Monday, June 22, 2015

The bottom will fall off Gambia's economy if... says IMF

The International Monetary Fund (IMF) Chief of Mission to The Gambia has finally warned the Government of The Gambia of an impending economic disaster if "corrective measures" are not taken immediately to reverse an imprudent fiscal policies.

Failure to take immediate steps will result in the regime being forced into a painful adjustment program, the Fund warned the appropriate authorities, including Hon. Fabakary Tombong Jatta and his colleagues of the National Assembly.  

The IMF Mission Chief, Mr. Bhashwar  Mukhopadhyay, made the revelations at a Civil Society Forum last Friday where he lamented at the fact that the regime has been pursuing inappropriate policies for a long time which has led to the country's current predicament, despite many warnings from the Fund and other donor agencies.  The IMF official was quoted as saying "there is no time for Gambia to waste in implementing corrective measures before the bottom drops out."

As we have reported in the pages for the past two-and-one-half years, the Jammeh regime has been financing its political agenda using domestic borrowings to achieve its political agenda resulting in a domestic borrowing that now stands at 50% of GDP in 2014, compared to 33% of GDP in 2012.  The regime's incessant domestic borrowing is fueling inflation, adding to the woes of the ordinary Gambian who's trying to make ends meet.

Public enterprises, such as NAWEC, GPA and GAMTEL, have been greatly impacted by an irresponsible government that has consistently drained them of financial resources resulting in their inability to meet their external debt obligations and to finance their day-to-day operations.

GAMTEL's domestic debt obligations to local commercial banks to the tune of over $ 12 million is still unexplained to the general public despite demands for explanation.  The joint parliamentary oversight committee (PAC/PEC) is derelict in its duty for refusing to demand full explanation of how GAMTEL incurred such a huge debt, and on what was it spent on.

The spiraling domestic debt has also contributed significantly to limiting the private sector access to credit from the commercial banks for business expansion which would have resulted in job creation for the growing army of unemployed youth. These inappropriate policies have inadvertently contributed to the mass exodus of Gambian youth towards Europe.

We'll wait and see whether the IMF will finally put a program in place that will inject some sense into a regime that seem to be over its head.  Incompetence and corruption, unfortunately left unchecked for several years, are the main drivers of the economic meltdown.