NIGERIA SNEEZES, GAMBIA CATCHES COLD

The year 2012 starts with astounding events unfolding in the Western part of Africa, with Nigeria reeling amidst protests for fuel subsidies, combined with threats imposed by the belligerent Islamic sect – Boko Haram. However, as Nigeria’s protest shows no sign of winding, Gambia’s oil market faces Diesel scarcity, leading to a handicap of the country’s transport sector.
On Saturday, the cloud that brings no fortune to the transport sector descended in the country, leaving several hundred vehicles and businesses dysfunctional.

From Brusubi – the country’s burgeoning metropolis – to Basse, the second capital, every diesel-consuming machine catches cold, as Nigeria sneezes from oil subsidy protests that swapped Africa’s largest oil producer overnight. After many years of experiencing diesel shortages, the country has fallen prey to gasoil scarcity again, handicapping economic opportunities as commercial vehicles and businesses are in a standstill.

As Senegambia Galp Energia petrol station runs out of diesel, so did the other several ten of petrol stations in the country. Thus on one side, this unfortunate scenario affects Galp Energia Ltd, Elton Ltd, Castle Oil Ltd, and Elton Ltd, the four companies that are involved in the retail of liquid fuel in the country.

“I think we are more affected by the fuel vendors, because if they don’t sell diesel, they sell petrol. So you can see their business is still moving at least. My taxi uses diesel, and since I understood there is no diesel in town, I decided to park it, before my remaining diesel dry up and I get stranded along the road,” said Modou, a taxi driver.

The shortage also affects many commercial vehicles, and even passengers who live on the breadline. Many could not afford to hire a taxi, as taxi men whose vehicles use petrol have decided to run only when they are hired. However, the very many whose vehicles consume diesel continue to suffer as their cars are left parking in garages and homes.

The shortage also creates transport problems, many also fearing that whenever diesel is available again, it will witness a hike in price.
However, as gasoil scarcity strikes the country, there are pockets of other people who stand to benefit from it. Taxi men who drive vehicles that consume petrol were on the smiling, as passengers scramble for vehicles on streets and main roads of the country. Many of them have opted not to resort to the normal routine of taking passengers from a designated destination to the other; rather they have chosen to be hired – which is more lucrative. This business-orientation-phenomenon has created transport problem, especially on busy days like Mondays, when many people were plying their way home after hectic weekends.

“My vehicle consumes petrol and since Saturday I have earned something that I cannot earn for a week. I used to run from Bursubi to Galp Energia fuel station in Kairaba and get no more than D50 for one trip, but now in only a single trip I accumulate up to D150. This is because I am always hired,” said Sol, a taxi driver.
An attempt was made by this reporter to speak with petrol stations managers, stakeholders in the energy sector, and those in the energy supply business, but to no avail. Many of them requested the red tape system.

Consequently the government has been subsidizing the price of diesel, but increment in the world market has affected the country in recent times. It could be recalled that the prices of both petrol and diesel were increased in May 2010 to reflect the rising price of the fuel in the world market. However the increase in the price of diesel was much lower; thereby making the price of diesel much lower than the real world market price, thanks to government’s subsidies.

The Gambia, like most oil importing countries, is susceptible to any exogenous shocks such as price increases in world oil prices. Any increases in external costs translate directly to higher importation costs and as a result higher prices at the pump. Taking into account Government taxes, any further increase in world oil price will lead to an erosion of the gains in the country’s development efforts.

The Gambia is heavily dependent on imports to meet its petroleum requirements. Petroleum products consumed in the Gambia is all imported. It is the second most important source of energy in the country, after fuel wood, accounting for about 17% of total primary energy needs according to the 2004 energy balance. The petroleum requirements of the country consist of gasoline (regular and premium), kerosene, and diesel oil (gasoil), LPG and jet fuel.

VISION 2020 VS JAMMEHISM AND JAMMEHNOMICS

When the term Marxism, Leninism, and Maoism first appeared in Eastern Europe, many rose to their feet, labouring under the delusion that their Guards (Karl Marx, V I Lenin, and Mao Zedong) are angels of mercy that have come to safe the proletariats. Albeit the political and economic theories developed by them had seemingly done something of that nature, yet they were sternly opposed.
This is the twenty first century and new governance structures have emerged. However, their dogmas and principles went unquestioned.

In this country, where three third of the population continues to live from hand to mouth, we are seeing an emergence of new-fangled theories: Jammehism and Jammehnomics.

But what do these eponyms mean for the unemployed university graduate at Badidu and the man who continues to suffer in silence in Diabugu, because of failed policies of decentralisation? Perhaps the status quo will remain analogous as it was in pre-colonial Gambia: state of intellectual slavery, where 300 years of British imperialism and 30 years of hard-earned government are replaced by a government, in which the citizens are unable to keep their heads above water.

As a retired Lieutenant for 17yrs, Jammeh has enjoyed respect and admiration from his uniform men

Jammehism and Jammehnomics are dogmas of Yahya Jammeh’s political and economic philosophies, which are a product of disillusion as far as the Millennium Development Goal one (end poverty and hunger) is concerned. We are three years away from the MDGs, three years away from marking ‘Golden Jubilee’, and nine years away from making Jammehnomic – Vision 2020 – a reality. With the coming of the Programme for Accelerated Growth and Employment (PAGE), or with Jammeh’s seemingly rejection of political pluralism, is this country going to triumph on the former, when more than half of the population continues to wallow in abject poverty?

Jammeh’s economic approach has unquestionably handicapped a proportion in the private sector: the tax quotient is high, the principle of non-interventionism has failed, and abuse of market powers is on the rife. Unless the government pulls off in rationalising taxes and tightening the vacuum of unemployment, Vision 2020 and the ubiquitous euphoria with which many Gambians celebrated Jammeh’s election victory will turn to disillusion. ‘Professor’ Jammeh has risen from being a Lieutenant to a ‘Chairman’ of a revolution, and finally to a business guru who sells bread, meat, sugar, the list goes on to feed the reader. With Jammeh’s venture in numerous businesses, the road to socialism and Soviet-replica of economic development, such as Marxist-Leninists is obvious.

Since unemployment has become the fastest rising worry in the world (according to a research conducted in November 2011 by the BBC in 23 countries for 11, 000 people), any effort to help curtail this worry would undoubtedly safe uncle Jammeh’s government from the wind of change that continues to blow in the Middle East, across North Africa to Rome (where media-tycoon Berlusconi was seen relinquished power), and to the Wall Street in New York.

Vision 2020: ‘The Gambia Incorporated’ is amongst other things, aimed at transforming this country into an “Export-oriented agricultural and manufacturing nation, thriving on free market policies and a vibrant private sector”; but how far have we gone in this mission statement, when we continue to export our cash crop raw: mango raw, cashew raw, groundnut raw etc. Jammehnomics should address, with seriousness, the diversification from this century-old economic practice to a modern Asian-style practice, because it has become a conventional belief in modern industrialised economies that the more a country specializes only in production of raw materials and agricultural produce, the poorer it becomes.

The Asian countries, like the West, went from being agrarian societies that manufactured and exported food and raw materials, to industrialized societies of what they are today.

Now on his doctrine of Jammehism, Uncle Jammeh continues to play the devil’s advocate in Africa, criticising the West for what he described as “British misrule”, whilst retaining his prerogatives of Islamic fundamentalism: “[…] when I was coming to power no one voted for me as I only based my faith in God and as far as I do not betray God, no election or coup can remove me from power.” This remark, made in July 19, 2011 at Jarreng, seriously undermines our sovereignty as a multi-party state, and therefore stands out as a food for thought.

Over the past 17yrs, Jammeh has ruled the West African country with an iron fist

Still on his ‘Vote for me or remain underdeveloped’ tactic, the Kanilai born president-elect continues: “For the road network [newly constructed] that passes through Jarreng, we cannot construct without making the infrastructure to pass through the village in view of your geographical location. But this is not the case for electricity as we can mount the electric poles over your village and yet you will not get power. I know that you people want a good health facility but that hospital will not be constructed in Jarreng. There will be [a] senior secondary school in the area but it will not be constructed in Jarreng.” This is the evidence of what I mean about Jammehism: ‘Vote for APRC or you will not taste the fruit of development.’

In a liberal democratic state, remarks of such nature mark the end of a president’s term in office; because the statement in itself circuitously advocates the departure from accepted policies, and calls for a single party state, where presidential election becomes null and void.
Can this political doctrine achieve an “Enterprising population and guarantee a well-balanced eco- system and a decent standard of living for one and all under a system of government based on the consent of the citizenry”, as enshrined in Vision 2020? Thus, Jammehism in this sense is versus Vision 2020, because the former seemingly rejects political pluralism, whilst the latter advocates for a “government based on the consent of the citizenry”.

Vision 2020, have called on every Tom, Dick and Harry in this country and abroad to work in tandem, irrespective of tribe, religion and political identity; and I believe that starts from creating a platform where the “consent of the citizenry” can be addressed.

To conclude, I will add: the recently concluded conclave between the government and Gambians in the Diaspora is one of such platforms that we need in order to realise the achievement of Jammehnomics and other development blueprints.

REVENUE DROP CREATES MORE FISCAL DEFICITS

The Gambia government has continued to maintain an emerging economy over the years with sustained real GDP at 5.5 per cent and other sound macroeconomic indices. Although its 2012 projected budget deficit stands at 3 per cent, the government has been finding it difficult to maintain fiscal deficit as expected due mainly to the fact that it continues to spend more than projected for as well as always fall short of generating its estimated revenues over the years, leading to large fiscal deficit and huge borrowings.

According to the Gambian government’s 2012 national budget, there has been significant drop in revenues as a percentage to GDP from 17.5 per cent in 2007 to about 14 per cent in 2011.
This has led to large fiscal deficits prompting government to engage in a series of tax administration reforms and expenditure controls.
Fiscal deficit is considered to be the total amount by which money spent is more than money received by a government.
In The Gambia, fiscal deficit as at end-year 2011 was budgeted at D466.3 million (1.5 per cent of GDP) whilst the estimated outturn (i.e. what turned out to be the expected final deficit over the year) for the same period was D740.5 million (2.3 per cent of GDP).
In a bid to maintain a sound fiscal management of the economy and curb its continual drop in projected revenue, The Gambia government in the past five years has introduced a number of Public Financial Management (PFM) reforms that are expected to promote macroeconomic stability, improve revenue mobilization, and promote efficiency in resource allocation.
Fiscal policy, which is government management of its spending and taxation decisions, has important, but much-debated effects on the short-run behaviour of a country’s economy. If governments choose to tax more than they spend (i.e. run up a surplus) then the impact of policy is to depress the overall level of spending in the economy. The reverse occurs if government runs up a deficit.

In the case of The Gambia, although government has been effecting necessary taxes that could depress the overall level of spending and creating more revenues, it has been seriously struggling to generate those expected revenues, while it continues to incur more expenditure on government outlays and other fiscal matters.
It therefore plans to embark on applying fiscal reforms that will include comprehensive tax reforms aimed at easing out the pressure and cumbersomeness of taxation in the country, and at the same time trying to generate substantial revenue through tax and non-tax sources.
A rundown of its fiscal out for the year 2012 gives a clear picture of this task of maintaining a sound fiscal policy while trying to generate more revenues in the course of the year.

FISCAL OUTLOOK FOR THE YEAR 2012
The primary objective of the Government has been committed to alleviating poverty, accelerating growth and improving the wellbeing of its population.
Therefore its fiscal policy for 2012 would have more to do about meeting this target of its Programme for Accelerated Growth and Employment (PAGE), the successor programme of PRSP II, which aims at alleviating poverty through creating employment opportunities for the people, especially its teeming number of younger population.

The 2012 budget states: “The PAGE is expected to be funded by domestic resources, traditional donors and non-traditional donors; it is based on Vision 2020 and various strategies, and is the execution template for the government’s long-term vision. Consistent with the Paris Declaration’s resolutions on aid efficiency and the ownership of development, PAGE acts as the main interface between the government and its development partners. It is fully aligned with the Millennium Development Goals (MDGs).”

REVENUE
Given the gloomy picture of the WEO [World Economic Outlook] characterised by threats of double dip recession in some developed countries the fiscal outlook for The Gambia has been cautiously projected.
The 2012 budget is prepared on the basis of the following key macroeconomic assumptions; to sustain real GDP at 5.5 per cent, inflation at 5 per cent, the overall budget deficit is projected at 3 per cent, current account balance excluding budget support at15.3 per cent. The exchange rate has been relatively stable, with gross official reserves projected at D185.9 million or 5 months of import cover.

Total revenue and grants for 2012 is projected at D5771.3 million (17.6 per cent of GDP) as against a total of D5650.2 million (17.8 per cent of GDP) a year earlier. Tax revenue is forcasted at D4613.9 million in 2012 increasing by D23.6 million from its previous year level of D4590.3 million. In the fiscal year 2012, grants are projected at D1157.3 million against D1059.9 million in 2011 including a 9.2 per cent increase.

EXPENDITURE
Total Expenditure and Net lending for the year ending 2011 was D6116.5 million (19.3 per cent of GDP). During the course of the year 2012 total expenditure and net lending is projected at D6722.8 million or 10 per cent increase by D606.3 million from its 2011 level. This is mainly due to higher than expected increase in external resources.
Other charges for the year ending 2011 were D2.2 million. This figure was projected to increase slightly in 2012 to D2.5 million constituting 7.76 per cent of total expenditure and net lending compared to 7.13 per cent in 2011.
The fiscal deficit for the year ending 2011 was D466.6 (1.47 per cent of GDP). The deficit for 2012 is projected at D951.4 million (2.9 per cent of GDP). The deficit will be fully financed through domestic and external borrowing. The net-external financing is estimated at D405 million while the domestic financing is projected at D541 million.
The public debt is relatively high and stood at 69.2 per cent of GDP as at end-December 2010 of which domestic debt represents 29.3 per cent. The concern is on domestic debt as it is more of a burden to the budget than external debt, which is highly concessional.

REVENUE MEASURES
In its effort to mobilize resources, The Gambia Government will introduce measures to help boost its revenue geared towards the funding of development programmes, the 2012 national budget says.
The government has therefore proposed the following measures to reverse the declining nature of tax revenue over the past three years.
These include implementation of a quota system on Duty exemptions on fuel for diplomatic missions; expansion of excise tax coverage through the collection of excise taxes on domestically produced goods; bringing into the tax net holders of Special Investment Certificate (SIC) whose certificates have expired; removal of the protection on sugar and cement, as the protection has not made any difference in the market price; increasing the revenue tax on laundry soap from D5 per kilo to D7.5 per kilo; and removing the fuel concession given to Gambia Ports Authority (GPA).

RECAPITALISATION IN 2012: BANKS TO INCREASE CAPITAL REQUIREMENT TO D200M

The final round for the increment of capital requirement of banks operating in The Gambia is to take effect December this year, lest the bankers forget.

The call for the increase of capital requirement started in 2008 when the Central Bank of The Gambia (CBG) issued a directive increasing the minimum capital of banks in two stages from D60 million to D150 million by end-December 2010 and to D200 million by end-December 2012.

By the time of the first deadline, December 2010, eight of the fourteen banks, then, were able to increase their capital requirement on time. Five of the six remaining banks did so at the eleventh hour when the Central Bank, through the Ministry of Finance, threatened to revoke the banking licence of any bank that would default in meeting the requirement.

However, it should be noted that increasing the minimum capital by more than 100%, that is from D60 million to D150 million, was such a mammoth task for the banks some of whom were barely making any breakthrough in their business turnover.

Since the Finance Minister publicly declared in December 2010 that six banks were yet to meet the capital requirement, there was big confusion among the country’s banking population who were in doubt as to whether “the bank I am banking with has met the requirement or is among those unable to meet it and therefore at risk of closure”.

The issue cast fear in the hearts and minds of many people in the country, including parliamentarians, who demanded to know the defaulting banks so that “we can take precautionary measures when dealing with them”.

The matter was only laid to rest when the Minister of Finance said there was no cause for alarm as the banks were rigorously been monitored by the Central Bank of The Gambia.

At last, all the banks, apart from Oceanic Bank (Gambia) Limited, met the requirement for December 2010. Oceanic Bank didn’t meet the requirement because of the fact that its parent company, Oceanic Bank International Plc in Nigeria, decided to divest from all international subsidiaries, hence its decision not to increase the capital of Oceanic Bank (Gambia) leading to the closure of the Gambia subsidiary. It should be noted that most of these banks met the capital requirement not from their own sources but rather with the support of their parent companies in Nigeria or elsewhere.
In the course of 2012, the banks are expected to start beefing up their capital at the Central Bank to gradually build it up from D150 million, which supposed to be the current level, to D200 million, the target by end-December 2012, in order not to default at the end of the year.

Central Bank of The Gambia

This year’s increment should not be difficult for any bank on a sound footing, financially, as it is just an addition of D50 million – from D150 to D200 million.

However, since in 2010, some of the banks have claimed they have increased their capital to D200 million two years before the deadline, while some say they have surpassed the 2010 amount but are yet to reach the 2012 level, and the rest say they are ready to increase come 2012.

It should also be noted that those banks that increased their capital at the dying minute in 2010 did so with the support of their shareholders to whom they virtually paid no dividend because they were not making any significant profit.
While pleading for the support of their shareholders, a managing director of a particular bank in 2010 told shareholders of his bank that “although the bank has operated at a loss for so long, without payment of dividends to shareholders, your patience is highly appreciated.”

Amadou Colley Central Bank Governor

A higher minimum capital requirement, the Central Bank says, serves several purposes. It would ensure that banks are better able to withstand periods of economic and financial stress and therefore support economic growth. It would also help in maintaining market confidence in the solvency of the banking system; imposing market discipline and providing a large cushion to protect taxpayers from the risk of being called to bail out failing banks.
The capital increase would further enhance the safety and soundness of the Gambian banking system which, in turn, promotes economic growth.

As in 2010, this year the CBG has resolved not to grant request for forbearance if a bank fails to meet the requirement. And to mitigate systemic risk that may arise from the revocation of a banking licence, the CBG shall take the following actions: invoke section 45 of the Banking Act 2009 and take over the bank; thereafter the CBG may invoke Sections 48 and 51 of the Banking Act 2009 and place the institution in conservatorship to be sold, merged or restructured; and apply to the High Court for compulsory liquidation under Section 52 of the Banking Act as a last resort.

Banking industry performance
The performance of the banking industry has been appraised by the 2012 national budget, which says that Gross loans and advances to the major sectors of the economy, accounting for 30.0 per cent of total assets, increased by 6.5 per cent to D5.4 billion in 2011.

Deposit liabilities continued to increase and totaled D11.9 billion, or an increase of 10.2 per cent compared to 2010. The ratio of non-performing loans to gross loans declined to 13.0 per cent in September, an improvement from the 16.2 per cent recorded a year ago.

The Net Foreign Assets (NFA) of the banking system, according to 2012 budget, increased significantly to D4.1 billion or 16.9 per cent mainly on account of the significant increase in the NFA of deposit money banks.

The net foreign assets of deposit money banks increased to D1.3 billion from D0.6 billion, mirroring the significant decline in foreign liabilities and increase in their balances held with other banks abroad.

In contrast, the net foreign assets of the Central Bank of The Bank declined by 5.1 per cent to D2.7 billion due mainly to growth in liabilities and payment of external obligations.

Standard Chartered, the 1st and leading bank in The Gambia

The Net Domestic Assets (NDA) are the sum of foreign assets held by in this case, the bank and, less their foreign liabilities of the banking system rose to D10.2 billion or 9.5 per cent mainly due to the increase in domestic credit, which rose to D11.5 billion or by 22.3 per cent compared to the 35.3 per cent growth recorded in September 2010.
The budget also says credit extended to the public sector increased significantly to D773.1 million or by 17.0 per cent relative to a contraction of 24.9 per cent in the preceding year. Credit to private sector, which constitutes 40.2 per cent of total credit, increased by 5.1 per cent to D4.6 billion in the twelve months to end-September 2011.
Furthermore, net claims on government increased to D6.1 billion or by 41.0 per cent due to increased borrowing from the domestic economy to finance government operations.

TOURISM SECTOR GIVES CRAFT MARKET VENDORS A FACELIFT

As part of the mandate to further develop tourism products within the industry, the Minister of Tourism and Culture, Fatou Mas Jobe-Njie, has commissioned a D5M craft market in Fajara to give a new lease of life to the trade of craft market vendors in that tourism spot of the country. Amat JENG reports the new development.

Vendors at the Fajara Craft Market have become the happiest entrepreneurs in the country, since January 3 this year when Tourism Minister Fatou Mas Jobe-Njie was handed the keys to the D5.5 million futuristic edifice built by Construct Gambia Limited – a construction company of first class standard.

These people are happy with the new complex

The new complex contains 48 stalls that can be utilised by 96 vendors.
In her opening address as the chairperson of the occasion, Hon. Jobe-Njie, Minister of Tourism and Culture, underscored the importance of building the craft market in Fajara, saying it is part of the mandate to further develop tourism products within the tourism industry. “The occasion marks yet the arrival of another significant milestone in the annals of tourism development in The Gambia,” she said.
Given the significant contribution tourism has in the country’s socio-economic development endeavours, Mrs Jobe-Njie could not have said more than this: “The development of craft markets within the tourism development area therefore remains a cornerstone of my Ministry’s policy on tourism, for the benefit of tourists who constitute the major clientele as well as Gambians whose products are sold at craft markets.”

People from Latin America to all parts of the world visit Gambia

As a hub for preserving the nation’s heritage and cultural identity, Minister Jobe-Njie urged the beneficiaries to view the craft markets as avenues where the country’s heritage of fine and plastic arts are showcased, saying the market will provide opportunity for Gambians to benefit from their creativity through sale of their products and craft bought by tourists as souvenirs and taken away to their countries of origin, which will in one way or the other contribute to making The Gambia known outside.
She continues: “Maintaining our competitiveness in the craft sector also contributes to our competitiveness as a destination, because the sum total of all that the ‘Smiling Coast’ offers as a destination, constitutes in reality the selling points of the destination that captures the eyes, hearts and minds of the potential tourist or traveler, which eventually lures him or her to choose our destination for a holiday.”
Minister Jobe-Njie urged vendors and stakeholders concerned to work together to ensure the market operates within the parameters of best practices so that tourists walk into it freely and orderly to avoid any hassles, either by vendors or ‘bumsters’.

Oreme Joiner, chairman of the Board of Directors of the Gambia Tourism Board (GTB), described tourism as an important sector that contributes in no small measure to the socio-economic development of the country.
Craft markets are an important component of the tourism product and as such should be given due consideration and protection for sustainable use.
Mr Joiner used the occasion to reflect on the Board’s efforts at similar projects, reminiscing in 2008 the completion of the Bungalow Beach Craft Market (commonly known as the BB Craft Market), the Bakau Craft Market and the renovation of the Sunwing Craft Market. He said they have also embarked on fencing the Brikama Craft Market.

The Board, he says, attaches great importance to the development of the local economy and its mandate to promote, develop and regulate the tourism industry by way of promoting local arts and culture.
This underpins the Board’s strong desire to revitalise tourism in terms of quality and standards, with a view to ensuring the sustainable development of this vital sector, he added.

He expressed gratitude and appreciation to Minister Mas Jobe-Njie, acknowledging that without her inspiration, dynamism, dedication and commitment, they would have found it very difficult to achieve success.
According to Mr Joiner, Minister Jobe-Njie is the pioneer of the initiative and has worked tirelessly with them throughout to ensure she fulfills the promise she made to the vendors of the craft market when she lasted visited them.

"Vendors and stakeholders concerned are expected to work together to ensure the market operates within the parameters of best practices so that tourists walk into it freely and orderly to avoid any hassles, either by vendors or ‘bumsters’"

He further extended his board’s appreciation to other stakeholders and Farrah Shams, who is not only the sole financier of the Fajara Craft Market project, but also a significant contributor towards the fencing of the Brikama Craft Market.

Farrah Shams of the Construct Gambia Ltd, in his brief handing-over speech, thanked President Yahya Jammeh and his government for giving Construct Gambia Ltd the opportunity to execute the project.

"Craft markets are an important component of the tourism product and as such should be given due consideration and protection for sustainable use."

Mariam Njie, president of Fajara Craft Market, expressed gratitude to the Ministry of Tourism and Culture for providing such a modern market for them. At the end of the ceremony, the minister and delegation were led on a conducted tour of the market.

GAMBIA RANKED POOR IN PROTECTING INVESTORS, GETTING CREDIT

Indicators presented and analysed in World Bank Doing Business have put forthright startling revelations of doing business in the world with the African continent standing at a vicious circle, as South Africa becomes the only country in Africa to top the world list in terms of ‘Getting credit’ to start up a business – all the others are left lingering at the bottom of the list, with The Gambia in a no-win situation, says author.
The latest World Bank Doing Business indicators which are benchmarked to June 2011 and looked at business regulation and the protection of property rights, featured 183 countries in the world of which The Gambia stands at 159 for ‘Getting Credit’ and 174 for ‘protecting investors’, leaving neighbouring Senegal at 126 for ‘Getting Credit’ and 166 for ‘protecting investors’ – a vicious circle for The Gambia; a country of around 1.8 million people.

The country's banknotes

In carrying out the research, the more than two thousand experts who did the work, first documented the complexity of regulation, such as the number of procedures to start a business or to register and transfer commercial property. Second, they gauged the time and cost of achieving a regulatory goal or complying with regulation, such as the time and cost to enforce a contract, go through bankruptcy or trade across borders.
Third, they measured the extent of legal protection of property, for example, the protection of investors against looting by company directors or the range of assets that can be used as collateral according to secured transactions laws. Fourth, a set of indicators documented the tax burden on businesses, and finally a set of data covering different aspects of employment regulation.

“Economies are ranked on their ease of doing business, from 1 – 183. A high ranking on the ease of doing business index means the regulatory environment is more conducive to the starting and operation of a local firm. This index averages the country's percentile rankings on 10 topics, made up of a variety of indicators, giving equal weight to each topic,” the report stated.
The report assesses regulations affecting domestic firms in 183 economies and ranks the economies in 11 areas of business regulation, such as starting a business, resolving insolvency, getting credit, paying taxes, protecting investors, trading across borders, dealing with construction permits, getting electricity, enforcing contracts, and finally registering property. The report reveals that getting an electrical connection for business start-up is most efficient in Iceland, Germany, Taiwan, China, Hong Kong SAR, and Singapore.

Singapore Tourism Blossomed Overnight

Whilst the report puts Guinea Conakry at the same level as The Gambia in terms of ‘protecting investors’ – an unfortunate scenario – it however scales Conakry to 150 in terms of ‘getting credit’.
Eritrea, Djibouti, and Madagascar have the poorest ranking in Africa – at 177 -- for ‘Getting Credit’, followed by Democratic Republic of Congo, 174, and Burundi, Mauritania, and Sudan at 166 and The Gambia at 159.
Guinea Bissau, Benin, Niger, Ivory Coast, Togo, Senegal, Mali, Sierra Leone, and Cape Verde all stood at 126 for ‘Getting Credit’, but Sierra Leone jumped on the list with 29 in ‘protecting investors’, with Ghana and Botswana sharing the same figure of 46 and Morocco stands at 97. Zambia breaks the record for Africa in terms of ‘Getting Credit’, standing at 8, followed by Namibia at 24; but the two southern African countries shared the same points of 79 for protecting investors, whilst neighbouring Mozambique stands at 46.

Apart from South Africa, the United Kingdom and Malaysia ranked 1st in the world for ‘getting credit’, New Zealand also tops the world for ‘Protecting Investors’, and Singapore came second on the table of 183 countries for this indicator.
South Africa stands at 10 for protecting investors, making it the only African country to be amongst the first ten, followed by Ghana and Botswana at 48 for ‘Getting Credit’, and Liberia and Morocco sharing the similar figure – 98 -- for getting credit.

For Moscow, it's uneasy to become an Int'l Fin. Centre, when the country banks continued to steal small investors' fund

Thus, in West Africa, if not in the world, The Gambia and Guinea are among the countries that have the poorest documentation in terms of protecting investors. Afghanistan closed the table with 183, followed by Lao PADRE at 182, Suriname at 181, and Djibouti at 179.
In West Africa, apart from Banjul, Conakry, Dakar, and Cotonou; Niamey and Abidjan also have poor records.
The UK ranks 10 in ‘Protecting Investors’, whilst the US stands at fourth for ‘Getting Credit’ and 10 for ‘Protecting Investor’. Singapore is ranked at eight for protecting investors and fifth for getting credit and Ireland stands at eight for the former and fifth for the latter.

WHY PROTECTING INVESTORS MATTERS?
Minority investor protections can have important implications for firm valuation. Researches on 539 large firms in 27 economies show that firm valuation is higher in economies with good investor protection than in those with poor protection.

Other researches show that corporate risk-taking and firm growth rates are positively related to the quality of the system of investor protection. Better systems may lead corporations to undertake riskier but value-enhancing investments.

Even though The Gambia's real estate continues to prosper, they are not fully protected

However, the Doing Business report, which was prepared in collaboration with the International Finance Corporation (IFC), measures the strength of legal protections of minority investors against misuse of corporate assets by company directors for their personal gain.

The indicators distinguish three dimensions of investor protections: rules on the approval and disclosure of related party transactions (extent of disclosure index), liability of company executives for self-dealing (extent of director liability index), and shareholders’ ability to access corporate information before and during litigation (ease of shareholder suits index). The standard case study assumes a related-party transaction between Company A (“Buyer”) and Company B (“Seller”) where “Mohamed Keita” is the controlling shareholder of both Buyer and Seller and a member of both their boards of directors. The transaction is overpriced and thus causes damages to the Buyer.

In the report, a high ranking indicates that an economy’s regulations offer stronger investor protection against self-dealing in view that stronger legal protection make minority investors more confident about their investments, reducing the need for concentrated ownership to mitigate weaknesses in corporate governance.

Therefore, investor protection matter for the ability of companies to raise the capital needed to grow, innovate, diversify, and compete.

“Without investor protections, equity markets fail to develop and banks become the only source of finance. Economies that have dynamic capital markets tend to effectively protect investors; thus making investors receive financial information they can trust; they participate in major decisions of the company, and directors are accountable for their managerial decisions. If the laws do not provide such protections, investors may be reluctant to invest, unless they become controlling shareholders,” the report explained.