By: Kemo Kanyi
Dr. Foday Joof, a sustainable financial economist, has warned that protecting domestic industries without proper planning risks worsening inflation and harming consumers in The Gambia.
In an exclusive interview with The Voice over the weekend, Dr. Joof cautioned that while shielding infant industries is important for national development, it must not come at the cost of the public’s welfare.
He argued that the country’s current economic strategy, which focuses heavily on interest rates, needs a broader, more context-sensitive approach that considers structural bottlenecks, supply constraints, and, most importantly, the needs of the people.
“Without balance, the noble goal of nurturing domestic industries can backfire, leading to inefficiencies and prolonged hardship for the very people it’s meant to help,” he said.
Dr. Joof emphasized that while the theory behind protecting young industries is sound, the implementation in The Gambia raises serious concerns.
He cited the recent spike in cement prices, rising over 30% in just two months, as a clear example of the downside of poorly planned protection policies. The increase, he said, stems from inadequate production capacity in the protected local industry, leading to scarcity.
“When protection creates scarcity because domestic producers can’t meet demand, consumers end up paying the price,” Dr. Joof explained.
“Did we miscalculate? Or worse, did we even conduct a comprehensive assessment to begin with?”
He noted that these policy gaps are contributing to inflationary pressure.
In July, inflation in The Gambia crept up from 7.2% to 7.5% a seemingly small increase, but one that significantly impacts households already grappling with rising living costs.
Dr. Joof also scrutinized the country’s monetary policy, noting that despite maintaining a policy rate of 17% for over a year, domestic credit continues to grow, further expanding the money supply.
“Is this truly monetary-driven inflation, or are we dealing with structural issues that interest rates alone cannot fix?” he questioned.
He pointed to a weak monetary transmission system, where short-term money market rates do not reflect policy shifts, while lending rates remain high, hurting both households and businesses.
“The irony is striking. The government borrows cheaply, but the private sector pays exorbitantly,” Dr. Joof said.
This, he argued, creates a dangerous paradox. While the government attempts to protect industries and manage inflation, the restrictive financial environment deprives the economy of what it needs most – access to affordable capital.
“In the end, the economy is being starved of oxygen. It deserves to breathe,” he stressed on this.
