The Gambia is putting its public finances in order. The goal of this initiative is to reduce a combined public debt to 123% of the country’s GDP, according to the World Bank. With a clear risk of over-indebtedness, the Gambian government has taken steps to impose fiscal discipline and avoid off-budget spending.
At first glance, the Gambian economy is doing well. The situation made by the Minister of the Economy Mamburay Njie in this month of November reveals growth that will reach 6.6% in December next 4.6% compared to the same period last year.
Only these figures hide a truth that the Gambian government can no longer avoid. Fiscal indiscipline and extra-budgetary spending forces the Gambian authorities to use excessive debt to keep the country’s accounts up-to-date.
Last October, the International Monetary Fund (IMF) demanded that public spending be circumscribed to avoid over-indebtedness. According to Minister of Communication Ebrima Sillah, several measures have been taken to comply with this order from the IMF. These include a temporary “freeze on recruitment to the public service, except in cases of extreme necessity. The restriction of official travel to the sole framework approved by the budget, and the rational management of the State fleet to reduce public expenditure”.
Some embassies and diplomatic missions of The Gambia Abroad will close at the end of this year. The chief of staff, General Masanneh Kinteh confirms that. The army will also operate a makeover to reduce public spending. “The need to decrease the security forces is a budgetary necessity. There have been gaps because before we were just over 2,000. Now the number has more than tripled.”
About 40% of Gambia’s domestic debt is held by domestic banks. The Gambian government is still in the majority of financial transactions paid in cash. This method of payment poses risks for the stability of the banking sector. The government has decided to make a radical change. “There will be no more payment points in the government departments. Which means that all payments are made to the bank after the presentation of a government payment slip,” said Minister of Communication Ebrima Sillah.
The Gambian economist, Nyang Njie, believes that these measures need to be strengthened by a law that caps the debt for each fiscal year. “I hope that the Minister of Finance subscribes to these measures. Gives them proof and applies them to the letter. And they must create a law that caps the debt.”
After the years of lead under Yayah Jammeh, Gambia is trying somehow to revive its economy. The small country in West Africa, landlocked in Senegal, has very few natural resources. And faces accumulated debt over several decades.