Re-publication - State House did not seek legal advice before signing the airport/border security tax contract with SECURIPORT and no exit clause in the contract.

This post, first published November 19th, 2018, was the forth and final
in a series of blogposts on the $40 airport security surcharge on arriving
and departing passengers at the Banjul International Airport that the
government is poised on putting into the effect on the 1st October, 2019.
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The contract signed by the Interior Minister with the Washington-based airport security firm, SECURIPORT, and co-signed by the Director General of Immigration and the Secretary to Cabinet of the Office of The President that became effective on the 21st September, 2018 is already posing additional challenges for the Barrow government.

The $20.00 airport security tax for each airline passenger traveling to and from Banjul International Airport - or $40.00 for each return ticket holder - proposed by government to go into effect next January was immediately opposed by airlines and tour operators alike.  FTI, the German tour operator's letter of October 30th, 2018 addressed to the Secretary General informed government that proposed tax comes with added hidden costs of $15.00 due to VAT and rental commissions to be paid in the destination of origin, increasing the total figure to $55.00 instead of $40.00.

FTI's further informed the government that if it is serious in creating a conducive investment climate, authorities must guarantee that additional costs similar to those currently being contemplated will not be implemented because it will have dire consequences.  In fact, the Board of the FTI has directed that should the tax be implemented, any and all investment will be put on hold, including the $100 million the company plans on investing in The Gambia in the next 5 years.  Its summer plans are also being put on hold until an amicable resolution is found.

The TUI Group has also put the government on notice.  For many years, they have been operating to Banjul and have increased the number of flights substantially since. They operate 5 flights per week from Amsterdam and 2 flights from Brussels which means that over 21,000 seats are allocated to The Gambia this winter.  TUI also plans to operate in the summer, all of which will inevitably cause a reduction in tourism spending and therefore negatively impact the local economy should the proposed tax be allowed to take effect. 

Among the reasons advanced by IATA, the international air transport association, on behalf of member airlines was the lack of consultations with airlines prior to implementation.

The setting of airport and air navigation charges falls under the purview of the International Civil Aviation Organization (ICAO)'s policies on charges (Document 9082) and taxation (Document 8632) and the manner in which the proposed airport/border security tax was handled by the government seemed to have contravened these regulations.  Tour operators such as FTI, the German tour operator, hotel resorts and others in the business followed suit in objecting to the proposed tax.

In addition to the stiff opposition from airlines and tour operators to the new tax because of the threat it poses to the tourism sector that generates 20% of of the country's GDP as well as the second foreign exchange earner, the contract between the government and SECURIPORT was negotiated and signed without the benefit of any legal advice from the Attorney General Chambers.

And as far as it can be ascertained, the project was neither subjected to rigorous appraisal nor publicly tendered  to attract other eligible companies, making the entire transaction susceptible to standard financial and ethical scrutiny.

To further compound the problems of the government of Adama Barrow, the contract, according to our sources, doesn't have an exit clause that would allow for the contract to be terminated under certain circumstances specified in the clause.  A standard clause in a government contract gives the government the right to unilaterally terminate a contract with or without giving reason or reasons.  The contractor in certain cases is entitled to a negotiated settlement.

In the case of the SECURIPORT contract, the government can only extricate itself from the contract if it is willing to pay the contractor the full amount of the projected profit the company is projected to earn during the entire contract period of 5 years.  Insufficient due diligence was conducted on the company, otherwise it would have shown that the company's Sierra Leone experience would have been a red flag based on local reporting by Standard Times Press of a US$16M that was allegedly fraudulently billed to the Ministry of Internal Affairs.

It goes without saying that such a contract clause is as disadvantageous to the government as it is callous disregard of a fundamental norm of making use of a team of lawyers as an integral part of any contract negotiations for the singular purpose of providing legal advice.

In this case the lawyers were conspicuously absent and so where the ministry of Finance responsible for all fiscal affairs of the government, the Gambia Tourism Board and the Gambia Civil Aviation Authority responsible for managing the Banjul International Airport.

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Re-publication: Border security tax is bad for Gambia's economy, bad for tourism and bad for Barrow's government

This post, first published November 14th, 2018, was the
third in a series of blogposts on the $40 airport security
surcharge on arriving and departing passengers at the
Banjul International Airport that the government is poised
on putting into effect on 1st October, 2019.
----------------------------------------------------------------------

Sidi Sanneh 

The persistent and flagrant violations of the open tender process, otherwise designed to encourage and promote competition among prospective bidders, is proving to be the bane of the Barrow administration.

We have seen recently such tender violations in the SEMLEX case, the CHINA BRIDGE AND ROAD CORPORATION and now with the SECURIPORT contract for the provision of border security services at will impose a $20 security tax on arriving as well as departing airline passengers passing through Banjul International Airport.  This means that every tourist visiting The Gambia will see an additional cost of $40 every time they visit the Gambia.

There is no evidence that the award of the contract to SECURIPORT was tendered.  And if exempted, no proof exists that the rationale for the exemption.  The lack of transparency in the tender process almost always results in the wrong company being selected at greater cost to the public treasury than when the project is tendered in an open and transparent fashion.

The impact of the proposed tax is devastating because the demand for air travel is highly sensitive to air ticket prices as well as incomes.  For instance, a 10% increase in the ticket price can result in a 10% reduction in the demand for travel for international long haul leisure flight (elasticity -1.0).  It is therefore important for government to plan well in advance for a series of consultations and to engage an air travel consultant, if necessary, with stakeholders, airlines, tour operators, hotel owners and local tourism-based enterprises.

Obviously, the process that the government adopted lacked transparency and was deliberately exclusionary.  Not only were tour operators excluded from the process that resulted in the border security tax, even government departments such as the Ministry of Finance responsible for all fiscal matter of the Government, the Ministry of Works which is the line ministry of the Gambia Civil Aviation Authority responsible for managing Banjul International Airport and as far as be ascertained, the Tourism Board.

As we have reported recently, the contract was negotiated and signed by the Minister of Interior, Director General of Immigration and the Cabinet Secretary for Government and The General Manager of SECURIPORT (Gambia).  Conspicuously absent from the tender award and negotiations process were the Ministry of Finance responsible for all fiscal matters of the Government, the Ministry of Transportation, Works and Infrastructure,  Gambia Tourism Board and the Gambia Civil Aviation Authority.  It is evident that government's preferred process lacked transparency and was deliberately exclusionary.

The Head of Operations of Meeting Point, The Gambia, a subsidiary of Germany's FTI one of the world's largest tour operators regrets to confirm that there was no consultations and as far as he can ascertain no one from the industry was involved in the process of assessing the new tax.  According to Meeting Point, "not even Gambia Tourism Board and the Gambia Hotel Association were consulted prior to publishing this [meaning the tax] and as far as I am informed, are adamantly opposed to this border tax."

The subsidiary of FTI believes that the border tax will probably discourage many from travelling to The Gambia for the following reasons: (i) the demand for air travel is price sensitive (ii) for many tourists, especially from new markets, Gambia is often not the first choice and when the price is high, prospective visitors will choose another destination  and (iii) the very existence of what is labeled as a "security tax" gives the feeling of insecurity i.e. the feeling that The Gambia is an insecure place; its a bad PR job.

FTI finds the introduction of such a huge tax increase in the middle of the season is something unheard of in any of the markets they operate in. Although FTI has not altered its plans for the Gambia, the same cannot be said of some of its partners where the Gambia is a new product.  In such markets, they are seriously considering withdrawing because the manner in which the tax was being introduced suggests that the Gambian market is unpredictable and cost planning difficult.

Imposing such a tax will  affects FTI's plan to promote summer tourism because, unlike winter months, there are many destinations Europeans can select from at that time of the year. 

The mere fact that government is thinking of implementing a security tax "may deter foreign investments because it shows how unpredictable the government can be and gives the impression they focus on short-term potential gain instead of long-term sustainable growth for the benefit of the Gambian economy and its people," the Head of Operations opined.

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Re-publication - Airport/border security tax contract signed with SECURIPORT

This post (first published Nov. 12th) was the second in a series of four previously published blogposts on the $40 airport security surcharge on arriving and departing passengers at the Banjul International Airport that the government is poised on putting into effect on the 1st October, 2019.  
----------------------------------------- 

The decision by the Barrow administration to impose a $20 airport/border security tax on passengers going through Banjul International Airport has attracted immediate negative response from IATA and the tourist operators.

The fact that negotiations have already been concluded and a contract signed with SECURIPORT, a Washington-based security firm has further complicated matters and has posed a real threat to the country's tourist industry.

The contract between Government and SECURIPORT was signed on 21st September, 2018 with the Minister of Interior, Mr. Ibrahim Mballow,  Director General of Immigration, Mr. Buba A. Sagnia and Cabinet Secretary - Office of The President, Mr. Ebrima Ceesay, all three signing on behalf of the Government of The Gambia and General Manager, Securiport Gambia, Mr. Luc Keppens, as the sole signatory for SECURIPORT.

The contract is for a period of 5 years, according to sources. The profit sharing formula or any financial aspect of the contract, for now, remains unknown.

Under Addendum IV, the contract is for the provision of Civil Aviation and Immigration Security services and E-Visa Management System services for the Government of The Republic of The Gambia under the Build-Maintain-Transfer modality.

 In view of the threats posed by international terrorist groups in the sub region and in order to identify other dangerous individuals such as drug traffickers and other criminals that would use the Banjul International Airport, the government decided to upgrade its system for the screening of arriving and departing passengers to ensure the safety of the air transportation industry.

To pay for the cost of the system upgrade, "government has decided to request the airlines to charge a fee to the direct beneficiaries of the system which are all the air passengers arriving and departing the national territory through the international airports." 

The border control fee will be $20 for each arriving and each departing passenger which shall be collected directly by all the airlines operating in The Gambia.  The Addendum made reference to ICAO's Doc 9082 which provides the framework within which charges and taxation to aid in the decision making process for government and airlines to arrive at mutually acceptable conclusions based on the four principles of non-discrimination, transparency, cost relatedness and consultation with users.

Effective 15th January, 2019, the scheme is expected to be operational with "airlines being 100% responsible for fee collection and its payments made monthly to the Gambia Civil Aviation Authority (GCAA). A late payment fee of 5% will be levied against airlines that will include the impoundment of aircraft and/or the cancellation of landing rights.

Airline crew and staff, children 0 - 2, passengers whose transit time does not exceed 24 hours and passengers whose flights are diverted to the Banjul International Airport re exempt from paying the border security tax.

As we noted previously, tour operators and IATA are all opposed to the border security tax based on the principles outlined in ICAO's Docs 9082 and 8632 (on taxation) which would require extensive consultations with stakeholders.  The airlines are also demanding the cost bases of the tax, supported by breakdown of costs and revenues as well as traffic forecasts and airport activities, documentation that has been absent up to this point.

This is a developing story....
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In subsequent blog post, we will take an in depth look at SECURIPORT, its track record, the manner in which the contract award was handled and why only the Interior Ministry and the Office of The President appears to have been the only one involved in the procurement process, if there was one.  What legal advice was provided, why the Finance Ministry appears to have been left out of the process when the project has huge fiscal implications.  What of the Tourism Ministry?  What about GCAA that runs the airport? Does the threat warrant the huge cost to the economy, to tourism.  This issue is more than a security problem.  

                                                                     ####

 

Re-publication: Airport/border security tax will result in D167m decline in GDP and approximately 2,000 job losses, says IATA

This post was the first in a series of four previously published
blog posts on the $40 airport security surcharge on arriving
and departing passenger at the Banjul International airport
that the government is poised on putting into effect on the 1st,
October, 2019. First publication November 12th, 2018
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The International Air Transport Association (IATA), the trade association of the world's airlines has issued a stern warning to the Government of The Gambia against its decision to introduce what the Barrow administration labeled as border security tax, if levied as is, will have a devastating impact on tourism and air travel into the country.

It is a $20 tax schedule to take effect on the 15th January, 2019.  Initially, the proposal was for a $40 tax  subsequently halved to its current level which will still going to impact both the economy and tourism negatively, according to industry experts.

Based on industry figures, the introduction of the border security tax will result in 8,500 fewer passengers departing from Banjul International Airport.  The impact will be shared between those travelling within Africa (- 4,200) and those travelling to/from Europe (- 4,000).

The impact to the economy will be equally devastating.  Based on the UN's World Travel Organization (WTO) estimates, 35% of visitors to The Gambia arrive by air and the percentage of those coming from outside West Africa is assumed to be 100%.  The World Travel and Tourism Council (WTTC) on the other hand estimates that total travel and tourism account for 20.1% of Gambia's GDP, generating D9.8 billion and supporting 107,500 jobs.

Consequently, a 5% reduction in demand would lead to a reduction of D167 million in GDP and a reduction of 1,835 in the number of jobs supported by aviation.

IATA's warning to the Barrow administration was accompanied with a reminder to its international obligation as member of International Civil Aviation Organization (ICAO) whose regulatory functions include policies on charges and taxation for decision-making processes, based on these four principles namely: (i) non-discrimination (ii) transparency (iii) cost relatedness and (iv) consultation with users.

As regards to cost relatedness, IATA is yet to be convinced that adequate consultations took place between government and airlines.  They are, therefore requesting that airlines operating in the Gambia be provided with information on the cost bases of the tax, supported with a breakdown of revenues and costs as well as traffic forecasts and airport activities.

In the absence of user consultation and transparent financial information, IATA and its member airlines will not be in a position to evaluate and appreciate the cost relation of the immigration/security services that will be provided and the level and structure of the related user charges.  IATA is thus requesting that a proper consultation mechanism be established so the requested information can be jointly analyzed.

IATA's letter to the Hon. Lamin Jobe, Minister of Transport, Works and Infrastructure dated 6th November, 2018, is recommending the suspension of the border security tax based on the issues raised therein that includes what is referred to as "a meaningful consultation and proper discussions with the airlines."

As regards the introduction of the new immigration/security measures, performance indicators - such as waiting time in security queues, passenger satisfaction, number of security staff, number of passengers screened per hour etc. - must be put in place to measure the quality of service, productivity and cost effectiveness of the new measures.

Government has yet to respond to the IATA letter and the threats by local tour operators to withdraw from the Gambian market or scale back their operations.  The Government has suddenly find itself in yet another dilemma that threatens the country second biggest foreign exchange earner - tourism.  It appears that the government has committed yet another infraction of standard procurement rules and procedures by entering into a contract with SECURIPORT without inviting proposals from other companies that could provide the same service. *

                                                                      ####
* The subsequent blog posts we intend to take a closer look at the SECURIPORT contract, the procurement process and related issues.

Persistent lack of transparency in Gambia's public procurement system may affect donor response to the financing of the National Development Plan

This is a re-publication of a blog post first published in June 2018.
We are revisiting the public procurement issue that seem to plague
the government of Adama Barrow.
-------------------------------------------------


The Gambia Port Expansion Contract with China Bridge and Road Corporation (CBRC) may pose the biggest threat yet to the Barrow administration's effort to transform the EURO 1.45 billion in pledges into actual commitments to finance the country's 3-year National Development Program (NDP) 2018 - 2021 following last month's successful Donors Pledging Conference in Brussels.

The persistent lack of transparency, and outright corrupt practises, that have plagued past government's procurement practices are once more rearing their ugly heads with the Ministry of Works and the Office of the Secretary General at the helm of what can only end up increasing donor skepticism.

At last May's GPA Board meeting, the decision was taken to engage the services of an international consulting engineering company to carry out the detail engineering design.  Even though the consultant completed the GPA's requirements on the present scope of works in the Engineering, Procurement and Construction (EPC) Agreement which were incorporated under advise of GAMWORKS and NIRAS Consulting Engineers of Denmark, CRBC rejected the observations.

Last June, a briefing session was convened by the Works Minister, Bai Lamin Jobe on the 4th June 2018 and attended by The Secretary General, Habib Drammeh,  GPA Board Chairman, Alpha Barry,  MD, GPA, Abdoulie Tambadou and Permanent Secretary of Works, Mariama Ndure-Njie to discuss how the EPC contract which is a component part of the China Ex-IM Bank-financed CBRC Port Development Project.

Some important aspects of the project are still outstanding because government, specifically the Ministry of Finance and GPA, the primary beneficiary of the loans, have not lend its full support.  These are : (a) The total loan sum of $177 million (b) provisions detailed in GPA requirements (c) value for money verification (d) Unit prices/rates to be provided while BOQ are confirmed after the detailed designs.

At their June 4th meeting, these critical aspects of the project raised by the consultants and rejected by CBRC were considered unnecessary by the Works Minister as these issues could be taken up later after the EPC has been signed as is.  In doing so, and while admitting of being unaware of the reasons CBRC's rejection of the observations by the consultant, he concluded that a competent Supervision Engineer, during the detail design, will ascertain that the unit rates and GPA's requirements comply with international standards as well as ensuring value for money.

Why would the government of Adama Barrow entrust such critical elements of the projects in the hands of a supervision engineer who, in all likelihood, will be a Chinese national, rather than continuing with more rounds of in-country meetings as proposed by the Permanent Secretary of the Ministry of Finance, Lamin Camara, requested that led him lament about the fact that deal is being rushed.  The GPA Board had scheduled a Board meeting for next Tuesday to discuss critical aspects of the project.

In an email correspondence obtained by us, the PS Finance said and we quote: "I MUST (emphasis his) say once again that the country is not in position to absorb such a loan facility as it will eventually take us to a very serious level of debt unsustainability and would eventually make us miss our programs with the Fund and the Bank (referencing the IMF and World Bank) and that may ultimately affect the gains we achieved  in the BARROW government." 

The Finance Permanent Secretary's email reveals that only 28% of the $177 million Chinese loan is concessional "which is way off from our program".  He further warned the Works Minister, Secretary General and the GPA Board Chairman and the MD that  the "loan facility comprises of one fifth of the whole public debt of the country so there is no way it can be financed given the current situation" hoping it will give pause to those insisting on proceeding without major issues being resolved at the national level.

The Works Minister's argument is that cabinet has decided and therefore they must proceed.  But was cabinet provided with all the facts laid out by the PS Finance.  Is the Finance Ministry so neutered that it can no longer lead the public finance debate as the final arbiter?

According to our sources, the Chairman of the Board of GPA wants government to proceed cautiously to ensure that the country gets value for money and not their intention to frustrate the decision of cabinet. In fact, a Chinese delegation had visited the GPA, accompanied by a Foreign Ministry official, and expressed their intention to reduce the scope of the China Ex-Im Bank financing so as to reduce the burden on government.  Even the Chinese recognize the burden of debt currently in the books to be unsustainable.

As we speak, a delegation comprising of the Minister of Works and the MD of GPA are to travel to Dakar to sign the agreement with CBRC on Friday June 22nd.  Why Dakar?  The loan is being contracted by the Government of the Gambia for Gambians as the beneficiaries and thus normal to have the loan signing ceremonies performed on Gambian soil.

We hope the Gambian authorities recognize that the decision to sign the agreement now, and in Dakar instead of Banjul, may cast doubt as to whether the Barrow government and his senior officials should be taken seriously when they commit themselves to a procurement process they claim to be open, fair and transparent.

$ 900,000,000 from Gambian-registered companies stashed in Panama, Gambians demand explanation - A Re-publication

Exactly three years ago, we published this post on the
Panama Papers and the Gambian companies listed in
them which helped Gambians focus attention on how
international criminal syndicates used weak states, like
our own, to launder money and other criminal activities.
This post was first published on 22nd May, 2016.
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Add caption

According to the Panama Papers, a number of companies registered in the Gambia have stashed almost $ 1 billion in offshore accounts.

We are studying the details in consultation with tax accountants, financial and legal experts with a view to gaining insight into this massive transfer of financial resources from one of the world's poorest countries.

We wish to draw the attention of our esteemed readers that operating offshore accounts in and of themselves may not necessarily be illegal unless it can be established that the origin or origins of these funds are as a result of illegal activities, such as drug or human trafficking or other forms of international criminal activities.

The Gambia is, of course, not the only country that is shown to have its citizens operating offshore accounts in tax heavens.  Prominent Senegalese businessmen are among those listed as operating accounts offshore.  The difference between them and the Gambian businessmen listed in their forthrightness.

The Senegalese businessmen listed in the Panama Papers were quick to respond to the revelation by explaining the rationale for these accounts which, according to one, was to legally reduce or eliminate further exposure to higher tax liabilities.  To some, this is unethical or unpatriotic.  To others it is a smart business move.  In short, one man's tax dodger is another man's astute businessman.

Amadou Samba, a Gambian businessman, a business partner and a close associate of the Gambian dictator is listed as operating one or several offshore accounts.  The amounts in one or several of these accounts are unknown.  However, the global figure for the country is listed as $ 900,000,000 a figure close to Gambia's estimated GDP of $ 1 billion.

Gambians deserve a response from both Amadou Samba and Yaya Jammeh as initial step in a process that will take the expertise of world class legal, financial and tax professionals to ascertain the facts on behalf of the Gambian People.

When Jammeh seized power, "rampant corruption" was the reason he advanced to justify the illegal coup.  A team of investigators were dispatched to comb the offshore centers in search of funds they believed were derived from the Nigeria Crude allocated to the then government as balance of payment support by the Nigerian government.  Today, the shoe is on the other foot.

Gambians must hear from Amadou Samba and Yaya Jammeh.
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Amendment:  The initial blog post figure read $ 900,000 instead of $ 900,000,000

                                                                   #####

Madam Attorney General, please resign (Re-publication)

This is a republication of a blog post first published
exactly three years ago today 19th May, 2016.  So it
incorrect to say that I was picking on Ba Tambadou
the current Ag and Minister of Justice.
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Mama Fatima Singhateh, Attorney General and Minister of Justice 

The political turmoil that besets the country could have been averted if there were principled and courageous leadership within the Attorney General's Office and the Ministry of Justice.

Unfortunately, the legal office of the regime lacks both leadership and direction. Instead, the Attorney General elects to have her office run from Kanilai village and not from Marina Parade in Banjul.

When Ousianou Darboe was arrested and thrown behind the police van, together with dozens of his party executives and supporters for simply exercising their inherent right under law, and subsequently charged with inciting violence, rioting and other trumped-up charges, the Attorney General could not follow the law because she allowed herself to be dictated to by Yaya Jammeh.

Together with her Director of Public Prosecution, S. H. Barkum - who should also resign and return to Nigeria - they concocted frivolous charges they hung around the necks of innocent persons at the instructions of Yaya Jammeh who has effectively used the judiciary as a potent weapon against his real and perceived political enemies and the competition in the private sector.

At a recently held meeting at the Justice Ministry in which both the Chief Justice and the Solicitor General (who also ended up being fired), the Attorney General was advised to drop all charges against ALL protester demonstrators, including, of course Ousainou Darboe.  She wasn't having none of it because she doesn't have the courage to face Jammeh with the right advise that the charges were frivolous and Ousainou and co should be freed.

The same sentiments - that these men and women are innocent - were expressed by Justice Ottaba who was assigned the case in an online radio interview. In fact, he editorialized that to treat Ousainou in the manner that Gambians witnessed, and a senior member of the Bar, at that, was "embarrassing"and he suggested a political solution to what he saw, and correctly so, as a purely political matter.

Justice Ottaba did the right thing by recusing himself from the case and the Attorney General and Minister of Justice did the wrong thing again.  Missing yet another opportunity of redeeming herself, she continues to press on with a case that any lawyer worth his or her salt knows these are trumped-up charges to please Yaya Jammeh.

Most of those arrested have suffered not only injustices in the form of false charges, most have suffered physical violence at the hands of the security personnel.  Solo Sandeng has lost his life which the regime is denying even though neither the Attorney General and Minister of Justice nor the Interior Ministry can produce evidence to the contrary.  This regime continues to lie and the Attorney General continue to help in the concealment of the truth.

Fatomatta Jawara, Nogoi Njie and Fatou Camara were all tortured.  Some, if not all, were allegedly raped.  When they appeared in court for the first time a couple of weeks ago, all three showed visible signs of torture.  As we speak a husband and wife and their 4-week old baby are all in remand and have been denied bail.  Despite all this, Mama Fatima Singhateh, whom we presume is also a mother, is still blind to the fact that Gambians are being abused, their human rights trampled upon, beaten, sexually assaulted by Yankuba Badjie's torturers, killed and maimed.

What will it take, Mama?  What will it take?  I think we have reached a point where the honorable thing for you to do is to resign.  I am sorry to be saying this because I know you are better than that but, from my vantage point, you are an utter disgrace to Gambians at home and abroad.

Yaya Jammeh is not worth it.  R-E-S-I-G-N