to the Third Session of the
53rd National Legislature of the Republic of Liberia
Theme: “Consolidating the Processes of Transformation”
Her Excellency Mrs. Ellen Johnson Sirleaf
President of the Republic of Liberia
Capitol Hill, Monrovia
Monday, 27 January 2014
Mr. Vice President and President of the Senate, and Mrs. Boakai;
Mr. President Pro-Tempore;
Honorable Members of the Legislature;
Mr. Chief Justice, Associate Justices of the Supreme Court, and Members of the Judiciary;
The Dean and Members of the Cabinet and Other Government Officials;
Mr. Doyen, Excellencies and Members of the Diplomatic Corps;
Her Excellency, the Special Representative of the Secretary-General of the United Nations;
Officers and Staff of the United Nations Mission in Liberia (UNMIL);
The Command Officer-in-Charge, Men and Women of the Armed Forces of Liberia;
Former Officials of Government;
Traditional Leaders, Chiefs and Elders;
Political and Business Leaders;
Officers and Members of the Bar Association;
Labor and Trade Unions;
Youth and Student Organizations;
Civil Society Organizations; Members of the Media;
Distinguished Ladies and Gentlemen;
Once again, in fulfillment of the mandate given by Article 58 of our Constitution, we are here to present the Administration’s legislative program and report to you on the State of the Republic. As we have done in the past, a full Executive Report, with comparative statistics, will subsequently be submitted to you. We hope that you will use it as a reference for more detailed information on the various public sector entities.
First, let us all give praise and thanks to the Almighty God for his manifold blessings upon our Nation, including our celebration, in 2013, of a decade of peace, stability and continued development.
With saddened hearts we bade final farewell, in 2013, to cherished loved ones. In their memory, please join me in a moment of silent meditation. Thank you.
Mr. Vice President and President of the Senate: Let me again, in this public manner, express my thanks and gratitude for your dedication and unflinching commitment to the national cause we embarked upon together nine years ago. I know that I can continue to count on you for support as we consolidate the progress and meet the challenges of the next four years.
Mr. Speaker and Mr. President Pro-Tempore: Thank you for your dedicated leadership of this august body, and for passage of significant legislations to improve the lives of our people. Honorable Legislators: We welcome all of you back, from your annual Recess, and look forward to continued good working relations.
Honorable Legislators: In addressing the Third Session of the 52nd National Legislature on January 28, 2008, I said that we could not bring “quick fixes to the monumental problems that we inherited,” that our tasks would be difficult and our challenges demanding. They remain so today.
We know that we have some distance to travel to overcome the challenges bequeathed to us by the long years of conflict, division, marginalization and exclusion. We know that it will require commitment to stay the course in the fight against corruption. We know that it will take courage to ensure that rights and freedoms are protected. But today, the bonds of our nation are stronger; the direction of our advance is clearer; and the common purpose of nation-building is compelling us to reach out to each other beyond our superficial differences in tribe, age, gender, religion and associations.
Therefore, Mr. Vice President, Mr. Speaker, Mr. President Pro-Tempore, notwithstanding the mounting challenges we face, and the difficult roads we must continue to travel, as a consequence of our combined efforts and the resilience of our people, I am proud to report to you that our Republic is, today, stronger, safer, and steadier than it has been in many years. I can thus say, with confidence, that the consolidation of the processes of Liberia’s renewal is solid; that our Agenda for Transformation, within the context of our National Vision 2030, is sound, realistic and achievable. I salute all Liberians, and thank our development partners for this remarkable achievement.
Mr. Vice President and President of the Senate, Mr. Speaker, Mr. President Pro-Tempore and Members of the Legislature: Thank you, again, for your cooperation in passing into law several pieces of legislation relevant to the reconstruction process of our dear country. The records show that 46 bills were passed and received during the 2nd Session of the 53rd Legislature.
The ratified bills include the Mount Coffee Hydro-Generation Rehabilitation Finance Contract between Government and the European Investment Bank (EIB) and the International Development Association (IDA) for the Accelerated Electricity Expansion Project, and the Liberia Financing Agreement between Government and the International Development Association for the West African Power Pool plus the Act ratifying the Treaty for the Construction, Operation and Development of the Interconnection Lines joining Côte d’Ivoire, Guinea, Sierra Leone and Liberia. These will lead to the rebuilding and expansion of generation, transmission, and distribution of electricity, providing an economic stimulus of widespread effect. An economic boost is also expected from passage of the Act ratifying the Loan Agreement between Government and the African Development Bank (acting on behalf of the Nigeria Trust Fund) and between Government and the African Development Fund (on behalf of the Fragile States Unit) which will give us a paved highway along that critical corridor connecting Harper and Karloken, that links our most southeasterly county, Maryland, to the rest of the country.
Honorable Ladies and Gentlemen: We recall also your ratification of the Restated and Amended Production Sharing Contract for LB-13 between Government and ExxonMobil Exploration and Production Liberia Ltd., a subsidiary of the world’s largest oil company, and Canadian Overseas Petroleum (Bermuda). This contract brings into the offshore oil exploration arena in our territory another reputable, credible giant oil company. It elevates Liberia on the list of frontier countries with encouraging prospects. Today, in the mineral resource sector, Liberia boasts the presence of some of the largest, most-experienced, and reputable companies as contracting partners for exploration and extraction of our mineral and hydrocarbon resources.
Honorable Ladies and Gentlemen: We were especially pleased that you ratified the Financing Agreements with the International Development Association for the Smallholder Agricultural Productivity Enhancement and Commercialization Project, and for the Smallholder Tree Crop Revitalization Project, both aimed at stimulating agricultural production among our small farmers. We also recall passage of the Voluntary Partnership Agreement with the European Commission, which sets the stage for assured access of our forests products into European markets.
Mr. Vice President, Mr. Speaker, Mr. President-Pro Tempore, Honorable Ladies and Gentlemen: Thank you for the several bills passed in support of good governance and the rule of law, thereby promoting administrative efficiency and fostering peace and security for our people. Paramount among these were bills to improve the investment climate and strengthen the financial system against money laundering by, among other things, establishing a Financial Intelligence Unit; and creating the Ministry of Finance and Development Planning and a semi-autonomous Revenue Authority. Our Penal Code was strengthened by amendments on illicit human trafficking, extortion, environmental crimes, and fraud. The Jury Law was amended to expand access to justice, improve sentencing in criminal cases, and to better facilitate the conduct of trials.
For local government, several new statutory districts were established which are likely to be integrated into a larger governance structure once the Local Government Act is passed. This will ensure that new statutory districts are not created solely for political purposes or would not impose undue burdens on the National Budget.
As you commence this 3rd Session of the 53rd Legislature, we urge you to consider passage of other bills that have been submitted but remain under deliberations. In particular, we refer to Bills that would:
Amend the Penal Code by providing for the Criminal Conveyance of Land;
Amend the Act establishing the Liberia Anti-Corruption Commission to provide for immediate Direct Prosecutorial Powers;
Amend the New Executive Law of 1972 to establish the Ministry of Gender, Children and Social Protection;
Repeal Chapter 60 of the Executive Law Creating the John F. Kennedy Medical Center and replace it with a new Chapter 60 to be titled The John F. Kennedy Medical Center Act (2013);
Amend the Telecommunications Act of 2007 with respect to the Liberia Telecommunications Authority; and
Amend Title 21 of the Liberian Code of Laws of 1956 to update the provisions of the Maritime Law and Maritime regulations to implement the Maritime Labour Convention, 2006.
Honorable Ladies and Gentlemen: Several Bills already submitted await your ratification. They are:
the Instrument of Accession to the World Customs Organization (WCO) and the International Convention on the Simplification and Harmonization of Customs Procedures;
the Financing Agreement for the Health Systems Strengthening Project between Government and the International Development Association (IDA);
the African Nuclear Weapon Free Zone Treaty;
the Protocol Relating to the Establishment of the Peace and Security Council of the African Union;
the Bamako Convention on the Ban of the Importation and the Control of Hazardous Wastes in Africa;
the Constitution of the African Civil Aviation Commission;
the Charter of the Africa Finance Corporation;
the African Union Convention on the Conservation of Nature and Natural Resources;
the African Union Non-Aggression and Common Defence Pact;
the Protocol on the Statute of the African Court of Justice and Human Rights;
the OAU Convention on the Prevention and Combating of Terrorism;
the Protocol to the OAU Convention on the Prevention and Combating of Terrorism;
the African Charter on Democracy, Elections and Governance;
the Convention on the African Energy Commission;
the OAU Convention for the Elimination of Mercenarism in Africa;
the Cotonou Partnership Agreement; and
the African Union Convention for the Protection and Assistance of Internally Displaced Persons.
Mr. Vice President and President of the Senate, Mr. Speaker, Mr. President Pro-Tempore and Honorable Legislators: We intend to submit several new bills, in particular:
A Bill to ratify the Loan Agreement between the National Port Authority and the Kuwait Fund for Arab Economic Development for the Port of Greenville Rehabilitation Project;
A Bill to Amend the Judiciary Law to Create Criminal Court “F” of the First Judicial Circuit, Montserrado County and Special Divisions of the Circuit Courts of other Counties to have Exclusive Original Jurisdiction over Corruption and Related Economic and Financial Crimes;
A Bill to ratify the 1988 United Nations Convention against Illicit Trafficking in Narcotic Drugs and Psychotropic Substances;
A Bill to Amend the Executive Law, Chapter 22, on the Ministry of Justice, Subchapter F, to strengthen the Liberia Drug Enforcement Agency;
A new Controlled Drug and Substances Act;
A Bill to Establish the Rubber Development Fund to mobilize financial resources to regenerate the rubber sector;
A Bill to Establish a Securities Market in Liberia;
A new Local Government Act in harmony with national policies designed to more efficiently render services in a decentralized manner;
An Amendment to the Public Health Law to add a new Chapter on Mental Health;
An Amendment to the Civil Procedure Law on Special Proceedings Concerning Mentally Disabled and Legally Incompetent Persons to be titled the “Mental Health Procedural Act”;
A new law for regulating insurance to be titled the Insurance Act (2014);
An Amendment to the Charter of the University of Liberia;
An Amendment to the 1989 Act Creating the National Commission on Higher Education;
A Bill to Establish the Liberia National Tourism Authority;
A Bill to ratify the protocol establishing the Community Court of Justice for ECOWAS;
Multiple Bills relating to ratification of several treaties, conventions and protocols Government has signed with the United Nations World Intellectual Property Organization (WIPO) and the Africa Regional Property Organization (AFRIPO) to protect the literary and artistic works of musicians, motion picture producers, writers and inventors;
An Amendment to the Mineral Development Agreement among the Government of Liberia, Sesa Goa Limited and Bloom Fountain Limited;
A Bill to ratify the Hague Convention on Inter-Country Adoptions;
A Bill Outlining Procedures for the Exercise of the Constitutional Authority for Expropriation;
A Bill to ratify a Mineral Development Agreement between Government and Hummingbird Resources (Liberia) Inc.;
A Bill to ratify a Concession Agreement between Government and the Liberia Cocoa Corporation, a wholly Liberian-sponsored agricultural enterprise; and
A Bill to ratify a Power Purchase Agreement and an Implementation Agreement between Jindal Corporation and Government for the construction of a 175 MW coal power plant.
Honorable Ladies and Gentlemen: Additionally, we will be submitting, for your consideration:
A Bill to Create Special Economic Zones in the country;
A Bill to Establish an Energy Law to govern the energy sector; and
A Bill for National Wildlife Conservation and for the Management of Protected Areas of Liberia; and
Concurrently, in keeping with the Forestry Reform Law of 2006 that requires Government to place 1.5 million hectares (30 percent) of forestlands under protection, we will submit a bill to establish the Gola National Park.
Mr. Vice President, Mr. Speaker, Mr. President Pro-Tempore and Members of this Honorable Legislature: Laws crafted must be consistent with our national interests, determining, before submission to you, the financial implications. Antiquated laws that retard the promotion of our fledgling democracy should be abolished. This Government was one of the first two African States that signed the Table Mountain Declaration, which calls for decriminalizing freedom of expression. Therefore, we will submit, for your consideration, bills to repeal all repressive laws as found in the statutes and in decrees of the PRC.
During the last several weeks, Honorable Members of the House of Representatives have been conducting consultations on a new Petroleum Law and the restructuring of the National Oil Company of Liberia (NOCAL). We trust the process you have undertaken will lead to a Petroleum Act that we would find suitable to approve.
Honorable Ladies and Gentlemen: During the period under review, we issued seven (7) Executive Orders to address national imperatives. They are: Executive Order #49 – Extension of Executive Order No. 36 Exempting the Liberia Water and Sewer Corporation from Customs Duties on Certain Products; Executive Order #50 – Moratorium on the Exportation of Unprocessed Natural Rubber; Executive Order #51 – Extension of Executive Order #41 Exempting Selected Entities from Customs Duties on Fuel; Executive Order #52 – Suspension of Sections 904(a) and 904(b) of the Revenue Code of Liberia as Amended 2011; Executive Order #53 – Moratorium on Public Land Sales; Executive Order #54 – Temporary Suspension of Import Duty and Goods and Services Tax on Commercial Public Transport Buses; and on Spare Parts for the National Transit Authority (NTA) Buses; and Executive Order #55 – Re-Issuance of an Administrative Code of Conduct for Members of the Executive Branch of Government.
THE STATE OF THE ECONOMY
Honorable Ladies and Gentlemen: We have indeed made significant advances in economic growth and development over the last eight years of our national stewardship. We are proud of the achievements of the Liberian people. But we must all be reminded that our country is recovering from a low economic base where 90 percent of our productive capacity had been destroyed, which is arguably the greatest decrease in economic output recorded in any country since World War II. Coming from where we were – a broken, destroyed and nearly incapacitated country – we have made marked progress in economic revitalization and the restoration of basic social services as part of the governance pact with the Liberian people. Socioeconomic conditions have improved as a result of the combined strong efforts of the national government, the people of Liberia and our development partners. As much as has been achieved in economic and social development and reduction in the effects of the multi-dimensions of poverty, we do admit that significantly more must be done and more will be done. What is required now is continued peace and stability and the combined efforts of all Liberians in advancing the national cause of shared growth and development.
In the decades preceding instability, Liberia’s growth record was remarkable as shown in statistical terms, but this masked serious problems of poverty and inequality in much of the country. The Agenda for Transformation recognizes this, pointing out that Vision 2030 will only be achieved if there is Economic Transformation – addressing long-standing structural deficiencies. The beginning years of our national recovery required reactivation of growth in those traditional economic sectors; however, these latter years demand a commitment not to repeat the mistakes of the past – to respond to inequality by lifting a larger number of the population out of long-standing poverty through inclusive growth.
Historically, our growth potential is challenged by chronic deficits in critical infrastructure, and a largely undiversified economy dependent mainly upon traditional export products – iron ore, rubber and timber – which are exposed to global markets’ volatility.
Despite these historical constraints and the sluggishness of global economic recovery in the last two years, the Liberian economy continues to be resilient. Growth registered an average annual 8 percent between 2006-2013 – the third highest in the ECOWAS region and well above the sub-Saharan Africa average of 2.5 percent.
Growth and progress could have registered even higher levels if greater effort had been made to unleash the potential consistent with the more than US$16 billion which was mobilized in Direct Foreign Investment. As we move to address historical constraints, infrastructure is a first priority. An economic Constraints Analysis conducted by the Government in collaboration with the Millennium Challenge Corporation, has identified electricity and roads as the two binding constraints to economic growth and private investment.
Reform of the fiscal system which started in 2006 is still a long way away from the efficiency level required to fully support our economic aspirations. The budget has increased significantly since FY2006/7, allowing service provision and investment to expand. Core revenue (tax revenue, non-tax revenue and grants) increased by an average of 29 percent each year, and total revenues, including contingent revenue and on-budget borrowing, rose from US$148 million in FY2006/7 to US$559 million in FY2012/13. Continued sluggishness in core revenue, increasing by only 17 percent over the previous year, and an average 27 percent over the seven years, suggests more effort to strengthen the Ministry of Finance which needs to take bolder steps, including proposed legislation to broaden the tax base.
Even though good partnership relations through grant support and one-off payments from sign-on bonuses have covered revenue gaps over the past years, this practice is not sustainable and could become a disincentive to efficiency in tax collection and tax consciousness. A vigorous tax enforcement plan is being finalized by the Ministry of Finance, to be implemented by a Special Task Force as we move to make the Revenue Authority operational at a much faster pace. The activities of this Task Force may cause discomfort and embarrassment for some public officials and prominent individuals and businesses that are yet to pay their fair share of taxes. We encourage each of us to check our records and move quickly into full compliance. It is only by paying our fair share of taxes that we can boast of truly contributing to our national reconstruction and development.
Expenditure for budget year 2012/13 totaled US$593 million, an increase of 22 percent over the previous year and annual average growth of 28 percent over the seven-year period. Recurrent expenditure, especially wages and salaries and goods and services, continue to dominate the budget, crowding out the capital expenditure required for a growing economy. In 2012/13, this amounted to US$326 million out of a total expenditure of US$593 million.
Capital expenditure in the Public Sector Investment Plan (PSIP) increased to US$138 million in FY2012/13 from the US$51.9 million allocated in the previous year. This included off-budget lending of US$14.4 million through concessional loans and credits. Additional off-budget financing through grants and loans to support programs and projects amounted to a disbursed amount of US$499 million, representing about 83 percent of the aid projection of US$567 million.
Loans contracted from external sources to date total approximately US$757 million. In support of a wide range of development activities, Acts covering US$456 million have been ratified while Acts for US$300 million are currently before you pending ratification.
Domestic debt service during the period totaled approximately US$40 million, representing settlement of Central Bank of Liberia’s US$7.5 million bridge and US$21.2 million overdraft facilities. An additional US$11.8 million was paid to settle other domestic debts, and US$7.09 million to external debts.
Having complied with the requirements of the HIPC program, which led to the waiver of a significant portion of our external debt, Liberia is able to access financial markets once again to increase public sector investment with fiscally prudent borrowings aimed solely at addressing the infrastructure deficit.
For the first time, the FY2012/13 budget was prepared using a Medium-Term Expenditure Framework (MTEF), a process that programs revenues and expenditure over a three-year period, thus aligning with the Agenda for Transformation.
Many challenges remain in improving financial management, a situation exacerbated by unduly long procurement processes which must be corrected. We are addressing these shortcomings by strengthening the Medium-Term Expenditure Framework budget process; strengthening the technical capacity of the Project Management Office in the Department of Budget; and reviewing the laws, provisions and organizational arrangements in the procurement process. We will also implement stringent guidelines relating to the State-Owned Enterprises which will no longer be allowed to make discretionary disbursements, approved by self-serving Boards that are not in conformity with our priorities and goals.
Honorable Legislators: If we are to achieve our development goals and respond to the calls of our citizens for better roads, more lights, available and affordable power, more water, more schools and more hospitals, we must reduce the waste in recurrent expenditure, and increase public sector investments to the level of minimum annual US$150 million, as required to achieve our growth targets.
We therefore ask, in the interest of a smooth budget process in this political year, that you exercise caution and consultation in your review and action on the budget submitted by the Executive. We too want more development in the rural areas, but this can only be achieved through a realistic budgetary process and a collaborative effort that recognizes respective constitutional mandates.
The financial system has continued to expand under the guidance of the Central Bank of Liberia (CBL) – in branch networks, foreign exchange bureaux and credit unions. This resulted in significant expansion in credit which was buoyed by policy measures relating to more stringent action by the CBL and the Commercial Court, resulting in a decrease in non-performing loans. Credit expansion will also be positively impacted once delayed implementation of the decision to reduce the reserve requirement of commercial banks is made, thus bringing the CBL in harmony with similar institutions in the region. Credit expansion will also have greater potential and maximum impact when citizens demonstrate their responsibility by repaying their loans, a factor which continues to weaken access to credit for local companies.
Relatively stable since 2010, the Liberian dollar came under enormous pressure during the year, resulting in a depreciation of 15 percent. This was due in part to deteriorating terms of trade caused by rising demand for imports and decline in exports from rubber which, along with iron ore, represents 95 percent of total exports. The UNMIL drawdown has also impacted the injection of foreign exchange into our market. The depreciation was also due to speculative capital flight which was addressed by CBL intervention in the foreign exchange market, which mopped up excess Liberian dollar liquidity that contributes to exchange rate volatility. At the same time, international reserves fell US$14 million below the target level required under our program with the International Monetary Fund, implying less than three-month import cover. A CBL decision placed US$22 million in commercial banks as economic stimulus lending to the agricultural and construction sectors and to Liberian businesses. The beneficial results of this action can only be assured through better coordination and cooperation by the leadership of the Central Bank and the Ministry of Finance.
Nevertheless, the high level of dollarization moderated the effect of the depreciation, keeping inflation at a single-digit 7.5 percent, which compares favorably with other countries in the region. The reserve target under our program with the International Monetary Fund was also met at the end of December.
The CBL remains a strong institution with potential to do more in support of growth in the economy. Significant progress has been made in regulating the activities of the insurance sector, modernizing the payments system and establishing a collateral registry. The issuance of 90-day Treasury bill denominated in Liberian dollar commenced in the fourth quarter of FY2012/13, primarily to facilitate revenue smoothing and as an initial step towards the creation of a domestic money market.
A four-year roadmap was formulated to address the dual currency issue through a rational and gradual transition process of de-dollarization through the removal of barriers to increase demand for transaction in Liberian dollars. A more effective cooperative role by the monetary and fiscal authorities will ensure that the economy performs as planned and the roadmap is implemented as envisioned.
Agriculture remains the key sector of the economy for local employment creation, poverty reduction, food security and income generation, as over 60 percent of the population depends on this sector for livelihood. Food security is listed as a national priority, but we must admit that there has been under-investment by both the public and private sectors. Only massive investment can fix this under-performing sector so that it can play the vital role of delivering inclusive economic growth, environmental sustainability and long-term poverty reduction. Our scarce budget resources cannot do this, given the many other priorities, so we will need to attract investment from the private sector. At the same time, the private sector will not respond if there is continued harassment, extortion and unreasonable community demands.
Consistent with national priority, the Ministry of Agriculture has mobilized support for smallholders with production potential in rubber, coffee and cocoa, as they will have positive impact on exports and employment. More needs to be done for smallholders in food crop and animal production who continue to produce at subsistence level in the informal sector. Support will require more than tools and seeds, as the lack of roads, storage and markets also serve as major constraints.
Bold action may be required by shifting from the existing low funding level to one that will build a solid foundation for a highly productive, internationally competitive and diversified agricultural sector. The 2014/15 budget submission will thus include: support for access to credit for farmers at an initial funding level of US$9.3 million; addressing the serious health concerns of small farmers – especially those producing rice in the more productive lowlands fields – with a three-year annual investment of US$ 1.7 million; and a three-year agricultural mechanization proposal with an annual investment of US$2.3 million.
Progress was made in developing the poultry industry. With direct support from the former President of Nigeria, the Obasanjo Farms, Liberia (OBL) was established in Grand Cape Mount County, and the first part of the operation – the production and sale of fresh eggs – was formally opened for business in July. A hatchery for the supply of day-old chicks will become operational in early March, and a Feed Mill will become fully operational thereafter.
Project New Outlook (PNO), an agricultural-based NGO established in 1998, is headed by its founder and Executive Director, Mrs. Beatrice Togba Wuo, with their head office at Barnard Farm, Paynesville, and two production sites in Zoe Dahn Clan. With funding from the Finnish Refugee Council, PMO launched a community-based program in 1999 with vulnerable women – widows, single parents and young girls that have dropped out of school, are unemployed, and yet bearing children – from the Forzohn Community, Mambahn District, and lower Margibi County. Between 2003-2006, PNO worked in 30 communities in Margibi County, in partnership with Mercy Corps, and provided training and support for improved farming methods. Mrs. Togba Wuo and her team are currently partnering with Finn Church Aid to implement two agricultural projects in which they support 96 vulnerable women farmers that have been trained to produce and market eggs and assorted vegetables in rural and urban areas of Montserrado County. We commend them and recognize Mrs. Togba Wuo’s presence here today.
Important action has been taken to stimulate the fishing industry, which has the potential to supply the local and export markets, increase revenue and create jobs. Tuna fish licensing will commence in February; and two fish landing clusters – a one-stop center where caught fish are stored, processed and distributed for the local market or for export – will be constructed in Grand Bassa and Grand Cape Mount Counties. A coastal station will be built in Harper, Maryland County; and industrial fish offloading and export jetties will be constructed at the Freeport of Monrovia. The head office of the Bureau of National Fisheries will be constructed at the Omega Village, in Paynesville, to monitor the implementation of the National Fisheries Policy. Legislation, as required, is near completion for submission to you.
Land is the critical asset of a natural resource rich country. Liberia has a total land area of 111,370 square kilometers, including 96,320 square kilometers of land and 15,050 square kilometers of water. Agriculture land constitutes about 27 percent of the total land area, but only about 5 percent of the land mass is under cultivation, making land utilization extremely low and lagging behind other countries in the region.
Access to land and security of tenure have been major constraints to increased production and productivity in the concession agriculture sector. This is due to competing and conflicting rights of tenure among mining, agriculture and forestry operators, creating tensions exacerbated by the historical claims to land in affected rural communities.
The Government has responded robustly to the issue. The Land Rights Policy promulgated in May is the clearest and most comprehensive categorization of land rights ever articulated in public policy in Liberia. Categories of land rights include: Private Land Rights, Customary Land Rights, Government Land Rights, and Public Land Rights. The Land Rights Policy represents a paradigm shift away from the unwritten but widely accepted policy of the past that gave government ownership rights over all lands. This is consistent with our decentralization program, and will provide opportunities for empowering rural communities by allowing them to manage their land and land-based resources so as to advance their economic growth and development. To ensure implementation of the new Policy, a draft Land Rights Law has been completed and is undergoing public validation for subsequent submission to you.
The Land Commission has also tackled other areas in the land sector. Land disputes continue to be a dominant feature of community life throughout the country. Land Coordination Centers have been established and are fully operational in Lofa, Margibi, Bong, Nimba and Maryland Counties. They serve as pilots in coordinating Alternative Dispute Resolution (ADR) for dealing with land disputes in these five counties.
Passage of the Criminal Conveyance of Land Bill is awaiting House concurrence. This bill which addresses criminal activities in the land sector, such as fraudulent sales, will enhance access to land and improve tenure security.
There is urgent need to create a new land agency, which would consolidate the land sector and improve efficiency and transparency of land administration and management. A draft creating the new agency is under review and will subsequently be forwarded to you.
Liberia is rich in natural resources: virgin forests accounting for 43 percent of the biodiversity in West Africa; mountains filled with iron ore, gold and other minerals; fertile land, with plentiful rain for agriculture; and our share of the Atlantic Ocean filled with varieties of fish and the potential for hydrocarbon.
The exploitation of these resources must be done in an appropriate governance framework that will protect the national interest but continue to create a conducive environment for investment. The management of our natural resources calls for an open and transparent environment which guarantees investors a fair return on their investment, while maximizing benefits for Liberian citizens and Liberian businesses.
New forest laws stress the integration of community, conservation, and commercial forest management, while a Community Rights Law empowers communities to fully engage in the management of forest resources.
The National Forestry Reform Law of 2006 makes provision for the issuance of five categories of forest resource licenses to access forest contracts: Forest Management Contract (FMC), Timber Sales Contract (TSC); Private Use Permit (PUP); Forest Use Permit (FUP); and Community Forestry. Poor management of the implementation of those laws resulted in a setback in attracting quality investors to the sector and in a major loss in revenue.
The issuance of 63 PUPs prior to the formulation of relevant regulations to guide the process raised national and international concerns. A Special Independent Investigating Body (SIIB) we constituted to probe the matter made recommendations that led to a moratorium on the issuance and operations of all PUPs pending the validation of the draft regulation. Meanwhile, 29 of the 63 PUPs issued have been revoked, while the remaining 34 are being reviewed for further action and possible cancellation. It should be noted, however, that this has no effect on forest operations which continue for entities with valid Forest Management Contracts.
Full revival of the sector, including contributions to revenue, is expected with passage of the legislation relating to bid premiums. The Board of Directors has been reconstituted and new management has taken bold steps toward compliance with all laws and regulations. The Voluntary Partnership Agreement with the European Union should attract quality investors committed to value addition to the sector.
The National Bureau of Concessions began work, with stakeholders, to develop a uniform national template to monitor and evaluate the compliance of concessionaires in the country, in order to reduce the many and often confusing reportorial lines. A National Concessions Cadastre is to be established for the administration and operation of a unified National Concessions Database System that will integrate and consolidate a repository of concession information. The Bureau is to make certain that concessionaires remain in full compliance with the terms and conditions of their respective concession agreements, and ensures that Liberian citizens and firms get the anticipated employment and business opportunities from these concession contracts.
The Bureau faces challenges, including the lack of human capacity, logistics and insufficient budget allocation. The new management is expected to address these challenges to meet the purpose for which the Bureau was created.
The Liberia Maritime Authority, despite the current global economic crisis was able to conduct its planned activities, contributing approximately US$19 million to the National Budget.
The Liberia Marine Training Institute, opened in October 2011 after closure since 1989, graduated 80, bringing to over 500 the number of trained and certified Liberians who are now prepared for employment in the Maritime sector. This is most inadequate when we consider that 4,000 vessels are registered under our Flag. Plans are under way to expand opportunities and train more Liberians for employment in maritime work.
The Authority initiated the innovative Beaches and Waterways project which, in its fifth year of operation, continued to employ over 1,900 beach community dwellers. This adds value, as many citizens can now walk and play on the beach without risk to safety and unsanitary conditions.
In 2013, Liberia was one of three sub-Saharan African States re-elected, for the 2014-2015 biennium, to the International Maritime Organization Assembly’s 40-Member Council, a notable achievement of the Authority.
The Ministry of Commerce is exploring ways to address the growing trade deficit and the difficult situation faced by consumers who are experiencing the negative consequences of the exchange rate depreciation. This highlights the urgent need to expand the export sector and diversify our economy away from traditional exports to new value-added sectors.
The fastest growing sectors are dominated by micro, small and medium-sized businesses, located in the service and industrial sectors that are producing beverages, vegetable oils, flour, plastic products, agricultural goods and cement. New firms established in 2013 are developing value-added sectors such as biscuit manufacturing and furniture.
One such company, the TIBA Industrial Group, is a local manufacturer of a variety of biscuit products – Marie, Nice, Ginger, Digestive, Glucose, and Cream Cracker – all of them very familiar to Liberians. TIBA biscuits are 100 percent manufactured and packaged here, with plans to export “Made in Liberia” products. TIBA currently employs 90 Liberians operating one shift – 90 percent of whom are women. At full capacity, the plant will operate three eight-hour shifts seven days a week, thereby increasing its workforce to 270 Liberians. This is an excellent example of the private sector creating industrial jobs for Liberians, and we want to recognize here and applaud the proprietors of the TIBA Group: Mackel Gharib, his father Rizkallah Gharib, and Cousin Atta Gharib.
We applaud another successful Liberian businessman who CNN has recognized as the street vendor who turned US$200 into a potential multi-million-dollar business. He is Mr. Fomba Trawally, founder and owner of National Toiletries Inc. (NTI). Under the label of Kumba, Bendu & Sons, NTI manufactures paper towels, napkins, toilet paper and baby diapers, as well as cleaning products. The company, which started production a little over a year ago, has 45 employees -- 32 of them women -- and is located in Whein Town, in Montserrado County. Let us recognize and appreciate this enterprising Liberian.
The Ministry ensured that MSMEs are assisted with a supportive business climate, by eliminating the L$4,200 business license fee and simplifying the procedures so that the entire registration process takes an average 48 hours. Liberia is thus rated the third easiest place to register a business in sub-Saharan Africa. This was highlighted during the first MSME Conference which brought together 800 participants comprising banking institutions, service providers and international equity investors, while equally highlighting the challenges faced by local entrepreneurs.
As a partial response to this challenge, we are preparing the guidelines for scrupulous implementation of Government’s decision to direct 25 percent of public procurement of goods and services to Liberian businesses, which amounts to access to millions of dollars in public procurement opportunities.
These businesses will also be helped by the Liberia Innovation Fund for Entrepreneurs (LIFE), in joint support from budget resources and the Liberia Bank for Development and Investment (LBDI). Efforts are under way to formulate policies and systems to protect consumers from arbitrary price increase and from poor quality goods. Without prejudice to our commitment to competitive open markets, we are considering ways to help private investment in local industries, which need protection from the influx of competing imports. Another measure under consideration is to impose a one-year transitional period after which non-Liberians will be restricted to wholesaling, providing retailing opportunities for Liberians.
The government has provided multiple opportunities to bring business to local SMEs, totaling over US$400,000 in the last year. Additionally these businesses have access to assistance in business planning and development. More help to local businesses translates into more jobs for the Liberian people. Tax waivers, the first SME Directory and an entrepreneurial exchange with Forbes Magazine were some of the initiatives undertaken during the year on behalf of SMEs.
Among initiatives for job-placement opportunities is the WELD program, which recently graduated over 300 students in the areas of welding, carpentry, and heavy-duty machinery. This program will be continued through the Booker Washington Institute, which has already provided the land for constructing a training facility through the UNIDO/Komatsu project.
Having been classified in 2013 by the World Bank Doing Business Survey as the third easiest place to register a business in sub-Saharan Africa, Liberia is now poised for more progress in achieving accession to the World Trade Organization.
Honorable Members of the Legislature: Consistent with our national interest, the Executive continues to engage positively with all friendly countries and peoples around the world.
We play an active and leadership role in the Mano River Union (MRU), the Economic Community of West African States (ECOWAS) and the African Union, upholding the ideals of peace and security, and the advancement of regional integration and cooperation.
Overall peace and stability in West Africa has remained stable through the individual and collective efforts of ECOWAS Member States. Notwithstanding, the region faces multiple political and security challenges, mainly linked to transnational organized crimes, piracy and terrorist activities. Liberia was proud to contribute an infantry platoon-size unit of the Armed Forces of Liberia (AFL) to join the Africa International Support Mission in Mali (AFISMA) – the first time that our country is participating in peacekeeping operations in 52 years.
Liberia successfully participated in the 50th Anniversary of the Organization of African Unity/African Union (OAU/AU) and, as a founding Member State, planned and executed several nationwide activities in commemoration of the historic event. We also participated in the AU’s Extraordinary Session, held in Addis Ababa, Ethiopia, in May, also marking the celebration of the Anniversary.
We continue to serve Africa in leadership positions under the African Union Commission mandate: the African Peer Review Mechanism, aimed to improve governance processes; and the High-Level Committee of African Heads of State to ensure inclusion of Africa’s Common Position in the Post-2015 Global Development Agenda. We also chaired the High-Level Panel on Fragile States, under the aegis of the African Development Bank, which aims to mitigate the vulnerability of fragile States to new political and economic shocks.
Honorable Members of the Legislature: As a result of intense diplomacy and concrete confidence-building measures, our administration has deepened friendly relations with the Government and people of Côte d’Ivoire, forging positive cooperation to address border-line tensions such as that which occurred in 2012.
Our two governments, with support from the UN Missions in Liberia and Côte d’Ivoire, made good our respective commitments to stabilize and restore calm along our border through measures intended to bolster security and build confidence. Meetings in Monrovia in September and October among our two governments and the UN peacekeeping missions, led to the establishment of a Joint Council of Chiefs and Elders to encourage border safety and continual promotion of confidence-building.
Our administration continues to pursue a robust development diplomacy agenda through the conclusion of cooperation agreements and joint commissions with friendly governments, including the People’s Republic of China, Japan, India, Indonesia, Guinea, Qatar, Equatorial Guinea, Brazil and Côte d’Ivoire. Memoranda of Understanding and Statements of Intent were also concluded with the United States of America and the European Union, establishing political consultation mechanisms for the promotion of bilateral cooperation. A bilateral forum with the European Commission was held during the year, and similar fora are planned in the United States and Japan in the next few months.
Liberia, as one of three co-chairs, hosted, last January, the Third Meeting of the High-Level Panel of Eminent Persons established by the United Nations Secretary-General to craft a global development framework to replace the Millennium Development Goals when they expire at the end of 2015. We recommend your reading of the report of the Panel, titled “A New Global Partnership: Eradicate Poverty and Transform Economies through Sustainable Development,” which has received global acclaim.
The Ministry of Foreign Affairs notes with satisfaction the increased foreign diplomatic presence in Liberia as a result of effective diplomacy, and a vote of confidence in the country’s future. These include the reopening of the British Embassy in Monrovia, with a Resident Ambassador, after more than 20 years of non-resident diplomatic presence; and opening of Embassies of Brazil, Sweden and the State of Qatar in Monrovia, at the level of Resident Ambassadors.
There are about 38 facilities housing our Chanceries and the residences of our diplomatic staff abroad. Fifteen of these properties are owned by Government. The properties in Washington D.C., Paris and Abuja are in relative good shape; the rest are in serious disrepair and have suffered from neglect over the last quarter century of our civil crisis.
Most of these properties are located in prime areas around the world and, with enough funding to give them a face-lift, Government could find itself owning properties of great value.
Most of the Embassies are understaffed. Staff accommodation is less than desirable, and because of inadequate rental allowances, many of the officers are forced to live in areas that are not representative of their status as diplomats of the Republic.
Additionally, there is no provision in the budget for education allowance or medical insurance coverage for staff and, in many instances, Government is in breach of laws of the host countries regarding benefits of local employees.
In the MRU region, we own prime properties for Chanceries in Abidjan, Conakry and Freetown, which are in urgent need of repair and renovation. The residence of the current Vice President of Ghana is a neighbor to the premises of our Embassy, and our Chancery is occupying land in the heart of Accra that is a few feet of the Foreign Ministry of Ghana. If immediate action is not taken to erect decent structures in these two locations, Government could lose them.
The same goes for the property in Addis Ababa. Because Liberia was among the first to acquire property in that country, our Embassy is within a stone’s throw of the new multi-million-dollar AU Commission Headquarters. The Ethiopian Government has been patient with us, but we could lose the property unless we meet the standards for properties within that vicinity.
In all, Government may need an allotment of at least US$20 million in order to bring all of our properties to a minimum standard so that they do not stand out among glittering buildings around the world. Such an allotment would also enable us to improve salaries and other benefits for our staff, and would make it easier to rotate, retire and clean up the Foreign Service.
SECURITY, PEACE, JUSTICE, AND RULE OF LAW
The celebration of a Decade of Peace in 2013 was a milestone achievement for us as a nation, regardless of our individual status, ethnicity, political and religious affiliations. We are all proud of this collective achievement, recognizing that violence, which knows no boundaries or differences, shatters and destroys; while peace pools the resources of a people, leading them to greater development.
With the support of the international community, especially the United States and United Nations peacekeeping and peace-building efforts, Liberia has rebuilt a new, ethnically balanced and professional army; and has embarked upon a process to enhance the professional capacity of the Liberia National Police, immigration and intelligence agencies in line with their responsibility for security within our borders. However, much work remains to be done, and so we welcome the recent UN Security Council Resolution 2116 that extends the mandate of UN peacekeepers to September 30, 2014.
Under the leadership of the Ministry of National Defense, a 1,980-person-strong Armed Forces of Liberia continues to position itself to support a democratic environment through tactical and technical proficiencies and the development of a robust capacity to defend our territorial integrity.
The Armed Forces Training Command, now headquartered at the newly renovated Todee Camp, assumed responsibility for tactical and proficiency training locally, and is presently training 140 new army recruits, which will be increased by some 400 recruits who were vetted and endorsed by the Joint Personnel Board.
The AFL is also expanding its Engineering and Medical Units to assist in reconstruction projects and social service delivery. Similarly, the Coast Guard, of 82 persons, is expanding and strengthening its capabilities to patrol and protect our maritime domain, as evidenced by the arrests of several illegal fishing vessels in our waters.
The UNMIL transition plan, which transfers security management of the state to the Government of Liberia, has entered its second phase, having completed phase one in the following strategic locations: Robertsport, Foya District, and the Loguatou Border, Nimba County. Plans are well under way for trained security units to fill security personnel gaps created by the UNMIL drawdown.
Mr. Vice President, Mr. Speaker, Mr. President Pro-Tempore: In my last year’s Annual Message, I indicated that we would, at the 2014 Armed Forces Day Celebration, install a Liberian Army Chief of Staff. Having consulted the relevant committees and your good selves, we have officially nominated, for confirmation by the Honorable Senate, the Chief of Staff, the Deputy Chief of Staff and the Brigade Commander, all of whom, if confirmed, would be installed in these positions on February 11, Armed Forces Day. We will then bid farewell to General Suraj Abdurrahman who has served us so well as the Command Officer-in-Charge.
In collaboration with the United Nations Peacekeeping Department, the Ministry of Justice managed the establishment of a regional justice and security facility, called the Hub, to decentralize and strengthen the Criminal Justice System. The first Hub, established in Gbarnga to serve Bong, Lofa and Nimba, was inaugurated in February 2013 and is currently at 95 percent completion. This has facilitated a successful management of disruptions in the three counties in the Gbarnga Region over the past year. The new Circuit Courthouses which will open within a month, buttressed by construction of three Magisterial Courts, in each of the other two Hub counties, will further strengthen and make the justice system more accessible to our citizens in the leeward counties. The inclusion of immigration services, starting in the Gbarnga Hub Region, will pre-empt the need to travel to Monrovia to regularize immigration status.
The construction of Hubs 2 and 3, in Zwedru and Harper, respectively, will commence soon. Similar facilities should follow, within the next year, for Buchanan and Tubmanburg, thus covering the entire country on a regional basis.
As mentioned earlier, an Alternative Dispute Resolution program has been established to enhance citizens’ access to justice. Activities under this action will include a scoping study to map and evaluate existing approaches; and a pilot project to explore and support innovative approaches at the local level.
Probation services that now cover only Montserrado, Bong, Nimba and Lofa will be expanded this year to include the entire country so that criminal defendants who deserve a second chance will have the opportunity to avail themselves of that right.
The prosecutorial capacity of the Ministry of Justice remains weak, although greatly enhanced by the appointment of a new Solicitor General. Progress is noted in the prosecution of gender-based violence, bank fraud, murder, armed robbery and corruption. A total of 172 cases were tried, with the government winning guilty verdicts in 144 of them.
During the year, a comprehensive nationwide baseline assessment of the Liberia National Police (LNP) was conducted to identify issues and develop a strategic framework for promoting effectiveness and advancement within the service. This is in recognition of the need to address difficulties faced by the LNP in terms of compensation, barracks, and logistics. A forthcoming reorganization and restructuring of the LNP will address these issues and ensure proper treatment for long-tenured officers who have served us well and kept our nation safe.
Training of police at the Police Academy to increase the current strength is ongoing. It is projected that, annually, 600 new graduates from the Academy will enter the LNP. This number will have to be substantially increased to meet the UNMIL drawdown target. We are pleased that the last graduating class included 97 university graduates, who are expected to help enhance the professionalism of the police. Concerns continue about reported corruption and disorderly conduct by police officers that undermine the reputation of the hundreds who continue to serve honorably despite the difficulties. The LNP must continue to enhance the capacity of its Professional Standards Division to investigate unethical conduct. We ask citizens to continue submitting complaints on unethical conduct for investigation.
In light of the substantial increase in vehicles and the lack of alternative roads, the record showed significant increases in the rate of injuries, deaths and property damage resulting from accidents caused by motorcyclists, particularly on the main arteries. It thus became necessary, as a public safety measure, to regulate and enforce the movement of motorcyclists in and around Monrovia, particularly on Tubman Boulevard. The sharp decline in the number of motor vehicle accidents indicates that this was the right decision.
The Liberia National Fire Service (LNFS), as another safety-promoting measure, undertook a massive Fire Prevention and Safety Awareness campaign in six major communities in Monrovia and its environs. It is planned to extend this to certain at-risk communities in other counties. The government has expressed special gratitude to the Fire Rescue Alliance of Minnesota, USA, for its support in procuring new fire service equipment and in-service training for LNFS officers.
The fight against trafficking in persons (TIP) is gaining momentum. Amendment to the 2005 Act on Trafficking in Persons to include Migrant Smuggling, resulted in a number of offenders being investigated and prosecuted for human trafficking. Endorsement of the five-year National Action Plan and early prosecution of offenders will add to this momentum and give evidence of progress to reverse the negative reporting which the country faces.
Drug usage and drug-related offenses remain one of the greatest security challenges, as our small country is plagued by an alarming rate of drug abuse and drug trafficking. Major effort is under way by the Drug Enforcement Agency, in coordination with other security agencies, to enforce vigilance and aggressive response in investigating and dismantling domestic illicit drug activities. Two major cases involving international offenses were prevented by the Drug Enforcement Agency and the National Security Agency, resulting in indictment in U.S. courts.
Honorable Members of the Legislature, My Fellow Liberians: The absence of reliable and affordable electricity, and the poor condition of a significant portion of our primary road network, represents major constraints to private sector value addition, investment and overall national development. If we are to achieve the economic transformation of our country, which guarantees a future of prosperity and employment for our youthful population, it is paramount that we invest, among other things, in infrastructure, giving priority to power, roads and ports, as well as to agriculture and forestry which have the potential to expand the economy for rural participation and food security.
Our Energy Program, under the leadership of the Ministry of Lands, Mines and Energy, is guided by a comprehensive electricity master plan which covers the development of electricity infrastructure and expansion of access to quality and affordable electricity services in the short, medium and long term.
In the short term, the focus is to expand the transmission and distribution infrastructure and to respond to the demand of residential and commercial customers. The medium term of one to three years will see major expansion in generation capacity.
In this regard, rehabilitation of the Mount Coffee hydroelectric power plant, our flagship program, is well on course. Manufacturing of the turbines, the most critical component of the project, is already under way, and physical work on the powerhouse and dam has already commenced.
Two days ago, on January 25, to the rousing reception and delight of the people of Louisiana, a few of you joined me and several of our partners in groundbreaking for the civil works phase of the project.
Even as Mount Coffee progresses, plans formulated by the Liberia Electricity Corporation (LEC) call for continually increasing our power-generation capacity by constructing three heavy fuel oil (HFO) power plants at the Bushrod Island facility. A total capacity of 38 megawatts will more than double the existing generation capacity, enabling us to connect more customers and offer electricity services at more affordable prices.
In order to upgrade the grid to absorb the power generated from Mount Coffee and the HFO power plants, the grid will be extended to new areas in the city, including the City Center, Sinkor, and communities along Duport Road, Rehab Road, Zuba Town Road and ELWA Road.
The Cross-Border Project, through which electricity will be provided to Maryland, Grand Gedeh and Nimba Counties from Côte d’Ivoire, progressed significantly, thereby expanding electricity access outside of Monrovia. Citizens are today rejoicing in Ganta, Saclepea and Sanniquellie as grid lights reach cities in Nimba, with Grand Gedeh and Maryland to benefit similarly within the next few weeks.
The commissioned Yandehoun micro-hydro power plant, in Lofa County, is already supplying power to Yandehoun and surrounding towns, benefitting close to 1,000 persons. Plans are under way to secure a US$50 million facility to replicate this success, constructing up to ten mini- and micro-hydro power plants in rural areas across the country.
The Three Corridors Project – to construct a transmission line from Monrovia to Kakata,