Pressured by its public debt which represents more than 120% of its GDP, Gambia’s government asked its lenders for a debt restructuring.
“We are calling to all, to the Club de Paris as well as to bilateral and multilateral lenders… The debt presently represents 120% of our GDP. It is very high and that’s the reason why we are asking for it to be restructured,” said Gambia’s minister of finance, Amadou Sanneh, in Paris, Tribune Afrique reported.
It is true that Gambia’s indebtedness level leaves not much operating margin to the Barrow government which since in place, launched its 2018-2021 development plan which involves a $2.5 billion investment in the sectors of power, infrastructures and agriculture.
Debt servicing captures half of the government’s budget revenues, impairing the authorities’ efforts to revive the economy.
“Our debt is unbearable… debt servicing takes a whole portion of State resources, leaving only a minimal budgetary margin for required funding in key infrastructures and human capital,” Banjul had already declared during the plan’s presentation.
The need for this small West African nation which is landlocked in Senegal, to restructure its debt, is urgent, for the recovery of its economy that grows less rapidly than its population.
Based on AfDB’s forecasts, the economy should grow by 3.5% this year, and 4.8% next year.
However, these results depend strongly on public investments, which for now, are hampered by the debt.