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. ******************************************************* http://home3.inet.tele.dk/mcamara http://www.gambia.dk **"Start by doing what's necessary, then what's possible and suddenly you are doing the impossible"*** ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ To unsubscribe/subscribe or view archives of postings, go to the Gambia-L Web interface at: http://maelstrom.stjohns.edu/archives/gambia-l.html To contact the List Management, please send an e-mail to: [log in to unmask] ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~