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Momodou
Denmark
11723 Posts |
 Posted - 27 Feb 2007 : 13:31:36
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OPINION
WHO APPROVES THE PRGF, GAMBIA GOV'T OR IMF?
By Suwaibou Touray
The caption caught my eye in the observer Newspaper which kept me laughing for a second. It is a wrong caption meant only to confuse us the readers. The caption is "IMF Approves Gambia's PRGF." The meaning of PRGF (Poverty Reduction Growth Facility) is very technical. One may be tempted to translate it to mean that a facility meant to reduce poverty for the Gambia is growing.
I dare argue that the IMF infact does not approve the programme. The fact of the matter is that it is the IMF which initiated the programme in the first place and convinced the Gambia to accept it, not the other way round.
The PRGF is conditionality on the Gambia because the Gambia is a highly indebted poor country. The APRC Government depended on loans upon loans thinking that it is loans which can develop a country. It is investment in the productive sectors of the economy that can create development not loans.
Loans not invested in production only goes to make a nation more and more indebted.
The Gambia was supposed to have reached the "completion point" since 2002 but did not. If it had reached the completion point, we could have benefited from a debt relief package amounting to about 66.6 million dollars or 1832 million dalasi. This package includes an interim relief in the form of debt service reduction by our creditors such as IDA, IMF and the African Development Bank.
But we did not attain the completion point because of what are termed as "slippages arising from a combination of so called exogenous stocks, fiscal out turns and accommodating monetary policy etc. What does this mean? It simply means that the Gambia Government could not manage the economy to reduce expenditure and raise revenue to be able to settle what was due to be paid to our creditors as stipulated in the conditions so as to attain the completion point. So in essence, we have failed to get the debt relief which could have earned us D1832 million dalasi.
Again what it means is that we have started from square one: and that is, the IMF is again saying to us try and get to completion point and benefit from debt relief. Again we are saying "the IMF has approved PRGF. The PRGF will never be done so long as the conditions for it are not met. It is like saying, hey! You owe me D1000 but if you can pay D500 to me by 10days from now, I will be willing to relieve you of 10% of the loan which you can also use to buy a plate of rice. What about if you did not pay D500 in 10 days it means you have also lost the 10%.
So will there be any jubilation in it if I should again tell you that I still accept to give you 10% if you should pay me D500 out of my D1000. Any sane person would not jubilate for such an arrangement.
According to the promise of SOS for Finance Mr. Gaye, after the implementation of a staff monitored programme, a conditionality imposed by the IMF between October 2005 to March 2006, the way has been paved for the restoration of PRGF from January 2007. He also promised that they will attain the completion point established by the IMF by mid year.
So it is clear. The attainment of the completion point is what will enable the Gambia to obtain the debt relief. The reason why I laughed when I saw the observer caption" IMF approves Gambia's PRGF" is because of my observation that it is aimed precisely to give us false hope. The PRGF is what the IMF promised. The caption should have read "The Gambia accepts IMF conditionality" not the other way round.
There is no escaping from it. This country has been reduced to a heavily indebted poor country. The Secretary of State infact confirmed this. According to him, the Gambia is a low income country with heavy need for continuous borrowing in order to meet the Millennium Development Goals (MDGs) which he said is a great challenge.
According to him, the result indicates that, with the full delivery of both HIPC and MDRI relief, the Gambia is deemed to be in debt stress.
I am definitely frightened by the SoS's utterance when he said "The Gambia is a low income country with heavy need for continuous borrowing in order to meet the Millennium Development Goals."
Is this not frightening? You are poor and heavily indebted at the same time conditioned to pay certain amounts at certain period or be refused loans which gives you stress. But again you are saying despite all that I need more and more loans to develop. Is that not just spiraling about in extreme poverty causing ignominious stress?
The answer is not to take more and more loans. The answer is to put programmes in place that would allow you to invest and pay loans stage by stage so as to get out of the debt trap. Then and only then would you be able to meet the target envisaged in the Millennium Development Goals which is a big challenge indeed if they are to be genuinely met.
Source: Foroyaa Newspaper Burning Issue
Issue No. 023/2007, 26-27 February 2007
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