Upper Saloum NAM Warns of Debt Distress Risks, Says The Gambia Still Able to Meet Obligations

By Fatou Sillah

The National Assembly Member (NAM) for Upper Saloum, Hon. Alhagie Mbowe, has acknowledged that The Gambia faces risks of debt distress but maintains that the country remains capable of meeting its debt obligations if fiscal discipline is sustained.

Speaking in an interview with West Coast Radio, Hon. Mbowe, who also serves on the National Assembly’s Finance and Public Accounts Committee (FPAC), noted that while debt distress is a growing concern across Africa, The Gambia has not yet reached a critical stage.

“The risk is there in terms of debt distress, but it doesn’t mean that Gambia cannot pay. We can pay, but it will take a lot of the country’s revenue,” he said.

He identified the country’s heavy reliance on foreign currency borrowing as a major contributor to its debt vulnerability.

“More than 60 percent of our debt is taken in foreign currency, and when that happens, whenever the foreign currency moves against your local currency, you are in big trouble, and that’s what is happening,” he said.

Hon. Mbowe further highlighted the impact of currency depreciation on debt servicing, citing longstanding loans dating back to the mid-1990s.

“The debt that we took in 1994-1995 around the AFPRC era, about 30 to 35 million from Taiwan, we are still paying. The time we took on that debt, the dollar was about D8.50; today we are buying at D73 or D74. How many times are we going to pay that debt?” he explained.

According to him, a substantial portion of Africa’s debt burden stems not only from new borrowing but also from the depreciation of local currencies.

“The debt stock that we have is not as a result of the money you are taking; a big chunk, 20 percent or more of it, is as a result of the devaluation of your own currency against the dollar, the pound, or the euro,” he added.

He called on the government to strengthen domestic revenue mobilization and reduce dependence on external borrowing.

“We need to increase our domestic revenue mobilization and try to shy away from these loans and then try to do things within our means,” he urged.

Emphasizing prudent fiscal management, Hon. Mbowe stressed that government expenditure should align with available resources.

“When people keep saying ‘cut your coat according to your size,’ I say no. Cut your coat according to the clothes you have; the clothes that you have are the revenue that you have for the country,” he remarked.

He also commended the government for exercising restraint in foreign borrowing in recent years.

“For the past two years, I think the government has been really very disciplined in terms of foreign borrowing,” he said.

Hon. Mbowe further praised the Gambia Revenue Authority (GRA) for its role in boosting domestic revenue collection.

“In 2016, the total revenue of the government was collectively about D8 billion, less than D10 billion. Today, we are talking about almost D30 billion in revenue. I think the GRA is doing a fantastic job,” he concluded.