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Momodou
Denmark
11852 Posts |
 Posted - 24 Sep 2015 : 16:06:02
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ECONOMIC SITUATION WORSENS
Foroyaa Editorial: Published on September 23, 2015
The talk of Gambia becoming an economic superpower is now becoming clear to many to be a mere joke as the economic situation of the country continues to worsen and poverty intensifies. Preliminary figures according to the IMF report shows a decline of 6.6 percent in exports (domestic exports and re-exports) in 2014 while imports rose by 10.2 percent. This will simply widen the trade deficit which stood at 8.7 billion dalasis in 2013 (domestic exports 414 million dalasis, re-exports 3.4 billion dalasis and imports 12.5 billion). Growth in GDP has declined to 0.5 percent according to official figures.
Vendors take their goods to the market but cannot find buyers. Poverty has disenabled many to meet the obligations of Tobaski. They just cannot afford to buy a ram and clothes for their families even if the prices fall. The current Tobaski sales and ram sales are a living testimony. If a vendor can sell only one or no pair of shoes in a day as some of them have said, how can he/she survive?
The economic policy of broadening the tax base to increase revenue is doing nothing more than to kill many businesses in the informal sector.
There is no other way than to develop the productive sector.
IMF WARNS OF WORSENING ECONOMIC OUTLOOK
Foroyaa: September 23, 2015
The IMF has warned that major policy slippages by the Gambia Government have led to worsening economic outlook IMF Managing Director Christine Lagarde considerably, especially since budget support from donors will not be forthcoming. It warned that the recent policy slippages are threatening near and medium term growth prospects and therefore called for strong corrective measures to address the growing macroeconomic imbalances and bring policies back on track. They recommend the restoration of the flexible exchange rate.
The remarks are contained in the following press release issued upon conclusion of its Article IV consultation with the Gambia:
PRESS RELEASE NO. 15/430
September 21, 2015
The Gambia has experienced large balance of payments and fiscal imbalances, caused by persistent policy slippages in recent years and financial difficulties in public enterprises. This was exacerbated by sizable exogenous shocks from the impact of the regional Ebola outbreak on tourism and the delayed summer rains in 2014. The authorities embarked on an economic program based on a strong 2015 budget and structural reforms, and efforts to secure donor support. The Fund supported the authorities’ efforts through a Rapid Credit Facility (RCF) disbursement in early April 2015 and a Staff-Monitored Program (SMP).
However, major policy slippages have occurred since the RCF disbursement, pushing the SMP off track and worsening the outlook considerably especially since budget support from donors will not be forthcoming. In early May 2015, the President’s office issued a directive imposing an exchange rate overvalued by more than 20 percent compared to the prevailing market rates, which the Fund staff assessed to be broadly in equilibrium. The fiscal position too has deteriorated significantly since mid-April, while inflationary pressures and T-bill rates have increased, reflecting the inconsistent macroeconomic policies. In the absence of corrective policies, The Gambia’s external viability and fiscal sustainability could be at serious risk.
Executive Board Assessment
Executive Directors noted that a cycle of exogenous shocks followed by policy slippages had led to weaker real GDP growth in The Gambia than in other countries of the region. Directors regretted that recent policy slippages have worsened an already difficult macroeconomic situation and are threatening The Gambia’s near- and medium-term growth prospects. Accordingly, they called for strong corrective measures to address the growing macroeconomic imbalances and bring policies back on track to achieve the objectives of the authorities’ economic program monitored by Fund staff. Directors agreed that bold action on a variety of fronts, including targeted structural reforms, is urgently needed to restore policy credibility, rebuild policy buffers, re-engage development partners and achieve The Gambia’s poverty alleviation goals.
Directors stressed that an ambitious and sustained fiscal adjustment is necessary to bring the fiscal situation under control. They encouraged the authorities to implement the measures in the current budget and to identify soon additional measures for a deep budget restructuring beginning in 2016.
Such an adjustment will create space for development spending while fostering macroeconomic stability and social progress over the medium term. Directors also highlighted the need to articulate a strategy to overhaul public enterprises in the energy and telecommunication sectors to stem their demand on budget resources.
Directors welcomed the Central Bank of The Gambia’s continued efforts to shore up financial stability. They commended steps underway to improve bank supervision and crisis management capacity. Directors observed that the flexible exchange rate regime had served The Gambia well, and agreed that the exchange directive currently in force to limit exchange rate flexibility should be rescinded immediately.
Directors welcomed The Gambia’s significant social gains over the past years but noted that there remains ample room to enhance inclusive growth and competitiveness. They encouraged the authorities to step up agricultural reforms and improve infrastructure in energy and transport to enhance economic diversification and resilience to shocks.
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A clear conscience fears no accusation - proverb from Sierra Leone |
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Momodou
Denmark
11852 Posts |
Posted - 24 Sep 2015 : 16:19:07
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Sidi Sanneh: IMF Staff-monitored program is off track, more bad economic news despite bailout
Tuesday, September 22, 2015
The International Monetary Fund (IMF) is reporting more bad economic news for the Gambia despite recent Rapid Credit Facility (RCF) or financial bailout extended to the cash-strapped regime of Yaya Jammeh.
In a news release announcing a recently-concluded mission to The Gambia, The Fund announced that the country continues to experience large balance of payments and fiscal imbalances.
Two reasons were cited for the deteriorating conditions of the economy, what the Fund described as persistent policy slippages in recent years and financial difficulties in public enterprises. These same reasons have been persistently cited by the Fund in previous Fund mission reports as the main reasons for the continued downward spiral of an economy that has obviously gone out of control with inflation now threatening to be a structural or endemic phenomenon. Just ask the person in the street.......
Read full story |
A clear conscience fears no accusation - proverb from Sierra Leone |
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toubab1020
12314 Posts |
Posted - 29 Sep 2015 : 15:58:12
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I wonder what a "policy slippage" is, anything to do with "attitudinal change" ? who knows.
SNIPPET: (hope you understand all that,me ? haven't got an idea all gobbledygook ,not plain English thats for certain !!)
"The release continued: “The authorities embarked on an economic programme based on a strong 2015 budget and structural reforms, and efforts to secure donor support. The Fund supported the authorities’ efforts through a Rapid Credit Facility (RCF) disbursement in early April 2015 and a Staff-Monitored Program (SMP).
“However, major policy slippages have occurred since the RCF disbursement, pushing the SMP off track and worsening the outlook considerably, especially since budget support from donors will not be forthcoming. In early May 2015, the President’s office issued a directive imposing an exchange rate overvalued by more than 20 percent compared to the prevailing market rates, which the Fund staff assessed to be broadly in equilibrium.
“The fiscal position too has deteriorated significantly since mid-April, while inflationary pressures and T-bill rates have increased, reflecting the inconsistent macroeconomic policies. In the absence of corrective policies, The Gambia’s external viability and fiscal sustainability could be at serious risk.”
http://thepoint.gm/africa/gambia/article/gambias-economy-hit-by-persistent-policy-slippages-imf-report |
"Simple is good" & I strongly dislike politics. You cannot defend the indefensible.
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Edited by - toubab1020 on 29 Sep 2015 15:59:05 |
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Karamba
United Kingdom
3820 Posts |
Posted - 03 Oct 2015 : 01:10:26
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| Gambian economy is already dead. |
Karamba |
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toubab1020
12314 Posts |
Posted - 08 Oct 2015 : 18:29:18
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FULL TEXT OF The Point Article
Thursday, October 08, 2015
The International Monetary Fund (IMF) has reiterated its advice and recommendation that the Gambia government rescinds its decision of imposing a directive on foreign exchange operations in the country.
The directive has already damaged the near-term outlook and increased vulnerabilities in the economy, it said.
This advice by the Fund was yesterday re-emphasised by the IMF country representative in The Gambia, Gaston Mpatswe, at a one-day forum held at the Kairaba Beach Hotel, organized by the Gambia Chamber of Commerce and Industry (GCCI) in collaboration with the IMF country office in Banjul.
The forum brought together members of the private sector, including banks, shipping companies, hoteliers, import and export firms, agro-businesses and other enterprises in the country.
In early May 2015, “the President’s office issued a directive imposing an exchange rate overvalued by more than 20 per cent” compared to the prevailing market rates, which the Fund staff assessed to be broadly in equilibrium.
The imposition of the exchange rate directive has “already damaged the near-term outlook and increased vulnerabilities” in the economy of the country, stated the IMF’s latest report on The Gambia after it concluded the Article IV consultation with the country on 18 September this year.
Since mid-April this year, major policy slippages have re-emerged, “worsening considerably” the economic outlook of the country, the report stated.
The directive in fixing forex rates has been counterproductive, said Mr Mpatswe while briefing members of the private sector about the IMF report and the current state of the Gambian economy.
He said the directive has also not brought about any reduction of food prices; rather it has impacted negatively on the forex market and the banking system in the country, to the benefit and expansion of the parallel market.
Furthermore, he noted, international or external budget support had not been forthcoming as a result of the policy slippages over the recent months and year.
He also said the fiscal position too has deteriorated significantly since mid-April, while inflationary pressures and T-bill rates have increased, reflecting the inconsistent macroeconomic policies.
“Furthermore, the gross international reserves’ import coverage is expected to remain below three months until end-2015 even with strong near-term corrective policy actions,” he quoted the IMF report stating, adding that The Gambia’s eroded policy buffers have significantly increased its vulnerability.
“In the event that the directive is not immediately rescinded and the fiscal slippages are left unaddressed, The Gambia’s external viability and fiscal sustainability will be put at grave risk,” the IMF report presented by Mr Mpatswe stated.
In the absence of urgent corrective action, he further noted, the social progress made in recent years would also be “under threat”.
“It is crucial that the recent exchange rate directive is rescinded immediately, and The Gambia returns to a flexible exchange rate policy,” he advised.
The findings and observations on the impacts of the policy directive on forex by the IMF report, as presented by its representative in The Gambia, were largely substantiated by many members of the private sector, who also challenged some aspects of the report.
Some members of the private sector explained how the volume of forex going through the formal system has “dropped significantly”, as well as affected both national and international transactions since the directive was issued.
The IMF report’s position as regards the forex situation in the country is that the recent exchange rate is “rescinded immediately” and The Gambia return to a “flexible exchange rate policy”.
The forum was chaired by the GCCI CEO, Alieu Secka, who stated that GCCI would continue to intensify its engagement with the government, through the Finance and Trade ministries, as well as through public sector institutions such as the Gambia Investment and Export Promotion Agency (GIEPA).
http://thepoint.gm/africa/gambia/article/imf-calls-for-uplifting-of-directive-on-forex |
"Simple is good" & I strongly dislike politics. You cannot defend the indefensible.
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ECONOMIC SITUATION WORSENS
