There
is no doubt that the economy of the Gambia is in bad shape.
But
there are not many roads to recovery given the known reasons that brought us to
where we are today.
One
can single out the high domestic debt as the main cause of Gambia’s bad economic situation. The reason
why it’s often said that Government’s
are hardly bankrupt is that they can always print money or borrow to pay their bills. But of course
both actions are inflationary and costly. The Economy of The Gambia has been on
this track for sometime.
Without
going into the details for some of the reasons why Government could not finance its program without
resorting to expensive borrowing.
It’s
now time to look forward to solutions.
As
the saying goes, “cut your coat according to your cloth” and focus on
priorities.
The
recent revision of the 2017 budget is welcomed in so far as it is anchored on
austerity in which discretionary costs are contained and there are easy targets
such as expenditure on vehicles, fuel, travel, Electricity bills for government
offices, which now need cashpower and some of the Foreign Missions need to be
closed or carry out staff reduction, etc. Government should also minimize
travels which take a lot government resources and also consider taking business
class tickets.
Resorting
to borrowing, especially domestic borrowing with high interest rates will crowd out investment and revenues that
would have financed important
development programmes would instead go towards interest payments.
It
is a vicious circle that can only be solved by painful sacrifice.
The
Government must therefore have a target date by which net domestic borrowing is brought to zero. This can only
be done by adopting an austerity
programme which simply means identifying waste both in revenue
generation and expenditure and to eliminate them.
The
executive must take the lead in this sacrifice and we don’t need to Invent the wheel but to learn from countries
that have been is similar situation and
what they did.
Fine
day
