26.4 C
City of Banjul
Sunday, September 25, 2022

In the wake of global uncertainty: Should we be complacent about the state of the economy?

- Advertisement -
By Dr Assan Jallow

Many experts have warned about the fragility of our economy and the failure of our policymakers to enact austerity measures to curb unnecessary excesses and create a cushion that will protect us from current and future events like what we are seeing in the world today. Therefore, it is important to understand that pandering does not equate to action. However, I welcome the establishment of the Presidential Task Force, which is earmarked to advise President Adama Barrow on what mitigation measures to adopt in the face of the current global economic downturn triggered by many factors, including the pandemic and further exacerbated by the Ukraine-Russia war. This is a laudable initiative and a welcome development that demonstrates a sign of visionary leadership by the president to contain the debilitating effects of inflationary pressures on the cost of fuel and rising prices of essential commodities. I believe that the task force members will measure expectations based on their terms of reference by unraveling the facts and extrapolating data to make well-informed decisions in our development planning by building the necessary structures that will help our national economy withstand short long-term natural, and crisis-induced human disruptions.

I present arguments to emphasize that policies emerge to address the specific needs of society and not impede its development. Additionally, as the needs of society change, the need to develop effective, sound, workable policies with critical deliverables whose outcome is to create a windfall of economic opportunities cannot be compromised. Hence, policy decisions should not be crafted based on pure chance and guesstimation or window dressing derived from desk research and fantasy but on empirical data driven by field research, data collection, and analysis that reflects the country’s economic reality. When policies fall short of the latter, blinders of reasoning are created, shared economic prosperity is hijacked, and seabed of hopelessness is formed, where misdirection and inattention become the currency of development. This is often referred to as ”senile economics”; a term that connotes dodgy and pseudo development models incapable of resolving nations’ intractable economic challenges due to not conceptualizing and formulating workable policies for sustained development. However, an introspective, conscientious, sober person should not favor or pursue a road that is faulty and suicidal and based on false development equations built on an ideological and illusionary goal of performing surgery or nursing wounds with incorrect surgical techniques. In light of our current development trajectory, we need to move from the current state of holding onto the concept of “yallah baah nah” while using pseudo-econometrics and financial modeling methods that reduce our competitiveness to a more research-driven and fact-based policy dynamic approach to cope with human-induced development challenges.

According to the IMF’s recently concluded “Extended Credit Facility Review Arrangement for The Gambia,” the government is doing its best to ease up inflationary pressures caused by the global supply chain challenges after the outbreak of COVID-19 and the recent war between Russia and Ukraine. The highlights of the meeting were: (a) the need for the government to maintain a sound fiscal and monetary policy, and (b) monetary policy needs to be tightened appropriately to confront ongoing inflationary pressures and maintain our fragile economy within the realm of prudent financial management. These are the necessary conditions and development equations to sustain the impetus of growth if we are serious about managing an economy that is quickly slowed by external shocks.

- Advertisement -

Substantive discussion of our problems

Many significant events have prompted an ongoing discussion on managing the economy, which we have been nursing for quite some time now:

1.         First, given our current economic situation, our government’s payroll system is overburdened, limiting its ability to pursue other critical reforms in different sectors of our economy.

- Advertisement -

2.         Our economy has also been subjected to price gouging. Market speculations by those obsessed with massive profits have further weakened and disadvantaged our economic activities to the point where monopoly is on full display with self-denial by those who use the invisible hands in trade and commerce because of their connections and influence within institutions and those in the corridors of power.

3.         Despite being an import-dependent country, the productive sectors such as fishery, agriculture, biodiversity, and manufacturing have been neglected due to the comforts of surviving on handouts and budget support. The funds that were meant to boost and commercialize agriculture productivity, our fishing stock for exports, and manufacturing capabilities have been squandered due to the misuse of funds, in which funds were diverted to capital outlays such as motor vehicle purchases, workshops, and travel allowances and per-diems, instead of financing the needed projects to create a goldmine of foreign currencies, jobs, and revenue to fund our national development budget.

4.         Our all-inclusive tourism package is a disaster. It is not fit for purpose as it is a move that kills cultural tourism, thus further dampening the chance for local culture to be displayed and for tourists to experience and feel it as packages paid for could limit tourists to the shores of urban tourism. Sadly, our tourism infrastructure is not anything to be proud of as our cultural and historical sites sit idle and neglected, as if tourism should be marketed based on idle talks and boosting of 5, three, and 2-star hotels when other vacation spots have better infrastructure and outreach publicity, and far more superior tourism products that attract more high-end paying tourists than those coming to our shores (see Senegal and Mauritius’s booming tourism industry in terms of percentage contribution to their respective countries GDP).

5.         The high cost of doing business, paying taxes, and registering properties, particularly on shipping containers (demurrages), and the congestion in our port make trade and investment less attractive. Despite our country’s strategic location and proximity to Europe, we failed to carry out necessary economic reforms. Senegal took advantage of our failure to recognize and reform our economy. Hence, establishing an international presence with the competitive advantage of being the destination of choice for value-end investors and companies to invest and visit; since the country (Senegal) boasts of major infrastructure found in major European countries. Their business, trade, and investment capabilities are superior to ours after implementing a series of reforms and modern state-of-the-art infrastructure.

6.         Increasing crime rates and burglaries, robberies, rapes, and high unemployment have created a climate of insecurity. Also, the recent fighting within our southern borders with the Casamance region of Senegal has become a fire-exchanging battlefield between the Senegalese military and the MFDC rebels, thus forcing the villagers to seek shelter and leave their homes for safety and security.

7.         There are also saboteurs in the government’s ministries, departments, and agencies (MDAs), causing worker productivity to decline. Interestingly, the current work environment in the public sector encourages workers to loiter and wander around, surfing the internet, playing video games, texting friends and family, or having their friends and families visit them in their respective offices during office hours and using the walls and corridors as “bantabas or Vous” to talk about politics. This leads to decreased output, as the employees’ creativity and professionalism have been compromised by political influence and the absence of productivity in public service delivery.

8.         Another is the prevalence of sit-down strikes among our public officials. One classic example is our nation’s healthcare workers (nurses) protest against the government over their transferred CEO. The sector prefers political confrontation to a compromise with the government, as evident in the recent past when nurses and public health workers protested over unpaid allowances and other unrelated issues that have been an albatross for most government agencies, including teachers.

9.         Furthermore, as noted in the Auditor General reports, we have a pervasive public corruption problem throughout our state institutions, ministries, and government agencies, as seen in the misused COVID-19 funds (COVIDGATE).

These are many reasons we are caught in the bubble of underdevelopment and poverty due to misplaced priorities resulting from intentional missteps or avoidable mistakes. The implication is that we cannot be silent and allow economic vultures and corrupt practices to bastardize our public purse for purely political reasons as if the future no longer matters in our development planning.

Summary conclusions and recommendations

Following are several suggestions to address our country’s current economic challenges:

We need to ensure that budget sustainability and development finance is a priority if we are to deliver sustainable growth with tangible results in the economy to improve the lives of the people and, by extension, rid the government of excess and waste. Therefore, we should shift our focus from retrogressive financing and symptomatic dependence on budget support to a more citizen-centric, good, accountable, and transparent socioeconomic and environmental outcomes rooted in shared values and prosperity. We must effectively mobilize financial resources and revenue generation to fund our national development programs. This is critical, and it will help us harness and promote the dividends of savings as a windfall for future investments and recovery.

To relieve inflationary pressures against rising fuel and food prices, the government should negotiate shipping discounts with major shippers and logistics companies. The ability to negotiate by building rapport through diplomacy is critical in these unprecedented times for building the future of bettering the lives of the citizens and not putting them in harm’s way or economically distressed situations.

We must do the unthinkable by creating an entrepreneurial state and modeling our development pedestals on long-term planning, investing in the productive sectors of the economy to create sovereign wealth and employment. This will help us build a fortress of financial resilience and address our structural vulnerabilities and any unforeseen economic shocks threatening our financial independence; if we are serious about ending the onslaught and extreme reliance on handouts for budget support to survive and finance our national budget.

There must be a refusal to politicize everything with the gimmicks of political propaganda, selling sectionalized conspiracy theories based on misinformation and disinformation. In this context, public and civil service employees must be committed to the country’s development for the collective good. They must appropriately use public resources to ensure they are effectively utilized and not used as a launchpad to feed their stomach infrastructure, cronies, and established elite groups. What this implies is that we must be interested in national development and not become self-infested with the notion that “Karri and Koo, Musubeh, Binta, and Fatoumata, Mamudu, Pateh, and Samba Ngoyaan” are eating left, right, and center, and why shouldn’t I follow suit since they aren’t caught. Let us end fraud-induced public corruption schemes and help develop our nation by implementing a substantial institutional reform and workable detection and deterrence policies to place our country in a region, continent, and global market competitiveness. Effectively managing fiscal policies requires a clear understanding of the current political economy and the necessary steps to ensure our feet are planted firmly on viable traction.

A critical look at productivity, efficiency, and effectiveness is a prerequisite to determining performance and ensuring that each employee plays a significant role as defined by their job descriptions. Therefore, the introduction of pay for performance would be a better alternative to the current performance metrics. Only a few do the work and get paid at the taxpayers’ expense.

The government of President Adama Barrow must not pursue an isolationist policy in the “Fonis” region because crimes thrive on frustration, anger, isolation, neglect, uncertainty, and economic difficulties/hardships (including high fuel prices, commodities prices, unemployment, etc.). Barrow must govern as the president for all, regardless of party affiliation, religion, ethnicity, region, or other socio-economic or demographic constructs).

To curb crimes and safeguard our country against future conflicts or violent crises, the government must do everything within its powers to create an enabling environment that promotes creativity and entrepreneurship through an effective public-private partnership where citizens’ growth and development are uncompromised and pursued on the agenda of skills-driven and gainful employment opportunities. We must revamp our national security apparatus. The current heavy fighting in the Casamance region of Senegal is a time-bomb if not addressed. Intensive surveillance is required to deescalate the situation and prevent the conflict from spilling over into our villages along the southern border with Casamance.

The current all-inclusive tourism model of the country seems counterintuitive, and it lacks value. It must be scrapped, and culture, sports, medicine, nature conservation, and eco-tourism must be promoted instead. This new oil will create a goldmine of economically long-term growth and development for our towns and villages by linking them to the center of economic activity.

In conclusion, our comprehensive national development plan’s key deliverables must be anchored in a cost-effective delivery mechanism to curb government excesses by promoting the dividend of savings as the anthem of recovery. This is critical because budget sustainability and development finance must be addressed if we are to wean ourselves from government excesses and waste.  More importantly, developing effective and sustainable financing mechanisms is critical if we are to achieve the shared prosperity of our harnessed financial resources.  Moreover, to combat the stench of corruption and ease the financial burden on citizens, businesses, and companies, we must continue to advocate for accountability and transparency based on ethical considerations. The government must demonstrate a strong political will to uncompromisingly fight crime, drugs, and public corruption. Education and outreach should be prioritized through incentivizing equitable employment, decentralized development, and eliminating the vice of centralized development planning and financing. To summarize, we can address our seemingly intractable development challenges as a nation by building an economy of equal opportunities for all to grow and succeed, which underpins our efforts to reduce income inequality, foreign aid, address political divisions, arrest prejudice, and end discrimination through the geography of unity, love, understanding, and equity.

Ramadan Mubarak, and wishing you all a blessed Eid in advance.

- Advertisement -
Join The Conversation
- Advertisment -spot_img

Latest Stories

GFF APPEALS COMMITTEE DETERMINES YOUNG AFRICANS’ APPEAL AGAINST REJECTION OF KAMASO’S...

The Gambia Football Federation (GFF) appeals committee has come out with its decision on an appeal filed by Young Africans FC over the rejection...

Falling for the temptation