Hi folks,

As I promised, I'd like to share with you some of my thoughts on the 2002 budget
recently tabled by SOS for Finance, Mr. Jatta, before our National Assembly.  I must
say, right off the bat, that I am disappointed that some people decided to write off
the budget (in some cases without even reading it).  I think this is very unhealthy,
and does not give due respect to the business of having serious and enlightened
debates about our nation's affairs.  No matter how much we disagree with the present
government, we owe it to the country to carefully consider what they have to say and
offer before jumping into mindless criticism.  Having said that, let me say a few
things about the budget.

First, I must say that the budge was sober reading.  I think both it's tone and
content were serious, and often very frank.  On governance, the SOS stated (section
X. Governance Issues): "We are cognisant of the fact that good governance is an
essential complement to sound economic policies."  Later in the same paragraph, SOS
Jatta said:  "We cannot do it all alone, that's why we need the collaborative efforts
of all stakeholders in societal development."

And I say "Halleluiah!"  Finally, it seems the Jammeh government has realized the
obvious:  it's either they conform to internationally-acceptable norms of governance,
or they will remain isolated pariahs, and worse, ruin our country in the process.
This change of mind (and hopefully of heart) has to be commended, especially coming
from a government known more for arrogance than open-mindedness.

I won't bore you by commenting on every bit and piece of the budget, but I'd like to
touch on a few issues such as the present state of the Gambian economy, and some
proposed policies.  According to SOS Jatta, while sub-Saharan Africa is projected to
enjoy a modest 3.8% in output in 2001, the real Gross Domestic Product (GDP) of The
Gambia is set to grow by 4.6% for the 2001 calendar year.  This means that we are
doing much better than the average sub-Saharan African country, and one can only hope
that we build on this.

Despite the above positive development, there are disturbing issues that loom large
over the Gambian economy.  In particular, the ballooning national debt, the budget
deficit, lack of investor confidence, and declining terms of terms of trade all pose
significant threats to the meager gains that have been made, and can most certainly
deter any future progress.  According to SOS Jatta, our national debt increased 11%
in 5 years, and now stands at $378 million.  The SOS said that the steep increase in
our national debt was to finance new projects, and one can only hope that these
projects start yielding dividends to pay for the loans - and then some.

The government's fiscal deficit is, according to SOS Jatta, expected to be contained
at about 4.6% of the GDP, excluding funding for a NAWEC generator.  I hope they are
keeping an eye on the deficit because if left unchecked, it could stifle the growth
of the business sector, and small businesses especially.  This is because part of the
budget deficit is financed from the domestic financial markets, resulting in
increased interest rates for bank loans. Besides, you can bet that banks will rather
lend a government than a small business.  It is thus not surprising that, according
to SOS Jatta, some Gambian banks have tightened their lending policies, resulting in
the total loans given out falling by 4.4%

Another issue SOS Jatta touched on was the lack of investor confidence in the
domestic economy.  According to SOS Jatta, this investor pessimism contributed to the
significant decline in short-term capital..  I think it would have been more accurate
to say that investors were pessimistic about the manner in which the Gambian economy
was being handled.

With regards the planned expenditures and programs, I would like to say that I found
some encouraging signs in the budget.  In particular, I am encouraged that the
government has a new Directorate of Science and Technology Education, and further,
will equip most Senior Secondary Schools with computer labs.  Other new programs I am
looking forward to hearing more about in the future include The Gambia Investment
Promotion Act, and the Trade Gateway Project.  SOS Jatta also discussed the
government's plans to increase the Internet gateway bandwidth, boost the
manufacturing sector, and enhance the development of small and medium businesses in
The Gambia.  I sincerely hope these projects come to fruition.

On the negative side, I would like to point out that it is ill-advised and
counterproductive to finance a Sports Development Fund with money from the Tobacco
Advert Levy.  We all know that the tobacco companies are heavily promoting smoking in
developing countries to make up for their declining markets in developing countries.
It is incomprehensible to me why The Gambia government would tolerate advertising of
tobacco products, not to mention using such advertising as a money-making tool.  I
suggest they revoke this policy, and ban the advertising of tobacco products in the
Gambia.

I also find it disturbing that just when I thought we were finally getting our act
together by launching a National Council for Arts and Culture (NCAC), the government
decides to saddle the organization with the operation and upkeep of Arch 22.  This is
ridiculous.  What, besides president Jammeh's ego, makes Arch 22 worthy of being
declared a national monument?  Further, if this government had to face the whims of
the democratic process, Arch 22 should face market forces.  The arch should be
incorporated as an entity (non-profit or not), and made to pay for it's upkeep with
revenue it generates.  And if it cannot generate enough revenue for it's upkeep, then
it's "bye, bye Arch 22."  It should be that simple.

This e-mail is getting to be rather long, but before I end it, I'd also like to
briefly discuss the budget from a historical perspective.  If you think the budget is
interesting reading, let me tell you that it's even more so when considered in light
of the past.  While I was going through my papers a few days ago, I stumbled into a
copy of the 1970/71 budget presented to parliament on July 1, 1970 by the then Vice
President and Minister of Finance, S. M. Dibba.

I also found a copy of "Sessional Paper No. 1 of 1966: Revision of the Development
Programme 1964/1967."  The paper reviewed progress made on The Gambia government's
Jan. 1964 to Jun. 1967 Development Programme, which was published as Sessional Paper
No. 10 of 1964.  Sessional Paper No. 1 of 1966 has an appendix consisting of the
introduction section from Sessional Paper No. 10 of 1964, which had gone out of print
by 1966.  Reading both papers, and the 2002 budget was very revealing, and I'd like
to share some thoughts with you.

First, the introduction of Sessional Paper No. 10 of 1964 points out that The Gambia
was one of the first African countries to prepare a "Development Plan", issued in
1943.  That plan was not, however, thought of as comprehensive enough, and in 1962,
the Gambia government decided to produce a plan to better integrate the activities of
the government and the private sector.  These efforts culminated in an April 1963
sketch plan, which was used as the basis for the 1964 Development Fund Estimates of
the Government.

In light of preparations for The Gambia's independence from Britain, the sketch plan
was replaced by an interim expenditure programme, covering a 3.5 year-span starting
from Jan. 1, 1964.  It is interesting to note that 1967 was the year that the Gambia
changed the fiscal year's start from January to July, and the present government
recently changed back again to a fiscal year starting in January.  I probably should,
one of these days, provide a summary of this important paper, which raises some very
interesting points.

It was particularly interesting to compare the Jatta and Dibba budgets.  In the
30-odd years between the two budgets, a lot has happened in The Gambia.  However, as
the saying goes, the more things change, the more they remain the same, and certainly
the Gambia's economic development efforts are no different in this regard.  Thus, the
budget deficit and trade deficit was a concern in Dibba's 1970 budget, just as it is
in Jatta's 2002 budget.  In 1970, Mr. Dibba pointed out that the domestic public debt
was not more than 0.9% of our national recurrent expenditure, and cost less than 1%
of our annual revenue earnings.  In contrast, SOS Jatta pointed out in his budget
speech that  23% of government expenditures between Jan. and Oct., 2001 was on
interest payments, and the deficit was targeted to reach 3.6% in 2002.

Another interesting comparison is that while Mr. Dibba said in his 1970 budget speech
that for the third year in a row the Gambia would not need to seek British budgetary
aid, D247 million (or almost 18%) of the D1.4 billion projected revenue for 2002 will
come from grants.  Similarly, while Mr. Dibba mentioned in his 1970 budget speech
that our in July, 1969, our external reserves were enough to cover seven months of
imports, in September 2001, the reserves only covered 5.2 months of imports,
according to SOS Jatta.

Before I wrap this up, I must mention that I found reading Mr. Dibba's budget very
nostalgic.  It discussed the introduction of the "Dalasy" (what happened to the
"y"?), the decimal currency system, the lime project, Phase I of the Yundum airport
project, and the then "Bathurst" Port.  I remember in particular the HUGE problem I
had understanding the decimal currency system when it was taught us at Armitage
school.  I never understood what the teacher was talking about.  My salvation was the
conversion chart in the notice board to the right of the door into the Assembly Hall
(the door on your right, by the Vice Principal's office, as you enter the hall from
the west).  There I was looking at the chart, and all of a sudden, it clicked!  I had
my Eureka! moment right there.

I could have gone on and on comparing and contrasting the 1970 and 2002 budgets, but
I think what I've said so far will do for now.  Besides, since I started writing this
e-mail, I've cooked my "Benachin", ate it, and as result, my brain is now shutting
down (laugh.)  So I'll stop here for now, and let others have a go at the budget.  By
the way, I only wish that an alternative 'peoples' budget.  Something less technical
than what was presented by SOS Jatta would have helped a lot of people better
understand what the budget was all about, and help enrich the debate and the dialog.

I guess that's about it!  Have a great week, and best wishes to all for a HAPPY and
PROSPEROUS NEW YEAR!!

Katim

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