There is a lot of wisdom behind the famous saying that economists kill more people than doctors. And in the case of our current situation, our finance Minister, who could at best be described as a ‘mbojo mbojo’ economist and at worst, an economic hitman; the impact of his macro-fiscal misadventures will surely kill far more people than the potential effect of any medical malpractice.
From his first supplementary appropriation bill, to his disingenuous hiking of personnel emoluments by an unprecedented 50 percent, Mambury Niies has sent thousands of people out of work and ruined dozens of families because of his fiscal malpractices, motivated by politics.
Just when I thought that the Finance Minister’s malevolent explosion of excise taxes on Banjul Breweries, that led to the closure of that company, was bad enough, he comes up with a budget with a deficit of more than D7 billion. And a quantum jump (more than 50%, year-on-year) in domestic borrowing to finance that deficit.
This budget also relies heavily on donor support, and that is dangerous. Given the circumstances, if our programme with the IMF is adversely affected, the promised budget support of our development partners may not come and the deficit could further widen to close to D10 billion. The inevitable consequences of such a possible scenario will be devastating to our economy.
Contrary to his stated premise “build forward better” for the 2021 budget, a more fitting mantra is “borrow forward for politics”.
How in the world, could our Finance Minister present such a budget to our National Assembly, just after the same Minister declared such a grim situation regarding our national debt. To quote from his own official statement on the current estimates being debated at the Assembly:
“As articulated by the recently concluded Debt Sustainability Analysis (DSA), conducted by the Ministry of Finance and Economic Affairs and the International Monetary Fund (IMF), the Gambia remains in debt distress as its current debt levels become unsustainable. Prudent fiscal measures therefore need to be taken by the Government to ensure that debt levels are reduced to sustainable levels.”
The Barrow Administration is desperate to win the hearts of voters for the 2021 election and they do not care about the level of damage such election spending binge is going to create for our macroeconomic framework. This budget is a major departure from our more prudent approach to development finance. As stated by the Finance Minister himself “unlike previous periods, when Government would primarily finance road projects through development partners, most of the Road infrastructure projects being implemented through the 2021 budget will be financed from Government (GLF) coffers.”
The question Gambians should ask this government is “why now?” To have wasted golden opportunities for major development support from a willing global donor community, only to spring into action in an election year, is a clear indication of the actual intentions of this government.
The Barrow administration knows quite well that if they would have to pursue the pledges made by donors at their famous donor conference held in Brussels, it would take a period way beyond this election year for the pledged funds to be realised and development projects rolled out. That is why they are not making any serious efforts to try to access these funds. They would rather wreck our domestic economy through reckless borrowing and dubious procurement processes to make sure they present some form of infrastructural development baits to our desperate electorate in 2021.
Barrow and his Finance Minister are taking this approach for obvious reasons. If they access funds from our donors, not only would they have to wait for several levels of due diligence; they would not be able to hand over these projects to their compromised contractors because of the strict procurement rules that would come with international development finance.
With the current proposals before the National Assembly, Team Barrow would be able to kickstart these projects immediately; get their kickbacks from contractors as well as save themselves the embarrassment of having to face contractors who already paid their bribe money into the accounts of key government officials but were not given a single contract so far. The Hakalang road project comes to mind in this case. If our National Assembly decides to approve funds for these projects, then they must be very vigilant in terms of monitoring of procurement and implementation processes.
Our National Assembly Members have been doing quite a good job in making noise about the excesses of the Barrow Administration. Now it is time to take ACTION. We have had enough of the ‘toastmasters’ effect with nice soundbites making the rounds on social media. It is now time to show Barrow and his economic hitmen that we mean business.
Our Finance Minister has decided to increase his revenue projections and at the same time created an unprecedented budget deficit in our COVID-battered global economy.
Our National Assembly members should slash this budget or reject it. This is the only way to ensure macroeconomic sanity in this upcoming election year. In the chambers of a visibly compromised National Assembly Authority, we need God’s blessings for any serious alteration to be made regarding the 2021 Budget. May Allah guide our representatives “towards the common good”.
By Momodou Sabally
Former research economist and National Budget Director, Momodou Sabally has undergone extensive professional training in macroeconomics and public financial management at the IMF Institute, the Central Bank of England’s Center for Central Banking Studies, Harvard University’s John F. Kennedy School of Government and holds a masters degree in Economics from Georgia State University in the US.
