FOROYAA – BURNING ISSUES

Issue Number 84/2003, 3-5 November, 2003

Editorial

Nawec And Its Secretary Of State

Who is the next SoS to go? The president has an iron broom to clean the
skeleton in the cupboard of his administration.

However, people are asking whether the next secretary of state to go is the
one responsible for energy, especially because of the state of electricity
supply.

The government has acknowledged that the generation of uninterrupted
electricity supply to satisfy the demand of the vast majority of the
population has been a major problem. Needless to say, without regular
electricity supply public, co-operative and private sector investments in
the productive base of the economy are inconceivable.

The problem of the sector had been identified to be one of generation,
transmission and distribution capacity.

The president took over the energy sector after accusing the NAWEC managing
director and others of unscrupulous practices. As usual people were accused
of wrong doing without ever being found guilty of wrongdoing. The president
simply served as prosecutor and judge and swept the managing director away.

The president took over the energy portfolio and promised to put everything
right. Today the uninterrupted supply of electricity that is envisaged is
still illusive. What is the problem? What has been done to solve it?

It is reported that in 2000 the total available generating capacity at Kotu
Power Station was 23 megawatts.

The president secured a loan, which led to the procurement of three new
generators. He brought and commissioned the generators amidst fan fare
emphsising that power cuts were going to be a thing of the past. By 2001 the
total generating capacity increased to 41 megawatts.

Interestingly enough the government did not did not engage in integrated and
holistic planning of the sector, which constitutes policy failure on the
side of the president.

In short, it was after purchasing the generators that it was realised that
the transmission and distribution system could not accommodate the increased
generating capacity. Hence there are three new generators but the crude
transmission and distribution network did not permit power to be made
available to customers without interruption. It was in 2002 that government
could get a loan amounting to 500 million dalasis from Taiwan to upgrade the
transmission and distribution system.

However, uninterrupted electricity supply is still unachievable. People want
to know what the problem is.

According to the government, NAWEC has been consistently losing money on its
operations since the president took over. It lost 50.2 million dalasis in
2000 and 55 million dalasis in 2001.

Suffice it to say that while total revenue for the sale of electricity,
water and sewerage services is expected to be 314 million dalasis, the total
expenditure on heavy and light fuel oils is 303 million; 45 million is
expected to be spent on maintenance of generators and lubricants.

While the public is constantly being told about this or that type of
maintenance, or that this or that feeder is down, the real fact of the
matter is that NAWEC cannot sustain the cost of its operations.

The SoS for energy has failed to deliver uninterrupted supply of electricity
since he took over. The iron broom should reach this skeleton in his own
cupboard.

Price Control By Might Instead Of By Policy Or Law Is Sheer Hypocrisy

Those who are led to believe that the president is really serious in
introducing price controls are completely misled.

If the president was really serious in imposing price controls he would have
caused for a bill to be prepared to impose price controls which would have
gone before the national assembly and eventually passed and assented to in
order to become law. It is such a law that law enforcement agents could
enforce.

The fact of the matter is that there is no price control legislation. The
orders given to quasi police forces who go to markets, especially lumos or
weekly markets, are arbitrary and without legal foundation.

Such orders, which are given to security forces that are duty bound to
defend the constitution, constitute gross violation of seniority.

It gives absolute power to security forces to trample on the rights of
others without any law providing for their action.

These actions are undermining the integrity of the police force. There
should be complete separation of functions between policing and military
functions. Those in the army should conduct army functions. Those in the
police should carry out police functions.

No policing duty should be performed by anyone who is not under the command
of the Inspector General of Police. He also must only give orders that are
prescribed by law. This is the way to prevent chaos in the markets as
obtains currently.

The president should not give titles to his appointees and then retain their
authority to exercise guidance and control over their departments. He should
practise devolution of power not its personalisation. This became manifest
on Friday when the commissioner of Brikama took the tractors offered to
Western Division to collect sugar given as charity by the president as a
symbolic gesture. The president fined them D3000. This is the height of the
personalisation of power. What authority does the president have to fine
anyone? These people will crawl to save their jobs. They know the president
can abuse his powers and remove them for no just reason.

It is this arbitrary method of governance that has led to tyranny everywhere
in the world. It should be checked to prevent us sinking deeper into
tyranny.

The State Of The Gambian Economy

Conclusion

The government continued to waste the potential of public enterprises for
productive investments while the private sector receives very little capital
from the banking system to invest.

In short, AMRC claims to have recovered D154 million in cash and kind out of
a loan portfolio of D335 million. Gambia is ranked the highest among the
successful recovery schemes. This is public capital. There is no evidence
that it has been used productively. Suffice it to say that keeping the money
in the Central Bank as claimed would not secure its appreciation because of
the rise in prices and the depreciation of the dalasi.

Can the reader imagine what could have been done with the AMRC funds since
1994?

The government has displayed complete sterility in thinking when it comes to
investing the capital recovered by AMRC. This is one corporation, which
could have assisted the Cooperative Union in purchasing farm produce and
cold storage facilities to preserve horticultural products for marketing. No
linkage has been forged between AMRC and agriculture.

Needless to say, the government proceeded to put Social Security and Housing
Finance Corporation at risk by investing the funds of the working people of
the country into the hotel business, which depends on the vagaries of human
taste. Instead of relying on the AMRC funds government purchased Mariatou’s
Beach hotel for D45 million and utilized D164 million for its refurbishment.
In short, a public sector investment package of D209 million dalasis has
been spent on one hotel at a time when government is not deriving a butut
worth of dividend from its shares at Senegambia Beach Hotel. Can one imagine
what could have been done with D209 million in terms of fishing,
horticultural production and the processing of fish and agricultural
products? Such public sector investments are clearly not in line with the
national interest. It is simply preparing the ground for future
privatisation schemes that will serve few beneficiaries at national expense.
In short even though government! has compensated GGC, the former GPMB will
still have to be privatised. Why public investment in hotels which can be
developed by private investment since it depends on the taste of people from
abroad.

In fact what became very suspicious was when Social Security called for
foreign exchange dealers to provide it with foreign exchange when it is
understood to be refurbishing Mariatou’s Beach Hotel. This automatically led
to further depreciation of the dalasi because of an increased demand for
foreign currency.

While the public sector investment remained too unproductive to enable the
government to earn dividends that would meet certain public expenditure, the
government continued to increase its expenditure without a broad tax base to
support the budget. This led to shortfalls in revenue below the expenditure
requirements of the government.

Consequently the government has been suffering from budget deficits since
1994 and has been relying on domestic borrowing to meet its expenditure. The
budget deficit excluding grants was D204 million in 1994; D461.3 million in
1995; D456.5 million in 1996; D324.1 million in 1997; D197 million in 1998;
D239.5 million in 1999; D196.8 million in 2000; D532.4 million in 2001 and
D545.5 million in 2002.

This has pushed the government to borrow up to D2900 million from local
sources as of October 2002. This type of borrowing makes the commercial
banks to concentrate on lending to government instead of providing capital
to the private sector, which the government claims, will drive the engine of
economic growth. Instead of driving the engine it is being strangulated by
high interest rates.

To be continued.

Issue Number 85/2003, 6-8 November, 2003

Editorial

"Operation No Compromise" A Total Failure!!

Ending Where He Should Start

The president’s comments after visiting Lat Kumba Lowe Street confirms that
he has started a war without the ammunition of law and sound common sense
economics. In passing, we will advise the president to visit the Sandika
area in Serrekunda or strongly review the cassette prepared by Halifa Sallah
depicting the horrible sanitary conditions in the area. The project being
launched for the development of the area should be visited by him so that he
can know that it is his government which lacks sincerity and innovative
capacity in promoting local government administration. The World Bank,
through Gamworks, has agreed to the plan of the KMC to rehabilitate roads in
Serrekunda such as Papa Sarr Street, Lat Kumba Lowe and others. We will
indicate in another article how government interference in Gamworks
management is wrecking the institution and why the president is skillfully
masking the crisis by paying a flamboyant visit to the site.

The president should make more visits to the inner city in Banjul and the
sub-urban areas in Serrekunda and Bakau. He will not claim as he often does
that he had transformed Banjul "poto poto" or muddy into a modern city.

If he makes this tour he will discover that all these areas wear the same
uniform of "poto poto", stench and drain that are either uncovered or that
leads to nowhere.

The decentralisation process has come to a halt, the councils are in
shambles. The ward and development committees are without means to function.
All development is just on paper and the advitisements on the television
screen. If the president were to make a tour of the inner urban areas he
will only see poverty, squalor and immense underdevelopment. He will stop
calling Gambia the Jewel of west Africa.

On the other hand, the president indicated that he knows the price of rice,
oil, etc in the World Market. He called on the wholesale traders and super
markets to bring the prices down or he will do so.

The president knows fully well that there are only two ways of keeping
prices down, that is; through "Compromise" or "No Compromise".

If the president was serious about a "No Compromise" policy he would have
enacted a law on price controls, create the institution that will establish
the price, employ inspectors to investigate, arrest and prosecute all those
who sell above the prices. Issuing threats without creating the law is an
exercise in misleading the public and promoting confusion.

On the other hand, the policy of compromise should lead to the establishment
of a world market price tracking desk officer at the department of state for
finance, the creation of a committee comprising of government, business
persons and members of consumer associations to negotiate profit margins and
the issuing of periodic prices to guide comsumers and business persons. In
negotiating market prices, consumer associations could give guidance to
consumers as to where they can get goods at reasonable prices and thus
influence marketing behaviour through consumer behaviour.

President Jammeh’s government, however, is neither here nor there. One
moment he promises to use might and another moment he turns to appeal to the
conscience of the business community. He needs to change his strategy from a
militarist code name "Operation No Compromise" to the "New Common Sense
Initiative."

Common sense dictates that prices be revisited through consensus building.
To fail to do so will only leads to a scarcity and greater hardship.

Take the example of CRD. A typical case is the relationship between the
fishing village of Jaaha in Niani and the neighbouring settlements like
Panchang. The Commissioner, chief and local APRC supporters told the
fishermen that they cannot sell their fish for more than 10 dalasis and
instructed the inhabitants not to buy fish for more than 10 dalasis. The
fishermen also withheld their product. Now the people in the area eat rice
with sorrel (bisap) okra and bitter-tomatoes. There is no fish or meat. This
is the ultimate consequence of price control by might. The villagers need to
take matters in their own hands, establish consumer task forces to negotiate
prices with suppliers if the officials fail to use common sense to negotiate
prices.

The State Of The Gambian Economy

Conclusion

In the last issue, having stated the yearly budget deficits up to 2002, it
was concluded that the government resorted to domestic borrowing to finance
the deficits. The sum borrowed as of October 2002 amounted to 2900 million
dalasis. This type of borrowing makes the commercial banks concentrate on
lending government instead of providing capital to the private sector which
the government claims will drive the engine of economic growth. Instead of
driving the economic engine the private sector is being strangulated by high
interest rates.

Consequently, businesses are borrowing less from the banks while government
is borrowing more. For example, the domestic debt stood at D627 million
dalasis in 1992. It rose to 743.4 million in 1993. By 1995 it stood at
D867.6 million. It rose to D1253.1 million in1997. By the year 2000 the
domestic debt rose to D2015 million. By 2002 it was close to D3000 million.

This growing domestic debt has impacted both on fiscal policy or taxation
and private sector investment.

In short, the Gambian economy depends mainly on taxation. For example, in
1999 tax revenue constituted 81.9 % of total revenue. 7 % of the revenue was
based on grants or foreign assistance. In 2000 the tax base became narrower
while dependence on grants increased. The tax revenue amounted to 77.3 % of
total revenue while grants rose to 11.1 % of revenue. In 2001, tax revenue
stood at 75.8% of total revenue while grants rose to 12.1%. In 2002, tax
revenue stood at 68.3 % of total revenue while grants skyrocketed to 21.3 %,
leaving the national budget to be increasingly vulnerable to external
pressures.

This cash shortage of government has led it to intensify taxation as well as
borrowing. The commercial banks have seen the government as a reliable
customer since it has the capacity to levy taxes to repay loans. The only
drawback is the more indebted the government, the more it directs tax money
from services to the repayment of debts.

The combined stock of outstanding treasury bills and central bank bills
increased to 2.3 billion dalasis from the end of December 2003.

What confirms that the dominant financial sector, the banking system, was
not linked to the productive base is the fact that while the total assets of
the sector stood at 4.4 billion dalasis as at the end of October 2002, the
total loans issued by the sector stood at 1.1 billion or 27.5 % of total
assets.

Suffice it to say that the largest portion of the banks’ assets is in
treasury bills and central bank bills. The private sector is increasingly
finding it difficult to borrow to invest. Gambia is therefore left with
neither a productive public sector nor a productive private sector that can
promote significant economic growth.

It is therefore no surprise that earnings from exports have fallen far short
of the expenditure on imports. This has made the foreign exchange earning
capacity of the country to fall below the demand for foreign exchange for
imports and the repayment of loans. The scramble for scarce foreign exchange
by the government to repay its loans and the business community is a
contributing factor to the depreciation of the dalasi and the huge increase
in prices.

If the two problems are to be addressed the government must know their
principal and secondary causes.

To be continued.

Issue Number 86/2003, 9-12 November, 2003

EDITORIAL

WHAT IS THE SECRETARY OF STATE FOR AGRICULTURE DOING ABOUT THE TRADE SEASON?

When the rainy season started there was much talk about people venturing to
farm. We have always emphasised that the Gambian farmers have been farming
irrespective of the President’s call. In fact, in 2001 the Gambian farmers
produced 131,000 tons of groundnuts. The companies were able to purchase
only about 70,000 tons. They did so by credit buying.

This has been the tragedy of the groundnut sector. Farmers would produce
while inadequate outlets exist for the marketing of their produce. This is
precisely why the SOS was asked during the last sitting of the National
Assembly what concrete plans are on the way to prevent credit buying in the
upcoming trade season.

The vice-president, speaking on behalf of the president, said that the
government’s role is regulatory; that the Departments of State for
Agriculture, Finance and Economic Affairs and Trade, Industry and Employment
constitute a Monitoring and Control Committee and, in consultation with the
Department of Cooperative Development, will closely monitor the marketing
arrangements.

December is at our door steps. The trade season is here. The Vice President
had indicated that ASPA exists to determine the marketing mechanisms.
Foroyaa saw the need to approach ASPA to find out what arrangements are made
for the marketing of groundnuts and what the prices are going to be for the
2003/2004 season. Foroyaa was informed no meeting had been held to review
the upcoming trade season.

Instead of Operation No Compromise the president who is SOS for Agriculture
should have been holding meetings on how to market our groundnuts to enhance
the foreign exchange earning capacity of the country. This is what will
sustain the value of the dalasi.

We challenge the president to prove that he truly stands for the development
of the farming community by declaring the world market price for groundnuts
and negotiate the best producer price for the crop. If he fails to do this
then one should question whether his Back to the Land outcry was based on
sincere desire to improve farm income. The president should also ensure that
there is no credit buying this season. If he cannot tell the farmers the
would market price he cannot ensure fair price for their nuts.

If he cannot ensure a fair price and prevent credit buying then his
retention of the Office of SOS for Agriculture is an exercise in futility.
The Electric broom should also sweep him.

The State of the Gambian Economy

Recommendation

The Central Bank of The Gambia is the monetary authority of the country. It
has the duty to maintain a fixed or flexible exchange rate system.

It is not a question of choice but a question of economic reality. In short,
if an economy is self reliant, if its balance of trade and balance of
payments are in surplus the country can afford to have a fixed exchange rate
system. In other words, trade surplus and balance of payments surplus would
signify that the country is earning enough foreign exchange to meet all its
external obligations.

On the other hand, if the balance of trade and balance of payments move
between surplus and deficit a country can have a flexible exchange rate
system that is regulated. The rates can go up and come down in accordance
with the supply of foreign exchange. The exchange rate should not swing
above or below certain points.

However, if the balance of trade and balance of payments are in permanent
deficit the exchange rates on the average must float. The central bank can
best handle the problem by advising government to reduce its demand for
foreign exchange so as to reduce demand. Government can also assist the
importers to look for cheaper sources of imports. This can also dampen
demand for foreign exchange by the private sector. The government can
promote good governance to encourage access to grants and foreign visits to
increase foreign exchange earnings.

The government can encourage investment of loans in sectors which can either
lead to import substitution to reduce demand for foreign exchange or promote
exports of goods and services that can earn foreign exchange.

The Possible Interventions of the Central Bank

Where the foreign exchange earning capacity of the country are determined by
both trade and balance of payment surpluses and deficits the exchange rates
of the country can be regulated by the Central Bank retaining reserves of
foreign currency which it can release periodically to provide more supply of
currency to satisfy demand.

However, if trade and balance of payments experience permanent deficit the
Central Bank can never have sufficient reserves to regulate the exchange
rates of the local currency by releasing foreign exchange in the currency
market. Any attempts to do so would only drain the reserves of the bank
without satisfying the demand for foreign exchange.

This is precisely what has happened in the Gambia.

In short, because of the permanent trade and balance of payments deficits
the dalasi came under tremendous pressure in 2000, 2001, 2002 and 2003. It
lost considerable ground against the major international currencies. It
recorded an overall depreciation of 8.4% against the major currencies in
2001 as compared to December 2000. The government attributed the pressure on
the dalasi in 2001 to poor performance of the tourist industry, reduced
cross border trade and serious difficulties in marketing groundnuts.

In 2002 the government continued to record that the dalasi continued to
depreciate against major currencies in the inter bank market during the
first 10 months of 2002. It attributed the greater depreciation to
expansionary monetary and fiscal policies and less than expected inflows
from tourism, re-exports and groundnuts export.

The volume of transactions in the purchase and sale of foreign exchange in
the inter bank market stood at 200 million dalasi as at the end of October
2002.

The Central Bank claimed that it had taken measures to arrest speculation in
foreign currencies and had narrowed the spread between the rates in the
parallel market and the inter bank exchange rates and by calling on foreign
currency dealers to register with them.

Government did not explain what the consequences of these measures were. The
public was simply informed of new measures to put an end to the depreciation
of the dalasi through "operation no compromise"

Issue Number 87/2003, 13-16 November, 2003


EDITORIAL

DOING WHAT PEOPLE WANT IN THE WRONG WAY

After the President’s Two hour ultimatum!

Two hours after the ultimatum, members of the security forces began to move
about the Serrekunda market to enforce the following prices: Palm oil at D5
per cup, cooking oil at D5 per cup, onions at D10 per kilo, potatoes at D 13
per kilo. The vendors argued that they would be driven to bankruptcy unless
the government can regulate the wholesale price. Some of the vendors shed
tears. One claimed that he bought rice named after Sadam for D410 and was
being forced to sell at D350. Foroyaa took the regimental numbers just to
confirm that they are members of the security forces. This confirms that
President Jammeh is condoning the exercise. In a similar exercise, a number
of agents invaded some supermarkets and gave them price lists for many
commodities to be implemented immediately.

It is very clear that the Gambian people want goods that they can afford.
However, no Gambian wants to go to the market and find it empty of
commodities. To ensure that goods are available at affordable prices there
is need to look at the wholesale and retail prices of commodities and
negotiate with importers and retailers for reasonable profit margins. This
could have been done in a mature, sensible civilized and legal way without
spreading fear or creating animosity between consumers and vendors. There is
no doubt that many small scale vendors would go bankrupt if they are
pressurized to sell their commodities below the prices they bought it from
the wholesalers. This will drive them from the market and create more
scarcity. The low prices will be in people’s head while goods to buy will be
off the shelves.

Again, we wish to emphasize to the Gambian people that the methods the
government has adopted proves that it is not competent to lead a civilized
and decent people. Every Gambian knows that government is responsible for
the price of petrol. If the government was sincere it will start reducing
the prices of commodities under its control such as fuel, electricity,
telephone and water.

We challenge President Jammeh to explain why petrol has been raised from
D10.50 to D19.00, diesel from D9.50 to D15.00 and Kerosene from D5.50 to
D9.50. If the President fails to make a statement on this one should
conclude that he is simply tying to find scapegoats for wrecking the
economy. It is the new tycoons who have wrecked the continent bank. They are
the ones who have put Gamworks to a halt. They are choking the vital pores
of the economy and then put the blame on the people.


ON THE STABILIZATION OF THE GAMBIAN CURRENCY

It is abundantly clear that unless The Gambia earns enough foreign exchange
to satisfy demand the dalasi cannot be safeguarded from depreciation.

Suffice it to say that as long as there is scarcity of foreign currency
there will be scramble for foreign exchange, which will lead to further
depreciation of the dalasi. It goes without saying that the Central Bank can
only intervene in selling foreign currency to reduce scarcity if it can have
sufficient reserves. Without sufficient reserves its intervention in the
foreign exchange market would amount to trying to make a fresh water lake
salty. It would constitute an exercise in futility. The government had to be
honest with itself. It is very clear that it lacks the reserve to intervene
by selling foreign currency in the inter bank market to increase supply and
thus dampen demand.

The government must acknowledge the crisis of the monetary system. It should
not cover it up by blaming speculators. Speculation does play a role in the
currency markets in all ECOWAS states. The government knew the volume of
currencies that were being exchanged in the inter bank market but it did not
know how much was being exchanged in the parallel market and by whom. This
is precisely why the policy of calling on all foreign currency dealers
(formal and informal) to register with the Central was an appropriate step
to provide data to study the volume of transaction in the parallel market.
President Jammeh’s militarist approach drove all the traders to the border.
Instead of registering and providing vital status ties to know how to
establish a regulatory framework for the parallel market, President Jammeh’s
use of security forces to arrest the mobile foreign exchange dealers has
compelled them to stay on the other side of Gambia’s border with Senegal.
Thi! s is shifting the foreign exchange transactions in favour of the
Senegalese economy. In short, while in the past, Gambians would sell their
groundnuts in Senegal and get CFA only to bring it to The Gambia to buy
cheaper goods, they are now afraid to have the CFA and would have to
purchase goods in Senegal to avoid their money being illegally seized by
security personnel. Those foreign exchange dealers who used to rent shops,
eat from restaurants and consume other items would now do that on the other
side of the border. In the long run, it is the Gambian economy which will
suffer a decline of its informal sector which has been the most resilient
part of the national economy.

At this very moment when government priority has been to become part of the
West African Monetary Zone, its preoccupation should have been on the
convergence criteria which makes the country to qualify to be a member.

The four basic criteria are as follows:

1.The budget deficits of each country excluding grants should not be more
than 5% of GDP in 2001 and 4% of GDP in 2002. The consumer price inflation
rate should not be above 10%.

The Central Bank financing of budget deficits should not be more than 10% of
revenue; gross reserves should cover at least three months of imports. In
2000 it was claimed that Gambia satisfied all four criteria. In 2001 it is
claimed that it sank to three and in 2002 it sank to two. The right monetary
policy was to ensure an exchange rate fluctuation margin that would not lead
to uncertainty in the ranks of economic operators and stagnation. According
to the ECOWAS target the fluctuation should not be more than 5%.

The Central Bank depends on external project inflows and purchases from
inter-bank markets to replenish its reserves. If government takes measures
that erodes international confidence in The Gambian economy the external
inflows will reduce and what could be purchased from inter-bank markets
could diminish if the operators in the hotel industry and those who purchase
groundnuts make external bank transactions for payments in external banks.
The country could be starved of foreign exchange. This would make it
difficult for small businesses to get foreign exchange from the banking
system to import. Only few businesses will survive.

Suffice it to say that if the foreign reserves of the government drop it can
even have problems with the IMF and the World Bank. This can lead to serious
imbalances in the support given for the stabilization of the economy. The
government needed to engage in stabilization measures for the exchange rate
of the dalasi and prices that would not undermine the confidence of economic
operators. It should have kept track of the volume of buying and selling of
foreign money both in the inter-bank and parallel markets by adhering to the
policy of compulsory registration of all foreign exchange dealers; reduce
their profit margins through taxation or negotiate the reduction of exchange
rates. Once the volume and direction of the flow of currencies are known,
the government could determine the vital nature of the formal or informal
sectors, which are benefited by the buying and selling of foreign currency.
It could also determine concretely how prices are affected by t! he
fluctuation. It would also compare and determine how the fluctuation of
currencies determines fluctuation in prices. It could establish a
fluctuation margin and negotiate parity between exchange rates and prices of
commodities affected and then negotiate the retail profit margins.

This is the scientific way to go about exchange rates and price
stabilization. Jammehnomics however prefers the militarist and chaotic way
just so that the people can believe that it is Jammeh’s power and not
economic policy hatched by experts which is driving the economy. Of course
might can enable the president to send security forces to tell people to
sell existing goods at given prices but might will not compel these people
to import or purchase more to continue to sell at such prices. Hence if the
prices being established are below the wholesale prices the retailers will
go bankrupt and there will be scarcity of commodities.

Of course the new tycoons who are aided and abetted to establish airlines,
wholesale businesses in essential commodities think that they could replace
those who collapsed with their own agents. This is where they are going to
learn the laws of economics, which do not dance to conspiracies and
militarist code names. In fact the debts of the Youth Development Enterprise
to the Customs and the Gambia Ports Authority have confirmed that such
schemes cannot benefit the state, the tycoons and the general public at the
same time. Moreover, the sooner they take over the branches of the economy
the more the country loses international confidence and the more difficult
the external economic environment for the country. This is precisely the
problem the country is having with our Gamworks programme, which we will
analyse in the next issue. As far as we are concerned prices and exchange
rates are not beyond rational regulation. The major obstacle to this is
Jammehnomics! , the militarist strategy which calls for arbitrary
intervention to regulate exchange rates and prices.

Issue No. 88/2003, 17-19 November, 2003

EDITORIAL

The National Assembly and the Arrest of the Majority Leader

When the Majority Leader was arrested on Thursday 13th November 2003, many
people called to ask Foroyaa whether National Assembly Members has
Parliamentary Immunities and questioned how he could be arrested without a
Session of the National Assembly being held to waive his Parliamentary
immunity.

On Thursday, the Speaker of the National Assembly was indeed approached for
the waiving of the Parliamentary Immunity of the Majority Leader. However,
unlike many countries where Parliamentarians cannot be arrested until their
immunities are set aside by Parliament, in the Gambia immunities are given
to National Assembly Members only when they are on their way to or are
returning from proceedings of the National Assembly. Section 115 reads:

"No civil or criminal process issuing from any court or other place outside
the National Assembly shall be served on or executed in relation to a Member
of the National Assembly while he or she is on his or her way to attending
or returning from any proceedings of the National Assembly".

National Assembly Members are therefore not immune to arrest while not
attending, going to or coming from a meeting of the Assembly. The National
Assembly did not have to meet to waive any Parliamentary Immunity. Of course
the Members did explore the possibility of meeting in an emergency session.

The Constitution states in Section 98 that "sittings of the National
Assembly shall be within Seven days of a request of a meeting of the
National Assembly by not less than one quarter of all the Members of the
National Assembly". The Majority Leader however was granted bail on Friday
14th November 2003.

Since the National Assembly cannot discuss a matter that is before the
courts it appears that the issue of an emergency session was a matter of
opinion. Just like any other Gambian it is for the courts to decide
innocence or guilt.

What is clear is that there is a shift in the political equation in the
country requiring a new evaluation of the political direction of the
country. What the future holds depends on maturity of the people of the
country who ultimately must determine the type of political leadership that
governs their affairs. Foroyaa is closely monitoring events and shall give
clear exposure to all the trends in the political life of the country.

Baba Jobe In Court

Accused Of Defrauding The State Of Tens Of Millions

Rumours are rife on why Baba Jobe was arrested. It is now necessary to
separate facts from fiction. It is a fact that the drama unfolded on
Thursday morning when the inspector general of police was instructed to
approach the Speaker of the National Assembly to find out how Baba’s
parliamentary immunity can be waived to facilitate his arrest because of the
claim that serious allegations of fraud has been made against him. When it
was discovered that parliamentarian only have immunity from arrest when they
are going to or from a proceeding of the national assembly or while it is in
session, the police proceeded to arrest him. He was detained until Friday
afternoon when he was taken to the high court. This is when it became
absolutely clear why he was arrested.

On Friday he and the Youth Development Enterprise Managing Director Baba
Kanteh were led to the High Court where six charges were read against them.
They pleaded not guilty to all the charges. Baba Jobe is facing the
following six charges:

The first count : The first count is under the Economic Crimes Decree of
1994. Baba is accused of the failure to pay Port Duties contrary to section
5(b) of the Decree to the tune of twenty-seven million, one hundred and
sixty three thousand, three hundred and ninety-five dalasis and fifty-five
bututs (D27,163,395.55). For the benefit of the reader section 5 (b) of
Economic Crimes (Specified Offences) Decree 1994, Decree Number 16, states:

"A person commits an offence if he, being a citizen or non citizen resident
in or outside The Gambia, in the course of any transaction or business with
a public body, he intentionally or recklessly causes any damage, injury or
loss, whether economic or otherwise, to the public body."

The second count: The second count deals with a breach of section 84 of the
Ports Act. The section reads: " Any master or owner of any ship, or any
owner or consignor or consignee of any goods who, by any means whatsoever
evades, or attempts to evade any of the dues or rate leviable under this Act
shall be guilty of an offence and shall be liable on summary conviction to
imprisonment for a term not exceeding six months or to a fine not exceeding
two hundred and fifty dalasis or to both such fine and imprisonment, and
shall in addition be liable to pay to the authority as penalty double the
amount of the dues or rates he evaded or attempted to evade."

The third count: The third count alleges that Baba Jobe and Baba Kanteh of
the Youth Development Enterprise have from 2001 to date caused economic
losses of D70 million dalasis in import duties and others.

The fourth count: Count four alleges that Baba is in breach of section 5(b)
of the Economic Crimes (Specified Offences) Decree and section 6 of the
Customs Tariff Act.

The fifth count: Count five alleges that contrary to section 291 of the
Criminal Code Baba has obtained credits at various sums totaling 70 million
dalasis from Customs Department under false pretence from 2001 to 2003, that
payment were done in cheques. Section 291 of the Criminal Code reads:

"Any person who:-

Incurring any debt or liability obtains credit by any false pretence or by
means of any other fraud.
With intent to defraud his creditors or any of them, makes or causes to be
made any gift, delivery or transfer of or any charge on his property: or
With intent to defraud his creditors or any of them, conceals, sells or
removes any part of his property, after or within two months before the date
of any unsatisfied judgement or order for payment of money obtained against
him is guilty of a misdemeanor and is liable to imprisonment for a term of
one year
The sixth count: Baba is accused of conspiracy to commit a felony contrary
to section 368 of the criminal code by causing financial losses to GPA and
the customs department. Section 368 reads:

"Any person who conspires with another to commit any felony or to do any act
in any part of the world which if done in the Gambia would be a felony and
which is an offence under the laws in force in the place where it is
proposed to be done, is guilty of felony and is liable if no other
punishment is provided to imprisonment for seven years, or if the greatest
punishment to which a person convicted of the felony in question is liable
is less than imprisonment for a term of seven years, then to such lesser
punishment."

Baba Jobe is charged along with Baba Kanteh of the Youth Development
Enterprise. The prosecution is being led by the Director of Public
Prosecutions (DPP) Mr. Agim.

Baba Jobe the first accused and Baba Kanteh the second accused are being
defended by Mr. Mai Fatty. Bail was granted.

The presiding judge, Justice Paul in granting the bail ordered each of the
accused and one Gambian surety to pledge with the court landed property
worth half the sum of Two Million Dalasis. In his opposition to the
application for bail Mr. Agim argued that the UN had imposed a travel ban on
Mr. Baba Jobe for his involvement in illegal arms trafficking and blood
diamond dealings and should therefore be refused bail. He however changed
his mind later and conceded to the application for bail.

The case was adjourned till 8th December, 2003. The National Assembly is to
held its budget session starting from 1st December. Foroyaa will closely
monitor developments without fear or favour, affection or ill will.

The State of the Gambian Economy

CONTINUATION

We have emphasised that the prices of goods and the exchange rates of the
dalasi are not beyond rational regulation; that what undermines such
regulation is "operation no compromise" which promotes a militarist style of
arbitrary intervention instead of the systematic monitoring of all the
factors which determine the prices of commodities and the exchange rates of
the dalasi and cooperate with all stakeholders to eradicate speculation in
the fixing of prices and the exchange rates of the dalasi.

We have shown that the government has been a contributor to the current
crisis by its huge dependence on loans, both locally and externally, and
through erratic decisions which are alienating donors like the world bank
which has been instrumental in putting the Gamworks programme in place. The
government had failed to make maximum use of the new policies agreed with
the World Bank.

In short, the Gamworks project emerged because of the realisation that the
collapse of the PWD had left a vacuum in being able to carry out public
works such as the building of schools, hospitals, roads and other structures
for rendering public services. Needless to say, it was envisaged that the
trained persons released by PWD would be able to establish small businesses
to enter into contract with Gamworks to implement many public construction
schemes. Gamworks was supposed to operate, as an autonomous public capacity
building institution, which would identify the best contractors and reward
them for their efficiency and effectiveness in implementing projects. The
management was to be free from political dictation in issuing contracts.

This government knows very clearly that it has been unable to raise enough
funds to meet its recurrent expenditure and depends mainly on foreign loans
and grants to meet the development budget. It needed to adhere strictly to
the terms of agreements with international institutions and promote
accountability and transparency in the implementation of the projects.
Furthermore, it had the duty to provide the support base to sustain the
capacity tapped by the implementation of the various projects.

The huge dependence on the loans and grants makes the economy very
vulnerable to external pressures.

For example, in 2003 external loans comprise 63.2% of the development
budget. Grants consist of 25%. Only 5% come from local contribution. A
review of the development budget year after year reveals that almost 90% or
more of the budget always come from loans and grants.

The loans provided for public works under Gamworks had the intention to
build local capacity service delivery in public works. What government
needed was to look at the means of providing a pool of equipment for
contractors to hire since no single one of them could purchase heavy
equipment. AMRC is said to have recovered 154 million dalasis in cash and
kind. Such cash could have been utilized to purchase equipment needed in
road and other major constructions to support Gamworks projects. This would
have enabled the country to rely on local contractors to implement major
projects and retain foreign exchange that could boost up the national
economy. The government however did not make use of its potentials. Instead,
its interference with Gamworks administration has led to a conflict with the
donors. Now, many projects, including the road projects in the Kanifing
municipality are in a state of limbo because of such conflict. How will
"operation no compromise" rectify problem! s created by the very architect
of the strategy?

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