By Mustapha Darboe
Finance minister, Amadou Sanneh, has informed journalists that government cannot increase salaries for workers this year due to significant damages to the economy.
The minister admitted that there is need for it but the budget, which still has at least a billion dalasi deficit to fill, can’t accommodate it.
“There is a need but the means are not there to increase salaries. I made that very clear at the tabling of the revised budget at the National Assembly,” he said.
He added: “We need to work very hard and ensure that the economy is buoyant to be able to increase salaries.”
Sanneh who first made the statement before the lawmakers about two weeks ago, repeated his position at the signing of a $56 million grant and credit agreement between World Bank and Gambia government on Tuesday.
Meanwhile, the finance minister has also informed journalists of the drop in interest rates which, he said, will motivate private businesses in the country.
“We are glad that the monetary policy committee of the Central Bank has reviewed the interest rates and revised it down to 15% from 23%.
“This gave greenlight to the banks—they are now dropping from 23% to 18% some. According to some of the managers I have spoken to, they still have room to negotiate with their bigger clients. We are hoping rates will go further down,” Minister Sanneh said.
“This is good for business and it is good for Gambia. With interest rates at 23%, to get a profitable investment will be very difficult… Investors who have taken the risk, courts re selling their houses, homes, assets and their businesses are collapsing because they cannot carry that interest burden.
“The lower interest rate, we hope, will ignite the investment process in the private sector and they will take up challenges in different areas: agriculture, light industries and energy. This will also create employment for the youths.”
The Gambian economy is facing some severe challenges compounded by unsustainable public debt at 120% of the GDP.
Finance minister said they have made cuts in public spending to reduce the budget deficit and avoid relying on domestic borrowing, which comes with higher interest rates.