By Harry Greaves, Jr. CPA
I learned something new about the circumstances surrounding our recent fuel debacle. It was Aminata, not Srimex (my apologies to Musa Bility) that was given the exclusive right by LPRC management to bring in 6,500 tons of diesel (equivalent to 2 million gallons, about 2 weeks’ consumption).
All other importers were forbidden to bring in any product until Aminata’s had landed. Problem is that Aminata’s cargo was supposed to have come in on January 10th. It is February 16th and no sign of that cargo. If TOTAL, the foreign importer that Musa Bility complains so much about, had not come to our rescue with a 7,000 ton cargo that is now discharging, the economic wellbeing and security of our nation would have been put at serious risk.
To support his claim that I was in the pocket of foreign importers, Mr. Musa Bility asserted, on T. Max Jlateh’s radio talk show “50/50”, that local importers’ market share never exceeded 15 % while I was managing director of LPRC. As the table below shows, that assertion is patently false.
I took over as managing director in January 2006 and left in September 2009. One can see that there was a dramatic increase in the market share of Liberian importers during my first year in office, from just 12% in 2005 to 35% in 2006. That growth continued into the next year, 2007. In fact, the market share of Liberian importers for gasoline was 50%. So much for the claim that I was in the pocket of the foreign importers.
I achieved these dramatic results for Liberian importers without imposing any quotas or limiting the right of any importer to import. I simply helped Liberian importers in a number of non-discriminatory ways. I put in a good word for some with product suppliers and even arranged financing for one, unbeknownst to him. I simply told him, “You will receive a phone call from such and such company. They will extend credit to you.” I hooked the very Musa Bility up with a large Nigerian oil company, OANDO, but that relationship unfortunately went sour because of his unorthodox business practices.
The market share of the 3 Liberian importers at the time dropped precipitously in 2008 because they did not take my advice. I warned them that the foreign importers would not take kindly to their eating, their lunch and would likely come back strong. To counter that, I suggested that they form one giant company so they could more effectively compete. But instead of doing that, they got seduced by their new-found wealth and chose to “diversify” into new territory, businesses with which they were unfamiliar, a classic mistake of burgeoning Liberian entrepreneurs.
I learned several decades ago from the legendary Liberian industrialist, Steve Tolbert, that if you diversify away from your core business into unknown territory without having the management infrastructure in place, you risk failure, and that is exactly what happened. As the price of crude oil escalated during the first and second quarters of 2008, reaching a peak of US$148/barrel, Siaka Turay (Aminata) decided he wanted to be a rice mogul, went to China and took a large position on rice, thinking the price would continue to rise. Bad move. The price dropped dramatically and he lost his shirt. The financing company backing him almost went bankrupt.
Musa Bility (Srimex) wanted to be the cement king of Liberia. He similarly lost a ton of money. These costly mistakes impacted severely on their core business, petroleum importation, because they used their petroleum money to finance their forays into unchartered waters. They were unable to pay their petroleum vendors on time, the vendors started reducing the amount of credit they were willing to give them and the downward spiral took hold, such that by the end of 2008 their market share had dropped precipitously from a high of 39% to 19%.
By 2011, the rot had set in. That’s when LPRC management decided to step in and set up the cartel of Aminata, Srimex and Conex (Cherif Abdallah) and to force foreign importers to buy through the cartel members, under the guise of “Liberianization”. If you deduct some 4.7 million gallons of product that MOTC was forced to buy from Srimex that year, the true market share of the Liberian importers in 2011 was 11%, not 23%, a level that was even lower than they had attained in 2005, the year before I took over at LPRC!
Mr. Bility would have us believe that the cozy monopoly that the Three Musketeers aka the Mandingo Mafia have arranged with LPRC Managing Director T. Nelson Williams to guarantee them healthy profits is good for us, the consuming public, because the monopolists are Liberian. Well, a monopoly is a monopoly is a monopoly, no matter the skin color of the monopolist. And we in this country know from bitter experience how harmful monopolies can be. Put another way, we know how beneficial to consumers free markets are. On the day Cellcom launched in 2004, the price of international calls dropped by 50% from US$1.00 per minute to 50cents. Sim cards that used to cost US$65.00 now cost as little as US$1.00. And the cell phone wars bombarding us on our airwaves have resulted in lower and lower toll rates.
My wife and I are in the food service business (P. A’s RIBHOUSE). We have never asked the government to exclude anyone from the catering or restaurant business, whether they are white people, brown people, yellow people, Lebanese, French, Italian, Chinese, Vai, Mandingo, Fulah, Mende, Gio, Mano, Gola, Kpelle, Kru, Krahn, Sapo, etc. We are willing to compete, to take our chances in the rough and tumble of the marketplace, where sometimes you win and sometimes you lose. The customer, not the government, should determine who prospers and who falls by the wayside. That is the essence of our free market system.
Mr. Bility wants us to believe that a cartel of 3 Mandingo boys (out of total complement of 11 importers, including 7 Liberian importers) is a valid definition of “Liberianization”? Puhleeeaze! Had he told me that when I was MD at LPRC, I would have promptly revoked his importation license, created my own Bassa Mafia by collecting 3 boys from Kokoyah (my home), issuing them import licenses, arranging product supplies and financing for them, and regaling them as paragons of Liberianization virtue. What a crock! The current cartel of the Three Musketeers at LPRC has a bad smell to it. It lacks transparency, is corrupt by its very nature and should be done away with.