Posted - 10 May 2013 : 22:39:56
1. THE WRITINGS ON THE ECONOMY ARE ON THE WALLS
"Human Rights does Matter in Economics
Over the years the value of the dalasi was supported not only by balance of payment support of the IMF but by the huge support given by donors and the NGO community which came in the form of foreign exchange. Suffice it to say that the re-export trade and the informal economy run by non Gambians and Gambians alike has enabled the country to serve as a transit point for foreign currency. Grants and NGO support do add value to the dalasi by making foreign exchange available.
However, if there is foreign exchange scarcity in the face of demand for more foreign exchange for imports and other cash transfers outside of the Gambia, the value of the dalasi is bound to depreciate. In short, according to the Press Release from the Central Bank the amount of foreign currency traded in the first quarter of 2013 amounted to 440.2 Million Dollars or 14.1 billion dalasi.
The Press release added that, in the first quarter of 2013 revenue and grants amounted to D1.5 billion (4.6 percent of GDP) compared to D1.9 billion (5.9 percent of GDP) in the same period in 2012.
The question now arises, what is responsible for the drop? The answer is simple. The drop has to come from the grants. Why? The Central Bank report indicated that domestic revenue is 200 Million higher than the earnings of the same period last year.
Hence if the sum mentioned represents revenue and grants, if the revenue appreciates and the total sum depreciates relative to the same period last year, the drop is attributable to the grant.
There is no doubt that if the human rights situation does not improve grants may continue to depreciate and deficits would lead to more domestic borrowing and taxation would lead to the scraping of the back of the companies and employees thus leading to the slowing down of the flow of foreign direct investment and flight of capital to tax havens.
In short, while revenue and grants for the first quarter of 2013 is put at 1.5 billion, expenditure and net lending amounted to D1.9 billion leaving an overall fiscal deficit including grants, of D330.4 million (1.0 percent of GDP) in the first three months of 2013.
This deficit has to be met by domestic borrowing. Hence, as at end-March 2013, the domestic debt increased to D11.3 billion (33.1 percent of GDP), or by 15.5 percent from March 2012.
We therefore recommend
for a speedy release of Imam Baba Leigh,
the pardoning of all those tried for false information charges for writing to the President,
review the tax system,
opening up of a dialogue with Jesse Jackson on electoral reform,
the establishment of a human rights commission and commitment to respect and promote human rights.
This is the way to rebuild confidence in the Gambian Economy."
Written by: Ousman Njie
SOURCE: FOROYAA NEWS: PUBLISHED ON FRIDAY 10 MAY, 2013 BASED ON THE NEWS CENTRAL BANK MONETARY COMMITTEE EXPLAINS AND RELATED TO NEWS UNDER 2. & 3 (BELOW);
2. THE POINT NEWS;
3. DAILY OBSERVER NEWS;
4. RELATED BANTABA TOPICS;
Edited by - kobo on 11 May 2013 04:02:30