President
Adama Barrow has said his government has inherited an economy that is
“virtually bankrupt” as the dictatorship of former president Yahya Jammeh had
“deprived the country of development and aid”.
“As
a new government, what we have inherited is an economy that is virtually
bankrupt and in need of immediate restoration,” President Barrow said yesterday
shortly before the signing of a 75 million euro financial package with the
European Union.
“This
sad reality was brought about by mismanagement of our finances,” the President
lamented. “What is truly sad is that our
debt burden has reached unsustainable level due to wasteful public spending.”
The
Gambia’s public debt for 2015 was estimated at 107.6 per cent of the country’s
Gross Domestic Product (GDP), the total value of all goods and services
produced over a specific time period.
The
Gambia is the third most indebted country in sub-Saharan Africa in 2016, after
Eritrea and Cape Verde, according to data from World Bank and IMF. The government was placed under an IMF
Staff-Monitored Programme due to its alarmingly growing debt level.
Reforms
urgent
President
Barrow said youth unemployment has also increased to more than 40 per cent, and
most public enterprises are debt ridden and underperforming, including the
energy sector.
“Our
economy, public institutions, including the civil service, the judiciary and
the security services need urgent structural reforms in order to realise our
commitments,” he said.
Budget
support needed
The
Gambian leader said in view of present economic situation, the government
“critically needs emergency budget support” in order to rescue the economy.
“Budget
support in this regard will immediately boost our economy,” Barrow said. “The Gambia is a country which needs the full
support of the EU.”
A
partner indeed
Neven
Mimica, European Union Commissioner for International Cooperation and
Development, said the EU would give the Gambia government budget support for
the first time.
Yesterday,
Commissioner Mimica signed a 75 million euro financial support with the
government, but said this money does not include any budget support.
“Not
a single euro out of the 75 million that we signed today is for budget support;
this is for projects that are already outlined,” he said.
However,
he was quick to add that the EU is already preparing a medium term package of
150 million euros, which would include budget support to the government.
“We
will do the budget support disbursement most probably in the summer of this
year,” he said without stating exactly how much would the specifically given as
budget support.
The
EU diplomat said the 150 million euro is for various projects and support for
the government up to the year 2020, and that includes budget support.
Commissioner
Mimica said the EU has never given budget support to the previous
government.
“What
we have been giving is under emergency support on issues like food security,
climate change and other such areas,” he said.
“This
is the first time we will give budget support to Gambia.”
The
EU had initially suspended all direct support to the Gambia government due to
the worsening human rights situation presided over by the former president,
Yahya Jammeh. It has just resumed
support to the government starting from yesterday.
Analysts
said the resumption of EU aid to The Gambia is a vote of confidence in the
country’s new leader, Adama Barrow.
