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Momodou
Denmark
11634 Posts |
 Posted - 20 Jan 2021 : 15:14:53
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My Take on Mamburay Njie's Assertions:
From January to September 30th of 2020, out of 17 major creditors, the Gambia was able to make 5 monthly loan payments. The Ministry of Finance has asked for loan deferment payments from 2021 to 2024, while the annual debt service payment is about 27% of the budget.
In my professional opinion, this is creative accounting to the extend that the residual proceeds will be used to explore road projects. This is again, "rubbing Peter to pay Paul." Unfortunately, these deferments will sustain accrued interests and possibly increase the future values on outstanding debts.
As reported by GRA, the agency collected less than D12 billion of domestic revenue when the budgeted amount was about D18 billion.
This week alone, the Ministry of Finance took another loan to the tune of D4.4 billion. As it stands, our country's total debt portfolio is more than D74 billion.
Equally speaking, Mamburay Njie cannot and will not disclose to the Gambian people our country's total negative fund balance, and total encumbered debt. It appears that we are driving a train with our eyes close.
Just last year, Mamburay couldn't answer a simple question on total assets of the country. All he had to say could have been: Total debt + or minus negative fund balance.
Economists have two differing opinions on deficits. Those on the left advocate deficits for larger economies, and those on the right believe in fiscal conservatism (constraint). Conditionally, due to the volume of activities and the viability of the private sector, larger deficits are gradually negated after seriously impacting a country's economy. Realistically, capital projects that are encumbered through debt are usually subsidized through special revenue funds that are used for periodic interest payments, and maintenance costs.
For a smaller economy like the Gambia, fiscal conservatism is the model. With recurring deficits, the Gambia's accounting equation is: Assets = Liabilities + Negative Fund Balance.
Thus, our country's total assets have decreased over time.
Naphiyo,
Dr. Lamine J. Conteh
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A clear conscience fears no accusation - proverb from Sierra Leone |
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toubab1020
12306 Posts |
Posted - 20 Jan 2021 : 15:59:56
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Momodou I am sure I am not alone in totally understanding the intricacies of this posting  surfice it to say the whole content is summed up in the penultimate paragraph:
"For a smaller economy like the Gambia, fiscal conservatism is the model. With recurring deficits, the Gambia's accounting equation is: Assets = Liabilities + Negative Fund Balance."
Which any housewife in the world would understand as, Hmmmmmmmmmm I cannot go shopping now as I have no money to buy things.  |
"Simple is good" & I strongly dislike politics. You cannot defend the indefensible.
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Edited by - toubab1020 on 20 Jan 2021 16:03:27 |
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Dr. Lamin J. Conteh’s take on Mamburay Njie
