Africa’s Creaky Fragile Poll Apparatus
Thinly-traded secondary loans for Liberia and the Democratic Republic of Congo were buffeted by disputed presidential elections extending incumbents’ tenure amid allegations of widespread fraud and manipulation. Liberia’s contest returned Nobel prize winner and former Citibank and UN executive Johnson Sirleaf with only 40 percent turnout as the main opposition candidate, claiming unfairness, boycotted the second round, while son of the original post-Mobutu DRC leader Kabila won over a veteran political activist almost double his age. Both countries recently reached the HIPC completion point and received billions of dollars in external debt relief with Congolese negotiations continuing with non-Paris Club and commercial creditors. Its operation has been controversial with anti-poverty groups at one extreme calling for total forgiveness under the doctrine of “odious” obligations, while distressed specialist funds argue that claims can be honored in light of additional loans taken from Chinese state banks in exchange for copper and diamond mining access. The World Bank criticized a $6 billion commodities for infrastructure building and funding deal, and reported no employment growth from small and mid-sized firms the past five years due to corruption. The country is ranked last on the UN’s Human Development Index, with most of the population in abject poverty and less than 10 percent with electricity as criminal gangs and warlords continue to ravage outlying province, especially along the Rwanda border where residual rebel groups have been accused of egregious human rights violations. The minerals sector has come under scrutiny with provisions of the Dodd-Frank law in the US to certify conflict-free sourcing. Construction and services around the large foreign aid and peace-keeping presence are additional economic mainstays supporting 5-percent plus growth on double-digit inflation. Under official lending programs, the central bank is barred from budget deficit coverage, and last year a big bank was closed under agreed financial sector cleanup.
Liberia’s biggest bilateral donor is the US which gave $250 million in 2010, and the Indian steel giant Arcelor Mittal has been the biggest investor in a $15 billion project portfolio with iron ore exports launched in September. The IMF forecasts 8 percent-range GDP growth this year and next after getting over 95 percent in debt reduction amounting to almost $5 billion. Hydropower installation and Monrovia port improvement were identified as investment priorities needed to better living standards as well as support the flagship Firestone rubber plantation. A debt management agency has been established to oversee fresh infrastructure borrowing as the government budget has increased to $500 million with a tight lid on spending. President Johnson-Sirleaf reiterated upon victory an agenda to be weaned from aid over the coming decade and achieve middle-income status by 2030 despite her fragile state mandate.
