Economists Dr Ousman Gajigo and Hon Seedy Keita Minister of Finance
By Dr. Ousman Gajigo
Since last year, I have maintained that the government’s concession agreement with Africa50 on the Senegambia Bridge could have been good for the country if the Ministry of Finance under Mr. Seedy Keita had taken their duties and responsibilities seriously. There is nothing wrong with asset recycling in principle. It can be beneficial to the country and contribute to our economic development. But the mere labelling of an agreement as “asset recycling” does not make it so.
The reality is that the concession agreement with Africa50 does not meet the requirements for an asset recycling scheme. An asset recycling scheme involves monetizing an existing asset to help finance another important infrastructure asset. From the very moment the Gambian public became aware of this agreement, the government never specified what specific infrastructure would be financed from the deal. It quickly becomes obvious that the government was just keen on receiving the payment upfront and spend it wastefully.
In fact, the Minister of Finance, Seedy Keita, included the first payment sent by Africa50 in the 2023 budget. What that means is that the amount would be used to finance the expenditures of that year. In fact, the government also indicated to the IMF that the 2024 budget will benefit from a non-tax revenue that will come from Africa50 deal. So, given the above details, the government’s actions rule out this agreement being consistent with a real asset recycling deal.
What is sad about this situation is that it was quite feasible to negotiate and execute a proper asset recycling deal that is in the nation’s interest. Let’s consider the current problem we are facing with our energy sector. The country has a huge energy deficit due to lack of investment in energy generation. We experience daily power outages, as well as low and fluctuation voltage problems. The country owes millions of dollars in arrears to both Senegal and Karpowership. Due to these arrears, the country is at serious risk of being cut off from power supply in a way that can devastate the economy of the country.
Imagine a proper asset recycling deal where the government invests at least $100 million into the construction of a new power plant. Such an amount would be enough to build a power plant with a capacity of 100 megawatts (MW). Such a capacity would generate enough energy to double our existing energy supply. Indeed, such a power plant would be able to generate enough energy to supply what we currently buy from Karpowership and Senegal combined. A new power plant with modern generators would lower generation cost, facilitate putting NAWEC on sounder financial footing and enhance energy security and sovereignty. This would allow the country to extricate ourselves from expensive power purchase agreements from the likes of Karpowership.
But instead, we have a poorly negotiated agreement with Africa50 under zero transparency. From the very beginning, the government was not forthcoming on important details about the deal. The first reporting on the deal came from foreign media. When the public and the National Assembly insisted on greater transparency, the government hid behind a dubious argument that the Public Finance Act empowers them to sign the agreement without legislative oversight.
After doing some research, I found out that the government was deliberately hiding a clause in the agreement that limits our ability to build further transportation infrastructure in the country. When the government could not hide this detail anymore, they started their damage control.
The presence of a clause that limits the country to build a bridge or other competing infrastructure has no presence in a deal of this nature. It does not matter whether or not the restriction is limited to a 50km radius. A future Gambia that is developing should have multiple bridges spanning River Gambia. In the city of Abidjan today, there is no fewer than five bridges. I am talking about only the city, not the whole country.
Public officials who are driven by the nation’s interest would have refused to include a clause in the agreement that limits the development potential of the country. The fact that such a clause is present in the deal is a sign that the Minister of Finance is driven more by short-term political interests rather than long-term development needs of the country.
The government was never forthcoming about the presence of the clause that limits the government from developing more infrastructure across the river. The government only released the agreement because they simply had no way of hiding it anymore after I revealed its existence. The recent posting of the agreement on the internet is not a sign of transparency – it was the action of a government that simply had no way of hiding what it wanted to stay hidden. If the government wanted to be transparent, several important activities should have been done from the very beginning.
First, there should have been consultations with the public and the National Assembly while the deal was under negotiation. Secondly, they should have done their due diligence and negotiated a better deal for the country. Thirdly, the signed agreement should have been released publicly from the moment it was signed. Furthermore, there should have been discussions about all the financial implications of the agreement in local languages across multiple media platforms rather than simply shouting about the deal’s “innovativeness”. No one needs the government to be innovative – we need the government to be effective in pursuit of the nation’s long-term development.
Now that the agreement has been released, it is important for the public to know that there are still many important details about the agreement that are still hidden. The associated financial model is still not a public document. The updated traffic study is still not a public document. The public deserves to get access to all these public documents in order to properly scrutinize this agreement.
I therefore call on Minister Seedy Keita to release all the remaining documents about the Africa50 deal. Transparency demands it. Public interest demands it. National development demands it.