Despite major challenges faced by Liberia due to the Ebola epidemic, Liberia EITI (LEITI) published their EITI Report covering financial year 30 June 2012 - 30 June 2013 in December 2015. The report includes a lot of information about the sector including production figures, the relevant legal frameworks and contracts and the contribution of the extractive sector to the economy.
According to the report, government revenue from the extractive sector increased by almost 70% to USD 186 millionin the 2012-13 fiscal year, and total commodity exports more than doubled to USD 352 million in 2013.
No oil production, more oil revenue
There is currently no oil production in Liberia, although there have been exploration licenses awarded in the past decades. While the last report disclosed that there was a drop in oil money from such licenses, the new report shows that revenue from oil and gas was nearly six times higher than in the previous year. The oil and gas sector contributed more than 44% of revenue from the extractive sector and almost 10% of total government revenues. The increase was largely due to a signature bonus payment of USD 120 million made by Exxon Mobil to NOCAL, the national oil company.
The mining sector’s contribution to the Liberian economy has been more stable and continues to grow, and increased by 22% to USD 70 million in FY 2012/13. Iron ore is the most significant commodity produced in Liberia, and production value more than doubled in 2013. The value of diamond production also increased with 40%.
As in previous reports, LEITI includes data on the agriculture and forestry sectors. The report shows that agriculture contributed to 35% of Liberia’s GDP in 2013, with palm oil and rubber being the largest sub-sectors. The report includes information on the legal structures governing the two sectors, their contributions to the economy, agriculture and forestry licenses and land rights.
Disclosure of ‘real’ company owners
Liberia has been committed to publish the ‘real’ or beneficial owners of the extractive companies operating in the country, and has conducted a beneficial ownership pilot. A LEITI report on beneficial ownership covering agriculture, mining and oil sector was published in December 2015. As part of the pilot, LEITI requested information on the top five company owners and natural persons with at least five percent shares in the company. Of the 89 companies included in the scope, 49 provided the requested information on their beneficial owners. The report found that there is limited publicly available information on companies operating in the sector and that government records on beneficial owners were not up to date. It includes recommendations on how to facilitate disclosure in the future.
Identifying gaps in how the sector is governed
The LEITI Report provides an overview of the extractive sectors’ legal regimes and the rules related to exploration and production of resources. LEITI has established an online library with contracts and concessions and has also created a Simplified Contract Matrix to enable stakeholders in affected communities, towns and villages to read and understand what are usually complicated concession agreements.
Despite the wealth of information about existing contracts and concessions, there is not much available information on the licensing processes and procedures for allocating contracts and licenses in Liberia. A Post Award Process Audit conducted by LEITI found that only 10% of the contracts awarded in the period between July 2009 and December 2011 were in compliance with the applicable rules. In light of these findings, the report found that more information on licensing processes could help to ensure that these are made in accordance with the legal frameworks.