Observer Editorial

August 9, 2002

Saving the Dalasi
The current downwards pressure on the Dalasi is indeed a cause for concern
to all Gambians. Our currency is depreciating rapidly against all the
international currencies, moreso the CFA and the Pound Sterling. This has
led to the expected rise in prices of basic goods such as soap, sugar and
luxuries.
The depreciation of the dalasi is due mainly to the fact that Gambia imports
far more than it exports. Our economy is so import oriented that even salt,
matches, and ordinary foodstuff are brought from abroad. Such importation
puts a severe strain on our foreign exchange reserve and affect the forex
markets negatively. Secondly, it was reported last week in the Gambia Daily
that speculators believed to be from Senegal bring in a lot of Euros, which
they change to dalasis and then to the CFA Franc and harvest hefty profits.
It is said that for every 1000 euros brought into the country by these
undesirable speculators, they realise a profit of D9,000.00.
This is daylight robbery.
The currency speculators are strangling our dalasi and sabotaging our
economy.
The free fall of the dalasi in the past few months is so alarming that
something as sinister as the work of speculators must be in the works.
We recognise the tremendous effort of the Central Bank to monitor and
regularise the forex market by requiring the street corner money changers to
register and set up shop.
However, such effort will not bear fruit in the face of money speculators.
No stone should remain unturned in order to bring back the glory and lustre
of our dear Dalasi. All the efforts of government to attract more investors,
join the WAMU and fight poverty will come to nought if the dalasi goes
deeper down the pit of depreciation and engender hyper-inflation.
Of course, we must add that the best buoy for the dalasi will be an
increased export base, especially in fisheries, peanuts and also increased
tourist arrivals. If Gambians really love their dalasi, they should strive
to need less dollars to import luxuries and look for local substitutes.
We suggest that our investors set up small import substitution industries
such that we will be able to save our foreign exchange for more pressing
needs like medicine.
Government can also help by hastening the production (directly or in
conjunction with the private sector) of staple food items such as rice,
potatoes, poultry and even edible oil, all of which are partially or wholly
currently being imported, but which can actually be cultivated and or
produced



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