Economic experts warn that replacing ArcelorMittal (AML) as the Buchanan-Yekepa railway operator could lead to wasteful spending and worsen Liberia’s financial situation. Maintaining AML’s management is viewed as crucial for economic stability, while the alternative proposal with High-Power Exploration (HPX) is seen as financially risky and politically motivated. Experts urge prudent fiscal decisions prioritizing the public’s welfare over political gains.
Economic experts in Liberia are expressing alarm regarding the government’s proposal to replace ArcelorMittal (AML) as the operator of the Buchanan-Yekepa railway. They argue that this change may incur significant financial costs and worsen the country’s precarious financial situation. Given that AML has managed the railway for years at no expense to the state, such a move raises concerns about wasteful spending.
ArcelorMittal has invested more than $800 million into railway rehabilitation and maintenance since 2005, and its existing agreement facilitates other companies, such as High-Power Exploration (HPX), utilizing the railway infrastructure without imposing additional costs to the government. The government is reportedly seeking to replace AML with a new operator that would necessitate hefty payments from the Liberian state.
Experts estimate annual management costs for the Buchanan-Yekepa railway could range from $50 million to $75 million, covering various operational needs such as maintenance and staffing. Given Liberia’s current economic challenges—including a decline in foreign aid—this expenditure could impose a heavy burden on taxpayers and detract funds from critical areas like healthcare and education.
Critics argue that the push to remove AML is politically motivated rather than economically justified, with some officials favoring HPX, a Guinean mining company, over the long-term interests of Liberia’s economy. The proposed arrangement with HPX would only provide Liberia with $5 million to $10 million in transit fees annually, which is substantially lower than the $200 million expected from AML’s new agreement.
Moreover, HPX reportedly lacks intentions to invest in Liberia or to generate local employment, in stark contrast to AML, which plans to create an additional 2,000 jobs in the region. Economists recommend that the government prioritize sustaining AML’s partnership as it ensures revenue stability and limits unnecessary expenditures.
Replacing AML with a new operator could hinder Liberia’s ongoing economic growth, posing considerable risks to financial stability. At a time when the country is grappling with escalating economic difficulties, it is imperative for the government to prioritize wise fiscal decisions that focus on the welfare of its citizens over political interests.
In conclusion, the proposal to replace ArcelorMittal as the railway operator raises significant concerns about economic repercussions and potential financial burdens on Liberia. Experts advocate for maintaining the partnership with AML to secure stable revenues and support local employment. The government’s decision on this matter will be a critical indicator of its commitment to responsible economic management and the welfare of the Liberian populace.
Original Source: frontpageafricaonline.com
