Compiled by Yusef Taylor @FlexDan_YT
- NAWEC National Water and Electricity Company
Clearly for The Gambia to make any progress in turning
A cap has been placed on single projects that may benefit from the Feed-In-Tariff; single projects have a maximum cap of 1.5MW to be eligible for the Feed-in-Tariff. Any project above that size must negotiate a PPA with NAWEC. Any changes in technology, project sizes and tariffs shall be contained in the Annual Authority Announcement made by Public Utilities Regulatory Authority for each year.
The Gambia is currently experiencing a severe electricity crisis and among the measures that have been identified and acted upon is agreement between NAWEC and SENELEC to enable the latter to purchase power from Senegal to address acute power shortage. Furthermore, the country stands to benefit tremendously from the cheap and clean source of power from the OMVG when the plants at Samba Gallo and Kaleta come on-stream in the next few years.
Government has lowered the fiscal deficit target (including grants) from 9.8 per cent of GDP in 2016 to 2.5 per cent in 2017. Cabinet and National Assembly have approved a revised 2017 budget, which cuts expenditures by 1.3 per cent of GDP from their 2016 level, despite including a subsidy of 0.7 per cent of GDP to cover NAWEC’s debt service arrears. While the new budget protects health and education spending, it cuts spending on the President’s Office, foreign embassies, government travel expenses, and public works. The elimination of ghost workers through an audit of the public payroll had closed the remaining financing gap by reducing personnel expenditures in 2017.
As indicated on Figure 6.8 Seven SOEs were unprofitable in 2013, with NAWEC registering the largest deficit at GMD 1,377 million in 2013. Others in the same situation were GAMCEL (GMD 244mn), GAMTEL (GMD 132mn), GCAA (GMD 99mn), GGC (GMD 41mn), GRTS (GMD 13 mn) and AMRC (GMD 0.2 mn).
In 2009 oversight of SOEs shifted from the Gambia Divestiture Agency to the Ministry of Finance and Economic Affairs (MOFEA). The lapse in oversight arrangements continued to undermine measures aimed at monitoring SOE performance, to anticipate needed corrective action, and to identify and manage fiscal risks. Over the last two years, MOFEA had intervened (some of which were loans) to cover losses incurred by NAWEC, GAMTEL/GAMCEL and GGC and by guaranteeing their other debts.
Although the Gambia has a desire to move towards a private sector led economy, there are significant obstacles in the way. The three most important challenges are electricity, access to credit and the tax code.
- The lack of investment and diversity in the power generation infrastructure is accentuated by the absence of successful power purchase agreements (PPAs) between NAWEC and Investors. This widens the disparity between the demand and supply of reliable and low-cost electricity. The inadequacy of supply and the relatively high cost of energy are significant challenges to regional competitiveness and the ability to attract high value foreign direct investments.