By Julius T. Jaesen II
When the Commissioner General of the Liberia Revenue Authority told the Liberian Senate during his confirmation hearing that our country can raise a billion in revenue to support development, he made those assertions cognizant of the huge dividends that we stand to ripe from ArcelorMittal’s phase two expansion.
ArcelorMittal which has a few more years left is seeking to expand its operations in Liberia for an additional 25 years. The phase two expansion project when ratified will allow AML to expand its investment portfolio by investing an additional 1 billion United States Dollars in Liberia. By this, it implies that not only will thousands of job opportunities both directly and indirectly be created but our country will benefit from millions of dollars in taxes, royalties, and other payments. This will help grow our national budget from a little over US$700 million to over a billion dollars.
The phase two expansion is a huge benefit to growing our national budget, accelerating development, and creating gainful employment opportunities for Liberia’s idled youth.
The government of Liberia stands to benefit from AML’s phase two expansion US$80 million when the third MDA is ratified. Currently, as per the existing agreement, AML provides a little over US$45 million per annum in royalty excluding other taxes and corporate social responsibility funds. But the third amendment brings a significant increase in annual royalty to the government and this needs to be welcomed by all well-meaning Liberians.
The Commissioner-General of Liberia Revenue Authority’s statement would not have come at such a time when ArcelorMittal-Liberia is expanding its operations in Liberia. His statement, like the IMF and World Bank, was bottomed on the massive benefits Liberia to ripe from our mineral resource sector, especially coming from its biggest corporate partner – AML.
Excluding royalties and other dividends, the phase two expansion will create an additional 2,000 direct new jobs and over 4,000 indirect new jobs. Those to be gainfully employed with AML will pay income taxes to the government of Liberia which inadvertently will help raise domestic revenue and grow the current size of our national budget. This will also increase savings in commercial banks when more of our citizens are employed and well paid. Also, commercial banks will have to expand and also enlarge their current workforce to be able to provide the most convenient services to their customers all across the country. Those additional employments in the banking sector will also contribute to increase in income taxes and obviously the national budget. So, Commissioner Thomas Doe Nah did not make vacuum assertions about the possibility of growing our national budget to a billion or even more. Those assertions were made heavily reliant on AML and our mining sector as a whole.
AML is Liberia’s biggest taxpayer and as well the largest Foreign Direct Investment (FDI) the country has seen since post-war. Over the last sixteen years, AML has invested over 1.7 billion United States Dollars in our country – paying tons of millions in royalties, taxes, signature bonuses, and other corporate social responsibilities to the Liberia government. The onus is on the government to manage properly these royalties, taxes, and other payments to the benefit of the country and its people – if Liberians are to truly feel the impact of these foreign direct investments.
Our government will have to embrace with open-arm AML’s phase two expansion that’s underway. If we must help develop our country, grow our national budget, and keep our young people gainfully employed so that politicians do not exploit them to protest against the government and cause insurrection in the country for personal greed, we will have to encourage the stay of well-intentioned foreign investors in the country, to include AML.
The investment climate we will create and the decorum with which we treat investors or our corporate partners will no doubt enable the inflow of more foreign direct investments in the country. And it can’t be gainsaid that to grow our budget and address our menacing socioeconomic quagmires it will require substantial foreign direct investments in our country.
AML’s decision to invest in Liberia, especially at a time our country was struggling to recover from the scourge of brutal civil wars which decimated lives and major infrastructures, was a remarkable and quintessential display of unmatched love for Liberia. No investor would have easily done so especially when our country was still fragile and tagged as an epic center of the conflict. This singular act of AML to announce a billion dollars investment in Liberia during the reign of not just a democratically elected government but a transitional government comprised of various warring factions and a few civilians inspired hope and confidence in other investors and development partners to heavily see the need to invest in a war-torn country – Liberia. This for me comes with lots of sacrifices and risks, and above all, Love for our country and its people. This is why I support AML’s phase two expansion. I know it has lots of opportunities for our country and its people. And I encourage our government to support the AML phase two expansion by ratifying the third mineral development agreement with AML.
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