies; and the role of the private sector in the continent’s regional integration.

PASTIL underscores the thrust of the Bank’s Regional Integration and Trade Division (ONRI) to support Regional Member Countries (RMCs) and Regional Economic Communities (RECs) in tackling soft constraints to trade and regional integration.

Indeed, weak implementation capacity of RECs and RMCs has been identified as the Achilles’ heel impeding Africa’s regional integration agenda. Such challenges are even more acute in low income and fragile states such as Liberia, whose capacity was decimated by a 14-year conflict.

The program is funded through the Africa Trade Fund (AfTra) established in March 2012 and managed by ONRI. AfTra is a responsive technical assistance facility for RMCs and RECs to participate in and benefit from regional and international market opportunities. It was established with CAD 15 million seed funding from the Canadian government, and the Bank aims at growing it into the biggest trade fund in Africa.

Speaking during the launch, Liberia’s Minister of Commerce and Industry, Axel Addy, noted that the PATSIL would support his country’s efforts to formulate and implement policy measures and reforms, to give the “final push” towards sustainable growth driven by trade.

Enhancing Liberia’s trade capacity for sustainable growth

The project will enhance the capacity of trade institutions in Liberia to create an environment for competitive trade, production and value addition. Welcoming the Bank’s timely support in this regard, the Minister noted that the program had come at an opportune time when the Government of Liberia takes a step change in its development efforts, moving from a focus on “post-war recovery and reconstruction” to “inclusive growth and wealth creation”.

The key outcomes of the project are: (a) an improved policy framework for the trade sector by supporting the development of key policies such as the trade policy and strategy, and a standards regime; (b) improved human resource capacity of the MoCI and Liberia Chamber of Commerce to enable them analyze, formulate, negotiate and implement trade-related policies; (c) improved productivity of the MoCI and the National Ports Authority (NPA) through the provision of information technology equipment and software. At present only 50 per cent of Ministry staff have access to computers.

Improved IT systems will enable the MoCI to roll out automated systems for the processing of import and export permits to businesses, shortening the processing time from 48 hours to 20 minutes with resultant costs savings for businesses. At the port, data collection systems are currently manual which leads to errors and inefficient operations. PATSIL will revolutionize operations of the NPA through the development of electronic archives, electronic data-collection tools and interfacing with operators, leading to efficiency gains the authority and traders.

Support to the Chamber of Commerce will focus on equipping over 120 small and medium enterprise (SMEs) Chamber members who are predominantly female- or youth-owned, with basic business development skills such as bookkeeping, preparation of winning business plans and accessing finance. Technical support will also be provided to enhance the analytical capacities of the Chamber to effectively engage in policy dialogue.

Addressing soft constraints to regional integration

This project will also support regional integration, which is one of the core operational priorities of the Bank’s Ten Year Strategy (2013-2022). By supporting the development of key policies, PATSIL will ensure that trade policy issues are streamlined in the national development agenda. This is essential to provide the foundation for Liberia to effectively engage on the regional arena through the Mano River Union and ECOWAS integration initiatives, as well as on the multilateral level through the World Trade Organization (WTO). It is only by articulating sound national policies and priorities that a country can effectively define and own its regional and multilateral priorities. PATSIL will also support regional integration by enhancing the capacity to implement trade-related policies.

The program also complements the Bank’s investments in hard infrastructure. As aptly put by the Bank’s Resident Representative in Liberia, Margaret Kilo: “It is the kind of soft component that really complements the infrastructure for Liberia. We will appreciate this project for a very long time to come.”

The Bank as a financier and catalyst

PATSIL will be implemented over a three-year period, and ONRI has secured US$1 million under AfTra to support the project for the first 18 months. This funding is meant to be catalytic in line with AfTra’s ideal as a seed fund. The aim is to demonstrate quick wins to unlock addition funding for the remaining period.

The Bank’s current portfolio in Liberia amounts to US $267 million.