Gambia Govt’s high debt burden impedes other development endeavours

The Gambia government’s high domestic debt burden, which continues to rise by the day and interest payment of which consumes more than 22% of the public revenues, is crowding out other public expenditures as there is no space to increase funding for employment creation, purchase drug for the hospitals, and other pressing national needs.

Mrs Songwe

“The debt dynamics today are dragging down in the economy and cold undermine growth in the future,” the World Bank regional director for The Gambia, Senegal, Cape Verde, Guinea Bissau, and Mauritania, Vera Songwe, has said.

Speaking at the recently ended (12 – 13 July) resource mobilization and investment for the Programme for Accelerated Growth and Employment (PAGE), Mrs Songwe said The Gambia’s debt has increased from 61.7 per cent in 2009 to 68.4 per cent in 2011.  Interest payments on debt are 22.5 per cent of public revenues. The World Bank director observed that if this trend continues, the government will have to forgo necessary infrastructure investments in energy and road construction.

Apart from reducing government’s power to channels fund to other areas, the high domestic borrowing is also pushing up interest rates and denying the private sector of the much needed fund for investment to generate employment.

World Bank approves $6m grant for Gambia to ‘provide urgently needed assistance’

World Bank Board of Executive Directors has approved US$6 million for The Gambia in grant financing by the International Development Association (IDA) that will provide urgently needed assistance to address 2011 - 2012 national crop failure in the country.

 

According to a statement from the World Bank’s Dakar Office, the funds is part of Gambia First Economic Governance and Reform Grant and the first in a series of two such Development Policy Grants covering 2012 to 2013.

The initiative will support the implementation of the country's Programme for Accelerated Growth and Employment (PAGE), which aims at improving the living conditions of the Gambian population by implementing cross-cutting reforms to diversify the economy and thereby reduce its vulnerability to external shocks.

“The full impact of the lower-than-expected harvest in The Gambia is now becoming apparent,” says Vera Songwe, World Bank Country Director for Gambia, Senegal, Cape Verde, Guinea Bissau and Mauritania.              

CROSS-BORDER TRADE BARRIERS CAUSE AFRICA TO LOSE BILLIONS – World Bank report

A new World Bank report has revealed that African countries are losing out billions of dollars in potential trade earnings every year because of high trade barriers with neighboring countries.

A news release from the World Bank on Tuesday announcing the publication of the 191-page report entitled “De-Fragmenting Africa: Deepening Regional Trade Integration in Goods and Services” states that it is easier for Africa countries to trade with the rest of the world than among themselves. 

The report is published at a time when African leaders are calling for a continental free trade area by 2017 to boost trade within the continent. 

Barriers to intra-Africa trade include trade permits, export taxes, import licenses, and bans, all of which are persistent.

According to the new report, regional fragmentation could become even more costly for the continent as World Bank forecasts suggest that economic slowdown in the Eurozone could cut off Africa’s growth by up to 1.3 percentage points this year.