The Economic Recovery Program of 1985 was not perfect as are economic policies of its kind but it got the job done. Let me hasten to add that some of us involved in its implementation are still struggling to come to terms with the hash but necessary corrective measures - measures embarked upon with the subsequent backing of the Gambian people because Sir Dawda Jawara campaigned and won re-election on the ERP in 1987, explaining to voters the program and why it was necessary to scale back government subsidies on basic food stuffs particularly rice, petrol, fertilizer and other farm input the farming community enjoyed previously.
President Jawara was extremely reluctant to embrace the ERP which he thought was too far-reaching with negative impact on ordinary Gambians, especially the rural population. His reluctance soon turned into a full blown apprehension prior to going to the country to sell it to the voters. During cabinet sessions, he would usually turn to his Finance Minister of the day - Sheriff S. Sisay - and ask in Mandinka "are you sure, Sheriff, that this will work" to which the Minister responded consistently in the affirmative but with some degree of resignation - " we have no choice, Mr. President." Although Sir Dawda eventually bought into the ERP, he couldn't help himself but to keep reminding an equally apprehensive voter that he was acting under the advise of his Finance Minister as if he was preparing the way in the event that the experiment in economic austerity veered south. Then the Finance Minister would have had to either tender his resignation or be fired.
The ERP succeeded in arresting the decline in GDP growth, and some of the new structures built around the new economy started to respond as predicted. Those civil servants who managed to survive the 20% retrenchment onslaught formed the nucleus of a 'leaner and meaner' core of what was regarding, then, as one of the best civil service in Africa. Botswanans, Sierra Leoneans,and even Ghanaians descended upon Banjul to learn a thing or two from Gambian civil servants and about their newly re-fitted civil service. To demonstrate that we have come off age, the successor to the ERP, the Program for Sustainable Development (PSD) was designed and managed entirely by Gambian civil servants with little or no intellectual input from the Bank or the Fund, except in supplementary resources to see the PSD through. We were always proud to remind everyone that, unlike the ERP, the PSD was home-grown.
The institution-building efforts were directed at strengthening the various organs of government to withstand, as I said earlier, structural and cyclical imbalances that are part and parcel of the business of managing an economy. What these institutions were not designed to do, however, were to withstand a human wrecking ball like Yaya Jammeh who is determined to use his unchecked and unfettered personal power that he'd acquired unconstitutionally to wreck havoc on an entire nation. No institution in Africa, however well designed, is strong enough to withstand such a callous, and some would argued, deliberate, onslaught.
Yaya Jammeh is systematically dismantling decades worth of work by dedicated Gambian civil servant, most of whom stayed home rather than join some of us in the highly lucrative international civil service trade. These former civil servants are now watching helplessly as their most-prized institutions like the Central Bank of The Gambia are being destroyed, in this case, by omission. Monetary policy, by law, is the purview of the CBG, yet it is Yaya who has side-lined the Central Bank during the current forex crisis brought about by his constant meddling. Most, if not all of the forex bureaus in the Gambia have been declared "null and void" by administrative fiat from State House and not the Central Bank. What this means legally is anybody's guess.
Gambia has faced more severe foreign exchange crises in the past. In fact, foreign exchange reform was a central piece of the ERP and an essential part of reversing the main distortions in the system of payments and exchange. By 1985, parallel market had effectively undercut the official exchange rate resulting in foreign arrears build-up that only a market-oriented solution was appropriate. Since the introduction of the dalasi in 1971, the currency has moved from being pegged at D5 to the pound sterling, to being devalued by 25% before it was allowed to float in January 1986 - all within a relatively short span of time. With the floating rate, the dalasi found its trading value in the international money markets but not before local prices started to increase dramatically. I could remember when the D10 barrier was reached sending shock waves across the economy.
All of this was taking place in the midst of the worst decade of drought ever experienced since Independence with declines in agriculture and other productive sectors. The managers of the economy did not panic but, instead, used the monetary policy instruments provided by the Central Bank Act ( which has to be amended to bring it line with the monetary reforms ) and through the leveraging of the international donor community, especially the International Monetary Fund, to manage the crisis. Concurrently, government also embraced macro-economic policies that encouraged diversification of the economy while encouraging public and private investments in foreign exchange earners like agriculture and tourism. This was the sign of a confident and competent leadership in direct contrast to the amateur hour coming out of the State House in recent weeks.
As hard as it is to say, ERP II is staring straight in the face of any successor government - be it transitional or otherwise - which will be more painful than its predecessor because of the extensive damage done to the economy and our cherished institutions by the disastrous outcome of the A(F)PR experiment in governance - a damage that would have otherwise withstood the normal structural and cyclical disruptions had Jammeh not insisted of taking measures that defy both economic and monetary theory, if not simple logic.