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City of Banjul
Thursday, February 29, 2024

A contemplative year end reflection

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For a private enterprise, the progress of a company is measured by the shareholders by looking at the bottom line. For the economic development of a nation, the bottom line can be taken to be two simple criteria that have a direct impact on the livelihood of a people – the cost of living and the standard of living.

Economic development, or simply development, is a way of reducing poverty or looking at it in another way, enhancing livelihoods.  In other words, it is to ensure that the people being governed have sufficient food on the table and enough income to take care of their basic needs whilst being able to also put some income aside for a rainy day.  The basic needs of the people are nowadays recognized as human rights – right to good health, education, reliable supply of electricity and water and so forth.

The foundation of development is basically universal.  It is to provide the necessary infrastructure (not white elephants) in the form of good roads, seaports, airports, telecommunication, schools and hospitals that would sustain a good standard of living.  One may add to this description the software type infrastructure of the strengthening of institutions of governance and operating within a democratic dispensation.

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The thrust for development is achieved through political activity. Politicking is a means of trying to select the best leader to lead the road to development.  Thus, political parties compete to win the hearts and minds of the people in order to be selected as the choice to lead. 

The elected political leaders have (or should have) a vision on how to develop their countries.  The vision must be supported by a good sense of judgment to be able to appreciate and understand the scheme of things at any point in time which further enables them to device responsive policies, design efficient strategies and lay down effective programs and projects for efficient implementation. The capacity to exercise prudence should have an underlying trait of compassion in a moral context, but perhaps politically called patriotism.  Both are expressions of care and concern – empathy. 

Very often, particularly in Africa, politics is seen as a zero-sum competition to rule – the winner takes all and the rest are considered to be losers with no better idea of moving a country forward and are rather seen as opponents to progress and development. 

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However, politics does not give a mandate to the selected leader to rule with impunity – doing whatever it likes simply because it had most of the votes from a preceding election (which, in Africa, is more often than not contested).  Anyway, that’s beside the point.

From some interesting perspective, there is generally no loser in an election.  Elections should be seen from the perspective of the voters and not the political parties.  The voters are supposedly to gain by voting for a leadership whose vision they trust would deliver progress and development whilst at the same time they would also have a political outfit, in the form of opposition parties, that should consistently monitor and evaluate the programs of development. 

The condition of the people can be simply measured by the achievements of targets established in a leader’s vision for development.  There should be a capacity to monitor such targets in an independent manner.  There lies the power of criticism and the role of an opposition party as an important contributor to the development aspirations of a people.

The saying goes – there are several ways to kill a cat.  But for positive achievements in development especially for countries called developed, there are two main tools that are used to achieve the goals set for progress. One set of tools targets the overall economy whilst another set is used as a precision tool that targets the various sectors within the economy – macro and micro economic policies.  They are both geared towards managing and fixing the economy.

National budgets are one such basic, but fundamentally important, instrument used for managing the economy.  They are not a mere expenditure apparatus for spending on the government machinery.  In that regard, countries undergo a repetitive cycle of a budget preparation.  The local practice of doing so is no exception.   

There have been various points of view expressed on the 2024 national budget.  Most of them raised concern about specific lines of expenditure, such as   the increased allocation for countrywide tour by the head of state, the allocation of a sum for medical care for senior public servants and the ruling political class, inadequate allocations to the social services and productive sectors, such as agriculture, health and so forth.

However, a more curious approach would be to look at the budget holistically in a more mundane manner.  Going by the example of countries that are developed or progressing, a very large percentage of their national budget allocations are directly given to social services and the productive sectors of the economy.   

That does not seem to be the case locally where some 95% of the allocation go into the recurrent expenses. Ironically, local councils are required to spend 40% of their budgets on development projects – a requirement that is unfortunately not extended to the national budget.

In other words, traditionally, budget allocations have rather been used as a means to sustain the government machinery and not as a tool for directly investing into programs that would improve the livelihood of the people.  Year in year out, the budget only goes to increasingly support the lifestyle of the government machinery.

In that context, it is important to always keep in sight some basic statistics of development.  If the rate of inflation rises from a single digit, some few years ago, to 18% within a relatively short space of time and the poverty rate from 48% to 53%  nationally and 76% in the rural areas and the rate of growth of the economy in general is predicted to fall to 4.9%, one wonders whether there is any meaningful vision with supporting effective policies in place to ameliorate what appears to be a consistently deteriorating state of the economy and by extension, the condition of the people.

Yes, development of infrastructure, such as roads, can be a significant contributor to development but the bottom line is – to what extent has this lowered inflation and reduced the poverty rate?  Can such infrastructure be a misdirected priority? 

These figures are important indicators of the economic well-being of the average person in the street, especially in a country where more than half the population is classified as poor and those that are poor have increased by 33,000 people in a single year. 

Have the macro-economic policies been failing to uplift the economy or is it high time that a lesson was learnt that the singular use of such policies is inadequate by themselves and that a greater attention should also be paid to a more judicious use and allocations under the national budget?

How does a country achieve a significant reduction of poverty and a lower cost of living and also enhance the standard of living by spending almost 95% of its meagre budgetary allocations on recurrent activities and, in addition, selling off, mortgaging and/or giving concessions to strategic national assets that would have provided a wider productive base to its very narrow economic base, a base that relies essentially on taxation, grants and loans instead of nurturing such assets to provide the necessary supportive income base that could have allowed for a lighter tax burden and a lesser dependence on loans? 

An allocation of only 5% of the taxpayer’s money for development purposes certainly cannot be a good bottom line for the people.  When would the building of a house that costs one hundred dalasi be completed when ninety-five dalasi of that money is spent on the paycheck of the mason and only five dalasi goes into the actual construction? 

The job description of a political leader of any country is simply to provide meaningful policies and programs that will positively impact the cost and standard of living of the governed.  Such a leader should be armed with a vision, motivated by empathy and compassion, with well-designed and effective strategies to efficiently implement programs of development. 

Poorly designed policies underpinned by Ponzi schemes of assets sales to overcome short term fiscal challenges and making imprudent expenditure and infrastructure development with no fiscal discipline don’t work for any country. 

As the saying goes, the economy is no one’s friend. The way it is handled defines the contours of progress and development for a country. One should contemplate on what the future generally holds for such a country. Happy New Year.

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