By Dr Assan Jallow
The center of gravity in our distress public debt seems to have shifted in favor of international advisors. The appointment of International Advisors by the current administration to advice and help negotiate on the country’s long-standing debt with the Paris Club and other development partners is like closing the barn door after the horse has bolted. It is not a bad policy-management decision by the government. It sounds like a good idea for policy to be able to respond to changing circumstances but the timing isn’t right and the cost to bear will be too high for small and resource-constraint Gambia. Invariably, action consistency and application shows that having an advisor alone doesn’t help to solve the mystery behind the perennial and magnitude of our ever-growing debt portfolio as a country. We will agree to disagree that advisors are like consultants who will borrow your watch and tells you the time.
The question is, do we want to be that country that will be told the time by the hired consultant in the name of an advisor to negotiate on our behalf for debt forgiveness under the Highly Indebted Poor Countries Initiatives (HIPCI)? What strategies would they adopt differently in handling our national debt crises? How was the Potomac Group selected and was the bidding done through the open bidding process? How much will it cost the government for the Potomac’s Group services? What happens if the group fails to secure debt forgiveness or put our debt on the plank of sustainability? These are questions we need to know as part of a broader-centric citizenship monitoring mechanism to hold our government accountable. We do not have the luxury to pay for services that were negotiated in closed-doors and won’t make any difference in our state of our economy. To be forewarned is to be forearmed.
It is important to note that there is no nation that is prune from public debt and of which developing economies are placed at the disadvantage for been at the receiving end where politics takes precedence instead of the real issues and policies. Yes, the problems abound and a country that is running a deficit in excess of 5% of GDP and a public debt of 116. 1 GDP is seriously in trouble with the likelihood of jumping off the cliff of endless economic challenges and running the risk of not likely to be granted a debt forgiveness. We have an agreement with our development partners like the IMF & WB that must be respected in managing the finances of our country, while ensuring we do not borrow beyond our limits and capacity to absorb. And, the Barrow economics must help to resuscitate the economy from the doses of stagnation, non-growth, despair, corruption, and poverty. That’s the economic model needed in this critical time of nation-building to help engineer a growing, robust, resilient and expansionary development economy to withstand both internal and external shocks.
The problems surrounding Gambia’s public debt are evidently complex and voluminous that the immediate need is for a policy environment that can push the country ahead on the curve of self-reliance. The state of health on the public debt isn’t encouraging and is beyond human imagination. To put in perspective, most of our debt constitutes 53% of the domestic stock. What this implies is that the principal part of our domestic debt is owed to local investors (financial institutions and individuals). It is heart-wrenching and worrying to hear from unconfirmed sources that our Debt-GDP has been recalculated with reports reaching out to be about 80%. No amount of GDP recalculation can address the problem of the public debt we incurred over the years when our development seems to be ignored in the face of parochial and self-serving interests of leaders and partisan politics. Our policy of response shouldn’t be built on the towers of pseudo-economics. The government has to avoid tip-toeing around the prevalent public debt distress narrative and develop a strategic policy direction within the dynamics of workable macroeconomic economic fundamentals in managing our economy and addressing the issues of debt and excessive government expenditure.
Addressing debt requires a political will form the government to prioritize its development programmes, hence meetings the needs and aspirations of the citizenry. And in this critical juncture of almost crossing the ‘Bermuda Triangle’ of exceeding the debt ceiling in our public financial resource management spectrum, we must ensure we budget within our means and enforce austerity measures. It is worthy to note that the problem of our national debt is bigger than having an advisor to turn around things unless we muster the courage and pursue austerity measures to address the seemingly intractable challenges of the over-bloated and incessant government expenditure spending. More importantly, we have Gambians with the requisite knowledge and technical competency in debt management and their knowledge and skills are desperately needed to help cushion our public debt. In the art of enforcement, once a government has decided on a course of action, it should maintain that course in order for the goals to be pursued and achieved. Hoping the government will listen and act in good faith in delivering the expected public goods in fiscal management.