Lessons from foreign investments in Liberia

Concession agreements:
A Plan of Action


Three categories of concession agreements have been distinguished:
  1. The so-called 'sleeping agreements': concessions which, one year after the signing of the concession agreement, still have not become operational. These agreements should immediately and without reservation, be officially revoked by the Government. The present practices have resulted in a situation which cannot be allowed to continue since the Liberian Government has granted territories to foreign concessionaires which exceed the total area of the country. This situation inevitably occurred since no records were maintained as to the number of concessions granted much less the total cumulative acreage involved.
  2. The second group of concession agreements embraces all agreements which have been signed for less than one year and which still have not become operational. These concessionaires should be given a deadline on which production activities must have begun. This period should in no case exceed twelve months. Failure to comply with this official request would automatically result in the definite cancellation of the agreement.
  3. The third group of concession agreements includes all foreign owned concesions which are operational as well as all future concession agreements.

A 'Plan of Action' is proposed which should be executed in two phases.

During Phase I, all agreements of the second and third categories (see above) should be immediately subjected to discussion and, if necessary, revision. After being  satisfactorily discussed and possibly reviewed (‘Phase I’), a general policy of renegotiating concession agreements may be introduced (‘Phase II’).

During Phase II each five to seven years every concession agreement will be reviewed in conformity with the then prevailing government policy and in the light of new economic realities. To facilitate this work, during Phase I there should be included in every concession agreement a provision which obliges the concessionaire to submit reports regularly to the Liberian Government on general or specific affairs as well as a provision which will guarantee the company’s collaboration with the Government in any case that the latter deems useful. Failure to comply with these obligations might eventually result in losing the concession.

The institution which seems to be the most appropriate to execute this task is the National Investment Commission, created in 1979 after the merger of the Concessions Secretariat of the Finance Ministry, with the Liberian Development Corporation, a public corporation.

This Plan of Action was formulated in the 1980s.
Though economic conditions have changed and many foreign investors have left, the basic ideas are still valid.





























Lessons from
foreign investments
in Liberia



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