(JollofNews) – The recent report by the Gambia’s minister of Finance, Amadou Sanneh, paints a very serious state of affairs for all home-based Gambians.
The Gambia’s debt is now at record highs culminating in this being 108% of Gross Domestic Product (GDP). The entire total annual GDP is 8% short of financing its entire annual debt.
60% of that debt is in treasury bills which the Gambian government is paying an exceptionally high rate of interest. The report further concludes that any further borrowing would have to fit in with the current fiscal requirement and such borrowing would need to be inline with strict fiscal criteria or rejected.
The report further encourages donor financial participation in order for the Gambia to just at least break even. In 2016, growth fell to its lowest level in recent history of just 2.2% compared to levels of over 6.5% in the not too distant past. Inflation for 2015/2016 was approaching 9%. These figures may well be lagging behind the current financial and economic situation. Clearly this leaves nothing for investment in infrastructure or new business generation as the Gambia moves into its “quiet” period of economic activity.
The Tourism season has ended until September and farmers face the rainy season. Mr Sanneh attributes the decline to external shocks hitting both agriculture and falling receipts from tourism.
The government is to further undertake a review of all state-owned enterprises with a view to identify, corruption and waste. There may be two immediate conclusions from this report.
First; the previous APRC government has left the Gambia in a dire state of finance.
Second; The absence of policy and information from the new regime of President Adama Barrow may be due to them coming to terms with the scale of the dereliction, left by the previous government.
This leaves the Barrow regime with very little room for maneuver in the short-term. The poor will continue to be hit the hardest by what could be termed as a double whammy” epitomised by lack of jobs and high food prices.
This leaves the government and the people living by hand to mouth with no extra for facilitating growth or a reasonable living standard. The long-term needs of lowering inflation and introducing measures to stimulate growth must be the order of the day.
Whilst reforming the constitution, justice system, police and military is a necessary political requirement, the government must take a firm stance on cutting it sown overheads to lead by example and its dependency on foreign aid.
The government has six months to guide agriculture and tourism on a sustainable path of growth, and needs to call on its most experienced personnel to introduce sustainable long-term policies to generate the necessary growth, lower inflation and with it fair taxation. Not a very easy prospect.
I wish the Gambian government well.