GMC NATIONAL YOUTH MOBILISER RESPONDS TO IMF PRESS RELEASE
On the 20th May 2010, IMF issued a Press Release on the performance of The Gambian economy. Among predominantly positive indications, IMF asserted that despite “global economic crises in 2009 and a sharp reduction in tourism receipts and remittances, real GDP remained strong...led by the continued rebound in agriculture”. It further postulates that although “tourism and remittances are expected to be soft in 2010 real GDP is projected to grow at about 5%, led by solid growth of 5% in key sectors including agriculture”. The Release noted that inflation has been kept under low cap, and indications hail for a declining trend. The economic realities on the ground vigorously disputes IMF interpretation of Gambian economic fundamentals.
It would be seen that IMF projections for growth indications were fundamentally based on a rebound of agriculture which is grossly untrue. Agriculture, predominantly small farmers with low and declining productivity, account for major percentages in the real sector. Evidence has shown that instead of a rebound in agriculture, the sector has been experiencing a progressive decline over the years, confirming that The Gambia has lost its regional market share in groundnut as its traditional exports.
Therefore growth indications based substantially on a progressively declining sector to lead such growth cannot produce any increase in GDP under current exigencies. On the contrary, evidence suggests a further declining contraction by 5%. This situation has been compounded by a “sharp reduction in tourism receipts and remittances”. The IMF Release is misleading, pure and simple.
Over a time, The Gambia’s broad macroeconomic aggregates have been highly uncertain. For the past fifteen years, high macroeconomic uncertainty has been a key determinant, as well as consequent of poor economic management. Gambian economy has been caught up in low savings investment equilibrium. With poor and low annual investment rate, The Gambia is far below the minimum investment of about 30% of GDP to unleash poverty.
Macroeconomic policy has been highly circumscribed by inefficient, highly uncertain public sector spending. Fiscal indiscipline has proved a challenge to effective macroeconomic stabilisation and efficient public finance management. Yaya Jammeh’s government has rendered the traditional instruments of economic management ineffective. By end March 2010 alone, the economy lost ninety million Dalasis (over four million Dollars) (unaccounted for) due to Yaya Jammeh’s senseless unauthorised spending madness on frivolity.
The national debt burden of nearly half a billion Dollars, excluding almost 500,000,000 domestic debt, represents a very high percentage of contractual service obligations. Government finances is also characterised by mismanagement and misallocation of resources, and other problems. The very low productivity of the private sector and lack of diversification of the economy are due mainly to Yaya Jammeh’s personal monopoly over all sectors: power generation, import of basic consumer goods, food stuff, construction materials and allied mining, livestock, transportation, IT, agriculture, etc, etc. For economic conditions to improve, significant obstacles need to be removed – Yaya Jammeh and APRC.
One need not niggle on the indisputable elements of poor economic performance such as high and increasing joblessness and underemployment; inflation; high and increasing incidences of severe poverty; indebtedness, poor housing; dysfunctional educational system; high income disparity, etc.
The Gambian economy shall continue to face enormous challenges and a bleak future if fundamental steps are not taken to redress this legacy of APRC failure. On the other hand, IMF stands to lose its credibility if it persists on unveiling this type of international deceit contrary to the stark realities known to all.
Unlike Yaya Jammeh who has no clue as to what the economy requires for growth, GMC has a plan to resuscitate the economy for sustained growth.
Alagie S. Ceesay
GMC National Youth Mobiliser