Assume you’re The Governor of Central Bank of The Gambia, what Monetary policy/ies would you adopt? What goals will you be trying to achieve with your choice?
Assume you’re The Finance and Economic Affairs Minister, what fiscal economic policy/ies would you adopt? How would the Appropriation Bill reflect your adopted policy/ies?
What should Dr. Barrow administration do?
These are no hypothetical questions for our country. These are questions facing our nation and the government is apparently unable to answer. Politicians across the board did not come up with any viable answer either. Nor do activists provide answers that has bear on the facts. The best I have seen/heard so far “……. oh! yeah! Government has to take loans because even USA and China take loans to develop their economy…………”
The Gambia is neither USA nor China in very financial/economic significant ways. Therefore, because USA/China borrowed is no good reason for The Governor and/or Finance Minister of The Gambia proposed Gambia borrow.
The Gambia is already 53 years old. We’re already in business for all these years. Any discussion of debt should account for CURRENT NATIONAL BALANCE SHEET – ASSETS vs LIABILITIES. The current liabilities are legal and economic obligations to be paid when due. Our abilities to pay should dictate what we should and/or should not borrow and not because all nations including USA and China are borrowing. THE TOTAL LIABILITIES D56.4B WITH 2018 DUE OF D4B -SEE TABULATION.
Placed yourself at the desk of a policy-maker such as Governor/Finance Minister responsible to our nation for these decisions. Your best response will be informed by the facts of The Gambia and not what other countries do or not do.
Now let’s examine Gambia’s basic financial outlay. The tabulation shows the last and first years in office of our 3-presidents. We will focus on Fiscal matters that affects our economic well-being. This budget layout is not the tool use Central Bank Governor to formulate monetary policy. Although this and other economic indicators will inform him/her choice for 1st basic decision – expansionary or contractionary economy. Anyways monetary policy matters another day!
We going for numbers for 2018 (Dr. Barrow’s 1st full year budget)
National Revenue: D9.4b. This is a projected number – we may collect that much/we may not. Historically we don’t. That’s why IMF/World Bank are always propping up with the famous ‘budgetary support’ to be able to pay wages. National revenue is the money Gambia expect to receive on taxes, fees, royalties, dividends from SOEs, etc. in the year 2018. So, it is only from this we can pay our expenses (bills). Take note of that! Any expenses more than that will be like YOU want to spend more than your wage.
Grants: D10.2b. This number has several problems. Government is accounting it for budgetary purposes as cash revenue coming in and that’s not the case. All or most of these are coming as projects. A good example of that is the building of The Friendship hostel and Independent Stadium, Gambia German Forestry Project, etc. These are worth billions of dollars/Dalasis but not delivered as cash to government.
In fact, for many such projects the donor nation sends along expatriates who control the implementation. It’s deceptive accounting at best and/or knowingly lying by accounting expected project funds as revenue in order to reduce the actual budget deficit. The 2nd issue which I can’t proof but worth a mention, is that compared to last year or even several years back the projected grant figure of D10.2 appeared inflated. We can proof these if they produce Variance Reports that shows the projected vs actuals. Whatever proportion of the projected grants are not cash receipt will only increase the above budget imbalance – hence the deficit.
Costs of government (paying wages, rents, ink, pens/pencils, telephones, vehicles, fuel, repairs, etc.: D19.1b. Noticed that this is ONLY OVERHED COST. This is the cost of having that government. This is not the roads, paracetamols, water, electricity, etc. that we paid taxes for in the first place. Even if you leave the D10.2 grant estimation as cash the costs of government is larger than the National Revenue. SIMPLY THE COLLECTOR COSTS MORE THAN COLLECTED. Each policy maker should tell us if that should be the case or not. More importantly the new government should be able to tell us how to revise the situation. Instead the made it worth – see the numbers between Yahya’s last and Barrow’s first budget estimates.
Debt Interest servicing: 2018 debt interest to be paid back is estimated at D4b. This is a legal obligation to be paid unless written-off by our creditor(s). Noticed that government cost has consumed all our money. Where then can we pay this D4b? To understand the implication of this problem we should know certain facts: We know there is no money left because of wages and other recurring costs. We know the debts were legally contracted and must be paid come due.
We know if we fail to pay our creditworthiness rating will drop making future loans prohibitively expensive – that will compound our poverty. We also know our debt structure is 3:2 – 60% domestic and 40% international. That means 60% of our debt is borrowed from within. The implication of high domestic borrowing means that portion is unlikely to be written-off. X or Y that purchased D10K or 100K treasury bills from Central bank is not well-off to forgive the country. If you’re one of those asking Dr. Barrow to ask for debt-forgiveness – here’re one limitation to that challenge. Because of the high borrowing cost (18-25%) in The Gambia continual domestic borrowing is grinding the nation into deeper poverty.
Furthermore, defaulting on domestic debt means strangulating/killing the golden goose – the very productive base that fuel our economy. Last on debt serving, paying D4 out of D9.4b National Revenue is 43% of the National Revenue. Already the costs of government have consumed our revenue. What do we do? Or what are they doing to keep us afloat – IMF/World Bank. That’s it own topic we can discuss another day.
Program costs: Dr. Barrow’s Appropriation Bill 2018 did not publicly provide clear sector costings. Yahya’s budgets show the program allocations by sector. If and when I do, I will be more than happy to factor those costs into the analysis. Regardless whatever is estimated for PROGRAMS WILL HAVE TO BE DEFICT FINANCE SINCE OUR REVENUE IS LESS THAN COSTS OF GOVERNMENT AND AS WELL DEBT INTEREST SERVICING. This why when they tell you there will be an uninterrupted electricity by December 2017 (already gone by 5 months ago) it will not happen. There is no money and the money to build Gambia did not/is not/will not come from the pockets of Jawara, Yahya and now Barrow. So far though all 3 failed abysmally to be good stewards of tax revenue.
Budget deficit: D0.9b. This is a doubtful number. The true deficit number will run into billions of dalsis if and when we removed all deceptive accounting entries and established exactly how much government intends to spend on programs.
National Debt: Government is not give a hard figure on the amount of debt except it’s total at 120% of GDP. Our GDP is estimated at over US$900m. For simplicity I rounded that up to US$1b. At an exchange rate of US$1 = GMD47 our national debt will be about GMD56.4b. See the last 2 rows of the tabulation. That means our per capita debt is D28,200.
Now think for a moment – is it possible for each of the 2 million people to produce D28,200.00 to pay off this debt? The answer is no. Many are kids (not at productive age), some are sick/ill and cannot produce, others are over ages/retired and are not producers. So, there is only a small productive base that has to produce to pay-off this loan. The smaller that productive base the bleak the prospects for the equation to balance.
KNOWING THESE FACTS HELP US MAKE INFORM DECISIONS AS TO WHETHER CONTRACTING LOANS ARE GOOD OR BAD. THIS HAS NOTHING TO DO WITH WHETHER USA OR CHINA ARE CONTRACTING LOANS. IT IS NEVER GOOD FOR US, WHO SUPPOSEDLY KNOW AND SHOULD TRY TO SHAPE DISCUSSION ABOUT OUR NATION BE THROWING OUT GENERALIZED STATEMENTS……SUCH AS EVEN USA IS CONTRACTING LOANS. WHAT HAS THAT TO DO WE GAMBIA’S BALANCE SHEET AND INCOME STATEMENT. IT DOESN’T HELP OUR NATION.
USA Total Revenue $3.4 trillion
USA GDP $18.57 trillion
USA National debt over $21 trillion
Very bad too. Because of bad government. USA government is as fiscally irresponsible as Gambia government. Because is USA doesn’t mean is good. Fortunately for USA, there money is world’s money so they have the luxury to print as much and pay whoever. Gambia maybe able to print as much they can afford but can pay anyone outside our borders. USA won’t probably do that because of other institutional restraints in place. They can also inflate the dollar for payment purposes – meaning they will give out less on current obligation. Again, they are not likely to do that for the same reasons.
God Bless Gambia
To The Gambia Ever True
The answers have been provided, Burama. The challenge is to get the voters to entrust the right people with the mandate of managing our affairs. We know the backbone of our economy is agriculture and we are blessed with fresh water (Natural resources) all year round.
If we seriously invest in the development of the agricultural sector, organise production, marketing and distribution in a structured way and endeavour to link this sector to a manufacturing base, we would have laid the foundation to answer that real question.
If coupled with a leadership that shuns pomp, extravagance and undeserved privileges in Public Office and eliminates ALL unnecessary expenditure from our National Budget, The Gambia will be able to balance our books within a relatively short time.
We have the material and human resources to do it. What we lack is the right leadership at the helm, and getting the voters to choose that leadership, under the current corrupt political system of bribes, patronage, lies and divisive tactics, is the biggest challenge we face. The job of educating the voters to understand this is the duty of all who want to see real changes in The Gambia.
Some of the smartest people in our country are those market women that birth us, raise us and sustain us daily. Lawyers, Physicians, Industrialists have been raised from their service and sacrifice. So let us simplify our economic reality somewhat. If I was making decision for Gambia what will I do: I will apply my best option. “Market Economics 101”
1. Cut waste. I will not spend money on things that have no value. A market woman will never buy a shoe called “Jordan”, she will go on the road side and buy a used shoe for her children. It will do just fine.
2. Do not borrow. Market women don’t borrow, they simply put money in a cooperative and wait for their turn to collect huge returns. Save today so you won’t borrow tomorrow.
3. Spend were it is impactful. Market women will sell fish to pay school fees. That is wisdom.
Our politicians and technocrats should learn from their mothers.
The answers are there if you wish to see.
God Bless The Gambia.
A brilliant comment Dr.and is food for thought to the Barrow Administration.Prudent fiscal measures should be instituted to address our unbearable debt burden.
Dr Sarr,
I just shun at simplistic measures that are handled by UNQUALIFIED and CORRUPT people. Because there can never be any brilliant outcome for the good of the population.
You are just wasting your time with this paradigm of priority areas for a people that would NEVER listen to you.
I challenge you to work towards FLUSHING them OUT of office. The solution lies in having credible, patriotic, selfless and energetic leaders, NOT this clique of CORRUPTIBLE, SELFISH and INCOMPETENT people.
A country that does not manufacture it’s own clothing needs, a country that cannot produce enough food for its domestic consumption, a country that has to rely on perpetual donor assistance to fulfill its budgetary requirements, a country relies on remittances for the very survival of its citizens, a country that cannot provide an affordable and reliable energy supply, IS A COUNTRY THAT CANNOT AVOID TAKING LOANS even if just to pay its civil servants.
Three successive governments have turned us into consumers of everything and producers of nothing. In such a scenario, the debt will only keep on climbing without any descent in sight.
It’s simple logic, friends!
Isn’t it shame that no single factory exists in The Gambia to produce peanut butter, peanut oil, peanut biscuits, charcoal from peanut husk etc?
Isn’t it a shame that despite the abundance of mangoes and oranges that we still importing expensive and unhealthy fruit juices from countries that does not even have those fruits?
Isn’t it a shame that we have been importing various assortments of canned fish for more than fifty years despite the fact we have an ocean to envy in the amount of marine resources it contains?
Isn’t it a shame that we thousands of our able bodied youth flee poverty only to die in the waters of the Mediterranean Sea because we can’t provide them with jobs in the elusive and highly regarded “private sector”?
I can go on and on without a pause. Isn’t that a shame?
You know what is even sadder Lamin? These millions will not be used for developing those sectors that you’ve mentioned. They will mostly be consumed by debt repayment, service provision and infrastructure development and Mark you, all materials and specialised expertise required for providing those services and building the infrastructure will be bought or hired, at exorbitant rates, from the donor countries. Meaning a huge chunk of these funds will go back to those countries, if they ever leave, in the first place.
That’s guaranteed business for those home industries; guaranteed jobs for workers in those home countries and guaranteed increased revenue for those home governments, as increased businesses and continued jobs means more available taxes.
Thus, loans, grants and what have you are a destructive and debilitating obstruction for our development efforts and endeavours, but a leadership that lacks understanding and is unimaginative would know no better.
That’s the sad reality of our situation.
Bax as grim a reading as your assessment makes, it’s the awakening we need as a constant reminder that we did not land by chance into the paws of poverty and chronic underdevelopment. It’s above everything else, as a result of POOR LEADERSHIP from the day we became an independent nation to today.
Gambia‘s soul is crying for leaders that will rescue its sons and daughters from dying from malnutrition and curable diseases.
Not those who receive gifts in secret to dish them out during daylight to be perceived as our benefactors. They are a bunch of charlatans prep up by an oblivious populace.
But let’s hold sway for the message, for the truth shall triumph over falsehood.
We have smart phones, smart cars and smart everything else. Surely we can have Smart Leaders too. You think.
Folks, come January 2019, I will be in the business of rallying the troops to bring meaningful change to The Gambia. We’ve got to start somewhere and not just keep mulling over what could be done! One of my areas of focus will be the drive to feed the nation through SME’s and Private-Public partnerships in agriculture. It’ll be a different approach to doing business in support of Gambian agriculture and I will be launching enterprises that have hitherto not been found in The Gambia. One of the initiatives will be the launching of an agricultural commodity trading floor in The Gambia to be set up by a group of bold and well informed young ladies! Other activities will follow after the group’s visit in November-December 2018.
I welcome all ideas on this forum. And I will be taking notes.
Let’s call this a movement that calls for independent thinking and bold initiatives outside of central government!
Under the current leadership and mindset, this government can never give us food security let alone food surpluses.
I promise a good CONGRATULATIONS write-up here on JollofNews once your venture suceeds, Inshallah (as with the Kerr Fatou write-up without any “ulterior motives”).
Wonderful idea.
Women and Agriculture = Food security. That Sir is real empowerment. May I suggest that you develop a template/plan and invite comments and suggestions to make your dream a reality. I love it.
Andy that will be a noble undertaking. The idea or at least what I’ve heard of it, sounds refreshing.
The is however one problem and that is the inherent limitations here that hinders one from going in specific specifics.
Am curious to know more.
By the way, I’d like to invite members of this forum for volunteering on an autonomous Board of Trade for select commodities in The Gambia.
Luntango, your ideas on the proposed undertaking are most welcome!
I will not be looking for a tap on the shoulder or congratulatory messages brother.
Do I sense some skepticism on your part?
Andrew Pjalo,
I’m leaving for home on 2nd July for my usual 2-month holiday. Tell me when you are coming and where you’ll be. I’ll get in touch, take you to my homes in the URR and CRR, give you a first hand insight into the micro-finance projects I undertook years back with some women, for your personal evaluation. I personally funded/continue to fund these projects with a meagre amount of D2500-D3000 for each cooperant, between 3-5 cooperants per year. Presently I am working with about 20 on-the-credit cooperants and more than 25 out-of-the credit cooperants.
I will subscribe, physically, logistically and if possibly economically to your venture. In the name of our beloved Gambian women, I wish you Allah’s blessings in this MOST IMPORTANT and NOBLE undertaking. There is no need for much saying, the need to assist our hardworking Gambian women should be prime in the minds of all citizens.
Words followed by actions! Bravo Babu and Andrew.As for Babu, I am very much impressed that you have a big heart for our dear country,The Gambia. I am sure Andrew and many of his likes will join you in the crusade to set good examples of patriotism.
The daughters and sons of the Gambia have responded to an in-depth analysis of our beloveth Gambia’s National Budget and Financial headwinds that Burama Jammeh delved into in a passionate and dispassionate manner, but yet objective and practical. Burama Jammeh’s analysis of the Gambia’s debt burden and how best to mitigate its negative and destructive impact on the Gambia and Gambians has paradoxically brought some Jollofnews Commentators who are usually diametrically on the opposite side of issues, somehow coalesce and “break bread” in a Unified voice of Unity of Purpose and Objective. Hopefully, the “Seeds” of a New and Improved “TESITO” of Collaboration sown here between the the regular Commentators on Jollofnews would be sustained and spread amongst all Gambians and be operationalized and Implemented for the greater good of and for the Gambians and Gambia. It is refreshing to see the usual “Party Politics” take a backseat for once, while practical solutions to difficult and persistent issues are being discussed with cest and passion. With an abiding believe, hope and trust in the can do spirit and ability of the Gambian, when he or she sets his or her mind and soul on a task, please don’t let this moment of “We”, “US”and therefore, the Gambia remain a “Paper Elephant” of ideas and words. Projects cost money and money is hard to come by most Gambians in the Gambia and even the Diaspora. Commentators on Jollofnews who are willing and able to coalesce and cooperate and pull their resources together need to do so to help Fund Enterprises and other vital Economic activities such as in Agriculture, Animal husbandry, Education, Health and Healthcare and Tourism. These would need Partnerships between Gambians and between Gambias and other Africans, Americans, Asians and Europeans to invest in an area one has a passion and an in-depth understanding of as far as Market Sustainability and Profitability is concerned. The Funding and Partnership issues reminds me of some very neglected potential. That is, several fellow Gambians were appointed as “Ambassadors” by President Adama Barrow who are not appointed for Foreign Service Deployment and are paid by the Gambian government. I am not sure what their Portfolio is, however, I am yet to hear what Nationally beneficial Project both internally and externally these “Ambassadors” have been involved with or assigned to be responsible for and have accomplished. They may have. All I am saying is, I am not aware of of it. I have not heard or seen one. I therefore, venture to recommend as well as suggest that these “Ambassadors” earn their salaries or wages by being the “Gambian Peoples’ Ambassadors” through Fund Raising and Charity Work as well as Volunteering their time and skills to Various Ad-hoc and Long Term Projects and Tasks in the Gambia and outside of the Gambia. Their Fund Raising endeavor should be well planned for maximum results. At no time, should the expenses of their Fund Raising exceed the Funds Raised. Nor should the Funds Raised be in the form of IOUs. The Funds raised by the Peoples’ Ambassadors are not for them, their families or friend’s. It is the Gambian Peoples’ Trust Fund and should be Banked and Invested as such. The funds can be used as “Seed money” to Women’s Gardening or Farming Cooperatives at a below Market Interest rate with a Six month Grace Period, thus allowing for the vegetables or peanut to be harvested and the agreed on Terms of reference of payments made. All Cooperatives would be linked by an Independent Board made up of Members of the Cooperatives and elected by members of the Cooperatives. Ideally, each Constituency should have a Cooperative, but the reality is, there are Constituencies in the Gambia such as Banjul, some parts of Bakau and Serekunda that may not be able to fully participate due to the issue of land availability and their mode of income general may not avail them to the task unless the government is willing to set aside land in these heavily populated areas where land is seen as Real Estate for building and not Agriculture or Tourists attraction Forests or Parks. Forests and Parks are a different topic to be addressed at another time and place, given their potential to contribute to the Tourism Sector of which Gambia relies on too. As a Sociologist and Social Worker for more than two decades, Community development, Organizational Dynamics, Social Cohesion and Stratification as well as Individual, gender, group and community empowerment are what I have been involved with and successfully performed over the years. Next, I will go into some of the Ways and Means of how “Self-sustaining” and profitable Organizations such as Cooperatives are Organised and Structured. Too regid or lax in structure, you have a problem. The balance is what one aims for and how to achieve the balance without sacrificing the Organizational Dynamics for Success is Next.. Allah/ God bless and be with the Gambians and the Gambia in good and bad times. Gambia is Too Small To Fail.
Now you are talking sense Sidi N Bojang! I have done and continue to do the little that I can for Gambia’s development – as I am sure so many many others at home and in the Diaspora are doing. But this is a great piece – why is it not an Opinion piece by itself?
The basic premise here Dr Sarr, without divulging too much, is to develop a concept(s) around which development oriented Gambians with the requisite perspective can coalesce to support a business model.
A Board of Trade for one would set guidelines and standards specifying acceptable grades of commodities, quality management best practices, publish pricing structure for acceptable grades of commodities, handling and marketing structures among other criteria. The autonomous board will work in tandem with and oversee the activities of the trading platform/floor.
The goal is to offer a credible and secure Gambian platform that will allow Gambian and other nationals, producers, marketers and international buyers to invest in real commodities and commodity futures. It is envisaged that a futures trading platform of international standards in the major crops, livestock and items that have seen added value will be established.
That, in a nutshell, is the gist of it for fear of plagiarism.
Babu, I’m glad to hear that you have been engaged in development activity on the ground and I’d be more than happy to partner with you or any serious and sincere member of this forum. I’m not sure that there’s a good way of getting in touch by email on this public forum but you may send an introductory email to pjaloandy@gmail.com
Anyone interested in a venture to produce Irish Potatoes in The Gambia? The planting window is narrow on account of the climate but the soils are great for the production of the crop.
Anyone with secure arable land with access to some from of irrigation can do it.
It is not a rain fed crop to be clear!!
By the way, I do have advise for Omar Jallow (OJ), Minister of Agriculture.
He keeps harping on the return of the Gambia Cooperative Union as an arm of government.
My advice is for the ministry to partner with the National Association of Credit Unions of The Gambia (NACUG) to establish, empower and SELF FUND independent cooperative societies outside of government interference and manipulation. The approach will serve the average Gambian farmer a whole lot better than a glorified Cooperative Union run by public officials under the ministry.
We can, are able to and therefore must do things DIFFERENT THIS TIME AROUND if we are to see different results. Here’s a call to put informed minds in key positions of leadership if The Gambia is to make headway in FOOD PRODUCTION!
Word is advice.