Liberia, once a byword for conflict and misery, has become an admired young democracy. Its development challenges, however, remain dire. Liberia ranks 182 out of 187 countries in the 2011 Human Development Index; its index value is lower today than it was in 1980. The IMF puts GDP per capita at less than $300. According to a World Bank paper, 400,000 of Liberia’s 650,000 households live in poverty.
Jobs are a crucial ingredient of a more prosperous future. Multinational firms are investing heavily in the country’s natural resources, including iron, timber, rubber, diamonds, and potentially oil. But many Liberians are also working to boost their own economy through entrepreneurship. My colleague Gayle Tzemach Lemmon, a CFR fellow and deputy director of the Women and Foreign Policy Program, recently visited the country to meet Liberian entrepreneurs and examine programs that are supporting them. In a guest post below, she reports on her findings.
In her recent annual speech to the nation, Liberian President Ellen Sirleaf Johnson talked about the need to create jobs. “This is our mission today: to create the infrastructure, jobs, services, and conditions that will not just meet our people’s needs but improve their lives,” said Johnson. “We must grow our economy to accommodate all Liberians, from the biggest landowner to the smallest petty trader.”
For entrepreneurs on the ground working to create jobs in the Liberian economy, the reality is a business environment rife with challenges: poor infrastructure, expensive power and, for some, prohibitively high taxes. The array of difficulties has not, however, stopped many from pushing forward with their business ideas.
“We are in green energy,” said Royston Gbelia, co-founder of SJedi Green Energy, a company that sells clean cookstoves across the country through a micro-leasing program. Gbelia and his brother brought 1,100 cookstoves into Liberia last April and sold out of the roughly $55 units in less than two months. “Our plan is to sell 10,000 stoves a year.”
Gbelia works out of a business incubator in downtown Monrovia funded with help from the Soros Economic Development Foundation. He and a dozen other entrepreneurs use the well-appointed facility’s Internet access, office space, and coaching services—all of which are a rich luxury in a country ranked 151 out of 183 in the World Bank’s 2012 Doing Business report.
Along with the incubator, funded by private dollars, Liberia has been working hard to get credit to small- and medium-sized businesses seeking loans. Much more remains to be done, but loan facilities and a push from the Central Bank have started the conversation about the need to get dollars to deserving entrepreneurs trying to help the president fulfill her economic promises.
A $20 million small-business lending facility called the Liberian Enterprise Development Finance Company, or LEDFC, funded by the U.S. Overseas Private Investment Corporation, seeks out small- and medium-sized businesses owned by Liberians. Those worthy of credit receive loans ranging from $10,000 to upwards of $500,000. In addition to the loans, the fund’s officers try to stay in touch with the entrepreneurs to help them grow. While the fund faced some difficulties at the outset with bad loans—entrepreneurs who took funds they never repaid—it now has close to a hundred loans outstanding, with women accounting for one-fourth of loan recipients.
Challenges remain, including, fund officials say, entrepreneurs who don’t possess the required paperwork or financial records to qualify for loans. But LEDFC tries to work with the entrepreneurs to help them get their paperwork in loan-worthy and bank-ready shape.
One entrepreneur grateful for the support is George Howard, founder of the construction firm Genesis Liberia. Looking out over the construction site that is part of his nearly $1 million waste facilities contract from the World Bank, Howard says without the credit he would have had no chance to buy the equipment he needed to win the job. He lost nearly everything during Liberia’s civil war. “I stayed thinking I would protect my property, and I ended up trying to protect my life.” Today his business has grown to be among the country’s largest, locally owned construction firms because he had the business savvy—and the credit—to expand.
Some Liberian entrepreneurs receive a boost not through loans, but through learning. Goldman Sachs’ 10,000 Women initiative runs a four-month program free of charge for Liberian women aspiring to launch their own ventures. In addition to learning about finance and accounting the women also receive access to computers and a resource library with help from the program’s administrators, who follow up on their graduates regularly.
“When I started I was just taking in money, not recording profits or revenue,” says Helen Kulua, owner of Safety Plus, a waste management firm that collects waste from individual homes and sells it on to larger waste management companies. At the moment she has 16 employees. Now that she has financial records in place and can plan for the future, Kulua hopes to expand from Monrovia into other counties in Liberia and on to neighboring Guinea, where she lived as a refugee during Liberia’s civil war. “It is not only for me to benefit, but it is also a good opportunity to help the environment and to provide jobs.”