Proffers Short-Term Fix
By: Momodou Justice Darboe
Japan-trained and US-matriculated economist Musa Basad Jawara has asserted that the volatility of the Gambia’s currency market has degenerated into a full-blown crisis, posing a threat to the purchasing power of locals preparing for the fast-approaching Muslim feast of Eid-Ul-Adha.
“The Gambian currency market’s volatility has turned into a full-blown crisis, threatening locals preparing for upcoming Muslim festivities, where they traditionally buy rams,” Jawara told The Voice on Monday.
Jawara, a former official of the US State Department, expressed concern that the country’s economic operators place more emphasis on routine budgetary issues than on establishing a response mechanism to fluctuations in the world economy.
“I am concerned that Gambian economic operators focus too much on routine budgetary issues and not enough on responding to fluctuations in the global economy, leaving the country unprepared for international economic changes,” he pointed out.
He advised the Gambian authorities to act now to address the upheaval in the exchange market to anchor down the dalasi.
“The Gambian authorities must take immediate action to address the exchange market volatility and stabilize the currency. A combination of fiscal and monetary policy solutions is needed to address the current crisis. The Central Bank should take action, implementing a dual approach to stabilize the economy; they must intervene swiftly to halt the ongoing fluctuations,” Jawara, who also served in a senior capacity at the Ministry of Trade under the PPP dispensation, advised.
To salvage the dalasi in the short run from the negative territory it found itself in, Jawara further advised the Gambian authorities to pump hard currencies into the currency market.
“Buying foreign currency, CFA FRANCS in particular, to inject into the market can stabilize the Gambian currency. However, it’s a short-term fix and may not address underlying economic issues. A more sustainable solution would involve economic reforms; targeted structural reforms and diversification,” suggested the former US State Department official.
“Let me underscore in conclusion, and I can’t emphasize this point enough, thus: The Gambian exchange market’s volatility is a top economic threat, worsened by external shocks. A combination of monetary and fiscal policies, plus external support, is needed to stabilize the economy,” he concluded.
