The U.S. is missing out on a lucrative opportunity to invest in an expanding African market, even as China steadily grows its economic footprint across the continent, one of Liberia’s top economic officials warned in an interview.
“What we want is for the American people to understand that they are losing an opportunity here for tapping into the investment that the emerging markets in Africa present,” Finance Minister Amara Konneh said Friday.
The U.S., which is doing just a “tiny fraction” of business in Liberia, “has to be willing to take risks, join the race and compete with Chinese and European companies,” he said.
“We are not turning our back away from the West, particularly the U.S., because international trade is not a zero-sum game,” said Mr. Konneh, who was in Washington to attend the World Bank’s annual spring meetings.
Beijing has substantially increased its investments in Liberia in recent years, relegating the West African nation’s economic relationship with the U.S. to second place. It is a story that is being repeated in other parts of Africa.
The official took a thinly-veiled swipe at communist China’s record of providing low-interest, unconditional loans to African governments in exchange for access to the continent’s wealth of natural resources.
“It is our view that foreign investment in Africa should support efforts to promote respect for human rights, good governance, transparency and responsible natural resource management,” said the State Department official.
The West often ties its loans to African governments to conditions such as promoting democracy and fighting corruption.
The U.S. established diplomatic relations with Liberia in 1864 after the West African nation gained independence in 1847 from the American Colonization Society, an organization that resettled free black Americans and freed slaves in Liberia.
From 1989 to 2003, Liberia went through a cycle of civil wars and misrule. The wars ravaged 90 percent of the country’s economy.
Under President Ellen Johnson Sirleaf, who was elected in 2005 and won re-election in 2011, Liberia’s GDP has grown at a rate of 8 percent.
Africa, meanwhile, now boasts 12 of the fastest growing economies in the world.
“I think the U.S. is watching to see how far this resurgence of Africa is going to go,” said Mr. Konneh. “It’s mostly a personal decision by investors, but our caution to them is that this could cost them in terms of creating their presence in Liberia.”
The U.S. has been reluctant to fully embrace investment opportunities in Africa because of an apprehension of a return to the nationalization schemes of the late 1960s and early 1970s, and bad governance, said Mr. Konneh.
The minister said these issues are “things of the past.”
U.S. businesses expanding in Liberia include such companies as ExxonMobil, Chevron and Anadarko.
Trade between Liberia and the U.S. has grown, albeit slowly, since the U.S. government reinstated Generalized System of Preferences benefits to Liberia in 2006 and granted African Growth and Opportunity Act eligibility in 2007, said the State Department official.
The U.S. is the largest bilateral donor to Liberia, supporting security sector reform, democratic institutions and the Liberian economy.
In 2013, President Obama included Liberia as a focus of the “Power Africa Initiative” to promote modernization of the energy sector and increase access to electricity. Mr. Konneh said U.S. investment would be welcome in the energy, power and agriculture sectors.
Liberia struggles with high unemployment despite its high growth rate.
“African countries are growing very well, but the growth is a jobless growth because most of this is filled by extractive sector investment,” said Mr. Konneh. “This is not just a Liberian issue, it is an African issue and a global issue.”
Mr. Konneh’s father, siblings, uncles and aunts were all killed in the war. He fled to Guinea at the age of 18 and then came to the U.S. to study at Penn State University and Harvard’s Kennedy School of Government.
“So many other families in Liberia also went through that same experience,” said Mr. Konneh of his war experience. “It is an experience that has shaped us into this new generation of Liberians who are dedicated to the cause that this should never happen again to our country.”