Issue Number 89/2003, 20-23 November, 2003
Editorial
The Gambian Courts In Crisis
It is true that the Attorney General is not a member of the judiciary but a
member of the executive. However according to section 72 of the constitution
he/she is the principal legal adviser to the government. The new Attorney
General would have to alert his mind to the need to inform government of the
crisis in the courts. The government got rid of appeal to the privy council
to make the Gambian court system to be completely independent. Section 126
of the constitution made the Supreme Court the final court of appeal for the
Gambia. Many cases are now pending waiting for the supreme court to be
convened. However, there is need for not less than five judges to convene
the court. In actual fact, the constitution makes it a requirement to have
at least 6 justices of the Supreme Court in active service at any given
time.
Furthermore, the Court of Appeal has to be constituted by three judges of
the court. Now all these institutions are waiting to be properly
constituted. The position of a judge is one of service, many lawyers can get
more money from private practice. Only a government which can motivate such
judges can attract Gambians to take up such duties in the national interest.
This requires respect for the independence and integrity of the courts and
its officers.
Suffice it to say, the constitution also calls for the establishment of a
Cadi Appeals Panel. This has been constituted after a long delay which
Foroyaa projected over and over again. Now, there is delay in the operation
of the panel contrary to what the Secretary of State for Justice said at the
National Assembly in August that it wold be operational within three weeks.
Cases are pending while the panel remains inactive for one reason or
another. This is causing a delay to justice.
Suffice it to say that the wisdom of the ages asserts that justice delayed
is justice denied. There is need to inject life in the judicial system,
otherwise it will go asleep. This institutional slumber has even affected
the legal year celebrations. Apparently, there is no zeal to breath life
into the judicial system by inspiring all stakeholders to be committed to
doing justice that is seen by all knowing that it is a profound principle of
jurisprudence that justice should not only be done but should be seen to be
done. The people are the final judge. Currently, they are grumbling against
the delay in the appeal system.
Should The National Assembly Intervene In Baba’s Case
The answer to this question is provided by section 120 subsection (3) of the
constitution which states:
"In the exercise of their judicial functions, the courts, the judges and
other holders of judicial office shall be independent and shall be subject
only to this constitution and the laws and…shall not be subject to the
control or direction of any other person or authority."
Notwithstanding this the whole National Assembly could have intervened
including non APRC members if he was detained without appearing before a
court for over 72 hours. In short, this would have been an opportunity to
teach Baba the importance of creating democratic laws and abiding by the
rule of law. Suffice it to say, since it is the dictates of law that a
person is innocent until he/she pleads guilty and is proven to be guilty,
this is the moment to teach Baba fair play and good faith. The press should
strive its best to treat allegations as allegations until proven to be true
in the courts. The public should be given the accurate picture of the
proceedings so that Baba will not accuse the press of witch hunting. As the
old saying goes in the face of adversity show valour and in the face of
victory show magnanimity. When a person is down, no matter how much one is
opposed to him, one should call for decency and fair play so that in the
final analysis a person shall be judged by his/her deeds and not on the
basis of people’s likes and dislikes. Foroyaa will present accurate record
of the proceedings of this case in good faith in the public interest.
The State Of The Gambian Economy
The Public Corporation
Public corporations have been completely ignored in the process of
regeneration of the National Economy. The ideology that the state should
roll back its activity and restrict itself to the provision of social
services and provide regulation for the private sector to bring about
development have given many governments in Africa the excuse to ignore the
productive potential of public corporations and reduce them into their
private milking machines to enrich themselves at national expense.
The facts we have shown clearly indicate that the small private sector in
the Gambia is even finding it difficult to attract investment not to talk
about sustaining economic development.
In fact, many financial institutions and private investors depend on
government treasury bills to increase their earning capacity. They also rely
on the government for the sale of goods for office use and consumption in
public institutions.
This confirms our view that African economies inherited a small or narrow
private sector from colonialism which had a very small manufacturing base
which lacked competitiveness in the world market. The financial institutions
were not linked to the productive sectors of the economy other than
services. Hence the private sector remained small. The public sectors could
not generate enough investment capital and dividend to increase production
and contribute to social development. Diversion of its resources dwarfed its
development. Today many countries lack both a viable private and public
development sector that could promote development, guarantee employment and
increase income.
This is why claims of socialist of capitalist development by such countries
have always been false declarations. What is lacking is clear development
strategies of any kind that could promote welfare on a sustainable basis.
This is why we classify economies like that of the Gambia which cannot rely
on any rigid ideological lines to take off. What is required above all are
policy makers and planners who are committed to making the institutions of
the state transparent and accountable so that it could serve to enhance
development of the public, private and informal sectors according to their
capacity to generate optimum development. PDOIS has always preferred to
accept our classification of the Gambian economy as one in transition and
one that needs a multidimensional development paradigm that can only be
worked out by a people centered and honest leadership, knowledgeable in the
intricacies of economic planning and development. Without that,
bureaucracies will be built which live above its means and promote perpetual
budget, trade and balance of payment deficits. Let us look at the nature of
public corporations in the national economy.
In 1999 the gross turn over of public enterprises amounted to D914.3
million. This represented 18.5% of the GDP. GAMTEL was the largest
contributor to the public sector turn over with a sum amounting to 268.4
million. NAWEC contributed 225.3 million; Social Security 128 million,
Gambia Ports Authority 116.9million, Gambia Public Transport Corporation
64.4 million, Gambia Civil Aviation Authority 54.2 million; Gambia
International Airlines 40.1 million; Assets Management and Recovery
Corporation. 6.3 million, National Printing and Stationary Corporation 6.3
million, Maintenance Services Agency 4.1 million; Independence Stadium and
Friendship Hostel 3.2 million.
Suffice it to say, public enterprises contributed to infrastructural
development in 1999 by making capital expenditure amounting to 213.5
million.
The public enterprises also contributed 69.5 million as loan repayments,
dividends and taxes.
A progressive would have established a development idea for public
enterprises. It should have kept track of its turnovers, its capital
investment, its contribution to government revenue in terms of taxes and
dividends, its loan portfolio and repayment ratio, its employment rate and
its assets. A proper monitoring of a sector of the economy which could
contribute 18% of the GDP would have facilitated planning for its
sustainable development on an annual basis. In fact, a correct development
strategy would have been to create a resource pool for dividends contributed
by public enterprises and utilise the pool for the promotion of social
services.
Let us now follow the public enterprise sector to prove that no strategic
plans were made for the development of the sector. Instead government had
only vague proposals of a divestiture programme to maintain the jargons of
structural adjustment paradigms while the public enterprises enriched a few
at the expense of public coffers.
In 2000 public enterprises registered a gross turnover amounting to D1,042
million. GAMTEL contributed 344.6 million, NAWEC contributed 212.1 million;
Social Security and Housing Finance Corporation 181.2 million; GPA 129.1
million, GPTC contributed 71.5 million, Gambia Civil Aviation Authority
contributed D57.4 million; Gambia International Airlines 44.3 million.
However despite the increase in turnover, public enterprises contribution to
government revenue dropped to D57.3 million in 2000.
The total investments made by the public enterprises was recorded to be 794
million. Without any sectoral indications the direction of such investments
become difficult to target for development purposes.
In 2001 government abandoned all schemes that geared to the planning of the
role of public enterprises in the economy by failing to declare its
cumulative turnover, its total investment and its total contribution to
government revenue.
In fact when a parliamentary question was put to the secretary of state for
finance and economic affairs regarding the payment of dividends to
government by public enterprises he revealed that most public enterprises
contributed not a single butut. In the next issue we shall come to this
point.
To be continued
Issue Number 90/2003, 24-26 November, 2003
Editorial
President Jammeh Should Address The Nation On The Attempt To Reduce Prices
By Military Means!!!
"I bought rice at D325 and transport made it D350"
Foroyaa has always maintained that with proper monitoring of the prices of
fuel, rice and other essential commodities and their systematic management
through dialogue with importers the retail prices can be regulated through
dialogue and the prices of all other local commodities could follow suit.
We argued that the militarist method of sending security forces to compel
retailers to sell at prices not determined by the wholesale cost of
commodities would only lead to bankruptcies in the informal sector and
scarcity of goods. Our experience has shown that the working capital or
money base in the informal sector is very small. Sometimes one maintains a
revolving capital of 500 to 1000 dalasis. Any encroachment in their earnings
from sales without reducing the expenditure on purchases would lead to
collapse of their business. In fact, contrary to popular belief many people
who sell meat etc take bulls from their owners to sell and repay them. They
cannot even afford to buy bulls and sell them for profit.
A leader should investigate all sides of a coin before coming up with a
decision that can satisfy all fair minded people. Failure to do so is to pit
the people against each other and blame them for inflicting hardship on each
other.
A living example of the viability of our analysis is Brikama market. On
October 13Th. the people were given the impression that palm oil will be
sold at D5 per cup, milk D30 per gallon; groundnuts D10 per tomato tin and
D250 per bag, coos and maize D10 per tomato tin and D300 per bag, findo D30
per tomato tin and D350 per bag; cassava D400 per bag, charcoal D1.50 per
cup and D30 per bag; candle D4 per packet and 50 bututs per stick, laundry
soap D4, sugar D2.50 per cup, rice D2 per cup, garden eggs, D100 per bucket,
sweet potatoes D100 per bucket; bread D2.50per loaf; one bonga fish D1 and
Gambian chicken D50 or less.
The end result is that commodities started to disappear from the market and
the problems of the poor increased. As prices climb back again we are back
to square one. The militarized way has not worked. It is leading to closure
of Lumos or weekly markets and more poverty. It is time to take the
democratic way and deal with prices through consultation and by increasing
the supply of goods and services and the earning capacity of the people.
We insist that the government teaches up good example by reducing the price
of fuel, electricity and water supply which is under its control. This can
have effect in reducing the cost of many commodities which require ice
blocks, transportation and so on.
The State Of The Gambian Economy
The Public Corporation
When a parliamentary question was put to the secretary of state for finance
and economic affairs regarding the payment of dividends to government by
public entreprises he revealed that most public entreprises contributed not
a single butut. The question raised by Halifa Sallah, member for Serekunda
Central, asked for the companies in which government had shares and how much
was realized from such companies during the 2001 financial year, both in
terms of dividends and tax revenue. SoS Jatta indicated that the companies
where government has shares and the respective contributions of each in
terms of tax revenue and dividends for the financial year 2001 are as
follows:
Enterprise Tax Paid (Dmbn) Dividends
Gamtel 27.34 0.0
GPA 5.29 1.0
GPTC 1.89 0.0
GCAA 1.20 0.0
GIA 2.73 0.0
NPSC 0.12 0.0
MSA 0.20 0.0
SSHFC 2.34 0.0
NAWEC 5.00 0.0
Banjul Breweries 1.06 0.02
Senegambia Beach 1.12 0.0
Total Tax Paid D48.28 million and dividends D1.02 million. SoS Jatta
indicated that it is worthy of mention that the above sums received during
the financial year 2001 are in respect of the financial year. Halifa
questioned why is it that companies like Senegambia Beach are making no
profit for government to be able to pay any dividend. What is responsible
for the absence of earnings from dividends? In response, SoS Jatta indicated
that for companies like Senegambia, there was an agreement in 1992 for the
loans that were contracted and guaranteed by government and are still being
serviced; instead of paying those dividends they are using that money to
service the loan to Senegambia. SoS Jatta indicated that they are looking at
the audited accounts of some of the other parastatals not paying dividends
to ensure that at least dividends that are due to government are paid. "This
we started because it is money we budgeted for and if it doesn’t come it
affects the way we implement our budget."
It is abundantly clear that the public corporations are not contributing to
public revenue in accordance with their capacity.
The government has proven that it is not in tune with the gross potential of
public entreprises in promoting sustainable development.
A review of the gross turn over of such entreprises, which amounted to over
1 billion dalasis in 2000, and total investments amounting to over 700
million confirms that if government was very serious about building the
productive sectors it could have transformed the public sector into an
engine for economic growth rather than shift production of goods and
services to a private sector that was over burdened with high interests
rates and under financed to the point that it could only generate very
limited revenue for government. We will come to this in our concluding
remarks. A government with a seriously meant commitment to promote
sustainable development would have established and maintained indices for
monitoring and ensuring the sustainable growth of turn over, good
investments, capital investments, employment rate and contributions to
public services through taxation and payment of dividends.
What is revealing is that the projection of resource indicators we have
highlighted ceased in 2001. In the 2003 budget speech no reference was made
to gross turn over, total investments and capital expenditures.
Only sectoral analyses were made. However, one can see the tremendous amount
of capital that is being generated for in the year 2002, after 6 months of
operation the revenue accrued to GAMCEL amounted to D255.9 million. This was
made possible by the rapid expansion of the Gamcel Network.
Suffice it to say, in a question posed to the Secretary of State for finance
and economic affairs at the National Assembly regarding the cash and assets
recovered by the Assets Management and Recovery Corporation since 1994, the
secretary of state indicated that the AMRC recovered cash and assets
totalling D154 million, of which D97 million was a cash amount transferred
to Government through the Central Bank and the Department of State for
Finance and Economic Affairs. The balance of D57 million being assets is
transferred to Government to accommodate Government departments and
agencies.
As of December 2002 a balance of D90.6 million was deposited in an account
at the central bank. We hope the audited accounts of the central bank will
reflect such a deposit. Members of the national assembly would have to
scrutinize the audit report with vitality.
Nonetheless, the investment potentials of the public corporation are immense
but the government has wasted all the potentials because of its lack of
clear focus and direction of how to develop the sector.
Having mismanaged the sector like all governments which pay lip service to
private sector led growth, they proceeded to give the impression that they
are in line with current international norms of dissociating government from
anything that deals with production. In reality they ended up without public
sector or private sector led growth.
Issue Number 91/2003, 27-30 November, 2003
Editorial
President Jammeh:
Tell the People the Truth
President Jammeh is fond of blaming the people for the economic hardship
they are facing. He always refuses to admit that the economic crisis we are
now going through is a consequence of his failed economic policies and that
the hardship has been aggravated by his militarist approach in solving
economic problems.
When muslim elders paid their usual Koriteh visit to the president at state
house on Wednesday, he dealt with the economic hardship that the people are
facing and the failure of schemes he personally initiated to alleviate the
living conditions of the people. What he said in this regard can be summed
up as follows:
While on his way to the mosque during the Muslim feast on Wednesday he saw
some vendors, presumed to be Muslims, selling. He deduced that they could
not spare just one hour to commemorate the most important feast in the
Muslim calendar. He implied that this is an indication that many who regard
themselves as Muslims put material things above Allah; that they are driven
by greed and are merciless. He further implied that such people sell their
goods at exorbitant prices. He went on to say that he took out his personal
money to import good quality rice to be sold at low prices in order to
minimize the hardship of the people, but the project failed under the July
22nd Movement. He then set up the YDE as an established structure to handle
the importation and sale of the rice but this was mismanaged. He further
said that he put his money in IBAS but the borrowers never paid back. This,
he said, is what brought about "Operation No Compromise" and as from now on
he would not compromise.
The president must stop pretending and tell the people the truth. He knows
very well that "Operation No Compromise" is unworkable and has therefore
failed. Even he himself admitted that he compromised under "Operation No
Compromise" "because of the month of Ramadan". If he persists with his
failed policy of Jammehnomics, using militarist tactics one could not but
accuse him of wrecking the economy.
In short, forcing vendors to sell at prices that do not commensurate with
the prices they got them from wholesalers and local producers would
tantamount to pushing them out of business and effecting scarcity of
commodities, because they would not be willing to sell at a loss. The
consequence is to ruin the informal sector, which is vital to the national
economy.
The president could change his policy to what is workable. He could change
his policy from "no compromise" to "compromise". In the first place, if he
is really serious about price reduction he would reconsider the recent
increase in the price of petrol from D10.50 to D19.00, the price of gas oil
from D9.50 to D15.00, the price of kerosene from D5.50 to D9.50, the unit
price of electricity, etc., all of which affect costs of transportation and
commodities. Furthermore, he could set up a unit to study price indications
and negotiate a price level with importers.
Alternatively, if the president is bent on price control and is serious
about it he would have enacted a law to control prices. A mechanism for
price determination would have been in place, the controlled prices would
have been published in the Gazette and inspectors with powers to arrest
culprits would have been appointed. The current wave of arrests by vendors
selling above would be controlled prices is unlawful.
The president gave the impression in his speech that he had done his best by
initiating schemes and investing his personal income for the benefit of the
people, but apparently because of greed and materialism the schemes did not
meet his expectation. This attitude is typical of the president. Whenever
there is success he boasts that he is responsible but when there is failure
he pushes the blame on to others.
In fact, a clear distinction should be drawn between being a president and
being a benevolent monarch. Indeed there is no room for a monarch under our
constitution. Dr Yahya Jammeh is free to become a benevolent man and
establish his charitable organisation. It is good, indeed noble to give out
charity. He is however advised that for the sake of accountability and
transparency it would be more honourable and dignified to declare how he
obtained the millions he has been dishing out since 1996, especially since
he failed to fully declare his assets during the 2001 presidential election
as required by section 43 of the constitution.
Being benevolent however is not what makes one a good president. The role of
a president is not to transform one’s populace into beggars and dish them
charity occasionally. The role of a president is to empower the people
economically and politically so that they become masters of their own
destiny. The role of a president includes mobilisation of the resources of a
nation and directing the economy to bring about development and to enhance
the livelihood of the people. President Jammeh has failed in his economic
policies and this has brought untold suffering to the people. The trade
deficit keeps increasing year after year because we continue to import
virtually everything we need and export very little. For example in 2002,
exports amounted to 417 million dalasis while imports amounted to 2900
million dalasis. The same applies to the budget, which had a deficit,
excluding grants, of over 545.5 million dalasis in 2002. To meet its
budgetary requirements the government keeps borrowing through the issue of
treasury bills and central bank bills leading to an internal debt of 2900
million dalasis as at October 2002. The external debt is estimated in
dalasis to be 18,000 million dalasis. Furthermore the government talks a lot
about private sector led growth. The reality is that there has been neither
private sector nor public sector led growth. There is no serious scheme in
place to develop the productive base of the economy, which is our salvation.
Hence the government is now trapped in a net of fiscal and external
imbalances. This is the reality, which the president must admit.
SEE THE NEXT ISSUE FOR A CONTINUATION OF THE ANALYSIS OF THE PRESIDENT’S
SPEECH.
The State Of The Gambian Economy
Public Corporations
The Potential of public enterprises to boost up the national economy,
generate revenue through corporate tax and dividends has been explored. It
should be abundantly clear that the government is now led by a dogmatic
notion that the state should be rolled back from production and depend
entirely on taxation to maintain public services. Many economists in
developing countries sing the same song not realising the peculiar situation
of developing countries. The policy makers of the country have failed to
grasp the peculiar situation of the Gambian economy and are therefore being
guided by confused and untested economic fundamentals.
Those whose minds are in tune with reality would know that the economies
that can have states which roll back their productive bases are those with
developed private sectors which provide employment to the vast majority of
the labour force. Such companies can pay corporate taxes while their
employees pay income taxes. These taxes are then utilized by the state to
provide services. Despite the fact that all developed market economies have
developed private sectors which control a huge world market the demand for
services cannot be sustained by tax revenue. This is why US, Britain,
Germany and France have been experiencing budget deficits which their
countries in the Euro zone are being compelled to control. The way Germany
and France are doing it is to cut down on government expenditure in their
foreign services and many social welfare programmes.
The peculiar situation of developing countries like the Gambia is that they
have a very small private sector with a low level of employment.
Consequently, corporate tax is very small. Company tax yielded 130 million
in 2002 while payroll tax amounted to D13.5 million. This shows small
earnings from payroll tax which confirms the low level of employment base.
Since the country has a small private sector, increasing company taxes would
only undermine the savings and investment capacity of such a sector. In
actual fact what can enable the private sector to accumulate more for
investment is less taxation. On the other hand, if the government depends on
taxation to provide services it would run into problem if it reduces the
taxation of the corporation. The simple conclusion is that tax based budget
is incompatible with the growth of the private sector in developing
countries. This is becoming abundantly clear in the Gambia.
In short, the more the government lacks avenue for deriving non tax revenue
the more dependent it becomes on tax revenue. However, with a small private
sector and low employment rate, government can only increase services or
maintain them in the face of inflation by increasing taxation. There is a
limit to how much government can get from corporations and the employed.
When the limit is reached, the government would have to experience a budget
deficit. In order to address the deficit, government would have to borrow.
This is why the Gambia government is becoming more and more indebted. This
deficit, excluding grants, rose from 196 million in 2000 to 545.5 million in
2002.
Here again, the government must undermine private sector led growth by
issuing treasury and central bank bills and bonds that will enable the
private sector to earn more from financial speculation on government
borrowing than investing in the productive base of the economy. Government
borrowing is increasing to cover up the deficit and create artificial state
of financial health. That is why the domestic debt has risen to 2.9 billion
by October 2002. Needless to say, 82% of domestic debts consist of treasury
bills. It is therefore no surprise that commercial banks are lending more to
government than financing the private sector to build up the productive
base.
One may now ask: What policy can enhance the growth of productive private
companies that promote the interest of countries with a narrow private
sector base. The answer is simple. Such countries must have states which
depend increasingly on non tax revenue so as to reduce heavy encroachment on
income and investment capital. An economy which undermines income and
investment capital must undermine savings and the potential to impact on
development.
_________________________________________________________________
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