Musa Gibriel Bala Gaye, Secretary of State for Finance and Economic Affairs has revealed that The Gambia is a low income country with heavy need for continuous borrowing in order to meet the Millennium Development Goals (MDG’s) which, he said, is a great challenge.

SoS Bala Gaye made these remarks on Monday, during the opening of an 11- day workshop, jointly organised by the West African Institute for Financial and Economic Management (WAIFEM), Debt Relief International (DRI) and The Gambia Government.

The aim of the workshop was to review and update The Gambia Debt Strategy document, which was prepared in 2000, identify creditors or donors in line with best practices in new financial for GPRS II, and the attainment of MDGs and sensitize senior government official on debt and new financing strategy issues. “The assessment for The Gambia bears eloquent testimony for the imperative of debt relief. Results indicate that, with the full delivery of both HIPC and MDRI relief, The Gambia is deemed to be in debt distress.

Against the indicative thresholds of 30% for NPV of debt-to-GDP in 2005, The Gambia recorded 83.5%, with regard to export criteria with indicative threshold of 100%, The Gambia recorded 312.3%. In that same year, the debt service ratio hit 21.1%, compared with the indicative threshold of 15%”, he added.

In his keynote address SoS Gibriel Bala-Gaye, said the workshop could not have been more relevant and timely, coming as it does, when The Gambia is on the threshold of reaching completion point under the Heavily Indebted Poor Countries (HIPC), initiative with the associated debt relief. In this regard, he said the country has just commenced implementing the Poverty Reduction and Growth Facility (PRGF) with a view to sustaining the credible track record it has demonstrated over the years.

SoS Bala-Gaye pointed out that another major challenge that looms heavily in the horizon is the burgeoning domestic debt burden.” Let me assure you that government has been making strenuous efforts to reduce the burden.
Nonetheless, the domestic debt stock has trended upwards sharply after an initial decline recorded in 2001. In particular, the debt stock fell from GMD4, 179million in 2000 to GMD2, 352 million in 2002.

Thereafter, a rising trend has marked the growth path of domestic debt: from GMD3, 590 million in 2004, debt stock increase to GMD4, 389 million in 2005,”he said.

SOS Bala-Gaye also outlined that the stance of the government has initiated the PRSP II to foster the development of the growth-enhancing programmes. The central goal of the new policy, he said, is to accelerate the growth of the economy so that The Gambia can achieve the MDGs and the national blue- print development Vision 2020.

“The vision includes such far reaching measures as debt policy and the establishment of the central project management and aid coordination directorate within the Department of State for Finance and Economic Affairs and Computerization of public accounts, through the integrated Financial Management Information System (IFMIS) for competent and transparent management of public debt. The aim is to administer aid and debt in line with economic, social and political priorities as established in the PRSP without compromising the country’s ability to pay”, he said.

In delivering the welcoming remarks, Dr Chris O Itsede, Director-General of WAIFEM said debt strategy analysis (DSA) is a fiscal management tool that country can use to evaluate its debt financing options, given the dynamics of its macroeconomic situation.

He added that the aim of the workshop is to assist The Gambia to reassess the amount of HIPC relief committed at the decision-point in 2000 vis-a vis, its long-term debt outlook and the impact of possible exogenous shocks on the situation at the completion point expected in the next two months.
He further stated that the reassessment will take fully into account, the impact of interim debt relief already provided, debt relief eligence at completion point under the Enhanced HIPC Initiative debt relief needed beyond the HIPC initiative committed under the Multilateral Debt Relief Initiative, and other official bilateral creditors, such as the Blair Commission for Africa Millennium Challenge Account (MCA).