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Momodou
Denmark
11833 Posts |
 Posted - 26 Jun 2007 : 19:10:13
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Foroyaa Editorial
THE GAMBIA STRUGGLING FOR DEBT RELIEF
The press release issued by the members of the IMF mission in connection with their visit to the Gambia from 8 - 23 June 2007 is quite instructive. The analysis which follows the publication of the statement will help the reader to understand the true state of the Gambian economy.
First and foremost, the IMF mission stated that it did welcome the plans by the Gambia government to "strictly limit new debt accumulation;" that "new borrowing would be only on highly concessional terms," that a new debt strategy will ensure effective debt management.
Secondly, the mission encouraged the Gambia government to pursue policies that will reduce "domestic debt and facilitate the gradual reduction of the domestic interest rates."
The Gambia had two development options in order to maintain satisfactory economic performance which could have enhanced debt relief and movement away from the poverty trap.
There was need for prudent fiscal policy and prudent public sector investment. As it stands both have been lacking. What is our proof?
Public enterprises are only relevant to the public sector if they render reliable and affordable services, as well as generate non tax revenue in the form of payments of dividends to government.
The lack of prudent fiscal policy is manifested by the stifling of the investment capacity of public enterprises by diverting their resources to finance many social and APRC self perpetuating pursuits such as the commemoration of July 22nd and other ceremonies to the point of rendering them incapable of even meeting their debt obligations not to mention paying dividends to government. For example, in 2005 the non tax revenue suffered short falls because of the failure of some of the public enterprises to service their loan obligations. Government paid D200 million from the budget to service the external loans of public enterprises in 2005 while it could only recover D56 million from them.
A prudent public enterprise management and investment policy and public expenditure policy would have led to reduction of the budget deficit and increase earnings revenue. This would lessen dependency on treasury bills or domestic borrowing, reduce the public debt, enhance more investment by banks in the private sector of the economy, productive public sector investment and thus lower multiplying effect in generating sustainable economic growth and development.
Another IMF mission has come and gone. The promise has been made to pursue prudent fiscal and macro economic policies.
Foroyaa is waiting for the dividends from public enterprises, reduction of domestic borrowing to finance deficits, prudent measures to ensure the purchase of our groundnut and cotton crops, sustainable reduction in inflation and reduction of poverty. This is the route to debt relief. We will keep the readers informed of any development.
Source: Foroyaa Newspaper Burning Issue
Issue No.73/2007, 25-26 June, 2007
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A clear conscience fears no accusation - proverb from Sierra Leone |
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