Liberia’s Trade Imbalance: The Story of the Egg
The healthy ratio between a country’s total imports and exports is one of many factors that can simulate a nation’s economy. For Liberia, their independence in 1847 was founded on trade issue, because they needed to be a sovereign nation in order to assess a tariff on exports to Great Britain as much needed revenue source. However, for most of the last 20 to 30 years this nation has been dependent on foreign aid and importation of goods such as foodstuffs since the production of locally grown or made goods was crippled by the war. This dependence created a huge trade deficit since the imports were far greater than the exports. Yet, in the last two years this gap between imports and exports has narrowed to where in 2009 the exports surpassed the imports (source: http://www.census.gov/foreign-trade/balance/c7650.html). Nevertheless, these trends do not show the true realities of this ongoing trade imbalance that is still dependent on imports for many goods such as food that could be produced domestically. The story of the simple egg will illustrate this point.
When researching and writing this post, I could not stop hearing the popular U.S. advertising jingle “the incredible, edible egg.” It is also made me reflect on the timeless debate “what came first, the chicken or the egg?” Clearly, the “egg” is the symbol of reproduction since it is the offspring from male and female propagation, but also it is the simplest representation of economic production.
Strangely enough, the “egg” is one of the many basic items that are currently imported into Liberia. The egg along with tomatoes, onions and other imported commodities could all be easily grown and produced in this nation. Obviously, a nation should be concerned when they import more of the simple items than what they produce locally, because even a simple egg can affect an economy. This reality can be clearly shown from an interesting story that occurred in 2008 while I was managing a guest house for a NGO I had formerly served.
In February 2008, I received several U.S. guests who were staying for two to three weeks, and as part of our service we served breakfast. Unfortunately, for nine consecutive days, I was not able to buy an egg anywhere in Monrovia. This occurred during their first nine days at the guest house, so the breakfast service was lacking scrambled or fried eggs, and French toast or pancakes. Throughout this period, I checked daily with my vendors at the foreign-owned and Liberian-owned supermarkets to be told to check the next day. Near the end of this period, I learned that the container with the eggs was sitting at the port, because an extra tariff was added to these imported goods. The vendors held off on paying the extra fee causing the goods to remain unpacked and unsold at the port. It was never clear what the outcome was, but the eggs were restocked at the supermarkets and I was finally able to provide the guests a hearty breakfast.
This story recently came back to light when the supply of eggs two weeks ago was not meeting the demand, so the consumers buying in the open markets saw an increase of 25% for a single egg. What this equated to for these mostly impoverished consumers is that they saw the price went from two eggs at 15LD (Liberian Dollars) to one egg at 10LD—currently the LD and USD exchange rate is about 70 to $1. Many people from developed nations may not see this change from 10.7 cents to 14.3 cent for one egg as a major issue, but when people in developing nations are trying to survive on $1 to $2 USD a day, any increase can be a detriment to their livelihoods.
I have shared this story about the nine-day “egg drought” from 2008 with many Liberians. This story has spawned many interesting conversations about eggs, tomatoes and onions. Several Liberians have shared how one of Liberia’s wealthy elite was selling eggs for a while on his farm not too far from Monrovia, but that service no longer exists. Also, they shared how in other African nations you will find the locally grown products, like tomatoes and onions, being sold inside the supermarkets whereas in Liberia they are sold on the streets outside the major supermarkets. They further explained how the cost of these goods in Liberia are much higher since they are imported whereas in the other African nations they are far cheaper since they promote local producers.
Liberia is an unique nation; it has a relatively small population of about 3.5 million and is abundant with many natural resources along with some of the most fertile soil for agriculture. I know for most of us who enter this country from the developed world, our minds can be baffled knowing the existence of these two variables—population size and available resources. It makes us ask “why is there poverty in Liberia”, because when computing these two variables it makes no sense at all. And when you add the fact that an egg needs to be imported, this is a clear indicator that something is wrong.
Many of us who grew up in the U.S. especially in the rural areas can remember our parents buying eggs from the local farmers. Often this trade was operated by women who were sometimes called the “egg ladies” This income from the egg sales helped supplement the family farm business, since their livelihoods depended on the revenue of the crops, animals or by-products that they sold in local or commercial markets.
In Liberia, this same concept could move a farmer out of subsistent living by supplementing their current production of market goods. These farmers in turn could also supply the countless number of people, especially women surviving on sales from the open markets (i.e. informal market). From these sales, a single mother could move her children from selling on the streets to sitting in classroom. A nation that promotes local production, can also stimulate their economy.
Majority of Liberia’s population, predominately women, are working in the agriculture and informal sectors, but the income from this work does not meet all their needs. Therefore, increasing locally grown and produced goods, Liberia can decrease their dependence on these imports and also their costs. In return, Liberia and its people can benefit from producing not only goods to be sold in their markets, but also expanding into foreign markets through fair trade initiatives.