New Gambia Transactional Or Transformational?

December 1st ushered in a new lease on life for Gambia and Gambians. Gambians registered their dissatisfaction with the former administration and severely punished them at the polls. Furthermore, Gambians displayed a sense of urgency paving the way for the new Gambia by having a zero tolerance attitude towards Jammeh and his incessant antics during the self styled political impasse. Now that the dust has settled and our euphoria has waned off, we have lofty expectations in rebuilding the country we all claimed to love. Gambians are yearning for transformative change whereby we do away from the culture of business as usual (transactional) to the business of transforming from what was to what ought to be.

I have been keenly following developments in the new Gambia particular that of public policy with a bias on economic management. I do hope that this administration leverage on the expertise of well meaning Gambians with requisite competence in revitalizing this economy because a poor showing of the economy will undoubtedly punish them in subsequent election cycles. In order for this economy to thrive, the government must be mindful of 3 economic fundamentals
i. Fiscal Consolidation (Scaling down the budget especially recurrent expenditure and rationalizing government operations and fleet management)
ii. Debt Resolution (Debt Rescheduling, Creation of longer term debt instruments etc.)
iii. Growth (Boosting growth leaders such as agriculture, Tourism and Fisheries)
Having said that, I am very disturbed with the economic rationale of the Ministry of Trade regarding their facilitation of flour imports to the Gambia and I therefore want to seek answers to their haphazard yet troubling economic pronouncements that will not only affect their sector but all other sectors of the economy. I hereby opined without hesitation and with a high degree of certainty that an importation strategy will not help develop the economic base of our country. Economies need growth drivers and key amongst these drivers are local production/ manufacturing. The policy employed by the Ministry of Trade, Employment and Industrialization is not only adverse to the macro economy but goes against the set objectives of the ministry. The Ministry is task with spurring growth hence creating employment and their promotion of imports goes counter to job creation. Secondly, the Ministry is tasked with the promotion and development of an industrial environment and the promotion of imports over local production deter our march to industrialization. Public policy must have a medium to long term view and that being the case, the Trade Ministry must not focus on immediate price reduction and that is nothing but a gimmick. I saw a trouble yet patronizing advert on the Point publication of July 24, 2017 praising the President and Minister for a job well done in allowing importation thereby reducing prices. First of,  prices are generally sticky and it takes a lag effect for prices to filter down the distribution channel before reaching the consumers. The only factor that may be responsible for a sudden drop in price is a price war orchestrated to assert market dominance. This implies that importers are willing to sell below cost to discourage local production thereby rendering the sector sterile. I want to respectfully inform the Honorable Minister and her Technical entourage that importation has its flaws starting with under invoicing which adversely affects custom valuation, curtailing of value transformation and job creation in the economy and the eventual degradation of our industrial ambitions. Most of the flour imported into the Gambia come from Western Europe and Turkey and they are highly laden with farm subsidies and this creates a distortion in pricing.

I therefore want to ask the honourable minister of Trade to clearly spell out the intended policy gains her Ministry wants to achieve in promoting importation over local production. Honourable Minister, your policy decisions generally have far reaching implications and am sure you were not cognizant of the fact that the major by product of a flour mill is the creation of animal feed meal precisely chicken feed. For your information, the Government of the Gambia aspires to have a vertically integrated poultry sector whereby we create our poultry from the hatchery to the food chain by generating all the inputs and production factors but your initiative is not only frustrating those efforts but it is scrapping the possibility of making Gambia poultry self sufficient. For this and other reasons, I urge you to have broader consultations before making such pronouncements in the future as mixed policy signals tend to put off investors because investment requires visibility and confidence. This new concern we trying to nurture called the #NewGambia begs for transformative processes not transactional intermediation. We do not want business as usual so let us look at the bigger picture and promote sustainable solutions that will underpin and bankroll our march towards economic independence. We do have merchant houses that have operated in Gambia for over a century and kindly show me one value creation they have added to our economy. I do hope my input is taken in good faith and in the interest of the greater good as Jeremy Bantham would have alluded to.



Nyang Njie

Management Consultant
Economist
Blogger

Mr Governor Of The Central Bank Is The Economy Stupid?

Good day Mr Governor! I have been keenly following the developments in the economy especially in the monetary space and the developments are a caused for concern. It is a noble feat to sanitize the economic space and institute prudent monetary management decisions but equally, the Central Bank's primary mandate is to foster price stability in the macro environment. I have noticed that the Minister of Finance has in effect declared a Statement Of Intent that the fiscal authorities will curb their appetite for borrowing. This Statement has been made good by the revision of the 2017 Government Appropriation Bill's deficit financing from approximately 4.8 Billion Dalasis to 1.7 Billion Dalasis. This is a commendable initiative worthy of mention but the manner in which the Policy Rate tumbled in a short spate of time is quite worrisome and in the medium term it can trigger undesirable consequences that are not in line with our monetary objectives.

The Policy Rate basically serves as a signaling tool and having it tumble from 20% to 15% by way of an announcement from the last Monetary Policy Committee Meeting of February 2017 represents a 500 basis points downward spiral. This signaling tool basically frame expectations of Bankers and other Economic Operators who have a nexus with the policy rate. Therefore the sharp drop has rendered the policy rate ineffective as a signaling tool. Equally, the governments prudent fiscal management has brought the T Bill rate for 1 year to 10.94% and 91 Day to 8.75%. My primary concern Mr. Governor is the sudden drop in the policy rate. This will have an adverse effect in the economy particularly in the Banking Sector. My fear is that the Central bank is attempting to align the policy rate with the current Tbill curve. Most Gambians view Treasury Bill as a store of Wealth and having the rates tumble so fast without prior warning makes TBills an unattractive investment proposition. This will make investors look into alternatives such as Foreign Currency (Euro, Dollar & Pounds). This in my view will cause significant misalignment in the economy as most people buying these currencies will not use it for transactional purposes but as a commodity and store of wealth. Consequently, this will put undue pressure on the dalasi as there will be too many dalasis chasing few hard currency thereby creating an economic anomaly that will distort price stability and subsequently inflation. Mr. Governor, I proposed that subsequent MPC meetings MUST review the policy rate with a view of an incremental change or easing of the rate over a period of time rather than a quick fix. Monetary Management albeit a Science comes with a finesse that caresses the economic variables that can trigger undue duress to the macro environment.

Mr. Governor, I consider the TBill rate as an operational rate and the pricing of this instrument baffles me as I can't identify a measurable matrix to ascertain the price associated with the Tbill pricing. Discretion is an enemy to policy formulation and monetary policy management is by no means an exception to this. Your recent position on the MPC is sending the a signal to the banking fraternity that they have to spur lending. Whilst this may be a well intentioned proposition, it can yield adverse effects that may affect the banking sector. A lesson not learned in the past will surely be repeated in the future. I therefore hope that your understanding of Central Bank Independence doesn't negate the fact that you can periodically, consult private practitioners for our opinion on prudent monetary management alternatives.

Telecommunication Liberalization- A Must In The New Gambia

Gambians have been anxiously waiting to see the liberalization of the telecommunication sector since the advent of the third republic. Telecommunication is a vital component of our economy as it not only facilitates trade but also link service providers and markets thereby reducing the information asymmetries that were prevalent before the introduction of mass communication platforms like GSM networks. The people of the Gambia have been short changed and overpriced due to prohibitive government policies that breeds inefficient service delivery mechanisms, corruption and the inaccessibility of destination Gambia from the rest of the world. The current Gateway arrangement with MGI needs an immediate cessation and should be replaced by the introduction of a viable liberal market that ensures Gambian telecom subscribers with an equitable service, priced at a reasonable tariff and of good quality. Liberalization of the telecom sector must be process driven to ensure that all stakeholder needs (Government, operators, subscribers and Public regulator) are all addressed adequately to foster an environment of high standards of service delivery and efficient pricing. The government must facilitate a transitional arrangement whereby the incumbent operator in this case GAMTEL assume the responsibility of managing the gateway on a temporal basis until the operators sort out their state of preparedness to handle their own carrier relationships internationally. This transitional period must not EXCEED 6 MONTHS. The following prerequisites must be adopted before the liberalization of the sector in order to avoid market chaos and unfair market positioning or the abuse of dominant market power.

1. Telecom Operators (GSM Companies) must first and foremost approach the sector in a holistic manner and not focus on the competitive nature of the business.
a. They need to work closely to usher guidelines and rules of engagement that will enhance the value proposition of the market and also promote price stability in order not to destroy value through tariff wars. Tariff wars will only give an edge to the subscribers in the short term but the loss in margin will make reinvestment of capital expenditure in the sector difficult thereby compromising service delivery mechanisms in the medium term difficult.
b. The Operators must have a preexisting arrangement with the Public Regulator (PURA) for the issuance of their licenses once the transitional period with Gamtel expires. This will allow a seamless transition from the interim arrange to a full fledge liberalized market. The licensing regime must not be an undue burden to the operators and ideally, the regulator can augment the existing GSM license to a unified license thereby covering all aspects of the telecommunication business process.
c. The sector must agree on the imposition of a price floor for all outbound and inbound international calls. This will reduce the incidence of price wars and heavy handed market positioning by operators.
d. The operators must individually calculate the economic loss incurred by the operators by way of the MGI contract with government. A demand note must be presented to government to recover all losses associated with the MGI contract
2. The Government of the Gambia must be committed to the liberalization track by supporting the process in good faith. It is the responsibility of the state to protect the interest of the greater good at all times and this includes the termination of the MGI contract because it goes against the grain of our strategic national interest. The government of the Gambia being the custodian/party to the MGI contract must endeavor to do the following;
a. Terminate the arrangement with MGI forthwith
b. Facilitate the recoveries of all financial losses due to the operators
c. Task Gamtel to operate and manage a national gateway for a period of six months
d. Work with PURA and Operators to institute a competitive tariff for destination Gambia including a price floor to avert price war amongst operators
e. Pursue legal action against MGI and government officials who are found culpable in the MGI arrangement
f. Establish a gatekeeper arrangement through a clearinghouse model to ensure revenue assurance for government and illegal sim box connections and by passes
3. The Regulator PURA is vital in the transition and final liberalization process of the telecommunication sector. The erosion of confidence by the operators and the general public on the efficacy of PURA as an effective regulator must be rebuild. Therefore, the following actions must be undertaken by the regulator to not only sanitize the sector but protect the esteem Gambian subscribers from poor service quality and excessive pricing models.
a Facilitate the acquisition of gateway licenses to all operators without undue bureaucratic hurdles
b Enforce a price floor mechanism for international call tariffs
c Monitor and ensure quality of service delivery and promote fair play and competition amongst operators
It is to the national interest to not only sanitize the sector but accord Gambians with international best practices for services delivered to the general public. I do hope that the vested parties adhere to these stringent guidelines in furtherance of a buoyant telecommunication sector.

The Mighty Has Fallen. Death Of The Daily Observer

Arthur Vanderbilt once said that "taxes are the lifeblood of government and no taxpayer should be permitted to escape the payment of his just share of the burden of contributing thereto." A lot of people are weighing in the closure of #DailyObserver. This newspaper has been in existence for over 20 yrs. I understand press freedom and the protection of dissenting views and voices. However, the closure of the paper was neither political nor journalistic. Gambia is a country of laws and the responsibility and onus of paying taxes lies with the tax payer not the enforcer. Observer operated outside the confines of the law by disregarding  a statutory obligation of paying taxes. The arrogance and bravado of this paper stopped them from negotiating a payment plan to offset their staggering liability. Therefore the closure is not only justified but legally prescribed by law. For the infomation of our readership, the GRA will not abruptly halt the operations of the newspaper without due notice. Secondly, the paper is not by no means in a position to offset its tax liabilities in the medium term considering the fact that their future revenue streams can't sustain the paying out their outstanding liabilities. A business has a right to live and a right to die and unfortunately, the Daily Observer chose death. May theybrest in peace. Legal compliance supersedes the press freedom rights of the observer or any other company. Ignorance has never been an excuse of breaking the law.

Ignorance of the law is not an excuse. It is folly for the Managing Director of the Defunct Daily Observer to blame the enforcer (GRA) for non payment of taxes by a corporate body (Daily Observer). Such a statement borders between corporate irresponsibility and wilful deceit. The only thing that's constant are death and taxes. OBSERVER chose not to pay their taxes and now they are dead. #RIP defunct newspaper once called Daily Observer. Oh by the way, DR Owl said that 100 days for the thief, 1 day for the Master yard.

GAMBIA' S INTERNATIONAL GATEWAY HURDLE

The word MGI in the Gambia is synonymous to broad day robbery and mystery.  This company's  existence was somehow virtual and indifferent to the Gambian way of life during Jammeh's regime.  A company that has been parasitic in terms of looting the public coffers and short changing Gambians in terms of pricing Gambia out of range as it relates to call termination rates inbound to destination #GM220. Driving past the bustling roundabout of Brusubi on my way home and coming across a tent with MGI Paraphernalia displaying their benevolence to poor Gambians during the holy month of Ramadan makes me feel irate for it reminds me of the sucker Gambia has chose to be in front of a despicable parasite who cares less about our wellbeing or prosperity. Am sure by now, my readership are curious as per who MGI are. Well MGI is a TELECOMMUNICATION voice gateway provider who terminates inbound international traffic on behalf of the Gambia. This company's existence has for long been shrouded in mystery as the stakeholders in the market ( Qcell, Africell, Comium and the general public) were not privy with the terms and conditions of their contractual obligations with the contracting party (Gamtel). After the fall of Jammeh, the cat has been let off the bag and the general public and telecom operators were made abreast of the plunderous arrangement entered by the state with MGI. 

We have all been patient hoping that the government will draw down the curtains on this exploitative relationship with MGI. This arrange has placed the operators, government of the Gambia and the general public in a disadvantaged position that called for immediate remedial action for the following reasons;
1. The government of the Gambia has a fiduciary responsibility to assure that revenue accrued to government ends in government coffers inorder to finance government fiscal operations.
2. The operators invested heavily in the telecommunication sector with explicit guarantees from government to operate in the country unfettered. Well this promissory accord by government have been violated thereby causing financial harm to operators and to a point it affects capital reinvestment in the sector by operators.
3. The Gambians telecommunication service users have been taken to the cleaners by MGI for charging a prohibitive termination rate that puts the subscribers at a disadvantaged economically and in terms of quality of service delivered. Callers into destination Gambia were either blocked from accessing Gambia due to high termination rates or their calls were high jacked by illegal terminators who saw a lucrative opportunity to steal inbound calls to the Gambia.
Based on the above, the stakeholders of the telecommunication sector wanted government to sever commercial ties with MGI for the interest of the greater good. The general public patiently waited for 6 months for a definitive resolution of this broad day robbery by MGI. To date, the government of the day is either pussy footing or dragging the termination of the MGI contract for reasons best known to them. We the general public are hereby reminding government of their responsibility to protect the public's interest by terminating this atrocious arrangement with MGI. Failure to do so within a reason time frame will lead to dire  consequences that may pitch government against the very people they vowed to serve. I am of the view that the operators are now at liberty to arrange for their own termination links in order to deliver an efficient service to their esteem subscribers. They unlike government are duty bound to serve their subscribers effectively and the laws governing our telecommunication sector permit them to operate gateways in furtherance of their business operations. This arrangement is guaranteed by the MOU signed by the ACE Consortium and the government. Something has to give in and it should be the riddance of MGI in our telecommunication sector. The million dollar question that begs for an answer is whose interest is this government serving by prolonging the robbery orchestrated by a vile and heartless company like MGI? You be the judge but #DeesTake on the issue is simple and resolute. We must have #ZeroTolerance for economic exploiters. We welcome bona fide investors in Gambia not parasitic corporates who prey on our vulnerabilities to milk us dry.

DATA WAR IN GAMBIAN TELECOMMUNICATION- WHO IS THE KING OF DATA?

The old adage cash is king is getting very synonymous with the prevailing trend in the Gambian telecommunication sphere. Data is now poised to be the next thing in telecommunications and Gambia is not left out in the fray. Subscribers of telecommunications services are constantly  increasing their demand for data services for their pressing wants and needs of accessing 0TC applications such as IMO, WhatsApp, Viber and other Social media applications. Consequently the network operators are positioning themselves to cater for the growing demands of the sector. The data business is currently shared by Africell, Qcell and Gamcel. There is quite a lot of noise as per who the data market leader is. Well the jury is out and statistics can’t be massaged nor twisted to tell a story that is otherwise not the case. The Public Regulator, PURA has published a Report for Q1 2017 KPI’s that can ascertain trends in terms of service delivery, technical roll out and updated network topology on both the 2G and 3G networks. This report is independent as it automatically collect data from live transactions executed on the various networks. For all intent and purpose, my emphasis will be on the 3G networks as all data transmission is channelled through that medium. The map below clearly depicts the current status of the 3G national topology as at end April 2017.

3G networks are prevalent all over the country but based on the PURA report of April 2017, Africel by far have more cells deployed than any other operator. This move by Africel is a deliberate tactical decision towards consolidation of its market dominant position. Africel has 736 cells, Qcell has 592 cells and Gamcel has 152 cells. The data war is for real. Pricing and marketing gimmicks alone will not ensure dominant position in the market. The relevant Capital expenditure is whats going to bankroll the data supremacy of the competition and Africel has over the past 12 months put in considerable capital expenditure to boost both transmission and data capacity of their network. Based on the foregoing, the jury is out and the data provided by PURA indicates that the data war for the time being belongs to Africel albeit that they are yet to launch a 4G neteork unlike Qcell. Based on the data provided by PURA, the Qcell LTE network is yet to make a dent on Africel’s data pie This can be explained by a possible lag effect on the introduction of a new technology by Qcell which is yet to filter down to its subscribers or the current rollout of LTE sites are so insignificant to the overall size of their network. For example if the current LTE coverage is less than 6% of their overall network the benefits of the new technology will not be felt. For the period under review, Qcell registered a negative growth -.72% in its data business whilst both Gamcel and Africel registered positive growth of 19.81% and 22.35% respectively.

As an analyst of the sector, I am baffled by the data returns from PURA as I was of the view that Qcell enjoyed a comfortable data lead in the market considering their marketing efforts. I can safely say that the jury is out unless this growth trend is tamed. Africel is undoubtedly the king of data in this war of megabytes and data bundles. Curiousity begs to inquire why is Africel a market leader? This will be addressed in subsequent posts after satisfying myself with more industry data but I can safely say that the reason for Africel having a dominant market position has more to do with its commercial strategy than its technological position. Data bundling and packaging reasonable voice tariffs sets the competition apart. Data is forming a significant portion of the subscriber's ARPU (Average Revenue Per User) and it will soon constitute 60% of overall revenue. In conclusion, our perception can often distort the reality on the ground

Reality Slowly Setting In As Cooler Heads Prevailed

Hindsight and after thought are always 20/20. The aftermath of the Kanilai protest cum riots has taught the nation an expensive lesson of national security and cohesiveness. The Gambia though diverse enjoy a social fabric woven with an intricate yarn. Tribalism, religious intolerance have never been a Gambian problem. These ills have been amplified over the past two decades by an ill intentioned social despot whose personal interest of political survival collided with our interest of national unity. Jammeh is a product of a tolerant Gambia who helped raised a child from the fringes of our social mix to the most powerful person in this country. His ungratefulness polarised the views of some amongs his midst to alienate themselves from mainstream Gambia. The problem of Kanila is neither a Jola problem nor a Foni problem. It was an incident fanned and flame by the Butcher of Kanilai to destabilise the country. Therfore the people who subscribed to his philosophy are either reactionaries indoctrinated by Jammeh or short sighted Gambians who do not subscribe to our national ideals. I want to see the perpetrators of the Kanilai riots be brought before a court to face the consequences of their actions. No other group of Gambians understand first hand the ill effects of insurgency  and belligerent acts as the people of Foni for they reside under the nose of the MFDC. Therefore, I expect them to be the first to denounce such attrocities.

The role of government is to effectively communicate with its citizens and manage their expectations. Listening to  the video tapes coming out of Kanilai, I noticed a glaring disconnect between some elements in Foni and the Gambian reality. The  only way to bridge this divide is to effectively communicate with the people of Foni and it starts with a presidential visit and dialogue. All citizens of our beautiful nation are equally important and relevant in our developmental aspirations. Therefore no Jola is insignificant nor trivial in our national life. Our common enemy is their disgraced kleptocratic son Yahya Jammeh. Jammeh has brought disrepute to a noble group of people. We should remind those elements fermenting discord that their loyalty lies to country not individuals. The ECOMIG CONTINGENT  is here to stay and we all need to find a mutually beneficial arrangement to coexist with them. Jammeh's wish of exposing the security vulnerability of this country to his scornful wishes will never be realised. The time has come for all Gambians to march to the promise land of prosperity ensemble. No one will be left behind. I am that Jola lady as my sisters name sake was Fatou Woula Badjie, I am that Mandinka as my cousin Numu Darboe hails from Niani. I am that Manjago as my aunt Jainaba Fourmose Gomez was one. I am that Fula as my grandmother Fatou Bah was one. I am Gambia because my diversity is my strenght. My interest is to usher a new dawn. A dawn premised on social equity, justice and  opportunity for all. God bless the land of Maba Jahou and  Kunta Kinteh. We can thrive if we see ourselves as Gambians. The wollofs of old would have said   " Ganaaw aiyee di jamaa". My condolences to the family of #HarunaJatta and his death deserves an inquest because all lives matter. For the Gambia I remain ever true