By Dr Basil Jones
Safeguarding the Lives and Livelihood of Gambians due to Covid19 lockdown.
Milton Friedman once said, “Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”
Addressing Covid19 pandemic is first and foremost a health priority. The lockdown is having significant negative impact on the economy, businesses both formal and informal and on households.
The government has announced a state of public emergency and seeking approval from the National Assembly to extend the state of public emergency from 7 days to 45 days. The government will need to repurpose its 2020 budget because Covid19 pandemic means that programs that were approved by the National Assembly will not be implemented 100%. Emergency powers have been invoked by the President to freeze prices and ration essential food (rice, meat, fish and cooking oil) and non-food (soap, sanitizers and cement) commodities to prevent price gouging and hoarding. Price freezing is necessary but not sufficient. More needs to be done and the whole 2020 budget of revenue and expenditure needs to be revisited and repurposed to (i) support health sector and (ii) ease the economic fallout on the Gambian population.
There will be unprecedented economic hardships and it is up to the Government of the Gambia to come up with an economic stimulus and relief package for Gambians.
In other countries, governments have come up a package to support businesses, households especially the poorest and most vulnerable in society, people who have lost their jobs and livelihood because they cannot go about their normal economic activities. The hardest hit economically will be those in insecure and informal employment who will not be able to get their daily livelihoods and their vulnerability is compounded because they do not have safety nets systems. A lot of people feed their families with the daily income they make hawking their goods or setting in the markets.
In advanced countries, stimulus packages of up to 15% of GDP are being provided (in the United States a stimulus of $2 trillion or 10% of GDP was approved by Congress). For a poor economy like the Gambia, our stimulus should be of this magnitude or more with a minimum of 20% of GDP will be needed depending on how long this pandemic last. The D500 million provided by the government to the Ministry of Health amounts to 0.6% of GDP to put things in perspective.
The Government will lose a lot of programmed revenue, the current account deficit will worsen, foreign exchange reserves will go down, tax revenue will decline because business and economic activities will go down and customs revenue will drop. With the lockdown, Gambians in the diaspora that transferred $130 million will not be able to do so as people are losing their jobs or have been put on unpaid leave. The tourism and manufacturing sectors are the most affected in the formal sector. Tourism has come to a dead standstill and we have seen factories like Banjul Breweries which is one of the largest taxpayers paying annually over D100 million in taxes to the exchequer close down their operations (might even close for good).
Where will the resources come from?
The government recently restructured its debt and does not have room to increase spending significantly. The government do not have the fiscal space and resources needed to fund health and economic priorities. There is then need for outside resources and some resources for Covid19 emergency support are available that the Government can tap into. The World Bank Group expects to deploy up to $160 billion over the next 15 months to help countries protect the poor and vulnerable, support businesses, and bolster economic recovery. The Gambia government has already benefited $10 million from this emergency response funding. The African Development Bank recently approved $3 billion Social Bond to support African countries fight Covid19.
Who should benefit from the stimulus and relief package (A people-centred response)
- Households that lose their income. All formal and informal businesses that are affected directly by the lockdown. Tracking the formal businesses should not be difficult as everyone of them is expected to have a TIN. For the informal businesses, the government should give a monthly income grant or unconditional cash transfers that can sustain their families. This is the only sustainable support that will make people stay at home and reduce the spread of Covid19.
- Businesses that have closed down and workers sent home, these employees can be given at least 50% of their monthly income over the next 3 months from the support coming from donor organizations. Alternatively, a wage subsidy can be provided to the most affected businesses such as hotels, restaurants.
- Interest-free loans can be extended to cash strapped SMEs.
- The agriculture sector should be given special priority especially women in the agriculture sector.
Allowances for Covid19 should only be paid to front line workers
It is disgraceful that civil servants in the ministry of health should at this time of special need and sacrifices, the first thing that they think about is paying allowances to themselves and illegally including the Hon Minister when he clearly told his staff that his name should not appear. If I was the Honorable Minister of Health, I will go to the President with an ultimatum either sack these workers to set an example or I resign period.
The health emergency and priority should be directed at providing protective gears and medical equipments and financial compensation to front line health workers. Already there are public awareness campaigns such as handwashing, keeping distance and staying at home. The government can reinforce these but for goodness sake don’t spend all the D500 million on workshops, meetings and paying perdiems.
Where is the funding coming from
- Government of the Gambia: D500 million committed to Health Ministry. There is also room for additional repurposing of budget and travel budget should be diverted to support the Covid19 efforts.
- World Bank – $10 million already approved for the emergency covid19 response to The Gambia.
- Repurposing the $30 million Gambia social safety net program grant from World Bank to focus on unconditional cash transfer.
- IMF $47.1 million extended credit facility to the Gambia approved on 23 March of which $6.7 million first disbursement has been effected. This is to help the Gambia with the Covid19 challenge.
- Potential resources coming from ADB, IDB and other development partners.
From the foregoing, with proper planning, resources should not be a constraint for the Government to fight Covid19 in the Gambia.
Making use of technical capabilities that exist in the country.
What is clear is that currently in the Ministry of Health, the technical capacity is very limited to provide support for such an emergency. We have qualified medical personnel in the Gambia who are retired and have worked for the government and the World Health Organization. I know of 4 medical doctors who are retired from WHO as country representatives and some are specialists in public health which is the type of expertise that is needed at this crucial time. I am still flabbergasted why the government is not making use of all the qualified expertise that is available. They can be in the technical committee to support the Minister of Health.
The government should also bring in opposition parties, National Assembly, GCCI, CSOs in the national interest and work with them. Covid 19 cannot be addressed by government alone. This is no time for political brinksmanship and grandstanding. The lives and livelihood of Gambians are at stake. The Ministry of Gender should be in all key committees.
Parting Shots
We do not know how long this Covid19 will be with us until vaccine/drugs is found to bring the epidemic under control. The longer the duration the deeper the health and economic challenges facing the economy. Government policies is more crucial now than ever as we are in uncharted territory.
As Milton Friedman said, “Only a crisis — actual or perceived — produces real change”. The success of the pace of recovery will depend on the policies undertaken by the government to provide safety nets to the most vulnerable in society especially in the informal sector, particularly women, workers who lost their jobs. The government does not have the fiscal space to finance the Covid19 recovery and will rely on grants from development partners and trust me there is money available. All that needs to be done is or there to be transparency and accountability in the use of the resources. This is now the time for a real change and If the government provides the policy leadership, it will be saving both lives and livelihoods of Gambians.