Salary increment should not mean price increment – Finance Minister

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By Tabora Bojang

In light of the recent salary adjustment by the government, there are concerns that consumer prices will skyrocket in the country amid global supply shocks associated with the Covid-19 pandemic and Russia’s invasion of Ukraine.

The government increased the salary of civil servants by 30 percent following the approval of the revised D22.7 billion budget by the National Assembly Thursday.


With inflation showing no signs of abating and price pressures in transport, fuel and basic food commodities broadening day by day, economic observers are of the view that the salary increment would come at a high price in the other areas of the economy as businesspeople could capitalize on it to increase food prices.

But addressing lawmakers on these concerns Thursday, Finance minister Seedy Keita said the revised budget is non-inflationary which must not warrant consumer price increases.

“I am also the Minister of Trade and we will not allow this 30 percent salary increment to pass through the consumers or the market operators as a form of price hikes. We are aware of the factors that drive this and these have been closely studied and the global prices for some of the essential commodities like flour are coming down and we are in advanced discussions with some manufacturers to bring the price of flour down to be reflective of the international dynamics,” Minister Keita noted. “This [revised] budget we proposed is not inflationary. Effectively, we have lowered the total expenditure by 1 billion dalasi and that is disinflationary and we are aware of it,” Keita added. He claimed that the government recently conducted a general review in the sub-region and realised that apart from the CFA zone where inflation is shorter because the CFA currency is linked to the Euro, Gambia has the lowest inflation.

“I will inform this august assembly that inflation is not only caused by domestic factors. It also has import driven factors due to our exchange rate. The US, the UK are dealing with the highest inflation in 40 years and we don’t expect ours to be any better,” the minister charged.

He also informed lawmakers that the prominent constraints facing the country’s economic climate are “revenue mobilisation and debt service.

“The current level of debt to GDP is 85 percent. This is very alarming. In the whole of Africa revenue to GDP is 16.7 percent but in Gambia it is only 11 percent. That means we are pulling below the weight of the African continent in terms of mobilising resources by 42 percent. Assuming we add that 42 percent to our GDP, we will not be talking about these things today. That is why our first course of action is to establish a new directorate that will be tasked to strengthen revenue and tax collection,” he said.