Donor-support to Gambia at 7.2% of GDP

Friday, October 20, 2017

The IMF Country rep in The Gambia has said that the total budget support to the country around the mid-year equals to 7.2% of GDP which is very sizeable.

The European Union provided 25 million euros, World Bank $56.1 million and an additional budget support is expected from the African Development Bank before the end of the calendar year, Ruby E.M. Randall told journalists yesterday.

Thanks to donor intervention, such a high challenge to the new government upon coming to power has helped to stabilise the economy in terms of debt-to-GDP ratio.

Ms Randall said Gambia was considered to be in debt distress at the time of change of government earlier this year.

“In fact, the debt was considered unsustainable particularly following the downgrading of this country’s rating.  The debt-to-GDP ratio at the end of 2016 reached 120%,” she said.

In perspective, Senegal’s debt ratio to GDP was 57%, while the average GDP ratio for ECOWAS was 29%.  Sub Saharan Africa, including South Africa and Nigeria, which have lower debt to GDP ratio, stands at an average of 53%.

Debt vulnerabilities, SMP

The Gambia is facing significant debt vulnerabilities and a big part of what the IMF is doing is working with the authorities to address those vulnerabilities.

The SMP is a micro framework of consistent policies that are designed to achieve macro-economic stability and put the country on a sustainable road path.  As part of that agenda, authorities are engaging with IMF to address their debt vulnerabilities.

“The executive board meeting at end of June 26 this year approved the disbursement under the Rapid Credit facility of $16.1 million for balance of payment support to The Gambia.  Also at that time, the Staff Monitored Program (SMP) also began its implementation,” Ms Randall said, noting that the core objectives of SMPs were to help catalyse budget support.

The disbursement of the funds by the IMF had helped to encourage other development partners to provide budget support to The Gambia, she said.

“This is particularly important when you consider the high debt-to-GDP ratio.  The flip side of it is that a high amount of government resources are being spent on debt servicing, thereby crowding out other priority spending areas such as poverty alleviation expenditures and social spending,” she said.

SMP is also a vehicle for allowing the authorities to build a successful track record to demonstrate their readiness to transition to a formal fund arrangement called an Extended Credit Facility (SMP). An IMF team will come in November to do a formal SMP review, return back 6 months later to conduct a second SMP review and also issue a formal request to transition into the ECF.

“So addressing the high debt vulnerabilities creates fiscal space for priority spending,” she added.

Gambian authorities are undertaking measures both on fiscal and revenue side through cutting expenditures primarily at the Office of the President.  According to the IMF staff, they are also undertaking a number of other reforms including vehicle fleet reform and travel policy, and a number of others to cut expenditures.

“They are also mobilising revenue, asset sales, and restructuring the debt at the central bank, issued a three year bond and create savings from that measure to the tune of about 1.5% of GDP,” Ms. Randall said, arguing that addressing the high debt vulnerabilities creates fiscal space for priority spending.

Sanna Camara,  The Point Newspaper, October 20th, 2017

Gambian migrants contribute 22% of GDP

October 18, 2017

The Minister of Foreign Affairs and Gambians Abroad has said that Gambian migrants contributed 22% of the country’s gross domestic product (GDP) in 2016.

Minister Ousainou Darboe said this statistics is according to a report by IFAD in June 2017 which also confirmed that The Gambia is second country in Africa that relies on remittances to GDP, just below Liberia at 31%.

A remarkable $181 million was remitted by Gambian migrants in 2016, Darboe added.

It is for this reason, among several others, that the new government is working very hard to harness the role of its diaspora in national development, officials said. 

Gambia’s President Adama Barrow, in a speech to the diaspora in New York in September, said The Gambia will benefit significantly more if it has diaspora bonds and other visible diaspora direct investment.

“This will pull together diaspora finances to fund specific national socio-economic and medium scale infrastructure development project, while generating return for the individual diaspora investor co-tended,” Mr Darboe said.   

Mr Darboe said he hopes The Gambia diaspora will have increased confidence in local financial institutions so that they will keep a significant part of their savings in the country thereby boosting the national economy. He is also looking forward to bilateral negotiations for “profitability of social security benefit for the Gambian diaspora”.

According to research, The Gambia has the second highest rate of tertiary educated migration population in sub-Saharan Africa at 63%, behind Cape Verde at 67.5%.

The foreign minister said the government must make sure that migration contributes positively to development outcomes, and ultimately play a vital role in achieving the 2030 Agenda.

Remittances to family and friends and what jobs diaspora can take home are some key highlights in the discourse on Gambian Diaspora.

“Such a narrow focus is a mistake, which may lead to missed opportunities, overstretch of diaspora goodwill and petty squabbles,” he said arguing that in implementing diaspora strategy that facilitates and harnesses their contributions beyond merely their finances and skills of individuals, the new government has developed a diaspora strategy, established a diaspora directorate and allocated a month to celebrate the country’s diaspora. 

Launching of an initiative by the Central Bank of The Gambia and partners to reduce the transaction cost of the remittances to a maximum of 3%, inauguration of the annual diaspora “Take in the Nation” forum to mark the declaration and start of the diaspora month scheduled for Dec 15 to January 15 are also part of the strategies. 

By: Sanna Camara,.  The Point Newspaper,  October 18th, 2017

57 Vehicle Donation By Gambian President To Parliamentarians.

1. Your report on the 57 vehicles is spot on. Do you know that Kallilou Waggeh owns the dealership of Fait vehicles in Dakar?
2. The 57 vehicles Waggeh donated to Barrow did not pay duty yet.
   If you remember the 2 vehicles that Yankuba Darboe of GRA handed to GRTS; it was actually from Barrow and those vehicles are Fait vehilces too.
   Plus the Mercedes Benz G Wagon of Jammeh is with Waggeh in Dakar.
3. Right now, Waggeh is working with some Turkish to bring generators on ships to help NAWEC.
4. Even the lifting of monopoly on flour import was done for Waggeh
5. Right now he has 1000s of tons flour in stock but he cannot sell it because he thought GRA was going to give him duty concession but they did not..Now he is competing with the other importers to sell his stock
6. He also has a lot of sugar in stock which he bought at a higher price and after the sugar arrived the price of sugar dropped drastically and now he is selling at a loss.

Freedom Newspaper, October 16th, 2017