If you borrow you must pay and this simple adage is the foundation of subtraction in mathematics. The magnitude of our debt especially the domestic component is as a result of persistent borrowing without any means to draw down the cumulative debt stock. This has made Gambia to venture on the verge of insolvency. If our total debt obligation is greater than our capacity to generate public revenue then we are charting in murky waters that may sink our overall development aspirations.
Our debt profile and instruments associated with it have a 365 days maturity. This is part of of our bottleneck as it relates to serviceability. In layman's language, we are contracting debt faster than we can generate revenue to payoff our liabilities. For every problem, there bound to be a sustainable solution to tame the anomaly. In the case of our bloated debt, we need to tackle it with a Pareto optimality view. This implies that we will employ a strategy that will make everyone better off without making no one worse off. This may sound utopian to the discerning mind but it is a feasible venture once government have a commitment to curb the festering debt stock. This approach will call for a medium to long-term term debt instruments (5-15 years) debt maturity profile. Once government is able to introduce debt instruments with simillar profile then the next plausible step is to negotiate with Teasury bill holders to move from the bills to treasury bonds. This approach will immediately relieve the treasury from making immediate debt payments to rescheduling of debt to medium to longer term profiles. This initiative like any other has a tradeoff and a price. The tradeoff basically lure the Treasury bill holders to accept longer term maturity and in return they will be offered higher yields. This will then give the Gambian treasury the time to reorganise and also curb their appetite to spend. Economic management may not be an easy task but the daunting challenges do come with inherent rewards.
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