The Liberian government, under the leadership of President Joseph Nyumah Boakai, has embarked on a significant undertaking to review and renegotiate several key concession agreements, aiming to secure more favorable terms for the country and its citizens. This initiative marks a departure from previous administrations, which struggled to revisit these long-term agreements, often locked in by rigid terms and lacking review clauses. The most notable achievement to date is the agreement by APM Terminals, a subsidiary of Maersk and operator of the Freeport of Monrovia’s container terminal, to review its 25-year concession. This breakthrough, secured after persistent negotiations led by the National Port Authority (NPA), represents a major victory for Liberia, as it seeks to align its concession agreements with current economic realities and development needs.
The concession agreement with APM Terminals, signed in 2010 and due to expire in 2035, originally lacked a review clause, a significant departure from international best practices. Previous attempts to renegotiate the agreement, including efforts under former President George Weah, proved unsuccessful. The current administration, recognizing the importance of revisiting the terms, prioritized the review as a key campaign promise. The agreement to renegotiate signifies a political win for President Boakai and, more importantly, offers a crucial opportunity to address long-standing concerns regarding high service costs, revenue sharing, and Liberian employment opportunities within the port operations. The review process is now formally underway, with a joint committee established, comprising representatives from the NPA, APM Terminals Liberia, the Ministry of Justice, the National Investment Commission, and President Boakai’s economic advisor.
APM Terminals plays a vital role in Liberia’s trade infrastructure, managing cargo handling, terminal operations, and port logistics at the Freeport of Monrovia. Since assuming control in 2010, the company has invested significantly in modernizing the port, introducing new container handling equipment, expanding the terminal, and implementing digital automation systems. These investments have undoubtedly improved efficiency and boosted government revenue collection. However, concerns have persisted regarding the cost of services, the distribution of revenue, and the limited opportunities for Liberian employment. The upcoming review aims to address these concerns and ensure that Liberia receives a fairer share of the benefits generated by its crucial port infrastructure. Critics of the original agreement, including Vice President Jeremiah Koung and the National Customs Brokers Association of Liberia, have voiced concerns about the excessive leverage granted to APM Terminals, including the ability to unilaterally adjust tariffs and the absence of an amendment clause for the first 25 years. These issues are expected to be central to the renegotiation process.
Beyond the APM Terminals concession, the NPA, under President Boakai’s direction and with technical support from the Ministry of Finance, Liberia Revenue Authority, and Ministry of Justice, has already successfully renegotiated other key agreements related to port operations, including the Marine Services Agreement and the Global Tracking and Maritime Solutions (GTMS) contract. These renegotiations have resulted in increased government revenue, reduced costs for port users, and a clear roadmap for greater Liberian participation in these services. The revised GTMS contract, for example, increased the government’s revenue share from a meager 3% to 40% in the first five years, rising to 45% thereafter. It also mandates that GTMS comply with all applicable tax laws, including a 20% corporate tax. Concurrently, costs for port users have been reduced, with lower fees for both 20ft and 45ft containers. The GTMS system provides real-time cargo tracking and security verification, enhancing transparency and minimizing risks associated with smuggling and illicit activities.
The revised Marine Services Agreement also incorporates significant improvements. An indigenization clause mandates the training and integration of Liberians into the operations, aiming for full local control within five years. The government’s royalty share has increased from 15% to 20%. Furthermore, the agreement provides for logistical and technical support to fully operationalize a navigational aid system, ensuring safer passage for vessels entering and leaving the port. These successful renegotiations demonstrate the government’s commitment to maximizing the benefits derived from its strategic assets and ensuring greater participation by Liberian citizens in key sectors.
The Boakai administration’s focus on reviewing concession agreements extends beyond the Freeport of Monrovia to encompass other crucial sectors, including mining. Currently, the concession agreement with ArcelorMittal Liberia (AML), the country’s largest iron ore mining company, is also under review. AML utilizes Liberian port infrastructure for the transport of its iron ore. While AML pays fees for this usage, the NPA contends that Liberia has not received its fair share. The ongoing review aims to address this issue and ensure that AML’s obligations regarding port infrastructure usage and marine services are clearly defined and equitable.
The renegotiation of these concession agreements represents more than just technical and policy adjustments; it signifies a broader effort to reassess long-term agreements that have shaped Liberia’s economic trajectory. The recent successes at the NPA serve as a powerful precedent for future reviews, demonstrating the government’s resolve to ensure a more equitable distribution of economic benefits derived from national assets. This proactive approach to managing concession agreements is crucial for Liberia’s sustainable development and economic growth, ensuring that the country’s resources are utilized to benefit its citizens and future generations. The government’s commitment to transparency and accountability in these negotiations further strengthens public trust and fosters a more conducive environment for foreign investment, ultimately contributing to a more prosperous and equitable Liberia.
