21st Century Economic Challenges for The Gambia
With the Dawn of a new millennium, the most important
challenge for the Gambian people is poverty reduction.
Being a largely agrarian and rural based economy, the most
vulnerable live in the rural areas. The poverty statistics
on the Gambia, makes dismal reading and is low by
international standards. Much more needs to be done to
drastically reduce this scrounge called poverty.
Let us pause for a moment and give some sobering
reflections of what and where we want to see the economy
develop in the next 25-year, 50-years and next century.
What legacy do we want to leave for the next generation of
Gambians yet unborn. Many analysts have indicted that some
of the economic and political problems of African countries
are self-inflicted arising from mismanagement and the
implementation of a particular economic dogma that does not
augur well with the economic realities of our countries.
There are numerous and myriad of problems that need to be
addressed. Such as inadequate health care and education,
lack of physical infrastructure and capital. The direction
the economy takes will be fundamentally determined by
domestic political and economic decisions.
The economic history of the Gambia since independence is
quite short. There are lessons of experience which we can
learn from in this short brief period and make sure that
the error (past and present) are in no way repeated.
A Perspective
As the economy emerged from colonial rule, an urgent need
was felt for economic self-reliance having won the fight
for independence as part of our overt political efforts at
nation building and political stability. An urgent need was
felt to broaden the production base and alter the pattern
of (under) development.
Faced with the overriding concerns of improving the well
being of our people, including raising income, improving
the levels of health care and nutrition, providing adequate
housing and assuring satisfactory living conditions for the
whole population. With the benefits of hindsight, one major
problem in the development strategy was the inadequate
support and development of agriculture, which could have
provided the resources for industrialisation. This sector
was not only neglected but was severely impoverished by the
continual drainage of financial, human and physical
resources. The pauperisation of agriculture deepened
poverty of the rural masses, producing a multiplier effect
on the rest of the economy.
The Key Areas of Intervention
As noted by the president of the ADB in the poverty summit
in Gabon recently who said “In all efforts aimed at
achieving rapid economic growth and the reduction of
poverty, it is evident that African countries will need to
shoulder the primary responsibility for formulating and
implementing the required strategies and policies”. The
onus is on African leadership, Gambian leadership to revive
the economy and reduce poverty with of course the
assistance of our development partners.
The key areas of intervention to reduce the reduce povery
by 50% by the year 2025 are:
Population growth
Given the small land size and as has been recognised by the
government, it is imperative that population growth is
controlled. Gambia has one of the highest population growth
rates in Africa. At the present growth rate, our population
is projected to double within the next 30 to 40 years. High
population growth not only adversely affect food supplies,
but also creates constraints on savings and human
development. Rapid population growth depresses savings per
capita and retards growth of physical capital per labour.
Increasing amounts of public expenditures must be provided
to create new social infrastructure for a larger population
rather than directly providing productive assets. This is
essentially why rapid population growth is a cause of
poverty. One can therefore easily recognise the beneficial
effects of declining fertility and consider the inclusion
of policies of family planning as an important and integral
part of the development planning process of the Gambia.
Controlling population demographics by empowering women.
The education of girls is key to solving poverty.
Throughout the world a shift from high to low fertility
rates has often accompanied economic and social
modernisation. Gambia has a very high fertility rate and
the sooner this is brought under control the better it is
for the economy in reducing poverty. It is said that the
education of parents is usually found to be one of the most
important factors explaining fertility change. There have
been various reasons put forward to explain why education
of parents may influence population growth. First education
is likely to have a negative impact on exposure. It
increases the age at marriage either because marriage is
delayed during schooling and subsequent employment or
because it takes educated people more time to find suitable
spouses. As a result, better-educated women start giving
birth at a later age than less educated women. This is why
everything feasibly possible should be done to encourage
our young girls to go to school. Second education lowers
the regulation cost of fertility control by changing
attitudes towards contraception and enhancing the ability
to understand and make effective use of fertility control
methods.
Economic policy
Strikingly enough, the best phase of our economic
development was the period immediately following
independence. The mismanagement and mistakes started with
the implementation of the five-year development plans
(first and second five-year development plans). It was
during this period that an opportunity to development the
economy was missed and wnet begging. Projects failed,
misuse of public fund was rife and there was complacency in
economic management. To compound this problem, and the
shortages of basic commodities that the economy was
experiencing in the early 1980s, we had no choice but to
adopt IMF structural economic adjustment programs to reduce
macroeconomic instability, remove economic distortions,
manage external debt, promote growth of exports and restore
sustainable economic growth. The implicit assumption is
that the additional foreign loans can restore investment
and economic growth. Since the foreign loans had to be
subsequently repaid with export earning, it meant that a
greater proportion of export revenue had to be used to
service our foreign debts, with very little being available
for investment and economic growth.
In the absence of significant investment to help diversify
the narrow economic base and expand export oriented
activities, the economy will continue to be always
vulnerable.
Fighting corruption
Our short economic history is replete with pervasive
corruption. In recognition of government corruption,
economists have been studying the effects of corruption (E.
Banfield, 1975), focusing on the principal-agent model of
corruption. This model focuses on the relationship between
the principal, i.e. the top level of government, and the
agent, i.e. an official who takes the bribes from the
private individual. These studies examine ways of
motivating the agent to be honest ranging from efficiency
to indoctrination. But why are government officials
corrupt. In countries like the United States, a citizen can
get a passport without paying a bribe, yet in African
countries, numerous bureaucrats need to be bribed and
bribing one bureaucrat does not guarantee that some other
bureaucrat does not demand another bribe. (Shleiffer and
Vishney). Bribery is possible because government officials
have the opportunity to restrict the quantity of the good
that is sold. (passports, building permits, import taxes
ect, ect). As Shleifer and Vishny explains, corrupt
officials go unpunished because their bosses often share in
the proceeds and because public pressure to stop corruption
in most countries is weak. To arrest and minimise this
situation and promote honesty, there should be an effective
policing mechanism to monitor the actions of government, an
independent audit free from political interference, as
(corruption) can be costly to economic development.
The goal of sustainable development should be practical and
not rhetorical. The development needs of the present should
not compromise the ability of future generation to meet
their needs. There should be growing awareness that
economic growth need not be in conflict with the natural
environment. Attention needs to be paid in economic and
public policy decisions to the goal of conserving and
enhancing the natural resource base and in using technology
in ways that value not only increased output but also
consider their impact on the environment, (Rio earth
Summit).
Finally if I was to gaze through the crystal ball and make
a wish for the Gambia, I would say the emphasis should be
on – COMPETENCE, GOOD GOVERNANCE, POLITICAL PLURALITY
HONESTY and RULE OF LAW.
In the interest of our nation.
Basil Jones
References
Amoateng, K., and B. Amoako-Adu, (1996), “Economic growth,
export and external debt causality: the case of African
countries,” Applied Economics.
Banfield, E., (1975). “Corruption as a feature of
government organisation, “ Journal of law and Economics.
Cornia, G.A. and G.K. Hellenier,(eds) (1993), “From
adjustment to development in Africa: Conflict, Controversy,
Convergence and Consensus?,”
Hadjimicheal et al. IMF Occasional Paper 100, “ Structural
Adjustment in a small open economy- Gambia”
Kabbaj, Omar, (2000), “Growth and poverty reduction: An
agenda for Africa at the dawn of the third millinniem”
ABD,Libreville Gabon
Panopoulou, G and P. Tsakloglou, (1999), “Fertility and
economic development: Theoretical considerations and
cross-country evidence, “ Applied Economics
Shleifer, A., and W. Vishny, “Corruption” Quarterly
Journal of Economics.
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