#Article (Archive)

Let's Balance Fiscal Theory With Harsh Reality

Nov 14, 2008, 5:46 AM

It is heartening to read the latest report by an International Monetary Fund (IMF) mission to The Gambia which states that so far, the financial system in The Gambia has not been affected directly by the global financial crisis.

This is good news indeed but one must ask the question; why then are people struggling so much to battle rising prices and a soaring cost of living? We would all love to believe that we remain largely unaffected but anecdotal evidence would seem to run contrary to this assertion.

The report follows a fourth review under the Poverty Reduction and Growth Facility (PRGF) by the IMF mission led by Mr. Tsidi Tsikata.

According to the IMF report, inflation has been rising in recent months reaching an annual rate of 6.3 percent in September but is expected to remain in single digits, as pressures from abroad ease with falling commodity prices.

The mission advised the government to restrain its expenditures in light of what it described as weaker-than-expected revenue performance and an uncertain outlook for 2009.

This advice may be fiscally prudent but many in the public sector and indeed the population at large will balk at the thought that government expenditure might contract rather than expand. We are in need of significant infrastructural investment, increases in public sector wages and many other government investments to keep our development on track.

We may have escaped thus far in the eyes of the IMF but people are struggling and this is what we as a nation must focus on. Numbers and financial analysis are one thing but they mean little to people on the ground who are struggling desperately to put food in the mouths of their hungry families.