Operational expansion of corporations and large businesses globally is usually occasioned by diverse and multilayered business interests not just exclusive to profiting.
Though profit-driven expansions generally occur when businesses seek additional options to generate more, for large mining concessions like ArcelorMittal it means protection of business interest for them, and long-term investment safeguards local jobs provision for economic expansion.
Empirical and anecdotal evidence show that a dynamic and growing SMEs sector in developing countries like Liberia, which are supported by big firms, can contribute to the achievement of a wide range of development objectives, including the attainment of income distribution and poverty reduction and the creation of employment for community members.
When small businesses are empowered to flourish, they mobilize saving and enhance production of goods and services that meet the basic needs of the poor.
While estimates vary greatly depending on definitions of SMEs across several countries, recent work by the World Bank suggests that almost 30 per cent of employment in developing countries like Tanzania is generated by the informal economy, while an additional 18 per cent is provided by (formal) small and medium enterprises.
Together these two groups contribute 63 per cent of GDP in nearly all developing countries.
It must not be forgotten that recently the 2022 US State Department Report on Liberia’s investment climate reveals that economic growth in 2023 will be driven mainly by the mining sector.
The report also indicates that structural reforms in the mining sector of the country are also expected to increase basic economic activities.
Given that ArcelorMittal is the leader in Liberia’s mining sector, it is with no doubt that AML’s phase two expansion will help overcome a lot of economic challenges in Liberia’s small business sector, and support growth.
For example, AML through its phase two expansion will hire dozens of small businesses in transportation, the general service industry, and more.
These SMEs will correspondingly contract or employ hundreds of unemployed Liberians who cannot find jobs in an economy whose growth has been stagnated since the end of the Ebola outbreak in 2016.
A healthy SME sector will not just contribute prominently to the economy through the creation of more job opportunities, but also, when they are empowered, help generate higher production volumes, increase exports and introduce innovation and entrepreneurship skills.
With AML’s support, any local industries will increasingly become more important for poverty reduction, as they will be the engine for economic growth.
This is why it is key for the government to continue to support the Phase Two expansion of AML in order to favorably shape the prospects of small and medium enterprises in Liberia.
When the opportunities are available, small businesses are obviously a tool for economic survival at a time when there are very little foreign investments and private sector employment in Liberia.
SMEs help to improve and sustain the health of the market economy in terms of job creation, domestic production and exports to promote individual collective initiative, basic social values, and are highly viewed as a crucial tool towards achieving social and regional integration for impoverished nations like Liberia.
In fact, it is these small businesses that will actually help AML’s plan for phase two of its mining operations in Liberia.
The Phase II expansion has projected an annual capacity of iron ore mine to increase from four million tons a year to 15 million tons a year.
Not just that the expansion will empower SMEs; it also states that the company will increase job opportunities for Liberians, to be accomplished through investment in an iron ore concentrator, expansion of the port facilities in Buchanan as well as increased utilization of rail capacity.