Shares of a new sub-regional reinsurance company, WAICA Reinsurance Corporation, formed by the West African Insurance Companies Association (WAICA), are up for sale at one dollar per share.
A delegation of the Corporation was recently in The Gambia, as part of the ‘equity road show’ of the institution to its member countries, to have meetings with potential investors, including individuals, companies and governments, to raise the initial capital of an institution conceptualised thirty years ago by the founding fathers of WAICA.
In The Gambia, the delegation held meetings with top officials of the Central Bank of The Gambia, the Gambia Chamber of Commerce and Industry as well as officials of the insurance industry.
During the meeting with insurance officials, attended by managing directors and other senior managers of all the insurance companies in the country on Thursday at the Kairaba Beach Hotel, the chief executive officer of WAICA Re, Abiola Ekundayo, said the reinsurance corporation will provide the much-needed reinsurance capacity for the sub-region.
Mr Ekundayo said the objective of the ‘equity road show’ was to raise the initial capital to kick-start the operation of the corporation. “Our authorised capital is US$100 million but we need to have US$25 million to start operations as according to the law of Sierra Leone, where the head office is located, you must pay 25% of the authorised capital before you start operations; that is why we are embarking on this activity to raise funds from individuals, institutions as well as governments of member countries of WAICA.”
The shares of the association are up for sale until 29 July 2011. It is expected that within this period the association will be able to raise the initial amount needed to commence operations.
WAICA Re, recently launched by the President of Sierra Leone, Ernest Bai Koroma, is out to fill the gap of reinsurance in West Africa so that reasonable proportions of reinsurance premiums that have been flying out of the sub-region to reinsurance companies in the West will be retained for investment. WAICA Re will provide its clients with comprehensive insurance, reinsurance, financial and business services of the highest quality and value.
Mr Ekundayo explained that there are many insurance companies in the sub-region but there are inadequate reinsurance companies to carry the risks that these insurance companies carry.
He said the sub-region needs a reinsurance company that has the capacity and ability to carry the risks that the insurance companies carry. “That is why WAICA Re was established,” he said.
As the CEO of WAICA Re, Mr Ekundayo said his vision is to build formidable sub-regional reinsurance company of international standard that can favourably compete with other notable global reinsurers.
It is estimated that the reinsurance premiums paid by West Africa insurance companies to overseas reinsurance companies amounted to US$65 million in 2009.
The future is bright for WAICA Re as the development of the oil and gas sectors in Ghana and Sierra Leone provides tremendous growth opportunities.
For his part, William B. Coker, secretary general of WAICA, formed by the five English-speaking countries of West Africa in 1973, said the sub-regional reinsurance company is enjoying diplomatic status in Sierra Leone, where it is hosted. “Enjoying diplomatic status means WAICA Re is not going to pay tax and you all know if an institution doesn’t pay tax it has higher profit and it’s from this profit that dividends of shareholders are paid,” he said.
“The higher the profit, the higher the dividends and obviously the institution will make higher profit because it will not be paying tax.”
Mr Coker told insurance officials that should any individual or institution invest in WAICA Re, the commercial arm of WAICA, “you will not regret it as you will make profit more than investing in any ordinary business ventures”.
Dawda Sarge, president of the Insurance Association of The Gambia, who is also the managing director of Prime Insurance Company Limited, said the occasion was very “unique and auspicious”.
He called on the insurance practitioners and all other potential investors to respond appropriately, by buying the shares of WAICA Re, to make the venture a successful one. “Our commitment must be backed with some action to make it move,” he said.
Senor Thomas, managing director of International Insurance Company Gambia Ltd, also urged her colleagues to support WAICA Re, saying “it is our own organization” as it’s a worthwhile venture. “Honestly I think we need to support the institution as we are all going to benefit from it,” said Madam Thomas, who is a member in the ten-member board of WAICA Re.
Pa Alieu Sillah, Commissioner of Insurance at the Central Bank of The Gambia, said WAICA Re has come at a very important time, especially at a time when the sub-region is working towards closer economic integration. “It is also an opportunity for the sub-region to prove that we believe in insurance because it is through that the insurance industry will develop,” he said.
Babou Cisse, a doyen of insurance and one of the founding fathers of WAICA who initiated the formation of WAICA Re thirty years ago, thanked the current executive of WAICA for making the dream that he and his colleagues decades ago had, come to pass.
He also emphasised the importance of reinsurance in the sub-region, calling on all and sundry to throw their weight behind the insurance industry in Africa.
At the end of the forum, the CEO of WAICA Re told this reporter that “already some insurance companies in The Gambia have pledged their support for WAICA Re in terms of money; that is raising the capital as well as giving business to the corporation”.
Monday, June 20, 2011
The National Assembly on Wednesday ratified a grant financing agreement amounting to SDR4, 600, 000 [equivalent to US$12million] that was given to the Gambia government by the International Development Association for the financing of the West Africa Agricultural Productivity Program (WAAPP)-The Gambia project under the first phase of the WAAPP.
Tabling the grant financing agreement before the National Assembly for ratification, Mamburay Njie, the Minister of Finance and Economic Affairs, said the objective of the WAAP project is to generate and accelerate adaption of improved development of technology in participating countries for the enhancement of agricultural productivity. He explained that the project focus areas are in alignment with the sub-regional agricultural commodities priorities as outlined in the EOWAS agricultural programmes.
Minister Njie said the project constitutes part of the first phase of the programme and consists of enabling conditions of the sub-regional cooperation in generation, dissemination and adaption of agricultural technologies; strengthening of the research system in the region as well as funding of the demand and driving technological generation through provision of research plan and project coordination and management, monitoring and evaluation.
Shortly after presenting the motion, Hon. Njie Darboe, the National Assembly member for Jarra Central moved the motion, and was supported by Hon. Borry Colley of Foni Jarrol.
Wednesday, June 15, 2011
The Central Bank of The Gambia has expressed concern about the emergence of countries such as China and India as new credit sources to Low Income Countries (LICs), like The Gambia, saying it has “raised new risks and challenges” to the borrowing countries.
China and India are becoming the major creditors for most of the Low Income Countries, including those in the sub-Saharan Africa, as the financial crisis have limited the ability of the financing sources like the World Bank and International Monetary Fund, to give loan.
The Governor of Central Bank of The Gambia, Mr Amadou Colley, while acknowledging the “opportunities” presented by these creditors, said if the borrowing process is not properly articulated, planned and executed, debt can quickly become sustainable and problematic.
Governor Colley made this statement at the opening ceremony of a-five day training on medium term debt strategy for English speaking West African countries organized by West African Institute for Finance and Economic Management (WAIFEM) in collaboration with the World Bank and International Monetary Fund.
The training, underway at Kairaba Beach Hotel, is aimed at providing participants with the requisite skills for developing a comprehensive debt management strategy, which aims at strengthening capacity in the methodology of medium term debt strategy.
The MTDS, developed by the World Bank and IMF, provides a framework for formulating and implementing a debt management strategy for a country. The MTDS tool primarily focuses on determining the appropriate composition of the debt portfolio, taking into account macroeconomic indicators and market environment.
“Maintenance of debt at sustainable level while achieving growth is one of the most critical issues of overarching importance to public financial management in developing countries,” Central Bank Governor said, adding: “Debt management has grown in complexity in recent times as the scarcity of concessionary financing has caused many developing countries to increasingly turn to commercial sources of credit.”
While emphasizing that borrowing process have to be properly articulated, Governor Colley explained that in the past many countries got into debt difficulties and debt overhang as a result of inappropriate borrowing strategies including on the terms and structure of new debt.
Prof Akpan H. Ekpo, director general of WAIFEM, said developing countries face various policy, institutional, and operational challenges due to weak management capacity and lack of efficient debt markets.
In a statement read on his behalf by Baba Y Musa of WAIFEM, Prof Ekpo said the MTDS is a fiscal management tool that a country can use to evaluate its debt financing option given the dynamics of its macroeconomic situation.
He said the MDTS can help a sovereign country to avoid “expensive mistakes” through evaluation of the cost-risk trade off. “That is to say it identify the optimal way to meet the government financing requirement at least cost with prudent degree of risk or risk measurement,” he explained.
He said the tool can also help a country to consider a range of alternate debt management strategies and assess the performance of the strategies on the basis of cost and risk to enable it to identify preferred strategy.
Eriko Togo, senior economist at the World Bank, said debt management cannot be treated in isolation, saying “it’s about transparency and accountability to the public”.
Christian Mulder of the IMF expresses his optimism about Africa noting that institutions in the continent are developing and technology is also improving.
“While there is a long way to travel, we need to keep building these institutions, to develop skills of personnel to make sound and critical decisions without mistakes,” he said.
The workshop combines lectures and hands-on exercise using a spreadsheet analytical tool to illustrate how a medium-term debt management strategy can be developed, taking into account a country’s macroeconomic constraints and the market environment.
Monday, June 13, 2011
|The revolution in the financial industry of The Gambia in recent years has augured well for the national economy and arguably business transactions, but the competition in the banking industry has left commercial banks in the country rocking the boat of bad debts due to unprecedented rate of loans and advances given out to customers.|
Commercial banks in The Gambia are grappling with bad debts more than ever before as their loans and advances portfolio continue to swell while increasing sums of monies given out as loans to customers continue to remain as bad debts, which are debts not likely to be paid, giving rise to banks losing millions of dalasis in profits.
The situation of FIBank, which by the end of last year published a long list of bad debtors owing the bank tens of millions of dalasis, is a case in point.
The International Commercial Bank of The Gambia also threatened to publish its list of bad debtors last year, due to huge sums of money or loans that are not likely to be paid by the debtors.
Impeccable sources in the banking industry have also revealed to Gambia News Online that banks such as Sky Bank Limited are contemplating publishing names of loan defaulters.
The wave of bad debts in the financial industry is also sensed in the air as banks and non-banking financial institutions continue to drag their clients to court to settle huge sums of money owed to them, some leading to the confiscation of landed properties of defaulting customers.
Trust Bank Gambia Limited and Standard Chartered Bank Gambia Limited are also struggling with controlling their loan portfolios. While Trust Bank is concerned that non-performing loans has been increasing and requires some checks, Standard Chartered Bank (SCB) is fighting tooth and nail to clean up its balance sheet of loan impairment.
“The Wholesale Banking business [of SCB] saw an increase in its loans and advances portfolio, but this was offset by a decline in the Consumer Banking loan and advances portfolio, resulting in a marginal decline of 2 per cent in the Bank’s loan and advances portfolio,” said SCB Executive Director for Finance, Richard Ahulu.
In the same vein, Trust Bank Board Chairman Ken Ofori-Atta cried out: “The loan books of Banks have consequently shown unprecedented levels of impairment and requires an urgent need for balance sheets to be cleaned up.”
The incidence of loan default is greater and intensive than even the competition, as a risk to the banking system, Sky Bank Managing Director Akim Yusuf said in an interview with Gambia News Online.
“At the end of the day banks would also have to make provisions from their profits, which will also eventually reduce bank profitability,” Mr Yusuf noted, saying: “So it is a greater risk than even the competition between banks. It can affect the overall macroeconomic policy of the government, because it reduces bank capacity to lend to the real sectors of the economy.”
According to the IMF mid-2010 report, while the increased number of banks in The Gambia helped to fuel a deepening of financial intermediation, it has also heralded intense competition among the banks in the country in a small market of 1.7 million people, which makes banks vulnerable to bad debts.
“As a result of the competition for instance,” Mr. Ofori-Atta observes, “there has been increased lending in both the public and private sectors, which unfortunately led to increased risks and Non-Performing Loans (NPLs) to the banking system.”
The intense competition has also resulted in a sharp rise in the cost of deposits and staff remuneration, noted the Trust Bank board chairman, who says “all of these have combined to amplify the pressure on banks’ earnings”.
Total earnings for the banking sector as a whole was negative in 2009, provision for loan losses increased and the level of non-performing loans also increased, according to Ofori-Atta.
“Although the capital adequacy ratio of 19% indicated the banking sector was still adequately capitalised, this still represented a massive drop from the preceding years and the aggregate percent masked a wide dispersion across banks,” he added.
The Central Bank of The Gambia is, however, applauded by the banks for “taking steps to mitigate emerging risks in the industry”, such as the introduction of the Credit Reference Bureau, to place checks and control on loan seekers and debtors across banks.
“We expect that with all of these policy measures [by the Central Bank of The Gambia], banks in The Gambia should be much healthier,” Mr. Atta said.
| Stakeholders from both the private and the public sectors had converged on Tuesday to commence the formation of National Export Strategy for the Gambia, which is aimed to improve the international competitiveness of the country leading to enhanced export performance.|
Pic: Naffie Barry, Perm. Sec., Min. of Trade, Regional Integration and Employment
Organized by Gambia Investment and Export Promotion Agency (GIEPA), the three-day national retreat, held at the Kairaba Beach Hotel in Senegambia, is to develop a framework for the Gambia national export strategy by reviewing existing national and sectoral studies and reports.
The development of an export strategy is crucial for the development of the Gambia’s economy. This is so because it guides the expansion of the production capacity and production base of an economy in efforts to meet domestic and foreign demand for both goods and services. This, in the process, creates employment, improves standards of living and contributes to growth in gross domestic product; all of which ensures economic growth and development.
Naffie Barry, permanent secretary, Ministry of Trade, Regional Integration and Employment, said the government has committed, through its Vision 2020 blueprint, to one day render the Gambia a net exporter nation.
The Gambia is a net importer as merchandise export of the country in 2008 totaled to $14 million while import total to a whooping sum of $329 million in the same period and the situation has not improved so much of recent. Gambia has experienced both balance of trade deficit as well as balance of payment deficit over various years.
PS Barry said: “The government is committed to the achievement of Vision 2020 being led by the private sector and it is for this reason that the government is doing all possible to provide the conducive environment for the private sector to lead in that vein.
“The development of a national export strategy is a reflection of the creation of such conducive environment as it is private businesses that would drive the exports of this nation.”
Fatou Jallow, chief executive officer of Gambia Investment and Export Promotion Agency, said her agency is the implementing agency of the national export strategy, the first ever national export strategy for the country. The financial support of the strategy is provided by the Commonwealth Secretariat.
However, the success of the export strategy, as any other strategy, lies in its implementation. Unless a strategy is implemented, its remains just a piece of paper.
GIEPA CEO recalled that a taskforce was set up in January this year, comprising different stakeholders from the private and public sectors for the development of the export strategy, which will play a crucial role for the development of the country and the realization of Vision 2020.
She explained that the export strategy will lead to an increase in production to meet domestic demands as well exporting the surplus.
For an economy with a population of under two million people and a Gross Domestic Product of around one billion dollars (in nominal terms), it is only prudent that the country explore market avenues that would ensure prosperity and growth within the sub-region and beyond. The market and population size limits of the country limit the chances of the country in achieving the growth rates envisaged under Vision 2020, to render The Gambia middle income country.
The Gambia’s population of less than two million with less than 30% of that population constitution the purchasing power base of the economy necessarily dictates that the country look at expanding effective demand elsewhere outside of The Gambia. This is underlining reason why the Gambia must consciously develop an export strategy to guarantee its sustained growth by first producing enough for its market with the excess output and service destined for international markets and bringing with it ample foreign exchange to finance trade and economic expansion.
The Gambia is among the new wave of Sub-Saharan African economies experimenting with the concept of a National Export Strategy. Countries such as Malawi, Nigeria, Sierra Leone, Ghana have completed the development of their national export strategies and some have done so only recently.
The European Union vice president announced canceling some planned budget support to Gambia government three months after United Kingdom cut aid to the country.
Pic: Catherine Ashton, EU VP
Catherine Ashton said, the move is motivated by EU’s commitment to making sure Gambia government adheres to good governance, respects human rights and step up means to tackle corruption.
She made this revelation recently while addressing concerns raised by Jean Lambert, a Green Party Member of European Parliament (MEP) for London on measures being taken by EU to encourage Gambia government to respect human rights and fight against corruption.
European Union is a major development partner to Gambia, intervening in various sectors of development. It also offers budget support to Gambia.
For instance, in 2005 EU agreed to support Gambia’s National Transport Plan with an initial amount of €44M. And in January 2011, an additional €28M was injected into the financing of this transport plan, which seeks to improve the country’s road network.
An expert who prefers to be anonymous says, the canceling of planned budget support will affect Gambia’s economy, which relies heavily on support from development partners, such as EU.
Earlier in March this year, United Kingdom had also announced cutting aid to 16 developing countries, including Gambia amid undesired results.
Some analyst attribute British cutting of aid to unnecessary expenditure of scarce resources by President Jammeh when poverty remains high.
“It is quite evident that unless President Jammeh makes an immediate halt to his extravagant lifestyle and minimises the unnecessary expenditure that has now become the familiar hallmark of the regime, The Gambia will soon be on the road to become a yet another failed stat,” says Demba Ali Jawo, a veteran Gambian journalist.
Meanwhile, EU vice president said, the latest consultation between EU and Gambia government took place in Banjul in April 2011 and discussions focused on human rights, democracy and governance, drugs, regional stability and economic development.
“The Gambian side made a certain number of timid openings regarding freedom for political parties to hold public rallies and independent investigation into two murder and disappearances cases. This now needs to be monitored,” Madam Catherine Ashton said.
She said, for now, EU has cancelled some planned budget support to Gambia government.
According to her, the European Commission is now re-programming its aid, including a governance project, which will address access to justice, media and public finance management.
“A second trance of this project in 2012 may encompass criminal justice (drugs and traffic in human beings), and a specific support of United Nations High Commissioner for Huamn Rights programme in The Gambia including reinforcing of The Gambia National Human Rights Commission,” Catherine said.
Mr Alieu Badara Ceesay, the Campaign Officer of Campaign for Human Rights in The Gambia (CHRG- UK) described the move as important since Gambian authorities appears to be shying away from giving the true picture of the situation in the country.
The International Monetary Fund has expressed concerned over The Gambia’s “heavy debt burden” most of which use to take large stock of the country’s outstanding treasury bills. In 2010, interest on debt consumed about 20 percent of government revenues.
However, the IMF mission failed to disclose the amount owed by government.
The total fiscal deficit of The Gambia for 2011 is estimated at D466.36 million representing about 2 per cent of GDP. This is expected to be financed by foreign and domestic borrowing amounting to D833.82 million and D120 million respectively.
A statement issued by David Dunn, IMF mission chief for The Gambia indicates that the IMF “welcomes the President’s leadership on addressing the debt problem.”
Mr Dunn issued this statement at the end of the IMF mission visit to The Gambia, from May 18–31, 2011. The IMF mission was in the country to initiate negotiations on a policy framework that could be supported by a new three-year arrangement under the IMF’s Extended Credit Facility (ECF).
“We support the intention of the Government to curb its borrowing needs beginning in 2011, with the goal of achieving near-zero domestic borrowing by 2014,” the mission said. “This will require a gradual, but steady fiscal adjustment, including a reversal of the decline in government revenues in recent years and firm restraint on spending.”
The IMF mission chief to the Gambia said: “We welcome the recently introduced cash-budgeting approach to contain monthly expenditures, which should assist in reducing the government’s net domestic borrowing to about 2 percent of GDP in the current year. This should help to ease pressure on interest rates, generate fiscal savings, and avoid the crowding out of credit to the private sector.”
The IMF said the new ECF arrangement will support the government’s forthcoming Programme for Accelerated Growth and Employment (PAGE). Financing of the PAGE will pose a significant challenge in light of the country’s already heavy debt burden.
In addition to seeking development partner support for the PAGE, the IMF said, we welcome the authorities’ aim to embark on a program of private sector participation in critical areas of infrastructure investment, including telecommunications and electricity generation.
To build broad support for the PAGE, the IMF team encourages the authorities to further engage civil society, the donor community, and other stakeholders in the final formulation of the strategy.
The Gambian economy continues to perform well, coming off another strong year for agriculture, particularly in rice and groundnut production. Tourism, however, has remained suppressed, owing to lingering effects of the economic slowdown in key European markets, but is expected to pick up later in the year.
Overall, gross domestic product (GDP) is projected to grow by about 5½ percent in real terms in 2011, while annual inflation would remain moderately elevated at about 6 percent, reflecting food and fuel price pressures.
IMF said the longer-term economic outlook is generally positive.
The IMF team will return to The Gambia later in the year to conduct discussions on surveillance issues and medium-term policy options, such as tax reform aimed at reducing rates and broadening the base. Program discussions could be concluded by early 2012.”
The World Food Programme Representative in The Gambia has observed that it will be difficult for The Gambia to attain food-sufficiency under the country’s current state of food production, which is based on rain-fed agriculture.
Gambian farmers heavily rely on rainfall for crop production and the pattern of rain is now becoming more and more erratic due to the climate change phenomenon.
Speaking to this reporter at his office at the UN House in Cape Point, Bakau, Malcolm Duthie said that for the country to be able to feed itself “we have to move from rain-fed agriculture to irrigated agriculture so that we can have all-year-round crop production”.
The country can feed herself sooner than later when this method of food production is operationalised, the acting-UN Resident Coordinator said.
The development of irrigation would provide the basis to develop a productive, sustainable and diversified agriculture, to achieve the desired food self-sufficiency and the development of a rice-based export-oriented agriculture, and to increase the foreign exchange earning capacity of the country.
To put the rice situation in The Gambia in its proper perspective, there is a need to appreciate that available data which indicate that there is sufficient land to expand production to the level required for the attainment of self-sufficiency.
However, because of the predominantly subsistence rain-fed production system, increased rice production and productivity has been severely constrained by the vagaries of the climate.
Rain-fed agriculture is more and more risky now because of the consistent late onset of the rains, sometimes a decline in rainfall in the middle of the season, an early end to the season or end-of-season drought, increased variability in annual rainfall, and increased frequency of intensive rainfall and runoff, resulting in severe floods.
The Gambia imports most of her food requirements, particularly grains, and produces not more than 20% of its rice requirement, which makes it very vulnerable to rise in prices and reduction in supplies from the international market as the country depends heavily on importation.
“There is a need to improve the country’s agricultural production,” the WFP Country Representative said, adding that the country should promote more non-rainfall agriculture, because one of the problems in the past years has been reliance on the weather and farmers can’t do much because the weather does not corroborate some times.
He says non-rainfall agriculture means boosting irrigation, better management of agriculture and other appropriate mechanisms.
“Though the government has laid down plans to improve agriculture, unfortunately its ability to act on it fast is restricted due to resource constraints as well as getting the right technical people to do the work,” Mr Duthie said.
The farmers and more especially the private sector should be motivated to take large scale commercial farming and invest in irrigation, he advises, saying there is a need for the private sector to invest in agriculture because “the government cannot do it all”.
He said further: “People should start concentrating on dry season agriculture as the season approaches because if we rely on rainfall agriculture we will never go anywhere. So there should be more concentration on growing food crops during the dry season and this is possible when we promote irrigated farming.
“There is a very good market now for exporting food. With the prices of crops getting higher, the farmers should not only produce enough to feed The Gambia but should also produce surplus for export. Farmers need to be encouraged and to be given incentives to produce surplus of good quality produce for a ready market for export.”
Oxfam, an international non-governmental organisation working to fighting poverty and injustice, has warned that by 2030, the average cost of key crops could increase by between 120% and 180%.
During the period of soaring global food prices in 2008 and the subsequent following period of global financial crisis, The Gambia was regarded as one of the 30 most vulnerable countries to these events due to the fact that 60% of the country’s needs were imported. Its high dependency on import of staple food supplies, its population’s significant dependency on remittances and the income from tourism made the country and the households especially vulnerable.
Although the amount of crop harvested this year has surpassed that of last year, this does not mean it’s enough to feed the country, WFP’s Duthie said, adding that the increment may be as a result of increase in land mass under cultivation but not increase in yield.
“The increase in the land under cultivation may be due to the back-to-the-land call of the President, which shows that there is support for improvement on the country’s agriculture from the highest level in the country,” he noted.
Agricultural development is a broad subject; it calls for substantive boost in a lot of areas ranging from improving information on prices to the farmers, to improving ability of the farmers, producing surplus, having enough and easy access to the market, and creating avenues for farmers to have credit in advance so that they can invest in large scale and buy fertilizers and better farming implements to produce surplus.
WFP has just completed a survey in The Gambia in which it is found out that approximately 11% of the total population of the country is food insecure or vulnerable to food insecurity, Mr Duthie said.
A significantly higher proportion of food insecure or vulnerable population, well above the national average level, was found in areas that are predominantly urban.
Areas with high poverty levels are more likely to have a higher proportion of food insecure and/or vulnerable households, the WFP rep says.
However, the survey was conducted during the period of the year when food is generally more available and there are less access constraints at household level, which means the number of food insecure households may increase as the lean season approaches.
Friday, June 3, 2011
Since a renewed directive from the Gambia government was announced recently, scare has somehow engulfed a great number of GSM subscribers, who are apprehensive about giving their personal details to GSM operators to obtain SIM card.
The Gambia government has issued a directive calling on all GSM operators in the country to register the personal details of any person who wants to purchase a SIM card from them, as well as get all unregistered subscribers (more than 800,000 sim cards in use) to turn in their personal details for registration with their respective GSM operators within a limited space of time in the second quarter of this year.
Failing to adhere to this directive as soon as possible would result in getting operators’ corporate licence revoked, a statement from the government has said. The registration of SIM cards is mandatory because “it is vital to preserving the country’s security,” President Yahya Jammeh says.
Since it was announced and advertised in the newspapers, the directive has sparked fears and created mixed feelings among the country’s growing population of cell phone subscribers who now comprise users of ages as low as 10. While some subscribers have welcomed the recently enforced directive, a greater proportion of users are reluctant to come to terms with the new development, calling it a new wave of “security measures” that would expose subscribers to the strategy of playing into the hands of the powers-that-be, a situation they say may force them to forego the use of cell phones, something which will dent greatly the revenue and income of GSM companies in the country and, by extension, the revenue base of the government’s Public Utilities Regulatory Authority (PURA) as well as the livelihood of individuals and micro-enterprises directly and indirectly connected to the economies of the GSM operators.
A joint statement from the Ministry of Information and Communication Infrastructure and the Public Utilities Regulatory Authority (PURA), the body mandated to regulate the activities of GSM operators, says the SIM card registration exercise is aimed at safeguarding the general public’s welfare and security.
SIM card registration would entail recording and verifying personal details of subscribers by a GSM service provider. “Such details shall include the phone number(s), names, date of birth, gender, address, alternative telephone contacts, if available, and the number of the Identification document used [by an individual],” the statement says.
Although PURA has promised GSM companies that it would keep information on personal details of subscribers secure, confidential and un-tampered with, many subscribers are edgy about the security of their details. “It’s my right as a consumer of your service to know where you are going to store my details,” a high school teacher, Musa Njie, underscored. “Just as I am giving you money I also have the right to demand from you what method you are taking to protect me.”
According to the new executive directive, any person purchasing SIM card should presents one of the following national identification documents: biometric ID card, national ID card, national passport, voter’s card, alkalo/seyfo certificate, resident’s permit and birth certificate.
“These documents contain my personal information, my details. Where are they going to store it; Will my privacy be protected? Some of these things need to be clear to the people, because you are taking my money and on top of that you want my personal details: I am not going to give any detail until and unless the GSM companies publish their privacy statement, because as consumers we have a right to privacy,” Ousman Fajato, a researcher, said.
However, PURA’s statement assures the general public that the information collected “shall not be disclosed to any person unless as required by the law.” It also says the information shall only the used for the purpose for which the registration exercise is being undertaken.
GSM operators’ stance
Even though there are indications that the GSM companies are concerned that the rigid condition of SIM card registration may put a damper on subscriber growth that would lead to a decline in revenue, many of them are reluctant to comment on the issue. Their recent press releases in the newspapers, however, call on subscribers to fully comply with the government directive.
“This is an executive directive and I don’t have anything to say other than to comply; we have all heard the president talking about it,” Africell’s director of sales and public relations, Papa Leigh, said.
Africell has arguably the biggest share of the GSM subscriber market in The Gambia, with hundreds of thousands of its sim cards being used by unregistered subscribers across the country, a similar situation being faced with by the country’s other GSM operators such as Gamcel, Comium and QCell.
Anam Jah, QCell’s senior manager of sales and marketing, said that even though the directive is good for security reasons, “my worry is that not many people have an ID document [to be properly registered]”.
Nevertheless, in addition to their recent adverts, GSM companies have been sending text messages to customers asking for their names, addresses and ID numbers to get subscribers unaccounted for registered. Customers are expected to furnish GSM companies with the required details through special numbers designated by the various networks.
“I received a text from Africell that I should send them my names, address and ID number, I have never replied, because I don’t really know why they want my details and how secured is it going to be,” Lamin Dukureh, a businessman in Serekunda, said.
Ousman Badjie, a taxi driver, had this to say: “I have replied since the very day they sent me the text, but I fooled them because I gave them wrong details.”
A statistician who prefers to be anonymous also said: “This is to show that there bound to be lots of bad data in the data collection. So if you have good and bad data, all mixed together, do you really have data. I am trained as a statistician and I know the value of good data; any analysis you make you have to start with the collection of good data, and without such data your analysis will be completely unfounded.”
A roadside seller of SIM cards said that since the introduction of the executive directive, she hardly sells five SIM cards a day. “People are not willing to give their details when they want to buy the SIM card,” she said, adding that the directive has hampered business for them and adversely affected their livelihood.
Another challenged faced by sim card hawkers is that most of them are semi-illiterate (if at all literate a bit) and are therefore unable to register the details of people who buy sim cards from them, especially those selling in the provinces.
All these intricacies put together would greatly compound the challenge of registering SIM cards as well as affect the growth of the mobile phone market in the country, as people shy away from using SIMS cards because of the renewed directive.
While income and revenue of GSM operators and regulatory authorities would be seriously affected, the commissions and earnings directly or indirectly derived from GSM companies by individuals and businesses dealing with them would be acutely slashed.
Research has shown that SIM cards registration in most African countries now affect the exponential growth of the mobile phone market in those economies.
In West Africa, for example, Ghana, Nigeria, and Senegal are among the countries that have tried to implement a similar order but are still finding it very difficult to accomplish the objective.
The winding-up of the bilateral programme of the UK Department for International Development (DFID) does not mean the end of UK development support to The Gambia.
Bobby Stansfield, UK Department for International Development Press Officer for Africa, Aid Effectiveness, Health and Education, has said the closure of DFID Bilateral Programme “does not mark the end” of the UK’s development support to The Gambia.
The DFID press officer said the UK would continue to provide financial support to The Gambia through their “existing share of World Bank, African Development Bank, European Commission and other multilateral programming”.
Early this year, the UK announced that it plans to cut its DFID support to 16 countries, including The Gambia, and four UN agencies. "The plans to redraw the aid map will concentrate efforts on countries where U.K. aid will, pound for pound, achieve the best results in fighting poverty and building a safer world, and where Britain is in the best position to deliver results," British Secretary of State for International Development, Andrew Mitchell, said.
DFID, a programme through which UK provides development assistance to other countries on behalf of the British Government, spent £1,059,056,000 (one billion, fifty-nine million and fifty-six thousand British pounds) in The Gambia in the last five years.
Mr Mitchell said the UK will longer provide direct assistance to The Gambia; that is the UK will no longer support projects in The Gambia, as the current UK government did a multilateral and bilateral aid review which shows that the British aid to The Gambia “is not being properly spent” and that the British tax payer is not getting value for money. This means the desired results for which the British render assistance to The Gambia “are not being realised”.
The UK government said it is now focusing its assistance where it can have the greatest possible impact. Over the years, DFID has supported several projects in The Gambia. These include basic education support for poverty reduction, which is aimed at enhancing the capacity of the Ministry of Education to implement The Gambia’s poverty reduction strategy through the education sector. The amount budgeted for the latest six-year project (2005 - 2011) was £4,284,970.
Another DFID project is the Gambia Legal Capacity Building Programme, aimed at improving the impartiality, efficiency and accessibility of the Gambian legal system. The budgeted amount for this seven-year project that commenced in 2004 was £3,113,893.
DFID has also funded the Gambia Financial Governance Programme aimed at supporting the development and implementation of a coordinated public financial management reform programme, to deliver sustainable results. £2,025,475 was budgeted for this six-year project that started in 2004.
DFID also supports a project on empowering civil society organisations in The Gambia through capacity building and network linkages. This project is to provide funding to civil societies for their projects, and to improve the long-term organisational performance and financial sustainability of a range of partner organisations as well as to demonstrate the advantages of and promote collaboration among organisations. The amount budgeted for this project which started in 2006 was £1,238,794.
The Gambia support to Pro-Poor Advocacy Group (ProPAG), aimed at supporting the engagement of civil society groups and the Gambian government on the policies, plans and implementation of the poverty reduction strategy, is also funded by DFID. An amount of £443,620 was budgeted for this project that started in 2003.
Most of these projects are however still operational, DFID press officer Bobby Stansfield said, adding: “As part of the responsible exit strategy, the DFID bilateral programme has been gradually winding down to ensure sustainable outcomes for the projects where DFID has been engaged.”
DFID has been providing direct assistance to The Gambia since it was set up in 1997 and “it would be difficult to list every project DFID has supported” in The Gambia, Mr Stansfield said.
DFID’s main support goes to activities in the four main areas: Legal Capacity Building Programme - to improve the accessibility, impartiality and efficiency of the Gambian Judicial System; Education sector - to enhance the capacity of the Department of State for Education to implement The Gambia’s poverty reduction strategy in the education sector; Financial Management Programme - aimed at strengthening the public financial management in The Gambia; and Civil Society capacity building measures including monitoring of The Gambia’s poverty reduction strategy.
The UK remains the leading bilateral donor to The Gambia in terms of engagement in policy discussions – and one of the few with an office in the country.
The UK also provides a considerable amount of assistance to The Gambia through direct support for regional programmes and indirectly through its contributions to multilateral organisations, such as the EU, the World Bank and United Nations agencies.