Pessimism, fear, and uncertainty among consumers and businesses in the country due to the excessive public sector exuberance over the past years has led to an overheated economy and inflation in the country.
The Central Bank Governor has revealed plans to curb inflation in the country. His comments are too late and demeaning, after allowing the plundering of our economy unchecked to secure his job.
All genuine masses knew Governor Saidy wasn’t appointed by his appointee to restore and stabilize the economy, nor to champion the public interest in that apex bank.
Instead, he was illegally appointed to aid and abet the use of expansionary fiscal policy to a dangerous degree, amid the funding of heavy infrastructural development from our little GLF funds.
The macro-economic effects of such decisions are overwhelming and severe to the growth of the economy as voters always appreciate public spending and low taxes.
Essentially, the Governor wouldn’t mount a political platform and openly call people to cast for the incumbent, but his actions were more or less the same as the grassroots canvassing Momodou Sabally was doing for the UDP.
Due to the political incentives faced by policymakers like the Governor, he was consistently biased towards engaging in more-or-less constant deficit spending, which they rationalize as good for the economy.
Here we are; the economy got badly damaged by high inflation. The CBG is trying to reverse course and attempt to contract the economy, after its fiscal malfeasance.
To combat inflation, we should cut spending to cool down the economy. This contradicts the recent erroneous inflationary budget runs by the Finance Minister to increase wages, and incur loans to fund some road infrastructural developments in the metropolitan area.
Was the Minister adequately advised about the negative impact of such a budget? Wage increments lead to inflation.
Therefore, after all these poor monetary policy practices little or none can be done to save our already broken economy. The new monetary policy decisions to be introduced by the CBG are nonstarters; meant to save faces.
Expansionary fiscal policy is usually characterized by deficit spending as over the years the government was constantly spending more than the receipts from grants and taxes.
Without a doubt, the reason why the Barrow administration is so obsessed with infrastructural development is to cling to power, as such decisions attract political popularity.
Absolutely, to restore the balance of the economic cycle, the government needs to pursue a contractionary fiscal policy to tackle inflation and other expansionary symptoms.
However, such decisions seem unattainable under Governor Saidy’s watch. If the President ever cares about the welfare of the masses and wants to tackle the economic hardship in the country head-on, Mr Saidy should be assigned a new job. He lost the charisma, integrity, Leadership, and respect to helm the affairs of this apex bank.
By Ebrima Jarra, BSc; Islamic Banking and Economics