Gambia's Debt At D10.3 Billion Halifa Sallah Explains Serious Economic Crisis
The Independent
NEWS
October 11, 2002
Posted to the web October 11, 2002
Banjul
The Gambia's burden of debt, which was quoted in the neighbourhood of several
millions last year, has rocketed to D10.3 billion, according to Halifa Sallah,
the minority leader in the National Assembly.
Honourable Sallah told The Independent in a recent interview that the country's
increasing debt burden has this year alone registered another inflation of D482
million, which is approximately one third of the national budget. This he said
is higher than the total budgetary estimate for Education, Health, Works and
Communication, Agriculture etc. He added that out of D10.3 billion, the
country's external debt component stands at D8.3 billion whilst the internal
debt component stands at D2.02 billion.
According to Honorable Sallah a combination of factors is responsible for the
country's increasing debt burden among which is the continuous reliance by the
APRC government on loans and grants for its development budget used for
providing roads and other infrastructures. He added that such loans and grants
have been increasing without The Gambia producing enough earning to buy things
needed for road construction and other infrastructural development.
Honorable Sallah further added that the production base of the economy has not
been well sustained over the past couple of years to support day-to-day
services from government departments as well as investing in development
projects such as infrastructure. He added that as the country is constantly
importing more and exporting less when it is not investing in the productive
base of the economy to earn enough in order to meet its development target, the
productive base of the economy is constricted and cannot support the
infrastructure as well as the day to day needs of the population.
He posited that because it was entirely dependent on taxes, the government
should ensure that any loan taken is invested in a strategically and well-
calculated manner such as opening up production in order to acquire more
wealth. He added that even if the country is going to depend largely on taxes
it must also try to depend more on a growing economy. According to him, if the
economic rate of the country fails to grow then the tax base becomes resupient
whilst the demand for the repayment of loans increase thereby running the
country aground and into a budgetary crisis in which 60-70 percent of her total
earnings would be spent on loan repayment. 'If that is the case then what would
the country have to continue servicing schools, hospitals as well as
maintaining the economy?' he inquired.
'This means that the public sector would run into serious problems of financing
whilst there would be constant competition between the foreign exchange to
repay loans and foreign exchange to import products such as fuel, goods etc
which may result in a serious economic crisis' he said.
On the current economic situation of the country Honorable Sallah stated that
the economy is in a state of crisis because the country is importing in excess
of its capacity to pay what amounts to D2 billion. This he said is a trade
deficit, signifying that The Gambia is a consumer country of imported goods
rather than an exporting economy. He added that as long as the country
continues to export less and import more, the value of the local currency shall
always be at risk. He observed that what could have supported the ailing Dalasi
was by services through tourism. He said it was unfortunate that however the
foreign exchange being realised does not remain in the country, because it is
not linked to the productive base of the economy. Ipso facto, he said the
country would always have ever-greater demand for foreign exchange to bring in
goods, pay loans etc than for the local Dalasi, a situation, which would put it
into deeper crisis.
Honourable Sallah added that we must avoid blaming foreigners in the throes of
our economic crisis, as international economy recognises no distinction between
a foreign or Gambian economy. He added that the blame cannot be put on
foreigners when the government is going everywhere calling for foreign
investors, which the groundswell of Africa's economy depends on. What must be
understood he said, is that the government must put in place a modicum of
fundamental economic tools and devise modalities on how to regulate it without
which the people will exploit to gain profit. He added that the regime should
also ensure greater access to the resource base and must also be encouraged to
enable greater access to resources so as to meet the day-to-day needs of the
population.
The idea of having healthy deposits to build infrastructure should also be
espoused. He added that should this obtain, future loans for the state could be
applied to expand the productive base of the national economy as well as
generate enough income to augment peoples' pay packages.
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