The International Monetary Fund (IMF) has expressed serious concerns about the Gambia’s rising debt vulnerabilities.
The IMF said the country’s debt-to-GDP ratio has skyrocketed by end‑2017 to nearly 130 per cent of GDP and total debt service-to-revenue (excluding grants) is now projected to average 53 per cent over 2018–20.
It added that an updated debt sustainability analysis shows that the Gambia’s public debt is now unsustainable, with high external and domestic debt as well as a large pipeline of already-contracted loans that pose risks to solvency.
The IMF made observations at the end of the second review of the Staff Monitored Program (SMP) with the Gambia aimed at enabling Gambian authorities to establish a track record for a possible Extended Credit Facility (ECF) arrangement and to incorporate the outcome of the International Conference for the Gambia that was held in Brussels during May 22–23, 2018.
Gambian authorities have so far adopted a multi-pronged strategy to restore and maintain debt sustainability, comprising measures to boost domestic revenue mobilization; re-prioritizing the existing projects pipeline and seeking improvements in the terms of the already-contracted loans to raise their concessionality; request for debt relief and restructuring from external creditors; and an NDP financing strategy that emphasizes grant financing and private investment. Furthermore, strengthening investment appraisal and selection processes should help to boost investment efficiency and productivity.
The authorities are also developing and implementing both a medium-term economic and fiscal framework (MTEFF), which will help anchor fiscal policy and facilitate policy-driven budget allocations, and a medium-term debt strategy (MTDS), which foresees a lengthening of the maturity of domestic debt to reduce rollover risk, both of which will be regularly reviewed.
The IMF noted that risks to the Gambia’s outlook stem primarily from legacy issues, including a possible resurgence of political instability, rising public debt and debt service ratios, and lack of control over external debt accumulation, including by state-owned enterprises (SOEs).
It added: “Mitigating these risks will require implementation of the MTEFF and the MTDS, alongside critical SOE reforms to strengthen their governance and enhance their operational efficiency and transparency. The recent completion of the prior action paving the way for the commencement of special audits of key SOEs was a critical milestone in this regard. The authorities are also amending the legal framework of the central bank to strengthen its operational autonomy and to support healthy financial intermediation and inclusion.
“The Gambia embarked on far-reaching economic reforms following its peaceful democratic transition in 2017. The current supportive political environment, ongoing democratic transition and gains in political and economic inclusion have been confidence-enhancing, helping to engender significant international goodwill. As a result, development partners pledged over US$1.5 billion at the recent Brussels conference held in support of The Gambia’s 2018–21 National Development Plan (NDP).
“Economic recovery is well underway and the outlook is favorable, albeit contingent on continued adherence to the policy reform agenda. The pickup in growth in 2017 to an estimated 3.5 percent from 2.2 percent in 2016 was underpinned by a recovery of agriculture following improved weather conditions, a rebound in tourism, increased trade over improved relations with neighboring Senegal, and renewed foreign direct investment.
“Fiscal consolidation and significant external financial support helped to improve the external position, stabilize the domestic currency, and spur a steady decline in consumer price inflation from 8.8 percent (year-on-year) at end-January 2017 to 6.6 percent at end-April 2018. Gross international reserves increased from 1.4 months of next year’s projected imports at end-2016 to about 2.8 months at end-2017. With the government’s reduced domestic borrowing, private sector credit grew by 13.8 percent (year on year) at end-April 2018, reversing its earlier declining trend. Continued strengthening of risk-based supervision and a greater willingness to act on early signs of asset quality problems by the central bank will help further to underpin financial stability.
“Implementation of the SMP remains broadly satisfactory. All-but-one indicative quantitative targets through end-March 2018 were met and most structural benchmarks were implemented. Although the continuous target on nonconcessional borrowing was breached at end-2017 by a substantial margin, corrective measures are now in place to prevent a future reoccurrence.”
In purely layman language, we are chewing more than what we can bite. And our appetite for more debts will inrease exponentially once we start the implementation of the NDP.
Mr President Sir,
What the IMF is saying is this.
1. You are bankrupt.
2. You are borrowing to barely survive.
3. You have no plans of getting out of the financial situation you are in, and
4. You have nothing of value to trade.
Sir I will like to recommend my unsolicited advice since all the smart people have not come up with a workable formula to help our cause. This is what I will do.
1. Reduce the size of government by half. Consolidate the ministries to
Interior, Economic development and infrastructure, Agriculture and Finance.
2. Disband GAF.
3. Stop ALL official foreign travel.
4. Sell off 80% of the official vehicle.
These 4 measures alone according to a Gambian born economist will improve our bottom line and financial standing by a whopping 62% in the first 12 months of 2019.
God Bless The Gambia.
Hallelujah Dr! Amen!
Points well taken!
Apparently, there’s a Grand Marabout somewhere in Niani that’s praying feverishly for The Gambia to shine in the mountain!
Won’t happen folks unless WE work for it!!
Remember that the IMF is going to dance along to the Finance Minister and Central Bank Governor’s FUZZY Math.
They all did the same through Yaya Jammeh’s journey to oblivion!
This debt and economic mess should be tackle a year ago, where are the graphic scale that the is keeping eyes on ? Look this figures numbers and cannot be manipulated.
This debt and economic mess should be tackle a year ago, where are the graphic scale that the government is keeping eyes on ? Look this figures numbers and cannot be manipulated.
Questions presented:(1) Can the executive spent money that is not appropriated by the National Assembly? (2) Can the National Assembly spent money without the President’s signature? (3) Can the President unilaterally take loans in the name of The Gambia without the National Assembly’s getting on board? If the President enters into an agreement for a loan without the National Assembly getting on board, that loan is null and void. The President should never spend government money that has not been appropriated by the National Assembly. As you can see, the name of the National Assembly keep coming up. While we should keep watch on the executive, we also need to pay attention to the National Assembly. That body approved the budget, less we forget that.
On the economy, as Dr. Sarr observed not long ago, the economic problems of the Gambia are not difficult to figure out. Bread and butter economics that exists in almost every Gambian household can do a lot of good for The Gambia government. Don’t spend what you cannot afford; live within your means; get rid of what is not of necessity; be discipline with your spending habits etc., Now, those who work hard and spend money out of their own pockets seem to observe the above, but those spend money not out of their own pockets do not observed the above. So long as the money the government spends is not coming out of their own individual pockets, they care less.
I hate to put it this way, but The Gambia right now is like a dinghy in the middle of the ocean. Those who claim to be in control of the dinghy are telling us (Gambians), the passengers in the dinghy that everything is going to be alright; we will take you ashore safely. Unfortunately, they are relying on the wind and not on the expertise of a seasoned captain who can navigate the rough waters. So when the wind blows north, they say ha ha you see we are moving in the right direction, and when the wind blows south or east or west they say again, ha ha we are moving in the right direction. It is a hard living to leave one’s life in a dinghy at the mercies of the wind. Have a blessed day everyone!
Samba, you are generous with your analogy. The Gambia is not like a dinghy, it is like an old rotten wooden canoe in the middle of the sea, taking in water fast.
We tend to ignore the NA, whose members have failed The Gambian citizens in the discharge of their duty. We tend to exonerate the citizens who fail to do their civic duties. I have said it severally on this forum, that our country is a three legged stool with all legs broken.
Our citizens are tired and too lazy to scream loudly for fiscal responsibility.
Our NA is full of hungry opportunist scavenging for food.
Our Executive and political elites are like human parasites.
We must fix all three legs for the center to hold.
God Help Us.
Dr Isatou Sarr, Samba, Andy Pjalo, Bax, Luntango, Tafel…………….
The point is how soon will you STOP talking about DINGHIES (which you can find in all our economic seas) and canvass for real IMPEACHMENT of an administration that is wastefully consuming the time, energy, resources, present and future livelihood of our people?
How soon will you take your MIGHTY pens to tell Gambians that we have no right direction and that our dear country should be immediately redeemed from the claws of these IRRESPONSIBLE MISFITS, these UNSCRUPULOUS CORRUPT and CORRUPTIBLE elements, who have spread all their corruptible tentacles in every sector of our lives?
Some of your audicious comments are laudable but fall far short of the words from real and serious redeemers of drowning and sinking ships/dinghies. Be SERIOUS!!
No words can change the present staus quo. They are UNQUALIFIED and blatantly CORRUPT. These two contagious and incurable “diseases” will never salvage our country from dependency, poverty and dire need.
Yesterday I gave a chronology of the grants, donations and pledges in real monetary figures since January 2017 when your bitty “coalition” (mis) administration took over. I challenged readers to give feedbacks on real macro/microeconomic benefits that our people gained from those monetary resources. No answers. Because there were no gains since 2017!
But at the same time, we can vividly observe/see personal lofty projects that belong to individuals who walk the cool corridors of our public offices. Yet our people are deprived of the most basic essences of improved livelihood.
Until yesterday there was no BREAD in the whole country. Where was Dr Isatou Touray to address that obnoxious situation. Where were the Think Tank, Permanent Secretaries, Secretaries, the NAMs, The Presidential Advisers, our PLANNERS who should have worked their Ph.Ds from experience to make sure our country is never held in ransom by foreigners (the grand majority of bakers).
What PROGRAMME has the Trade Ministry planned since 2017 to curb such drastic anomalies? Imagine the fishermen and fishmongers going on strike. Imagine the butchers and cattle/sheep dealers going on strike at Banna Salo/Tobaski. Who are in real control of these crucial sectors of our economy? Gambians or foreigners?
I refer you to response @Samba. It is sufficient for me.
You know you are in serious trouble when the IMF, the very institution at the heart of Gambia’s (and Africa’s ) massive indebtedness, tells you to STOP borrowing. IMF is the architect of the economic conditions we find ourselves in today. Gambia became a member of the IMF soon after independence, September 21, 1967 to be precise. The IMF claims, amongst many, to support member countries facing financial difficulties to get out of their troubles. Our economy, in 1967, despite being just independent, was in a much better state than today; after 4 decades of IMF control and direction. There is no institution, other than the Gambia Government, that is more culpable for our situation today than the IMF.
But the IMF is only doing what it was created to do: to formalise and maintain the financial colonialism of the New World Order that emerged at the end of WWII, with the US as the new imperial power, to whom all must surrender their national wealth. The IMF is doing a very good job of it. We are the ones that don’t know what to do, except a few, who are demonised, undermined and eventually removed from power, through coups, assassinations or war, as we saw with Nkrumah, Ghadaffi, Sankara, Cabral, Saikou Toure, etc.
The adherents, on the other hand, like our own DK Jawara, are rewarded with “stability”, titles and honours, hence knighted as Sir Dawda Kairaba Jawara.
This current leadership has no clue what to do but they have our overwhelming mandate. Once again, we DESERVE everything we get.
My in-law said:
” … IMF is the architect of the economic conditions we find ourselves in today … There is no institution … that is more culpable for our situation today than the IMF. BUT THE IMF IS ONLY DOING WHAT IT WAS CREATED TO DO: to formalise and maintain the FINANCIAL COLONIALISM of the New World Order that emerged at the end of WWII, with the US as the new imperial power, to whom all must surrender their national wealth. The IMF is doing a very good job of it. We are the ones that don’t know what to do, except a few, who are demonised, undermined and eventually removed from power, through coups, assassinations or war, as we saw with Nkrumah, Ghadaffi, Sankara, Cabral, Saikou Toure, etc.
WE DESERVE EVERYTHING WE GET”.
Yes we deserve what we get.
There is hope. The only way out of slavery is:
1. First take out our HOE.
2. Plant CASSAVA.
3. Make BREAD.
It is quite simple. Is it not. Only remaining question is.
1. Are we willing and ready to get off the chair, role up our pant legs and sleeves, clear the bush and do the work needed to UNSLAVE us.
Take personal responsibility for our actions
Throw IMF out of the country
Stop Stealing
Stop Killing
Stop spending money we don’t have
Start saving for the future
This is where I am going with this rant.
HOE = HONEST WORK, CASSAVA = CROPS, BREAD = FOOD. That is real freedom and Independence. That is a gift Gambians can give ourselves.
You know Dr. I believed Jammeh’s sweet talk to begin with and truly believed that he would, in your words:
1. First take out our HOE.
2. Plant CASSAVA.
3. Make BREAD.
But then he very quickly started doing everything you condemn. he started:
1. Loving and Coniving with IMF;
2. Stealing Big Time;
3. Killing Big Time;
And now, ironically, the thieving IMF are warning our new rulers!!
As my in-law says:-
“WE DESERVE EVERYTHING WE GET”
You were not alone. Nothing wrong with the message, the problem was the character and motive of the messenger. Yahya Jammeh is a thief and a murderer. Gambia electorate must be vigilant and choose moral leaders with the right message and the ability to deliver on the message. But of course Dida you already know this and have said so many times before.
Bax, ……………..This current leadership has no clue what to do but they have our overwhelming mandate. Once again, we DESERVE everything we get.
___________________________________________________
WHY are we deserving of that?
Didn’t we exercise our constitutionally guaranteed RIGHTS to elect our representatives, particularly the president? Isn’t the president and his/her cabinet charged with organising society and managing how we produce, distribute and consume our resources?
Mwalimu, I don’t know if you will agree or not, but for me, where there is a right of choice, and where that right is exercised freely, without force or coarcion, then the voters would deserve whatever they get from that choice they made, particularly, if that’s occured repeatedly.
Gambians have repeatedly chosen individuals and parties that have not put any credible policies or realistic wealth generation plans to meet their (parties/candidates) fairy-tale promises before the electorate, whist rejecting those that have done so on the most flimsiest excuses and ridiculous considerations.
Therefore, we deserve everything we get from our governments and until we stop trivialising politics and political representation, we will continue to wallow in poverty and misery in the midst of abundant wealth, whilst wondering where we went wrong.
As depressed as your answer makes me, I have to agree with you. The responsility in the chain of actions that determines whether food will be put on the table or not, begins with electing the right people into positions of immense power and influence.
But I also believe our leaders from independence to today, are always the first and the last to break the sacred social contract. Which does not absolve the populace of their right and responsibility to elect and to remain vigilant.
I’m talking in circles probably, maybe just because I want to give the poor Gambians a pass.
It’s just frustrating…………
Babu, in 24 years, the word “impeachment” have found a place in your vocabulary only the last two years. I do not know what to make of that. Please do not get me wrong, I am not deflecting the current government’s ineptitude at all. Some of us you will agree have been very consistent. We were against your man Jammeh when we believe he was not good for Gambia. We are writing against the current administration because like, Jammeh, we believe Barrow is not good for Gambia. However, you my dear sir, cannot say the same thing. That is not to say that you are wrong in some of the things you say about this current inept government. I do not know if you ever read it, but two months into the Barrow administration, I wrote an article titled “Jumping Off The Barrow Bandwagon.” Some people I know told me I was crazy at the time. Do you believe for a moment that a National Assembly that rubber stamps everything this administration put before it will ever impeach Barrow? You know, just like your former National Assembly. Have a blessed day everyone.
Astute Bax, is up to something. We have to begin from the inside out. When a person takes a flu shot, the shot is actually flu and that is why for a short time the person feels like he or she has the flu. Exercise, I mean working out, is nothing but self induced stress into the body. The flu shot or the exercise act as a defense to the body when the flu season really kicks in or when stress from without comes. The flu shot or the exercise prepares the body for the enemy without. So without exercising, stress can kill and without taking a flu shot, the flu can do major damage to the body. Taking a flu shot or exercising is like taking care of oneself so that outside influences in the form of the flu or stress can be keep at bay or at least manage the impact when those things hit. Now if one is not prepared then one is at the mercies of the flu or stress. There is a reason why doctors tell their patients to exercise and when flu season is near, to take the shot. Take Gambia as the person who never takes a flu shot and never intended to do so. Or take Gambia as the person who never exercised in its life. What happens then … the result can be where we currently are. What has Gambia been doing from within to prepare itself so that it does not completely become dependent on outside help and conditions. I am not saying Gambia has to cut off the rest of the world. The point is that because Gambia does absolutely nothing from within, it becomes completely dependent on loans and grants. If those loans and grants were to stop, what becomes of Gambia? Of course, you know what comes with those loans and grants. We elect those who make decisions for us. Would a better selection help, absolutely. Our so-called leaders are a product of our society and we need to own up to that and reflect on that as well. Jawara, Jammeh, and Barrow are all products of our society. Should fingers be pointed to the outside of course, but it is disingenuous to not also point some fingers at us.