Liberian Business & Economic Empowerment Act Introduced At Lower House

By Abraham Morris-231886294820-abrahammorrisabrahammorris@gmail.com

Grand Kru County District Two Representatives, Jonathan Fonati Koffa, has submitted to the House of Representative a Bill seeking to protect the law protecting Liberian businesses which was identified in the 1973 Investment Act.

The Bill submitted to the House of Representative provides for criminal penalties for violators and also creates a fund to ensure that Liberian businesses in the subject succeed.

The Bill, according to Representative Koffa, seeks to create policy for the desire that Liberian not be marginalized in their own economy, whereas the Investment Act of 2010 and progeny provided for certain restrictions on foreign ownership of named enterprises and reserved such exclusively for Liberians.

The Bill proffered by the Grand Kru County lawmaker further seeks the need to create a restrictive environment and stronger enforcement mechanism so that the Liberianization Policy as envisaged by the government and people of Liberia can become a full-fledged reality and not just a goal.

The Bill which is titled: “Liberian Business and Economic Empowerment Act of 2018,” prohibits foreign ownership and reserved for exclusive ownership of natural persons who are citizens of Liberia ‘certain businesses.’

Those businesses the Bill seeks to reserve for only Liberians are: the supply of sand, block making, itinerant merchant (peddling), real estate and real estate management services, travel agencies or travel agency contract for airlines, distribution and retail sale of flour, rice and cement.

Others businesses the Bill when passed into law seeks to further empower Liberians include: retail of stationery and office supplies, ice making and sale, tire repair shop, independent auto repair shop (not restricted to dealership), shoe repair shop, retail of timbers and planks, operation of gas stations, video clubs, importation and sale of second hand or used clothing, distribution of locally manufactured products.

The Bill also sets aside exclusively for Liberians, the importation and sales of used cars (except for certified used cars imported by authorized dealership of the same make), custom brokerage services, stevedoring, ship chandler services, commercial printing services, trucking services (all forms), newspaper publishing and printing and payment processing systems and services including sales on behalf of government.

Representative Koffa’s Bill also introduces seeking joint venture and participation of Liberians in that, foreign investors may invest or engage in the following businesses provided however that the investment capital of said investment is more than one million United States Dollars and at least twenty five percent share of common stock owned by natural Liberian persons.

It also indicates that operation of any enterprise under such category must be approved by the National Investment Commission before any license can be issued by the relevant agencies of government.

Businesses under such category are: production and supply of stone and granite, ice cream manufacturing, advertising agencies, graphic and commercial artists, production of poultry and poultry products, production of beef and pork and beef and pork products, entertainment centers not connected with hotel establishment, sale of animals and poultry feed, bakeries, pharmaceuticals.

Others include: repair of transformers and generators (unless those under manufacturer warranty), fishing and fish processing, especially activities within the territorial waters and light manufacturing, processing or packing services of any kind.

The Bill also ensures that all foreign companies doing business in Liberia and enjoying duty free services or other tax incentives are hereby required to source all supplies and services that are available on the local market.

The legal instrument, proffered also said provided, however, that the requirement of the Act may waived if the cost of the goods or service is more than 20 percent when compared to ECOWAS region countries.  And that any company failing to adhere to such provision is denied duty free and other tax incentives on those purchases.

In order to be considered a foreign investor for the purpose of a joint venture with a Liberian citizen under the proposed Act, the foreign national must provide proof of funding by display of local bank confirmation of wired funds into the country from foreign sources.

It said that said funds shall not be less than US$500,000 for the initial deposit. It also provides that any business or industry in which a Liberian person has made investment in excess of one million United States dollars, no business owned by non-Liberian shall be allowed to engage in such activities unless it is proven that the Liberian-owned business in unable or incapable of meeting market demand. However, it does not apply to other Liberian-owned businesses or natural persons.

Hence, the Liberian Government is hereby authorized to establish a Liberia Business Development and Investment Fund (LBDIF) of not less than twenty million United States dollars for the purpose of guaranteeing or subsidizing loans or providing incentives or financing instruments for Liberian to succeed in accordance with the goals and objectives of the proposed Act.

Meantime, contribution to the fund shall be made through: an initial US$5,000,000 from budgeting appropriations; setting aside 10 percent of the proceeds of the Maritime Program on an annual basis; allocating 20 percent from signature fees collected on any concession agreement signed; soft loans or grants from development partners interested in business development and any other dedicated fees or taxes or such other mechanism as the government may device.

Accordingly, any foreign national be resident or not who violates any provision of the Act, when passed, and any Liberian for the purposes of evading the aims and objectives of the proposed Act, fronts for a foreign national being he/she resident or not of Liberia, shall be subjected to punishment of not less than three years imprisonment and not less than US$100,000  or its Liberian equivalent.

Furthermore, all materials, equipment, and proceeds associated with the violation shall be confiscated and auction for the benefit of the public treasury.

Meanwhile, the Bill when passed will repeal Schedule E of the Investment Act of 2010 and replacing it with its whole and as to its sub parts, the provision of the proposed Act.

And that as of the effective date of the Act, any foreign national engaged in any of the prohibited businesses in Section three, or is not in compliance with the conditions of businesses in Section four, shall have two years to close the enterprise and/or come into compliance.

The Bill further seeks to establish the Liberia Business Development Authority (LBDA), which shall in consonance with the Liberia National Police and the Ministry of Justice monitor and enforced the law governing such Act.

The LBDA, when established, shall be headed by a Director General and two deputies and as well supervised by a Board of Directors comprising of the Ministers of Finance and Development Planning, Commerce and Industry, Justice, Chairman of the National Investment Commission (NIC) and three members of the Liberian Business Association from their members in good standing.

 

 

 

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