Wednesday, April 2, 2014

The economy continues its downward slide

How does "[N]ow we are to assess how things are working", a quote attributed to an IMF official paying a courtesy call on Gambia's Isatou Njie-Saidy translate into a "sound stabilization of the economy" after the Fund official suggested that "the Gambia government and the Ministry of Finance and Economic Affairs (as if they are not one and the same) have been working responsibly to control spending.

It is an understandable conclusion to reach if you happen to be a regime that is desperately looking for the 'feel-good factor' after making a mess of an economy that was once the envy of the sub-region, if not in Africa.

The economy is nowhere near stable, macro-economically speaking , even though the IMF did say some improvements have been registered in the last quarter of 2014, but cautioned that they'd have to see if a trend develops in this quarter.  As far as we are aware, the Fund mission is not in Banjul, and it's already there, its report is not yet out to reach any conclusion.  If experience is anything to go by, the 2% target of domestic debt to GDP will be exceeded again because this regime is a collection of a chronically indisciplined bunch led by an equally and fiscally indisciplined Yaya Jammeh.

He was out the other day preaching the gospel of fiscal prudence to the National Assembly, and touting a 5.4% growth rate while conveniently ignoring where that growth is actually taking place or the fact that Gambia's population is growing at blistering 3.19%, according to World Bank's 2012 estimates, effectively wiping out any gains the economy might have registered.

Scant mention was made of two of the most important foreign exchange earners of the Gambia's economy i.e agriculture and tourism by Jammeh during his National Assembly speech and for good reason.  Both sectors are headed for yet another disappointing year despite the usual platitudes and sloganeering like "eat what you grow and grow what you eat" and "my government's ultimate to turn The Gambia into the holiday destination of a lifetime."

A closer look at the budget allocations over the last ten years, both sectors' share of the total pie have been dwindling with agriculture research and extension services being affected the most.  This year's groundnut buying season is particularly worrisome with GGC running out of cash to buy the farmers' crop, and the market exclusion of private buyers.  The monopoly status of GGC, a near-bankrupt organization is in both incomprehensible and it is blatantly anti free market that works to the detriment of the Gambian farmer who was deprived of the possibility of getting fair price for his/her produce.

The social sectors aren't fairing any better.  The education sector continues to experience steady erosion in quality which is manifesting itself in poor exams results when compared to previous performances of Gambian students among themselves, and particularly among students within WAEC countries.  The regime continues to emphasize brick-and-mortar over the software aspect of education (teacher training, supplies and textbooks) because the latter is less visible than the former, and for a regime that places high premium on propaganda.

The health sector suffer similar fate with empty medicine chests and other medical supplies in main referral hospitals and health centers.  Building structures is one thing, getting them to a functional standard to serve the general population is quite another.

All the gloss the regime tries to put on a flailing economy is a desperate attempt by the growing unpopularity of Jammeh for overseeing a declining economy and an increasingly isolated regime, diplomatically.  The recent humiliation that Jammeh suffered at the hands of his own ECOWAS colleagues in Yamoussoukro's when he tried and failed at becoming Chairmanship of the regional body is further blow to his stature as a credible leader, both at home and in the sub-region.  resignation is the only honorable thing left for the dictator to do but we are not holding our breath.