Foroyaa Newspaper
Issue No. 76/2003

Editorial
Operation No Compromise
The Facts and The Myths
President Jammeh claims that the basic reason for the rise in the prices of
commodities is the speculation on the dalasi and artificial price fixing by
people he referred to as vampires.
The president threatened that by last Thursday (October 2nd) he would deal
with the problem of foreign currency.
On Friday, the Secretary of State for Trade, Industry and Employment
indicated that the exchange rate of the dollar had gone down. He claimed
that this had proven the president right that speculators artificially
create the depreciation of the value of the dalasi.
In our view, the APRC government has a very simplistic understanding of the
nature of the economic problems of The Gambia. The president seems to be
surrounded with too many informers and very few technical experts on the
economy.
Anybody who follows the stock markets of the world would notice that any
incident could lead to a rise or fall of the stocks. This is due to the fact
that investors are human beings. They invest and take part in trade when
they have confidence. They withdraw or hold back when they lack confidence.
It is clear to those who are not even economists that the demand for foreign
exchange and the scramble to buy and sell it is what leads to the
depreciation of the dalasi. Those who can afford to buy it at a higher rate
end up dictating the exchange rate. The only way to control the depreciation
of the dalasi is to increase the supply of foreign exchange above the
demand.
President Jammeh however wishes to defy the reality and control the market
through “operation no compromise”. Now they are announcing that he is
successful. What he has succeeded in doing is to stifle demand through force
by suppressing the competition for the buying and selling of foreign
currency in the non banking market for trading in foreign currency.
In fact, NIA officials have been posted where foreign currency used to be
traded.
How then can government announce that the depreciation of the dalasi has
been halted? What could be said is that the official bank rate is reduced.
This however has to be followed over a period to determine trends. What is
clear is that while people can go to the banks to sell currency few can buy
foreign currency from the banks. Some banks are buying the dollar at 33
dalasi while others are buying it at 36 dalasi.
There is absolutely no doubt that if the banks cannot provide the informal
sector with foreign exchange an underground market will grow that will
intensify the depreciation of the dalasi. All Gambians want a strengthened
dalasi and lower prices so that people can buy food and cement to build
houses. However, this cannot be achieved through economic adventurism.
Take the butchers in Brikama, for example. On Thursday, they were forced to
sell meat and bone at D35 and steak at D40 per kilo. The butchers claimed
that they bought the meat at D54 per kilo. On Friday, they suspended selling
meat. If the government fails to do what FOROYAA suggests by stopping the
economic adventurism and proceed to scientific study and objective action
there will be scarcity of both foreign exchange and goods. This can lead to
the flight of businesses. Pretentiousness paves the way to anarchy in
economic management.


Letter to the President & Others
On Waa’s Remand in Custody
Below, we publish a letter written by Halifa Sallah to the President and the
Secretaries of State for Justice and the Interior.
A government without principles cannot be trusted. A government with
principles acts without fear or favour, affection or ill will, in accordance
with the constitution and laws of a country.
Mr President, a few days ago your newly appointed Secretaries of State swore
to carry out their duties in accordance with the constitution and other laws
of the country.
Section 19 of the constitution states categorically that a person should not
be detained for more than 72 hours without being taken before a court. The
leader of NDAM was arrested in connection with a newspaper article published
by The Independent. He was in police custody from Tuesday, September 30,
2003 to Friday, October 3, 2003.
It was expected that he would be released on bail pending court action.
Instead, he was escorted to Mile Two Prisons in gross contravention of the
dictates of the constitution.
A regime based on impunity would be insensitive to the dictates of the law.
It would seek to punish before the law takes its due course. It would pass
judgment on individuals on the basis of perceived threats.
A truly secure and democratic regime cannot be pushed to honour the law with
total disregard because of ill will. It would recognise that in the exercise
of authority of government one must come into contact with those who are
opposed to one’s mandate. They would try to say and do what would remove one
from office.
Such people may exercise their rights to the point of being suspected of
violating the law. If that happens, the courts should be left to determine
whether one’s actions have exceeded the bounds of what is considered
reasonable and justifiable in a democratic society.
The executive is too politically bias to assume the responsibility to
determine the innocence or guilt of its opponents. If one has a fascist
executive it could even torture and kill its opponents. This is why the
courts are given the responsibility to determine innocence or guilt.
When justice is allowed to take its natural course no allegation of impunity
will be levied on a government. I must emphasize again that no sovereign
Gambian possesses the personal or divine power to rule the country with
impunity. Power that is entrusted should be exercised in a just and fair
manner in order to earn respect.
It is hoped that this letter will alert your mind and that of the Secretary
of State for the Interior to exercise direction and control on how cases are
handled according to the dictates of law, conscience and justice.
While anticipating a swift and just response
I remain
Yours in the Service of the Nation
Halifa Sallah
October 4th 2003



Edward’s Meeting With Business Community Absolves Foroyaa

In an interview with Halifa Sallah on President Jammeh’s remarks during the
swearing in of SoS Ceesay and SoS Bala Gaye, he said that there is need to
address the economic problems of the country but that President Jammeh’s
type of economic adventurism will only make matters worse. He called for
action to be preceded by research.
When SoS Singhateh asked the business community to diagnose the situation,
Hatib Janneh the proprietor of Jimpex said that the issue was too complex to
diagnose without setting up a committee to do a comprehensive review. SoS
Singhateh initially said that the matter needed to be settled there and
then. However, after a diagnosis he also concluded that a committee was
needed to study the problem as quickly as possible.
Even though President Jammeh claims that some of us have no credentials as
economists, we now proceed to advance a series of articles that all his
economic advisors will corroborate. The ultimate objective is to prove that
President Jammeh is on a mistaken path and the security forces have been
misdirected to engage in an economic wreckage programme passing off as
“Operation no Compromise.” We will offer better options to economic
adventurism.  We agree with the Inspector General of the Police that the
matter is beyond party political consideration.
The Key to Understanding the Gambian Economy
First and foremost, it should be clear that the more an economy is self
reliant, the more it produces the goods and services required by the
population, the more it creates a balance between imports and exports, the
more it can stabilise prices, currencies and incomes through regulations and
control mechanism.
On the other hand, the more dependant an economy, the more it depends on
others for the supply of goods and services, the greater the intolerance
between imports and exports, revenue and expenditure, the less capable it is
to control, regulate and stabilise prices, currencies and income. This is
the tragedy of the Gambian economy which became evident since 1979 when
scarcity of foreign exchange in the formal banking system eventually led to
the low importation of essential commodities, scarcity of these commodities
and price hikes.
As the growing trading sector competes for foreign exchange they expanded
their sub-regional trading outlets relying on the CFA as a sub-regional
currency, which was then pegged and supported by the French Franc on the
basis of equal value. Instead of depending on the banking system to get
foreign exchange the traders in the Gambia expanded their trading links in
the sub-region and received payments in CFA.
The lower tariffs enabled the businesses in the Gambia to provide lower
prices to consumers in the sub-region. Smugglers under the guise of
religious sects and other developing routes through porous borders expanded
the trade outlets of the country. Gambia also benefited from the economies
of scale when groundnut prices were higher in the Gambia. Many Senegalese
farmers in the border area would cross the frontiers and sell their nuts.
Unable to utilise the dalasi in Senegal they often buy goods is the Gambia
to take it to Senegal. This strengthened the Gambian currency. On the other
hand when the prices of the crops are better in Senegal Gambian
           Farmers sold their crops in Senegal and brought the CFA to the
Gambia, which they could utilise to purchase goods in the Gambia and this
enabled the Gambian businesspersons to get foreign exchange. Hence Gambia
was gaining from both sides. It was the Senegalese economy, which was losing
from both sides since purchasing was being done in the Gambia to the
detriment of the Senegalese industries. The volume of CFA hoarded by Gambian
businesspersons became so much that the Senegalese regime wanted an economic
and monetary union to address the problem. When this could not be realised
the Senegalese government utilised the devaluation of the CFA and border
restrictions to contain the businesspersons in the Gambia.  These
restrictions were short lived as Gambia started to benefit from another
economics of scale when trouble in our sub-region and economic migration
sent Nigerians, Ghanaians, Sierra Leoneans, Liberians, Bissau Guineans,
Conakry Guineans and other nationalities to the Gambia. They sent CFA home
as the dalasi also became a sub-regional currency as people accepted it in
Nigeria, SierraLeone, etc. since they could send it to relatives in the
Gambia. Those who migrated to the Gambia brought their skills or wealth.
They became consumers and therefore expanded the volume of business
transactions. The fact that Prsident Jammeh knows very little about
economics and his economic advisers have failed to do a thorough study of
the economic realities of the country made them to make very unintellectual
like remarks regarding the CFA and the presence of foreigners in the
country. The problem of the Gambian economy is neither the CFA nor the
foreigners. The problem is the lack of building of the economy towards self
reliance. We need short term measures to minimize the disequilibrium in the
economy and the hardship of the people. We also need long term measures to
stabilize prices, the currency and income. Let us now proceed to examine the
true state of our current economic problems and then recommend the measures
that are necessary for any patriotic government to adopt.

The True State of The Gambian Economy

              The Gambian economy has ceased to depend largely on
agriculture to enhance national income because of the failure to diversify
and increase farmers’ income to ensure greater investment. Consequently,
agriculture contributes between 22 and 25 percent of gross domestic product
(GDP). Tourism contributes between 10 and 16 percent of GDP depending on the
reports relied on. The service sector comprises 70.6 percent of GDP. While
the trading sector which is a component of the service sector contributes 39
percent of GDP, industry contributes only 11 percent of GDP. The Gambian
traders are not relying on Gambian goods to trade. They import from other
countries and re-export what is imported to neighbouring countries. In this
way, they earn CFA and other foreign currencies. There is nothing wrong in
selling and earning foreign exchange form other countries. What needs to be
done is to encourage a part of such earnings to be invested in the
production of local goods and services for export and for local consumption
in order to reduce dependency on foreign products and generate employment.
It is now necessary to find out what has gone wrong with our economy to
cause the depreciation of the dalasi, price rises and reduction of income.
See next issue for Part II.

Foroyaa Newspaper
Issue Number 77/ 2003
9th. October, 2003

EDITORIAL
“Operation No Compromise” breeds chaos and national discord.
Those who govern are sitting idly by while the nation sinks into economic
chaos.  Every poor person wants lower prices.  It is the duty of the
government to find out why prices are high and find a solution that will not
lead to the scarcity of goods or conflict between consumers and market
women.
The President’s claim that the price increases are deliberate actions to
create economic difficulties has led to the intervention of the security
forces and vigilante groups to force butchers, bakers and market women to
reduce prices.  For example in Tallinding Sicap Market, a vigilante group
appeared to tell the women that they must sell Palm Oil at D3 per cup.  The
women claimed that they bought the barrel at 7000 Dalasis; that if they sell
the palm oil at D3 per cup they would end up with 3,000 dalasis plus.  This
would make them incur a deficit of 3000 dalasis plus.  They were also asked
to sell oil at D2 per cup.  It is also claimed that a basket of bonga is
bought at the price of 300 dalasis while they are now being asked to sell
bonga at a price of one dalasi each.  The market women argued that if the
government really wants to control prices it would have to force the
suppliers to reduce prices and then go down to regulate it at the retail
level.
Butchers are being arrested throughout the country for selling meat and bone
above 40 Dalasis and steak at 45 Dalasis per kilo.  Many butchers complain
that they get bulls from people and sell them to repay their loan.  It is
now becoming clear that many butchers are middlemen who take bulls from
people only to sell them and repay their loans.  It is very clear that many
small-scale enterprises are now going underground, causing poverty and
tension to increase.
The words of the wise say: - “If one does not know where one is going one
should go back to where one comes from”.  The Jammeh regime has lost
direction.  It is now covering up its failures by showing the seed of
national discord.  Foroyaa calls on the people to replace national discord
with national dialogue.  Political Parties need to hold rallies and civil
society organizations symposia and community meetings to explain what is
going on in the country and map a way forward.  Gambia is too important to
be left in the hands of those who have proven their incapacity to ensure
liberty and prosperity to the people.  How can one promote security by
making non-Gambians in particular and Gambians in general feel economically
insecure?



JAMMEH TEACHING THE WRONG LESSON
Lamin Juwara’s Unlawful Detention

“When a government is insecure it can be frightened by the citing of a
‘Wolf! Wolf!’ even if no wolf is forthcoming.  This is the state of the
regime,” says Halifa Sallah.  Asked about the state of Lamin Juwara, Halifa
said that the enforcer of the law is now proving to be a breaker of the law.
  He added that he has contacted the authorities to tell them that no person
should be detained in The Gambia for more than 72 Hours without being taken
before a court or granted bail.  He said that he has put it to them that,
one cannot teach others to respect the law if the teacher is a lawbreaker.
Halifa indicated that the order to detain Juwara is from above; that he is
classified as a security detainee.  This means that he is not only charged
with an offence, but has been transformed into a political prisoner.  Halifa
argued that pressure is being intensified for the regime to respect the law
and release him or take him before a court.  He said that the issue is not
about Juwara; that it is a national issue; that it is a question of whether
a nation would allow a head of state to behave like a monarch who can order
the detention of persons with impunity.
Pointing out that the President may think that he is teaching a lesson but
it is the wrong type of lesson, said Halifa.
He emphasized that he has said over and over again that the President has no
personal divine power.  What he is teaching is that he is capable of abusing
the power of the people and utilizes it to make the security forces to
behave with impunity.  The lesson he should learn is that leaders come and
go.  They should treat others how they wish to be treated.  Juwara is a
party leader.  He should be treated with respect, he should not be sent to
prison by executive order.  This is tyranny, pure and simple, said Halifa.
He called for a public outcry against the detention.
Asked what would be done if the government fails to listen, Halifa indicated
that he has engaged in consultation with all the other political parties and
is continuing to meet religious leaders, trade unions, women organizations,
youth leaders and all those who are opinion leaders. In his consultations he
discusses the state of the country and what is necessary from both the side
of the parties for an alternative government and the existing regime to
ensure peaceful coexistence of people with different political opinions and
affiliation and how to ensure the peaceful transfer of state authority
should the masses wish to bring about change.  What to do would be certain
after such consultations.
He concluded that it is time for political parties for an alternative
government to show that we can manage crises to earn the respect of the
people.  “We will show that the liberty of the people is safer under our
humble stewardship than under a regime which does not hesitate to display
arrogance in running the affairs of the country.  We will utilize every
wrong step of the regime to prove to the Gambian people that it is unfit to
govern a civilized, dignified and sovereign people.  We shall continue to
share with the people the view that they should never despair or mystify the
regime. But they should never lose sight of their ownership of power.
Instead of being frightened by the abuse of the power they put under the
care of leaders, they should simply consider the perpetuation of the abuse
as unfit to govern, take back their power and entrust it under the care of
those who can be trusted to exercise it to enlarge their liberty and
prosperity.”
Asked what he thinks of Juwara’s statement, Halifa said that the interview
is a reported one and the matter is under investigation.  He added that
Juwara simply expressed an opinion, that he even said that other opposition
parties could be consulted.  He argued that this is enough to show that the
opinion should not be taken as a threat to state security.  Halifa said that
as far as he is concerned, the parties for an alternative government are out
to organize the people to replace the regime and would not allow themselves
to play a cat and mouse game with the regime through street protests.  The
aim is to build a force, which the regime can respect and take seriously and
which the people can have trust and confidence in.  Halifa argued that he
frankly does not think anybody who is bent on undermining state security can
be as adventurist as to declare one’s intention without preparing a force to
act should one find himself/herself in a state of confrontation with a
regime.  Halifa said that those who wish to subvert a regime would prepare
themselves in secret.  He said that the count would finally decide on the
matter.
Halifa further observed that for a state to disregard the law and try to
teach lessons by using might is best described as tyranny.  The alternate
price of tyranny is the alienation of a regime and its demise.  Halifa
cautioned the APRC regime to pay heed to what he referred to as the
irrevocable verdict of history.





PART II
THE TRUE STATE OF THE GAMBIAN ECONOMY
The attempt to control the depreciation of the dalasi and prices by security
might continues as Jammeh’s “Operation No Compromise”, go into full force.
The regime has concluded that speculators cause the depreciation of the
dalasi and it has ordered the security forces to stop the operation of the
parallel market.  It has also concluded that prices are artificially
inflated and it has instrumented for retailers to be forced to sell at
prices determined by government instruction.
Banks are selling foreign exchange to their customers and are willing to buy
foreign exchange from anyone.  The dollar is being sold at D32, the CFA at
D205, and the Euro at D36.  A bag of rice is still being sold by the Youth
Development Enterprise at D395.  The price of petrol is still nineteen 19
dalasis per litre; gas oil is fifteen 15 dalasis and kerosene 9 dalasis, oil
is being sold at 6 dalasis per cup.  A bottle of soft drinks is still seven
7 dalasis.  A bag of flour is still at D510, a bag of sugar is still at
D465.  However the security forces are bent on forcing the retailers to sell
oil, meat, vegetables at fixed prices without controlling the wholesale
prices.  The end result of the exercise is to make the small retailer
bankrupt, make the big retailer to hoard goods or withhold the purchasing of
new goods and create artificial scarcity.  This can lead to the creation of
underground markets where people buy and sell foreign currencies and goods
at higher rates.
Foroyaa has made is clear that every Gambian is concerned with the rising of
prices and the depreciation of the dalasi.  The APRC government is always
quick to accuse people of lack of patriotism for not approving its measures.
  Foroyaa wants to make it abundantly clear that it strongly sees the need
to address the crisis in the commodity and money markets but has long told
the government that such crises in the markets are a reflection of a larger
economic crisis, which the government has always denied.  The government’s
practices are the cause but the government is blaming those who are simply
finding ways and means of keeping their heads above water while the others
drown to be the cause of the drowning of the masses in a sea of  poverty.
This is a self-righteous government, which never accepts its faults.  This
is why it is now engaged in economic adventurism, which is going to create
artificial scarcity of goods, economic insecurity and the deepening of the
economic crisis.
One may now ask: What do we need to know about the crisis of the Gambian
economy, how is the government the main culprit and what is the way forward?
In part one, we have shown that the Gambian Economy is a service based
economy with services contributing approximately 65-70% of GDP, trade is
contributing as a component of the service sector about 40% of GDP,
agriculture is contributing 22-25% and Industry approximately 11%.

The Cause of the Depreciation of the Dalasi
Our agricultural and industrial sectors are very low in productivity.  The
country is exporting very little.  This is why the export earnings for 2002
stood at 417 Million.  The country is importing most of what it is
consuming.  In 2002, the country imported 2.9 Billion or 2900 Million
dalasis worth of goods.  In simple economic terms our earnings from exports
could not pay for imports.  How then does the country earn foreign exchange
to pay for imports as well as to meet International Obligations?

The Sources of Foreign Currencies
Gambia earns foreign exchange from imports. Tourism also contributes its
quota.  Of course the bulk of the foreign exchange from tourism stays with
the tour operators who share their earnings with the airlines, etc.  The
country benefits from the out of pocket allowances of tourists.  They have
been relying on hotels, foreign exchange bureaus and the parallel market to
exchange their foreign currencies. Furthermore Gambians and non-Gambians who
have relatives abroad often receive foreign currencies from them.  Infact,
with the depreciation of the dalasi many Gambians and non-Gambians have been
investing in real estate.  Land speculation has intensified, which is also
accompanied by new construction schemes.  Foreign currencies are derived
from such investments. Needless to say, Gambians are going to Angola and
other countries in search of diamonds.  Those who succeed also make
investments in the Gambia.  It is also clear that foreign currencies are
derived through the free and secret movement of goods across the boarder.
Many smugglers and businessmen do not depend on banks to get foreign
exchange.  They simply sell goods in neighbouring countries and earn foreign
exchange currencies.
Now one may ask: What gave rise to the depreciation of the Dalasi?

The Depreciation of the Dalasi
The demand for foreign currency had exceeded supply in 2002 and the Central
Bank had to intervene by selling foreign exchange in the inter bank market
to enhance the availability of foreign currency.  There is increase in
demand for foreign currency by government. In order to maintain a foreign
reserve of 1.6 billion dalasis in 2001 and 1.7 billion in 2002  government
has to have foreign exchange to repay its debts and meet its external
obligations.  This is one reason why the demand for foreign exchange exceeds
supply.  Furthermore, the business community has been creating their own
foreign exchange reserves to continue their trade without relying on the
commercial banks entirely.  This has led many of them to establish foreign
exchange bureaus or have their mobile foreign exchange dealers.  The
scramble for foreign exchange went in the favour of the big business persons
who could purchase foreign exchange at higher price and sell their good at
high prices.  It should therefore be clear that the competition for scarce
foreign exchange is what gave rise to the purchasing of the foreign exchange
at a higher rate to drive competitors into bankruptcy.
The depreciation of the dalasi also led to rise in the prices of imported
goods such as the prices of petrol, rice, sugar, flour and other essential
commodities.  As the prices of locally produced goods were pegged to them,
this led to general rises in the prices of all commodities.
How can this problem be handled?

The Way Forward
First and foremost, the government must accept its own mistakes in the
development of the present crisis.  It should pursue means to regulate the
economy that do not pit the people against each other.  How is this to be
done?
See next issue for the Conclusion.

_________________________________________________________________
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