Sunday, September 22, 2013
The week in review
The findings of the Fund made depressing reading. It was more of a series of warnings to Yaya Jammeh, and his economic management team on how not to manage an economy, especially one as fragile as Gambia's. Specific warnings were issued to the Office of The President to refrain form delving into monetary policy matters generally, and in the management of the foreign exchange market specifically. This warning was necessary because of the president's recent foray into the markets by fixing forex rates, and issuing instructions to the Central Bank in clear contravention of Gambian law. Monetary policy is the purview of the Central Bank and not the Office of The President. The interference resulted in disruptions which, in turn, allow market uncertainty to set in, which encourages capital flight and dampens remittances from abroad.
But if you are the official mouth piece of the government, The Daily Observer (DO), the editors saw an economy on a rebound with a projected increase in GDP. While this is true, DO omitted the other half of the story which qualified the projected growth that is threatened by persistent weaknesses in the balance of payments, leading to depreciation pressures on the Gambian dalasi. The Fund also noted, most recent and worrying problem of "inconsistent economic policies which have intensified these pressures."
This week also saw the convening of the National Assembly's Committees on Public Accounts and Public Enterprises (PAC - PEC) in preparation for the new Session of Parliament. The gathering was addressed by the newly appointed Secretary General (SG) and Head of the Civil Service who also doubles as Minister of Presidential Affairs which is oxymoronic. The civil service is apolitical. It is there to serve the government of the day. Therefore, the SG should not hold a substantive political position in the cabinet. The position is of a ministerial rank but not a ministerial rank. Anyway, the gathering was presumably to prepare the work schedule of the two parliamentary committees but the opening remarks by the Secretary General was more about what Yaya Jammeh expects from the audit arm of the National Assembly.
A huge Supplementary Budget is expected in the next few weeks despite persistent warnings of the IMF and other donor agencies against large fiscal deficits - financed mostly through domestic borrowing - adding to the country's debt burden. Interest on debt consumes 22.5% of government revenue in 2012. The government appears to be trying to avoid a repeat of last year's Supplementary Budget request which raised eyebrows in Washington as well as other donor capitals when a total of D 400 million in additional funding was requested, representing 25% of the total 2012 budget. The budget deficit will continue to rise if the National Assembly continues to act as a rubber stamp of the Executive.
This week was not all economic management issues however. There was the 3-day visit of Ms. Sue Ford Patrick to Banjul. She has since traveled to Casamance. Ms. Patrick is the new American Adviser to the U.S. Ambassador for Senegal on the Casamance civil war which has been described as the longest running civil strife in Africa. The 30-year old low-intensity war has been prolonged because of neglect of successive Senegalese governments but also because of meddling from Banjul. The lack of local coverage of her visit is an indication of the apprehension of the Jammeh regime in having the Americans take a more proactive role in the conflict because it dilutes Jammeh's influence in a peace process that he had fought so hard to be recognized as an indispensable player, as the indisputable sponsor of the Salif Sadio faction of the MFDC.
Finally, a story to watch in the coming weeks is the members of African Union threat to withdraw en masse their membership to the International Criminal Court as a result of the Kenyan Vice President Ruto's case scheduled to take place next week at The Hague. The Kenyan President Kenyatta was also indicted by the ICC. The Kenyan Parliament has voted this week to withdraw membership at the ICC, and the Cote d'Ivoire cabinet has decided not to transfer Mrs. Simone Gbagbo, former First lady, to The Hague. She will be tried locally by an Ivorian court.
As a result of these developments, the Gambian Chief Prosecutor of the ICC will be faced with her biggest challenge since her celebrated election by consensus last December in which the AU played a pivotal role. Meanwhile, the AU has announced that an extraordinary meeting will be convened in October to carry out their threat to withdraw their individual memberships to the ICC. There are serious doubts however that the two-third vote threshold can be achieved for the threat to be a reality.