Before taking this analysis any further, I would like to bring your
attention to the new concept (well, new to the Gambia) of International
Credit
Rating administered by Fitch, Inc. - a rating company based in New York
with offices around the world - to your attention. Mentioned in the 2003
budget as delivered by Famara Jatta is that Gambia is currently rated at a
B- (B minus). Now what does that mean? Here's some information I found
on the Fitch web site regarding Gambia's ratings. I wish Fams had done more
in explaining what this rating would mean to our economy and how
it all works. Like many other issues covered in this budget, he does not
see it fit to explicate the implications to ordinary Gambians. As usual, we
will bring out the nooks for those who care to know.
Here is Gambia's rating as of November 11, 2002 according to the Fitch web
site at: (Quote)
<<http://www.fitchratings.com/corporate/ratings/issr_rtng.cfm?
issr_id=80110506:>>
1- Long Term Foreign Currency - B- (B minus)
2- Short term Foreign Currency - B
3- Long Term Local Currency - B- (B minus)
Short Term Rating
B-Speculative. Minimal capacity for timely payment of financial
commitments, plus vulnerability to near-term adverse changes in
financial and economic conditions.
Long-Term Rating
B -Highly speculative. 'B' ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments
are currently being met; however, capacity for continued payment is
contingent upon a sustained, favorable business and economic
environment. (End quote)
My opinion is that this is a premature initiative considering the current
investment environment in Gambia. This rating is supposed to make it
easier for foreign investors to ascertain that their investments will not
be unreasonably risky. Taking first things first, I think that there are
lots
more issues that need attention to attract more foreign investors. I wonder
what Alimenta would think of such ratings if they were
considering coming back to Gambia. Not that I believe they would ever think
like that. This is just another case of misplaced priorities.
Now, to round up my analysis, it is crystal clear that planning is not only
essential but also absolutely necessary when resources are limited and
when sizable public funds are being committed for long-term development
programs or projects especially during times of economic
quandary. Efficient and effective management of resources in the Gambia can
only occur if planning and budgeting complement each other to the
extent that the function of the budget becomes one of mobilizing necessary
revenues for funding programs which enhance the realization
of intended objectives. Planning in Gambia is marred with issues such as
lack of cooperation and coordination among government ministries, lack
of adequate data, and shortage of well-trained staff.
The severity of Gambia's structural economic imbalances, the vulnerability
of the economy to external environment, declining revenue,
liquidity problems, and uncontrollable expenditures shall obscure any
reform effort on budgeting and economic performance. In addition, many
years of budgetary crises, coupled with the lack of adequately reliable
statistics and fiscal scrutiny, erodes the credibility of the whole budget
process.
Several changes in current budgetary practices should be considered to
break the cycle of recurrent deficits. The first measure is for government
to produce realistic expenditure estimates based on available resources and
avoid hedging on receipt of large proportion of revenues from donor
assistance. Undue emphasis has been placed on the HIPC debt relief fund in
this year's budget. Secondly, governments should take steps to cut the
exorbitant spending by the executive highlighted by the numerous overseas
trips with the president's private plane as well as the cost of
maintaining the craft. Meaningful budgetary reform in Gambia shall continue
to remain a distant prospect as long as economic and fiscal
stability remain elusive. Finally, meaningful reform must encompass
devising of complementary planning and budgeting systems. Improving
the linkage between planning and budgeting is essential for efficient
allocation of resources.
Gambia's budgetary deficiencies are daunting. They are exacerbated by an
impoverished human resource base, a large debt burden, minimum
investment flows, high population growth, and widespread poverty. Such
negative parameters create a very difficult environment for budgeting and
the realization of meaningful development. Consequently, our fiscal system
is plagued by the various constraints including uncertainty in
resource availability, massive corruption resulting from inadequate
expenditure control and accountability, and mismatch of planning and
budgeting.
The road to sustainable fiscal reform will be a long and difficult one.
Structural political and economic reforms are a must. However, some
positive initiatives mentioned in the 2003 budget are welcome. Initiatives
like the computerization of revenues collections – ASYCUDA for Customs
and Excise – will help in the maintenance of accurate databases and help
create some form of revenue control. Institution of reliable auditing
procedures and harmonizing planning and budgeting processes are much
needed.
In the final analysis, improvement of our fiscal situation hinges upon how
Yahya Jammeh and his public administrators will reckon with the
prevailing realities. An important expectation is for them is to learn how
to value the need for efficient management of public resources,
committing themselves to political, judicial and economic reforms,
establishing adequate planning, monitoring, and control mechanisms of
programs, boosting revenues, and reducing public spending.
-BambaLaye
==============================================
"Our lives begin to end the day we become silent about things that matter."
-Martin Luther King Jr.
====================================================
"Throughout history, it has been the inaction of those who could have
acted, the indifference of those who should have known better, the silence
of the voice of justice when it mattered most, that has made it possible
for evil to triumph."
-Halle Selassie I
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