Sierra Leone Telegraph: 30 June 2018:
The Gambia is the smallest country on mainland Africa, but the legacy of more than two decades of authoritarian rule has left its new democratically elected government with big challenges.
The Gambia’s Finance Minister, Amadou Sanneh, began the daunting task of rebuilding its devastated economy only days after his release from prison under the old regime.
Sanneh was in Washington D.C. for the 2018 IMF – World Bank Spring meetings, and IMF Country Focus sat down with him to talk about the economic impact of the former government’s isolationism.
What was the state of the economy when you stepped in as Finance Minister?
When I stepped in, in January 2017, The Gambia was a broken country. Also, bankrupt. Most of the institutions were affected by the 22 years of dictatorial rule.
Institutional processes were broken and a lot of the state-owned institutions were near bankruptcy. Every sector was damaged. (Photo: Gambia’s Finance Minister, Amadou Sanneh).
So what were your priorities?
We tried to bring sanity back into the economy. We introduced controls for fiscal management and brought in all the income streams that previously were not being used for the government.
What about debt?
The debt we inherited was 120 percent of GDP. So, this is a big challenge for us. We’ve tried to reduce the level of borrowing and to restructure the debt, especially domestic debt. We are reducing the short-term debt by issuing three five-year bonds, which were successfully subscribed.
And, on the international debt, we had been invited to discussions with the Paris Club. So, they’re working on a way to see how they can assist The Gambia in restructuring or obtaining relief from our creditors.
So you have a compelling story. Tell us about your personal circumstances and how you came to be a policymaker in The Gambia.
By profession I am an accountant, and I was appointed accountant general by the armed forces in 1994 when the military took over. We thought it would return to civilian rule after the two years, but they decided to continue. So, I resigned in 1996 and set up my own practice. In 2013, they charged me with sedition and put me in jail for three years.
The government put you in jail?
This was a strategy to silence the opposition. And so the current Foreign Minister was in jail with me, and the Minister of Lands was also there, and many of our executives. They just rounded up all of us and put us in jail.
Were you able to stay in touch with what was going on while you were in prison?
We tried our best but they were brutal. They took out all the televisions, so we couldn’t get information. No radio, no letters, no calls.
And how did you become Finance Minister?
When the new government was sworn in, the current President, Adama Barrow, pardoned and released all of us, and two days later I became Minister of Finance and the National Treasurer of the United Democratic Party.
How did that make you feel stepping out of prison and into the position of Finance Minister? Did you feel overwhelmed having been isolated all that time?
Yes. It was really not something I was banking on. I just wanted to be free, out of prison. I was going to take a holiday, rest myself, and then continue with my life. But, you know, when I was appointed, the challenge is what really dawned on me. It wasn’t a small task.
Becoming Finance Minister in a country that is bankrupt, with no resources, and in complete isolation. A lot of the people who were skilled civil servants had to leave the country, so we had capacity problems. It was serious. We had to take on this challenge. I will say it wasn’t easy, especially in the first year.
Now you’re in the process of rebuilding the country essentially. How much of this process is about Gambians regaining the trust in government institutions?
I think one of the biggest dividends in this chain of events is the freedom that people feel. People are so vibrant now. In the media, there are no restrictions, and they’re often very critical to government.
As they should be, right?
Yes. Every little thing, they analyse and comment. So it keeps us on our toes. It’s something we fought for and we cherish it, a strong democratic freedom of speech.
Before, you couldn’t say anything, and you were always looking who was behind you. Now people are free.
We are doing reforms. Legal reforms. And the codes have been reformed. And the constitution is also being reformed because the former president changed our constitution. He introduced articles where if you were 65 or older, you could not stand for elections. That was a way of banning opposition members from running because they were older than him. It’s really shocking and alarming.
There’s been, especially at the IMF-World Bank Spring Meetings, a lot of talk about trying to encourage more investment in Africa. How do you see The Gambia fitting into that initiative?
We are doing our best to create the environment in terms of doing business in The Gambia. We have some incentives that we offer to investors, like tax holidays and duty-free capital equipment for those setting up manufacturing. So, we are doing our best.
I know it’s a competitive environment, but at least we are also playing a role to make The Gambia a very friendly investment country.
And the hotel industry this year picked up very well. We now have fully booked hotels all over compared to the time we took over when the crisis was there, flights were cancelled and hotel occupancy went down to zero.
And today we are expecting two new five-star hotels being built, so the investors in that sector at least we are getting confidence from that. So, it’s picking up now. We have seen some growth signs and that is encouraging.
And are the local young entrepreneurs also gaining confidence in the idea of starting businesses?
Yes. That is very important because the level of unemployment is very high. We’ve seen a big deficit in the skill level. We need a lot of skills training for the youth into the various disciplines.
And hopefully, when they excel to a certain level they can open their own business. There’s only a certain number that can serve in the public service.
The role already we feel is over bloated from the previous regime. And, you know, redundancies are a painful exercise and sometimes politically very tense for the government, but some of this we have to face. So, we are encouraging the locals to get into business and entrepreneurship.
But the main concerns have been the cost of capital or access to capital. That access is a serious problem because the rates have been around 24 percent at commercial banks.
And apart from import/export quick trading where you will pay off loans in two or three months, if you take 24 percent into a business that’s long term, it’s going to be extremely difficult to survive.
What do you think the role is of the international community in trying to help get the country back on its feet?
I think they have a role to play, to bring us back into the international circle. And we have been very happy the way our partners, both bilateral and multilaterals, have come to support The Gambia in these challenging times.
The World Bank gave budget support last year, the European Union gave budget support, and the IMF came in with the Rapid Credit Facility program. So, they’re supporting both the budget and institutional reforms and providing policy advice.
The Gambia is so small, about 2 million population; it’s not even the size of some of the towns in some countries. So I think to transform the situation, although it’s challenging, it’s something that can be achieved.
We are encouraging our partners to come up with more and reinforced—I will say front-loaded—assistance to help transform the current situation that we are in. And then, it will become easy for us to manage ourselves and invest in the future development of this little country.
This conversation with the finance minister of the Gambia is published by the Sierra Leone Telegraph, courtesy of the IMF Country Focus team.