Towards Inclusive Growth and Economic Diversification · 2016. 11. 28. · Source: Indexmundi,...
Transcript of Towards Inclusive Growth and Economic Diversification · 2016. 11. 28. · Source: Indexmundi,...
Towards Inclusive Growth and
Economic Diversification
Hon. Boima Kamara Minister of Finance & Development Planning
November 22, 2016
Economic Outlook: Current Crisis in Context
Economic Diversification: Adopting Export-Driven Industrial Policy for the 21st Century
Revisiting the Agenda for Transformation: Investing in Infrastructure for Trade Facilitation & Job Creation
Current Crisis in Context
•Created fiscal space by removing external debt burden of $4.9 billion through the HIPC process
• Increased domestic revenue from $80 million to a peak of $470 million in 2014, and mobilized substantial support to invest in trade facilitation infrastructure
•Dismantled trade barriers through ongoing reforms, contributing to an average annual growth rate of over 7.5% prior to the EVD Outbreak
Sources: Ministry of Finance and Development Planning
5.9%
6.8%7.2%
8.2%
12.7%
6.0%
5.1%
6.1%
7.4%
8.2%8.7%
0.7%0.3%
-0.5%
3.2%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Liberia Real GDP growth
Fuel crisis
Path of sustained growth on way to double digit growth
Ebola – back to freefall
Source: MFDP, IMF (revised October 2016)
-6.00
-4.00
-2.00
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Comparative Medium Term Outlook- % Real GDP Growth
World Advanced economies ASEAN-5
Sub-Saharan Africa Liberia
Source: MFDP, IMF (revised October 2016)
8.23
12.72
5.975.09
6.097.43
8.25 8.66
5.906.80 7.20
8.23
12.72
5.975.09
6.097.43
8.25 8.66
0.690.02
2.46
4.735.41
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Percent of Real GDP Growth
(2006-2018)
Pre-Shocks Period Post -Shocks Period
Analysis of 2016 half-year activities points to more agricultureactivities driven by increases in rice and cassava production
• Filling output gap requires diversification
• Agriculture and manufacturing sectors can provide best alternatives
Impact of Ebola Virus Disease
Price decline for key exports: Iron ore, rubber, gold, etc.
UNMIL Drawdown is peculiar to Liberia
-25.00
-20.00
-15.00
-10.00
-5.00
0.00
5.00
10.00
15.00
20.00
25.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Percent of Real GDP Growth
Liberia Ivory Coast Ghana
Guinea Nigeria Sierra Leone
Source: MFDP, IMF (July 2016)
0%
10%
20%
30%
40%
50%
60%
70%
80%
0 100 200 300 400 500 600
Sources: IMF, Government of Liberia, Labour Force Survey (2010)
Agriculture
Commerce
Mining & Utilities
Construction
GovernmentTransport
Manufacturing
Number of workers, thousands
Avera
ge a
nnual G
DP g
row
th 2
00
5-2
01
3
Few Workers Many workers
Low Growth
High Growth
Liberia GDP per Capita vs Lower Middle Income Status Threshold
Growth in Liberia has long been driven by mining sector…
Mining driving Growth, but not creating jobs:
• Agriculture only grew 2.8%, but accounts for about 50% of workforce.
• Manufacturing, which is also labour-intensive, only grew 3.6%.
Source: Indexmundi, World Commodity Prices 2015
-0.25
-0.20
-0.15
-0.10
-0.05
0.00
0.05
0.10
0.15
Iron
Ore
Ru
bbe
r
Cru
de O
il
Co
al
Gold
Co
ppe
r
Co
tton
Co
ffee
Tea
Na
tura
l G
as
Co
co
a
Perc
en
t ch
an
ge s
ince J
an
uary
2013
Global price declines have accelerated focus on value addition at home
Diversification away from extractive commodities is needed
Source: MFDP, LRA
-
10,000
20,000
30,000
40,000
50,000
60,000
Q1 Q2 Q3 Q4
Trade Tax in '000 USD' Chart
TR tax
2014TR tax
2015
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Q1 Q2 Q3 Q4
Gross Trade Value in '000 USD'
Gross Trade 2014 Gross Trade 2015
Gross Trade 2016
Adopting Export-Driven
Industrial Policy for the 21st Century
Operationalize LATA
•Support value addition in
agriculture (through
financing, public goods,
market access)
•Strategic investment, both
domestic & foreign, in value
chains + downstream
processed goods
Support Manufacturing
•Expand electricity
distribution
•Link creative financing for
MSMEs + commercially-
viable businesses
•Attract more FDI in
manufacturing
Invest in Infrastructure:Link farmers to the final consumer + Connecting businesses to the grid
The LATA aims to develop priority agricultural value chains through private sector investment, innovative financing, adoption of an export-oriented industrial policy and enabling business environment. The following deliverables are sought by Dec 2017:
Rubber: Rubber Development Fund, 3 RSS Clusters, Operational, Access to new markets
Cocoa: LACRA Act passed, foreign value chain investor, access to inputs & extension services for smallholder farmers
Oil Palm: Outgrower scheme pilot, processing mills operational, Exports of Oil Palm, Non-concessionary production & marketing increased
Strategic level. Program formulated, budget available. eRegistration of farmers. Cost sharing mechanism. Financing facility for coops and agribusinesses. Warehouse Receipt System . Business Dev’t services. Agro-dealer network. Regulatory reforms. Quality control
Rice: Increased yields & access to market; Cost of production reduced; Private sector investment; Export markets explored
Fish: Robertsport & Mesurado fishing facilities operational, tax & regulatory reform, bankable aquaculture projects
Cassava: High quality cassava flour used in bread, starch production
Poultry/Livestock: Investor in feed production, backyard poultry rearing project
08/24/2016 15
Rubber RubberwoodRibbed Smoked Sheets
Household UtensilsShoes
Oil Palm Cooking OilSoaps
Biomass fuelFeed
Cocoa Grade A CocoaCocoa Butter
CosmeticsChocolate
Fish Fresh/driedFillets
CanningFish Sauce
Cassava High Quality FlourChips
StarchesGari
Rice CerealsFeed
Rice OilNoodles
1. Identify those able to play pivotal roles along the value chain
2. Provide enabling factors
3. Address bottlenecks inhibiting growth
Business Support Services
Foreign Markets
Exporters
Processors
Aggregators/Traders
Agriculture Production
Inputs to Production
Components of Functioning Market System Enabling Gov’t Support
SPS, VoC & standard compliance / infrastructure
Clear Regulatory Frameworks
Facilitation through Signature Listings / agri-infrastructure / Investment promotion
Improved Agri - Infrastructure
Farmer & Agro-Dealer Registration / Access to Finance / Research
Duty-free critical inputs
Domestic Markets
Local Wholesalers
Creating a Sustainable Market System relies on both public & private sectors
Investing in Infrastructure for
Trade Facilitation & Job Creation
Sector Strategies and Plans
Informed by various studies and diagnostics Incorporates issues of equality and inclusion
Five Year Development Plan (Agenda for Transformation)
Inclusive Economic Growth Participatory Socio-Political Development
National Vision (Liberia RISING 2030)
Broad national aspiration to be achieved by 2030
FU
TU
RE
CO
RR
IDO
RS
of pavement completed or scheduled to be completed by 2017732 km
of on-going works in late 2017 (incl. urban roads),
278 km
of unpaved roads with finalized feasibility study (by 2017 latest) & financing
168 km
700+ km with available or on-going feasibility studies by 2017
MONROVIA
Mt. Coffee Hydro Plant
Monrovia Consolidation
RIA Corridor
Bomi Corridor
Cote d’Ivoire, Liberia, Sierra Leone, Guinea
(CLSG) Project
Kakata Corridor
India ExIm (Ganta,
Gbarnga, Zorzor)
HFO 3HFO 2
Source: Presidents Delivery Unit
More affordable and reliable electricity coming online to reduce cost of doing business…
MONROVIAPorts of Buchanan &
GreenvilleUpgrade of Equipment
Freeport of Monrovia Fuel Unloading FacilityMesurado Fishing Pier
Roberts International Airport
Airport Terminal ConstructionRunway Upgrade
… & the rebuilding of ports will further facilitate domestic & regional trade by 2017
Source: Presidents Delivery Unit
AGRICULTURE BUILDINGS
• Samuel KanyonDoe (SKD) Sports Complex
• Ministerial Complex
• Capitol Building Annex
•Liberia Agricultural Transformation Agenda
MANUFACTURING WATER & SANITATION
• Monrovia Industrial Park
• Special Economic Zone (SEZ)
• White Plains Rehabilitation Plant
• Three Towns Water & Sewage
GoL is also investing in hard & soft infrastructure to facilitate service delivery
Source: Presidents Delivery Unit
Transforming Liberia Together