Rédaction Africa Links 24 with Mr. Gaye TheVoice
Published on 2024-03-12 10:23:05
Dr. Ousman Gajigo recently analyzed the press release from the Monetary Policy Committee (MPC) of the Central Bank regarding the Gambian economy. The press release attempted to paint a positive picture of the economy, but Dr. Gajigo highlighted the stark reality that contradicts this narrative.
The Gambian economy, according to the MPC, was described as “resilient.” However, Dr. Gajigo argued that this characterization is far from accurate. The country’s GDP growth rate of 5.2% in 2023 may seem impressive on the surface, but when broken down on a per capita level, it equates to a mere 2.3%. This indicates a lack of substantial growth that is essential for the country to progress to a higher income category.
The vulnerability of the Gambian economy stems from the agriculture and tourism sectors, which are prone to shocks such as droughts and decreases in tourist arrivals. The lack of investment in irrigation infrastructure exacerbates the dependency on rainfall for agriculture, leading to significant economic setbacks during dry spells. Dr. Gajigo criticized the government for failing to prioritize agricultural infrastructure development, relying heavily on donor-funded projects with short-term sustainability.
Similarly, the tourism sector in The Gambia lacks diversification and innovation, relying on basic attractions such as proximity to Europe and affordable travel. This makes the sector easily replaceable by other countries with similar offerings, leaving it vulnerable to shocks and fluctuations in tourist numbers. Dr. Gajigo emphasized the need for unique, sustainable attractions that can extend the tourism season and differentiate The Gambia from its competitors.
The issue of international reserves was also scrutinized, with the MPC highlighting that The Gambia has reserves to cover 5 months of imports. However, Dr. Gajigo revealed that this reserve level was inflated due to an IMF special drawing rights allocation, which was not a result of government policy. The country’s widening trade deficit, driven primarily by the agricultural sector, poses a significant threat to international reserves, as imports exceed exports.
Remittances from Gambian nationals abroad have been a consistent source of international reserves, but these inflows are not influenced by government policies. Factors under the government’s control, such as trade deficits and import facilitation, have actually decreased international reserves over time. Dr. Gajigo urged readers to critically assess the government’s narrative presented in the MPC’s press release and consider the underlying realities of the Gambian economy.
In conclusion, Dr. Gajigo’s analysis sheds light on the structural challenges and vulnerabilities plaguing the Gambian economy, calling for strategic investments, diversification, and sustainable development policies to drive long-term growth and resilience. The discrepancies between the government’s narrative and the actual economic conditions highlight the need for honest assessment and proactive measures to address key issues hindering the country’s progress.
Read the original article on The Voice Gambia
