MONROVIA, Montserrado â€“ Finance Minister Samuel Tweah has unveiled what he termed as the Beijing Envelope, following Liberiaâ€™s participation in the Forum for Chinaâ€“Africa Cooperation, which ended recently in the Peopleâ€™s Republic of China.
Addressing a special press conference at the Ministry of Information on Tuesday, Tweah said Liberia will benefit from a natural resource swap investment facility of US$2.5 billion over a period of five years. He said the amount, which he described as the most significant package accrued from the forum, was committed to the country by the government and people of China at the end of bilateral discussions between the Chinese president Xi Jinping and the Liberian delegation, headed by President George Weah.
â€œThis is not a loan, it is an investment facility and framework entered into between the China Roads and Bridge Corporation or CRBC and the government of the Republic of Liberia under the full calculation to unveil US$2.5 billion financing for the countryâ€™s development over the next five years,â€ he noted.
CRBC is one of the four large state-owned companies in China which is part of the international project contracting market, mainly focusing on roads, bridges, ports, railways, airports, tunnels, water conservancy projects, municipal works, and dredging both at home and abroad. Its business scope also covers investment, industrial development, trade, leasing, as well as services.
The minister clarified that the package was not a cash waiting to be available to Liberia in a dayâ€™s time, but a natural resource swap, a new module that monetizes future flows in developing countries. He said the module is similar to what Ghana agreed to in order to get US$2 billion committed by China through a Sino-Hydro deal.
â€œWe will extract our resources, but our experience shows that the module weâ€™ve used in the last 75 to 100 years has not worked – not just in Liberia but all of Africa. Weâ€™ve not been able to enjoy the kind of development commensurate with our resource endowment,â€ he said.
According to him, the amount will also become part of the governmentâ€™s financing source for its US$5-6 billion development plan that has yet to be released.
He noted that the facility will boost priority infrastructure projects, including roads and electricity, including the construction of a dam on the St. Paul River that will enable the country to generate over 600 MW of power. With this, he said the country would be able to export power to other countries. Another agreement would see the provision of solar panel street lights to the country.
He disclosed that the government also secured an agreement through a Chinese partnership to cultivate 500,000 to 1 million tons of rice every year. He said this is in line with Weahâ€™s commitment to address the countryâ€™s long-standing challenges, including the lack of adequate rice production and supply.
â€œThis is why he wanted to be president â€“ to do the big things that we have not been able to do. So, rice production is one of those big things,â€ he added. Tweah noted that the agreement will provide employment opportunities for many young people and show competitiveness for value chains in the agriculture sector.
The US$2.5 billion package, according to the minister also includes an agreement to give preferential treatments to vessels flying under Liberian flagship at China’s ports, similar to the treatment given those flying under the Chinese flag.
â€œThis will also seek and certify Liberian seafarers for employment,â€ he noted. He said an elaborate framework is being mandated by the president to follow up on the rollout of the development package.
Resource for infrastructure swap is a mechanism popularized by China, especially towards African countries. It involves exchanging natural resources for infrastructure. Revenues from exporting natural resources are used as collateral to finance infrastructure development. As the ministry has not released documents providing the details of the agreement yet, the terms of the deal are unclear, including which natural resources will be used.
Earlier, the government announced that China committed a US$54 million grant to fund for emergency food aid and the construction of two overpasses. The amount was part of a sum of US$60 million in grant and aid being committed by the Chinese government to African countries.
The finance minister said the amount was one of the highest aid packages of the Chinese government to African countries and the highest in Liberiaâ€™s history.
Featured photo by Zeze Ballah