In November 2023, the President of Liberia, President George Manneh Weah, issued an Executive Order No. 124 banning the exportation of unprocessed natural rubber. Now, this news is a big one and it is controversial because rubber is the most important export commodity in Liberia. In fact, Liberia is Africa’s largest producer of rubber so this means that Liberia’s economy is heavily dependent on rubber. So, this begs the question, why would the President of Liberia decide to ban the exportation of a product that is not only the major export commodity in the country but also a source of livelihood to a large number of people? Also, if you observe closely, this move by the Liberian President follows the recent trend by African leaders to ban the exportation of unprocessed minerals. So, another question is why are African leaders taking this move? Isn’t the exportation of these minerals supposed to bring revenue for them? Stay with us as we find out in this video.

In theory, the exportation of goods and services is highly beneficial to a country because it contributes to economic growth and it means that lots of goods and services are produced in the factories in a country. This also means that the country has a developed industrial system. In reality, this is true for countries around the world except in Africa. How is that possible you may ask? Well, African countries are blessed with abundant resources needed to produce finished goods for exportation quite alright but, the colonization period plus the economic policies that African countries who just became independent were forced to implement by the IMF and World Bank in exchange for financial assistance created a state where African countries could not develop the technological and economic capacity needed to establish industries that would produce finished goods with the abundant resources that they have. This has, therefore, led African countries to be dependent on the West for industrialized goods. But African countries still had to export goods as a way of generating much-needed revenue so they had to export the only product that they had in abundance which the world needed to produce those industrialized goods, the mineral and natural resources also called primary commodities.

The disadvantage of exporting these primary commodities is that the prices are affected by shocks in the global market and African countries end up selling these commodities at low prices and then importing finished goods made from their commodities at a higher price. So you see even though exportation is good and brings in revenue, for African countries they end up using the revenue gotten from the exports to import finished goods, and most of the time, the export revenue is not enough that’s why they have to borrow money at outrageous interest rates to finance importation. This is why most African countries have a balance of payment and a balance of trade deficit with more money flowing out of their countries. Take for example, Nigeria, which exported raw materials worth US$33.5b in 2020, consisting mainly of crude oil, gas, and cocoa, the volatility and vulnerability of commodity prices have brought about a 41.5% depreciation of the Naira against the US$ since 2016. Aside from this, African countries are also faced with the exploitation of natural and mineral resources by Western industries established in the countries. These Western companies come into African countries, get the minerals needed at ridiculously low prices, process them, and sell them to Africa at very high prices. Meanwhile, because African countries have been told by the IMF, and World Bank that getting foreign investment into their country is essential to their economic growth, African countries end up signing agreements with these Western companies that are beneficial to them but detrimental to the country’s growth.

Faced with this background, some African countries have decided to address this issue of exploitation by issuing a ban on the export of unprocessed minerals. In June 2023, the Namibia government imposed a ban on the export of unprocessed lithium and other critical minerals. They did so so that the country could capitalize on the increasing global demand for metals utilized in clean energy technologies, thereby ensuring potential economic benefits for Namibia. In December 2022, Zimbabwe prohibited the export of raw lithium from its mines so it could cash in on value addition and stop losing billions of dollars in mineral proceeds to foreign companies. With continued high international demand, Zimbabwe is projected to become one of the world’s largest lithium exporters, with the government hoping to meet 20% of the world’s total demand for lithium when it fully exploits its known lithium resources. Also, in 2022, Nigeria rejected a request by Tesla to mine its lithium unless Tesla decided to double down on value addition by setting up a battery-making factory in the West African nation.

commented that the moratorium on the exportation of rubber will create competition in the Liberian rubber sector which has been dominated by the American company, Firestone since 1926.

Others however such as James W. Sayekea, Chairman of CORSAL, believes that the move by the President would not be beneficial to the Liberian economy, and he has called on the incoming members of the 55th National Legislature to revoke President George Weah’s executive order No. 124. James Sayekea said that the group believes in the free-market system and holds dear its valuable principle of competition, which promotes and sustains free trade, and added that the order by the president is heartless and seeks to suppress the already struggling masses. He further added that the rubber sector must be left alone to operate on the basis of “willing seller and willing buyer” because it will greatly help to improve the lives of the rubber sector actors, our families in particular, and Liberians in general.

Seyekea also noted that the executive order negatively impacts the government’s revenue collection, as well as the livelihoods of truckers, farmers, shipping lines, and other actors in the rubber industry. According to him, truckers for example who transport rubber between and among actors in the rubber sector buy huge quantities of fuel daily in order to facilitate the movement of their trucks. And, the more they move the unprocessed rubber and consume fuel, the more they contribute to the road fund and also increase sales at filling stations. But, he said all this is no longer happening as a result of the ban. Whether or not the ban will be revoked remains to be seen but the fact is the government’s move is a good step in the right direction because the exports of unprocessed commodities have resulted in Africa missing out on the advantages of spill-over.

However, while this move is a good step in the right direction, merely banning the exportation of unprocessed rubber alone is not enough. The government of Liberia will have to go further to build infrastructures that would support the manufacturing industry so that the rubber can be processed in the country thereby creating employment opportunities. This means there needs to be a good network of roads, rails, bridges, and access to the market. Since Liberia does not yet have the technical know-how to process these minerals, they can insist that any company that is interested in the rubber should build a rubber processing plant in the country. This would ensure that rubber would be processed in the country and instead of exporting unprocessed rubber at low prices, it would be processed rubber that would be exported. It would also create employment opportunities for the Liberian population which would also teach them the skills needed to process the rubber. And from there, more local companies would be established in order to keep up with the demand for processed rubbers. This would be the beginning of Industrialization for Liberia.

It’s this same step that Zimbabwe is following. After the ban on lithium export was imposed in the country, in order to curb excessive smuggling of lithium as well as enhance value addition, and beneficiation and spur significant opportunities for investment in processing and manufacturing firms, the government of Zimbabwe is currently exploring a joint venture with a Chinese company to set up a battery metals processing plant in Zimbabwe. Now, if this deal works out, Zimbabwe will be in the right direction to industrialization. So, it’s now up to the Liberian government to turn things around in the country.

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