Wuli East Member Says
By: Kebba AF Touray
The National Assembly Member for Wuli East, Hon. Suwaibou Touray, said The Gambia is disturbed by debt distress.
He made this statement at the National Assembly on Monday, 11th December 2023.
Touray said he is opposed to increasing consultation fees at health centres and public hospitals across the country, adding such a move will pose a big burden on the poor, who will end up resorting to non-scientific methods of cure.
Hon. Touray was reacting to the budget speech delivered by the Minister of Finance and Economic Affairs on Friday 8th December 2023, at the Legislative House in Banjul.
“What is also disturbing this country is the high debt distress, and it is my opinion that merely increasing taxes can be counter-productive and can aggravate poverty and even slow down growth. Taxation is not bad, but if we want it to work, we must be transparent and convince the people that their tax money will benefit them from projects initiated by the Government,” he said.
He proposed the need for Government to inform the people about how the country is implementing their tax money and even publish a medium-term revenue strategy about how these funds are being used. He added since the nation has such a huge budgetary deficit, convincing people that taxes money are been used for specific projects, will certainly help in improving the trust and confidence of the people.He however said that caution must be taken not to paralyse the masses in governments efforts to finding new sources of revenue.
According to Hon. Touray, many countries are eliminating certain taxes and going in for production, thus recommending that the country should go digital and introduce e-filing systems, and decrease the time spent on preparing and filing taxes.
“We have a mining or extractive sector and we have to insist on transparency in that sector. Funnily enough, not much has been said by the Minister on that score and looking at the estimates, not much has been accrued by that sector. It is looking like a dead sector. What is happening in Sanyang, Bato Kunku and Kartong mines? Hon. Touray asked. He said the Minister has provided a lot of reasons on why the economy is faltering even though he said the economy has displayed remarkable resilience in the face of global economic challenges that threatened to slowdown gradual recovery from the COVID-19 pandemic. He said the Minister highlighted that headwinds include the lingering effects of the COVID-19 pandemic; spill-over effects of the Russia-Ukraine War, and the growing impacts of climate change and adverse weather events, leading to disruptions in global supply chains, with high volatility in global financial markets and high inflationary pressures fuelled by rising food and energy prices. He added the tightening of global financial conditions and the increasing cost of capital and debt service, are partly responsible for the faltering economy. That while they can agree with him about the causes, the Minister needs to focus much attention on what the country needs to do internally,in order to lift itself from her current stagnant state of affairs.
“Let us focus on reducing corruption in all its facets such as favouritism in handing over or supporting businesses of relatives, friends, etc,” Hon. Touray said. He suggested the need for the country to look out for diversions of aid money meant for the country, to foreign bank accounts. He noted this proposal seeks to ensure these monies are not susceptible to theft.
“Trade can contribute immensely to economic growth as it increases the amount of goods and services that we sell to other countries,” he said. Hon Touray commented that trade can improve productivity of a country’s work force because if the country is selling goods, it is also developing skills and increasing products of varying types or varieties of goods.
“We are aware that China is fighting to feed itself, and they also need clothes, grain, meat, cotton and so forth. Why can’t we explore this area so as to increase trade? We have groundnut but we are not able to transform it into finish products to be able to maximise profits,” he said. He cited China as the world’s largest economy and said they are interested in not only oil, but also in bauxite, chrome and other minerals.
“So why don’t we explore to ensure that we discover what we have in our country? That is how we create wealth in order to cater for the needs of our people,’’ he said. Looking at the budget speech, he said exports grew significantly to US$215.8 million in the nine months of 2023, from US$44.1 million in the same period in 2022. That the main export items for this period edible fruits, fish, cashew and groundnutsthat were destined mainly for India, China, UK, and Turkey as the emerging markets of the world, and said they must be fully targeted because it is where the future is. Hon. Touray said it is now getting clear that the country’s dependence on loans and grants will not generate economic growth for a poor indebted country like the Gambia.
“It is about time that we look up to other African countries that have graduated from aid dependency like Botswana, South Africa and Rwanda, for an easy way out. And let no one tell you that if we do so we will suffer,” he challenged. He reminded his colleagues that the Finance Minister said estimates and expenditures of the 2024 Budget are anchored on reduction of the overall fiscal deficit including the gradual reduction of net-domestic borrowing as a percentage of GDP, over the medium term. This he said connotes that his solution to the economic crisis is precisely to do the above and reduce the overall deficit as well as the gradual reduction of net-domestic borrowing as a percentage to GDP. He therefore said that as NAMs, they should focus on the promise to ensure a gradual reduction of domestic borrowing and a reduction in deficit. Notwithstanding, he said tighter global financial conditions in response to multi-decade highs in global inflation rates is adversely affecting the country’s macroeconomic fundamentals which in turn generates foreign exchange shortages that weighs in on Forex reserves and exert pressure on the Dalasi. That to aggravate the situation, the balance of payments was negatively affected by high food and fuel import bills; disruptions of the cashew nut trade and elevated freight costs.
“Added to high global food and energy prices, strong domestic demand has strengthened inflationary pressures in the country with inflation reaching record-high levels of 18.5 percent year-on-year up to September 2023. But this has reduced to 18.05 percent in October 2023,” he said. He underscored that the macroeconomic environment makes fiscal policy management and consolidation efforts more difficult as the Central Bank of the Gambia increases its policy rate to curb inflationary pressures. He explained that when the Central bank raises interest rates, it is the economy that slows down, because the cost of borrowing increases; That those taking loans will have to pay higher interest rates which in turn makes the purchase of goods and services more expensive.
“So it is my position that raising interest rates by the CBG may somehow reduce the speed of inflation, but it may also lure investors to invest in treasury bills to allow government to borrow more money domestically,” he said.
On domestic resource mobilization, Hon. Touray challenged Government to accept that what the country needs is to increase investment by at least 5% percent or higher of GNP, and preferably in the productive sector. He said this can appear difficult but it will be rewarding. He concluded by hailing the Finance Minister for what he described as an informative statement on the state of play of the Gambian economy.
