Fix up the vulnerability gaps in the economy

Thursday, October 26, 2017

Although donor-support to The Gambia has been forthcoming to help in bailing our government and nation out of the economic mess it has found itself since the demise of the Jammeh government, the Barrow administration has more work to do to ensure the economy is brought back to a sound footing.

Achieving that would require no magic but actual fiscal discipline and vigorous revenue maximization.

It has been established that the country is debt-distressed with high debt-to-GDP ratio, precisely 120 per cent, which makes our vulnerability severe and worrisome, a dire situation exposed to our nation by the exiting administration of Jammeh.

If the Barrow government must make a promising headway to redeeming the nation from such economic stress, it must be seen to be running through the path of fixing the breakages in the economy, especially in the micro-economic backyard to be able to meet the challenges of the vagaries of weather on the macro-economic standpoint at the international level.

As has been declared, 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.

However what seemed to have been going on under the yoke of high level of indebtedness, otherwise debt-stressed situation, is that the government would have to be diverting huge chunk of its revenue generated into servicing debt through interest payment. This, as rightly stated by the IMF country representative in The Gambia, leads to crowding out “other priority spending areas such as poverty alleviation expenditures and social spending”.

In this situation, therefore, what is best advised is to apply prudent fiscal discipline and strategic revenue generation to fix up the gaps and vulnerabilities in our economy.

It is always stated that charity starts at home, and there is no better place to start with in this fiscal cleansing exercise than within the confines of internal government circles such as cutting expenditures primarily at the Office of the President and undertaking reforms in the purchase of fleet of vehicles, in travel policy and in a host of other expenditures running dry our meagre resources, which can be used in the most essential areas of our national development.

We really cannot afford to act lackadaisically in this race to revamping our economy that is highly dependent on donor support, which currently stands at 7.2 per cent of GDP – Gross Domestic Product: the total value of goods and services produced within the country during a year.

“Addressing high debt vulnerabilities creates fiscal space for priority spending”

Ruby E.M. Randall