Sabally claims CBG governor confirms his prediction on economy

Dec 2, 2021, 1:03 PM | Article By: Arfang M.S. Camara

Momodou Sabally, the former Presidential Affairs minister, secretary general and head of Civil Service in the Yahya Jammeh government has claimed that the governor of the Central Bank of The Gambia has confirmed what he predicted more than two years ago that a government that has eschewed fiscal discipline will ultimately cause macroeconomic instability with a devastating effect on the lives of poor Gambians.

“With consumer price inflation in food and non-alcoholic beverages accelerating to 8.97 for the month of October 2021, the Governor has virtually admitted that this government has wreaked havoc on our economy,” Mr. Sabally writes.

“The Governor himself is even warning us about “heightened inflation expectations next month” this is a clear testimony that Gambians will be facing serious economic hardship in the near future.”

He added that it is however laughable that the CBG governor attributed the price hikes to structural constraints at the ports, “telling us that his institution cannot do anything about our current economic realities. This is totally disingenuous. The port has been here for decades so the structural constraints at the ports is nothing new.”

According to him, the cause of this economic malaise, apart from the excessive tax burden, is unrestrained wasteful expenditure by the government. This wastage was financed with heavy domestic borrowing that has sent the total domestic debt stock to unsustained levels with additional borrowing of almost D3 billion during the past year alone.

“This same Governor is aiding and abetting the Finance Ministry instead of restraining them through prudent monetary policy.”

“He is on the record on the front page of the Standard, saying the Central Bank has reduced reserve requirement ratios and concomitantly urging commercial banks to lend to government for projects in this very political cycle.” 

Mr. Sabally, who was the director of budget at the Central Bank for over 10 years concluded that the real reasons for this high inflation is irresponsible fiscal policy by the Finance Ministry, aided and abetted by the Central Bank.

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