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Tuesday, July 16, 2024
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Foreign reserve borrowing is not the solution – Sabally

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By Alagie Manneh

Opposition UDP member and former presidential affairs minister, Momodou Sabally, has said government’s borrowing of millions of U.S dollars from the country’s currency reserves cannot solve the current economic crisis and could in fact be catastrophic for the country.

The funds were given to businessmen who “faced difficulties in getting foreign currency in order to ease the burden on Gambians and ensure prices of commodities are lowered,” the president had announced at State House.

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But in his reaction Mr Sabally, himself an economist, said: “It is my contention that despite any intended good intentions of the presidency, this move is not going to help the situation because we know there are challenges in the global macro-economic situation, and business people will have to operate with a profit motive. That is why government must not interfere in business. It has always led to catastrophe, from the First Republic, down to the Jammeh era.”

Sabbaly told The Standard that what the government needs to do is to “manage the economy, and implement good policies that will lead to macroeconomic stability.

“Instead, this government has successively taken macroeconomic policy measures that are clearly counterproductive and clearly against macroeconomic stability, like for example, the almost 100 percent increase in salaries within the past five years, excessive borrowing that has been labeled to the effect that it has made our domestic debt unstable. All of these things, is what has created instability in the market, and has made it practically impossible for businesses to function because of the unpredictability of prices in the domestic economy,” he said.

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Mr Sabally advised the government to stop ‘interfering with the independence’ of the Central Bank.

“They should stop this business of taking our hard-earned currency, and giving it to their own selected, preferred business people. This is actually tantamount to corruption because the sharing, whatever you call it, of our foreign exchange reserves, should be done in an open, transparent manner, through bidding in the money market. But is that what happened? Apparently, no,” Sabally charged.

“Furthermore, in addition to this foreign exchange mis-intervention practices, this government announced recently that they bought cooking oil, more than a hundred containers. From the Jawara era, to the Jammeh era, anytime government gets into business, it leads to catastrophe. Whatever good intentions the Barrow administration has, this is going to be counterproductive. The end result is going to be the consumers suffering. This government’s intervention into the markets is going to hurt genuine businesses,” he concluded.

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