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| Momodou |
Posted - 18 Mar 2014 : 20:07:30
DEPRECIATION OF THE DALASI AND ITS IMPACT ON BUSINESSES
By Suwaibou Touray
Foroyaa Burning Issues: Published on Tuesday, 18 March 2014
Suwaibou Touray, Alhagie FS. Sora & Kebba Jeffang contribute to this story.
How depreciation of the dalasi affects business and what coping mechanisms are undertaken by the business community to minimise its negative impact constitute the object of our investigation.
Mr. Massireh Jabang, a fish vendor at the Serekunda market, described her business as disappointing, stressing “if there could be another source of income for me, I will prefer to engage in that instead of selling fish because of the lack of profit as well as the burden involved.” She said getting fish at a high price and then selling at the price expected by customers is discouraging.
She was asked what she thinks is the solution, she said she does not know but the fishermen should try and stick to reasonable prices so as to allow them to stay in business. Mr. Muhammed Faal, a fish monger at the Banjul fish landing site was asked his impressions regarding his job and the challenges he faces at present.
Fall intimated that their average daily catch is impressive but complained that despite the catch they get, they instead suffer losses when selling the fish. He said what is good for them would be to adjust the prices to cope with inflationary pressures.
“But our clients complain a lot when that is done. Women vendors complain that our prices are high but they are not aware of the expense we incur to get the fish,” said Muhammed Fall, a fisher folk.
Asked how they intend to continue doing business under this situation, Fall said: “we have no option but to try and manage the situation by persuading our clients (vendors) to cooperate with us and to convince them that we are not the cause of the increases, but it is due to inflation caused by the depreciation of the Gambian Dalasi against the CFA which results in the increase in fishing materials and gears.”
Mr. Jallow, a shop owner at Albert Market in Banjul, described the business situation as very difficult and explained how difficult it is to plan business once pricing is in a volatile situation where the local currency is depreciating by the day or even hours. He said since they have no control over the situation they only try to purchase foreign currency to meet import costs.
Asked the foreign currency he does business with, Jallow said he uses the CFA to import goods from Dakar, Senegal.
He said the CFA’s appreciation against the Dalasi especially during the year 2014 is quite rapid. An importer engaged in the importation of general merchandise from emerging industrialised countries like China, Thailand, Indonesia, Dubai, etc, and operating a busy shopping chain in the Greater Banjul area, said what they have realised is the fact that the banks have limited foreign money. He said the fact is that it is very hard to get the needed foreign exchange to do one’s business efficiently.
He was asked what coping mechanisms he is applying since he is still in business. He intimated that to be effective, he decided to become a licensed foreign currency dealer and set up a forex bureau where he manages to acquire foreign currency from individuals to carry on his business.
He admitted that planning ahead is not an easy task for them.
A construction engineer also told this medium how their company is undergoing tremendous pressure in trying to cope with the trend of inflation caused mainly by the depreciation of the Gambian Dalasi.
He was told that the Central Bank informs that the Dalasi has depreciated in nominal exchange rate terms by 15.2 percent; which is high, the engineer was asked how they are coping. He said the measures they take to avoid severe losses are manifold, but mentioned just a few.
He said buying construction materials in bulk and storing them is one measure at their disposal. He also said saving money in foreign exchange accounts in the banks is another option they could utilise because they could later withdraw and exchange in Dalasi when it is absolutely necessary.
He intimated that even though banks charge a minimum of 1 percent any time one goes to withdraw, it is one measure applicable to them.
The construction engineer further went on to intimate that they also invest in immovable goods where possible within the Greater Banjul area because the value of such investments hardly depreciate within a short period.
Mr. Gaston K. Mpatswe, the IMF Representative to the Gambia when asked to give advice to the business community on how to plan and cope with the inflationary pressures brought about as a result of the continuous depreciation of the Gambian Dalasi said: “What I could say is stabilizing the economic environment which includes lowering down the depreciation pressure.
This would be good for the business persons generally including traders,” said Mr.Gaston Mpatswe, the IMF Representative to the Gambia.
He added that the advice they have provided for the Government is that their fiscal and monetary policies should aim at putting conditions in place so as to stabilize the economy so that inflation can be low and traders do not have to worry about the exchange rate.
On whether the Gambia should follow countries like Ghana to reduce the use of the Dollar as a medium of transaction in its domestic economy, Mr. Mpatswe said: ”I don’t think there is a problem of Dollarisation in the Gambia.” He said what the Gambian economy is facing is pressure on the Dalasi due to other factors which he said they’ve discussed with the Gambia Government and which the government have agreed to implement.
“The government have agreed to do whatever they can do to implement the strong policies that can help stabilize the economy,” informs Mr. Gatson Mpatswe, IMF Country representative to the Gambia.
Expert Advice to business Operators
An Economist at First International bank in Banjul, Mr. Lamin B. Ceesay, was asked to share his views with the business community regarding strategies to apply in dealing with the continuous depreciation of the local currency.
Mr. Ceesay advised the businesspersons to engage in export and re-export trade. According to him, this would help them generate fair returns on their investment and thus earn them foreign exchange.
“Indigenous entrepreneurs must extend their businesses across the borders to other countries. This would help reduce a specific country risk e.g. government tax policies, border closures,” he opined.
He further advised that they should also promote partnerships among local entrepreneurs, noting that this would enhance productivity through networking, understanding market dynamics, exchange of experiences among others.
Mr. Ceesay added that business persons should promote the production and marketing of locally produced products. This, he said, would reduce the demand for foreign currency, adding that the business people need foreign exchange mainly for importation.
“Exclusive marketing of tourism products by The Gambia Tourism Board on year round Tourism should be encouraged which will also help a great deal in generating foreign exchange for the importers,” advanced Mr. Lamin Ceesay.
Source: Foroyaa |
| 3 L A T E S T R E P L I E S (Newest First) |
| gambiabev |
Posted - 19 Mar 2014 : 21:48:20
1.00 GBP = 63.8332 GMD
British Pound #8596; Gambian Dalasi
This is the exchange rate today.
Last time I was in Gambia the rate was 38dls approx.
What is inflation rate in Gambia at the moment? |
| Nyarikangbanna |
Posted - 19 Mar 2014 : 20:27:09
All he is saying is that factors responsible for the continuing decline in the value of the dalasi should be combatted so as to reduce their impact.
Thanks |
| toubab1020 |
Posted - 18 Mar 2014 : 21:40:25
Should this man have been a politician instead of a "financial wizard" ?they both use language the true meaning of which is unintelligible to the average person 
"Mr. Gaston K. Mpatswe, the IMF Representative to the Gambia when asked to give advice to the business community on how to plan and cope with the inflationary pressures brought about as a result of the continuous depreciation of the Gambian Dalasi said: “What I could say is stabilizing the economic environment which includes lowering down the depreciation pressure.
This would be good for the business persons generally including traders,” said Mr.Gaston Mpatswe, the IMF Representative to the Gambia." |
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