by editor | February 21, 2017 3:34 am
The performance of the Gambian economy has been lacklustre at best in spite of the glowing and often misleading reports by The World Bank and IMF. The World Bank and IMF often prepare glowing reports on the performance of Gambia’s economy, but contradicting views are apparent through many incontestable indicators; not the least of which is the increased poverty, capital flight, lack of skilled manpower, declining agricultural sector, which has resulted in a marked drop of the national GDP, among others. The defective appraisal methodologies the World Bank and IMF utilize to measure the performance of the Gambian economy are prone to conclusions that have absolutely no bearing on reality, primarily because the data provided by the regime is based on fudged and manufactured numbers, and false and deceptive accounting practices.
All the reports the World Bank and IMF prepare for The Gambia’s economy are disproportionately rosy, and clearly, contradictions to their reports are also manifest in the total lack of improvements in the quality of life of Gambians. Moreover, the marginal gains registered have primarily benefited an insignificant percentage of the population, most of whom either have direct access to foreign aid funds by virtue of their positions in the regime, or can access government administered funds through tribal affiliations and the crony culture.
In spite of the World Bank and IMF reports, The Gambia has accrued a massive international debt of $1.6 billion, accounting for debt service of 25% of the total GDP, which is further stifling economic growth. The Gambian economy is burdened with pervasive illegal practices in the financial and banking sectors, which is exacerbated by pervasive corruption, chronic lack of accountability, money laundering, infusing drug money into the economy. But another failure of the Gambian economy, is its dependence on foreign aid, rather than investment, as the primary engine for economic growth.
In addition, the multitude of financial institutions are not up to provide investment capital, either because of lack of capital, or the institutions are only designed for small savings and micro lending; hardly enough to spur economic growth.
The necessity to overhaul Gambia’s banking and financial institutions is overwhelming for several reasons; but mainly to exclude banks, which lack the capital to invest in economic growth and expansion, but also to protect Gambian consumers from losses they could incur in the likelihood of bank failures. Banks and fictitious financial institutions that are set up primarily to launder illegal drug money, counterfeit currency, or for the exclusive purpose of generating quick profits at the expense of Gambians, must be completely excluded from participation in the nation’s economic activity, due to the likelihood of failure they pose. The mere presence of such illegal financial activities is devastating to both the economy and to Gambians who entrust these banks with their life savings. However, one of the most contentious issues facing our country is Yahya Jammeh’s multiple business interests, which spread the depth and breadth of the Gambia’s economy; from butchery, transport, sand mining, communication, construction, bread bakery, agriculture, manufacturing, import/export, property development and food processing.
These businesses, under Kanilai Group International, KGI, entirely owned by Yahya Jammeh, not only stifle competition, but Yahya Jammeh’s monopoly of state resources and state apparatus to expand the various business ventures of his company has created an unfair disadvantages for competitors, even as it dampens business morale, discourages investment and entrepreneurship, and created a near monopoly that adversely affects the entire business sector, to the detriment of the country’s overall economy development.
Despite the positive spin the World Bank and IMF reports have put on the performance of the economy over the years, the Gambia’s GDPs over the years have contracted significantly every year since 1994. The regime’s annual working capital, or the budget, if you will, is still heavily dependent on and financed by foreign aid, principally from Britain and the U.S. The Gambia’s GDP is insufficient to generate adequate revenue from export, as well as personal and business taxation, to be able to finance public sector projects, make payroll for the civil service, invest in the education, build road infrastructure and provide adequate health care for Gambians. To date, Gambia’s debt forgiveness, or debt relief, amounts to billions of dollars, and the regime, in part, relies on the existing and often sought debt-forgiveness regime to stave off total bankruptcy.
Further, Gambia’s productivity decline can be measured by the drop from $378 per capita GDP in 1985, to $353 in 2000, which in real terms is huge. Agricultural production, which previously accounted for 75% of Gambia’s GDP, only two decades ago, now accounts for a paltry 22%, and still declining, but employs 74% of the total labour force. The service industry; communications, electricity generation, hotels, among others, now account for 64% of Gambia’s GDP, yet employ a mere 15% of the labour force, and producing nearly two thirds of the annual GDP.
This anomaly is reflected in the over 60% unemployed and underemployment of Gambia’s productive labour force, in particular, its youth. Significantly, Gambia’s export earnings have dropped from $.044 billion in 1975 to $.019 billion in 2000, creating a massive decline of $.025 billion. In short, the Gambia is now producing far less to the international as well as the local and regional markets, which will choke the economy of foreign exchange; the currency of the importation of valuable goods and services. Additionally, the rural population, who were mostly self-sufficient in food production only two decades ago, are now, for the first time, completely reliant on imported food for their daily sustenance.
Over the past two decades an increasing number of farmers have abandoned farming life and the rural countryside to migrate to metropolitan centres in the Kombo region in a rural urban drift that has completely changed the character of the Gambian economy. There is no longer incentive to farm, due primarily to the lack of market outlets for their produce. As of now, many farmers across the country are owed monies for harvests relinquished to private merchants and traders acting on behalf of the state, but have been unable to recover their hard earned monies; some for more than a decade.
This has resulted in a new and thriving cross-border trade; at a great loss to the Gambia’s economy. The justification for Gambian farmers to gravitate towards new market sources is found in a theory of market economy; “capital, inherently growth generating, yet constantly limited by the market in which it has grown, has historically attempted by all means-including conquest, banditry and piracy-to push the frontiers of its market.” This aptly explains the phenomenon of Gambian farmers abandoning the inadequate market outlets in the Gambia for alternative markets sources across the border in Senegal. Besides, speaking of the broader economy, Yahya Jammeh cannot show where the $1.6 billion or 48 billion Dalasis of external debt is spent in Gambia.
With schools in a terrible state of repair and lacking teachers, the health care sector under-staffed and lacking supplies, roads in the metropolitan centres and around the country in poor state of repair, Gambia’s economic deterioration is evident for all to see, despite the handful of glitzy edifices the regime has constructed with grant money. What Yahya Jammeh is heading is not a government in the true sense of the word, but a cartel of drug dealers and characters who have perfected the art shady financial dealings.
The Gambia’s future with Yahya Jammeh at the head, looks bleak, but Gambians cannot lose hope. For, someway and somehow, the Gambia will persevere and emerge from its deep political inertia, a better country. As long as Yahya Jammeh continues the arbitrary and unilateral dictation of Gambia’s fiscal and monetary policies, the Gambian economy will continue its downward slide to an inevitable meltdown and complete collapse.
Author: By Mathew K. Jallow, Madison, Wisconsin
Source URL: http://thegambiaecho.com/the-gambia-in-retrospect-how-yahya-jammeh-destroyed-the-economy/
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