The IMF reports on the macroeconomic situation of the Gambia for the year 2019.
It is to be noted that GDP growth rate is not a direct measurement tool of the living condition of the general population. GDP rates do not take into consideration the level of poverty reduction, maladministration, corruption activities, capital flight, health, education and employment environment in a particular country. IMF and the WB are financial institutions, IMF being a budgetary support arm as well as financial and fiscal policy adviser and monitoring of the austerity measures to be implemented. The WB on the other hand is lender together with other international lenders use the IMF as a barometer and rating agency for foreign direct investment risk. IMF’s role is not to fight against corruption, it is here to make sure that external government loans are catered and paid for. Please note that over 60% of government revenue goes to service external loans, this is huge considering that more loans are contracted in addition to the old ones. Wherever you see IMF and the WB in a country it simply means that country is not economically and financially self-sustainable. Therefor as mentioned above brandishing a good GDP growth rate is not an indicator of poverty reduction of the general population. However, GDP serves what it means in pure economic term, to whose benefit is another subject for discussion.
Now let us see bellow how to grow the GDP further in the Gambia’s case.
Within three year the Gambia registers a 6% GDP growth. In as much as it is laudable effort, the Gambian economy could enter the double-digit growth rate in the next three years if the following remarks are taken into accountseriously:
1- Beside Gamtel/Gamcel, GPTC, GNPC that compete with the private sector for market share, all other public corporations enjoy monopoly status in the Gambian economy. Those corporations that enjoy monopoly status are expected to do better year after year given that Yaya Jammeh’s hands are off their operations. In a monopoly environment no management should pound their chest for registering better financial performance on a yearly basis. Those public corporations that compete head on with the private sector and perform well deserve all rights to be given a tap on the back as they emerged doing good out of a competitive environment in the private sector.A new hard look by Government must be accorded to these competing corporations for them to perform better in the near future. Administrative regulations and burocratic red tape relaxations must be accordedthem to be on equal footing with their private sector competitors. You cannot tie ones legs and ask him to run, it does not make sense at all.
2- Trade in the Gambia should be encouraged to move the value chain into processing and packaging. For this graduation to be possible Government should consider reducing the electricity tariff for the new young industry. That way their products could compete the imported ones. There is no country in this world that has not gone thru industrialization protection for some time before opening up to import competition. There are two ways to protect local industry, either raise the import duty of the competing product whiles making sure domestic production meets the local demand or alternate duties when there is a gap in the supply and demand chain. Or ban the product importation to protect the locally madeproduct provided it is labor intensive thus creating more employment for the population. The second point will be fought by outside forces that will brandish the different treaties that Gambia is a signatory. It is fair to say that you cannot let a child compete with an adult and win. A choice can be made that sooths the best interest of the Gambian economy.
3- Gamtel/Gamcel be privatize forthwith, they are on the brink of the bankruptcy zone and face a stiff completion from the private sector telecom operators.Government should urgently adopt an innovative model of privatizing Gamtel/Gamtel by holding a minority share of say 20% giving 5% on loan to the staff for performance motivation and floating 10% to the general public buyers leaving 65% shares to the future strategic buyer. The above three way shareholding model is what made Sonatel of Senegal highly performing to the point of entering six West African markets within a period of 15 years. Doremember when Trust Bank was floated it quickly became the second biggest player in the Banking industry.
4- It is to be noted that trade balance between Gambia and Senegal used to be in Gambia’s favor from independence to 1992 due to the re-export trade but is now in Senegal’s favor. Black stone for construction,cement, fruits and vegetables, milk products and biscuits, local food spices, women artificial hair products etc. and of course the money transfers from Senegalese migrants resident in the Gambia made the balance tilt in favor of Senegal. For this reason, the Gambia should approach and insist on Senegal to open up more to Gambian cross border trade activitiesspecially our to traditional Sahelean countries. Remember Senegal protect few of their local industries against outside competition and rightly so. As mentioned above the Gambia should be encouraged to do the same for our future industries.
5- It is high time for the Gambia to think of building a railroad system from Brikama to Basse. This can be done on BOT basis with a foreign country or partner while making sure of our local private sectorparticipation in this new venture. China did it in Ethiopia and can be tapped for this huge project necessary for heavy transportation of goods and containers to the borderline with Senegal for onward transport to land luck countries in the Sahel. This project will greatly ease the road network load and reduce its maintenance cost whiles increasing its life span. More jobs and new businesses will be generated with the new railroad network.
Economist will agree with me that it is not always by increasing taxes that generate more revenue but rather by reducing them to attract a bigger volume of trade and services and a wider willing taxpayer to discharge their civic duties without feeling the pinch. Do remember that if Government invests the collected taxes on social projects and programs the citizens will be more proud and willing to pay their share of taxes.
It is a give and take scenario that encourages the population to contribute their share to national development.
Finally as always until otherwise, Gambians should become more business oriented and economic conscious as it is the only sure way to put food on the table, create employment, reduce poverty, increase prosperity and eliminate the back way syndrome.
Pa Njie Girigara.