Economic experts are cautioning against the Liberian government’s plan to replace ArcelorMittal as the operator of the Buchanan-Yekepa railway, citing potential financial strain on taxpayers and essential services. The proposal may favor High-Power Exploration, which offers significantly lower fees, thereby jeopardizing Liberia’s economic stability and job creation. Advocates emphasize the necessity of retaining AML to secure long-term revenue without incurring additional costs.
Economic experts have raised significant concerns regarding the Liberian government’s intention to replace ArcelorMittal (AML) as the operator of the Buchanan-Yekepa railway. Critics argue that this decision could lead to wastage of public funds and further exacerbate the country’s economic challenges. AML has effectively managed the railway at no cost to the government while investing over $800 million in its rehabilitation since 2005, a stark contrast to the substantial fees a new operator may demand.
Government officials are reportedly advocating for the replacement of AML with another operator, potentially requiring Liberia to spend between $50 million to $75 million annually on railway management, inclusive of maintenance, staffing, and compliance costs. Economists warn that this financial strain could burden taxpayers and divert essential resources from healthcare, education, and infrastructure.
The motivations behind the proposed change appear to be politically motivated rather than economically sound. Concerns have arisen that officials may be favoring High-Power Exploration (HPX), a Guinean mining firm, over the long-term financial well-being of Liberia. Under the proposed arrangement, HPX would contribute only $5 million to $10 million annually, a fraction of the $200 million AML is expected to provide under a new agreement.
Furthermore, HPX has not expressed intentions to invest in Liberia or generate local employment opportunities, in stark contrast to AML’s potential to create an additional 2,000 jobs through its expansion. Experts emphasize the importance of retaining AML’s management of the railway to enhance revenue streams for Liberia, avoiding unnecessary financial burdens.
The ongoing economic instability and depletion of foreign aid puts additional pressure on the government to prioritize sound financial decisions that will benefit the populace rather than political gain. The forthcoming decision regarding the Buchanan-Yekepa railway is poised to serve as a crucial indicator of Liberia’s leadership and its commitment to making economically prudent choices.
In summary, the initiative to replace ArcelorMittal as the railway operator could introduce severe financial hardships for Liberia. Experts advocate for the continuation of AML’s management, stressing its proven economic benefits, job creation potential, and overall contributions to national revenue. Policymakers are urged to prioritize fiscal responsibility and the welfare of citizens over political considerations, as economic stability remains critical for the country’s future.
Original Source: frontpageafricaonline.com
