Opinion: The Supplementary Bill: What next for Gambia’s economy? Retrogressive or Progressive?

Monday, December 24, 2018

The contentious Supplementary Bill presented by the Gambia’s Finance and Economic Affairs minister,  Mambury Njie has been approved by Deputies at the National Assembly in Banjul late Thursday evening.

The Bill, which is over 500 million dalasis is purposely meant to cover the government’s expenses for the fiscal year 2018.

Parliament rejected the initial Supplementary Bill of One Billion dalasis last week, forcing the Barrow Administration to revise the Budget and cutting up half the initial cost. 

Atleast, 16 Parliamentarians rejected the revised Budget tabled by Minister Njie, leaving Lawmakers at a deadlock which was broken by a vote from Speaker of the House Mariam Jack-Denton in favour of the Bill.

Gambia has surpassed its threshold for Domestic Borrowing. The World Bank has pinned the country’s net Domestic Borrowing at about 400 million dalasis but Thursday’s vote with already existing huge domestic borrowing, the country’s unserviceable local debt has surpassed D2BN, changing the economic trajectory downwards.

Thursday’s Parliamentary approval of the supplementary budget has put the nearly insolvent country’s fiscal discipline out of compliance with IMF and World Bank guidelines. This has raised concerns that it will increase the rates of Treasury Bills at the country’s reserve bank to keep the economy afloat and likely to increase interest rates at banks due to high government borrowing which will affect local businesses from securing low interest loans.

Gambia is very dependent on foreign aid and development partners but has not received any budget support this year, except for US$7million which was secured by then Finance minister Amadou Sanneh from the African Development Bank (ADB).

President Adama Barrow has placed high hopes on some US$1.7BN pledged by European nations to his Administration for his National Development Plan (NDP).

Mr Barrow has used the pledges which are yet to be delivered, to drum up political support for a likely second mandate. When he assumed power, Barrow claimed that he has inherited a divided and broken nation with a ransacked Treasury.

Will the EU nations honour their pledge to a government which is going out of compliance with IMF and World Bank guidelines?

Author: Assan Sallah in Germany