Dawda Jawara - Economic Reform

Economic Reform

As one of the most marginal nations in the capitalist periphery at the time of independence, The Gambia was incorporated into the world capitalist system as a supplier of agricultural exports (largely groundnuts) and tourism. Since independence, there has been little change in the structure of the economy, which remains very heavily dependent on groundnut production. Agriculture and tourism are the dominant sectors and also the main sources of foreign exchange, employment, and income for the country. Thanks to the growing economy, the government introduced in the 1970s the policy of Gambianization, which led to an expansion of the state’s role in the economy. There was a 75 percent increase in total government employment over the period from 1975 to 1980.

In mid-1985, The Gambia under Jawara, initiated the Economic Recovery Program (ERP), one of the most comprehensive economic adjustment programs devised by any country in sub-Saharan Africa. With the aid of a team of economists from the Harvard Institute for International Development and the International Monetary Fund, The Gambia greatly reformed the economic structure of the country. Under ERP, in 1985-86, the deficit was 72 million Dalasis, and it increased to 169 million Dalasis in 1990-91 (Budget Speech, June 15, 1990). However, by mid-1986, just a year after the ERP was established, the revival of The Gambian economy had begun. The government reduced its budget deficit, increased it foreign exchange reserves, and eliminated it debt service arrears.

Under the ERP, money-seeking opportunities became more abundant, and, unfortunately, many private businessmen and public officials turned to illegal means to make profit. Corruption created a serious legitimacy crisis for the PPP. Several cases of corruption were revealed and these seriously indicted the PPP regime. The Gambia Commercial Development Bank collapsed, largely due to its failure to collect loans. An Asset Management and Recovery Corporation (AMRC) was set up under an act of parliament in 1992, but the PPP government was not willing to use its influence to assist AMRC in its recovery exercise. This was particularly embarrassing because of the fact that the people and organizations with the highest loans were close to PPP. In an embezzlement scheme at the Gambia Cooperative Union (GCU), fraud was revealed in Customs, and through the process of privatization, it was discovered that many dummy loans had been given to well-connected individuals at GCDB. A group of parastatal heads and big businessmen closely associated with the PPP (nicknamed the Banjul Mafia) were seen as the culprits responsible for corruption in the public sector. Driven to make profit, many elites did not refrain from manipulating state power to maintain a lifestyle of wealth and privilege. Corruption had become a serious problem in The Gambia, especially during the last two years of the PPP rule.

By 1992, The Gambia was one of the poorest countries in Africa and the world, with a 45-year life expectancy at birth, an infant mortality rate of 130 per 1000 live births, a child mortality rate of 292 per 1000, and an under-five mortality rate of 227 per 1000. At that time, 120 out of every 1000 live births died of malaria. The Gambia also had a 75 percent illiteracy rate, only 40 percent of the population had access to potable water supply, and over 75 percent of the population were living in absolute poverty.

Structural adjustment programs implemented in response to the economic crisis resulted in government fragmentation, privatization, less patronage in co-opting various groups and growing corruption. The 30-years the PPP regime operated with diminished resources and therefore could no longer rule as it always had. The credibility of the competitive party system was severely challenged as Jawara’s PPP was unable to show that good economic management could lead to benefits for the majority of society.

To combat the myriad threats to political survival, a leader needs resources. Despite the existence of both state- and time-specific variations, it is possible to identify a range of resources leaders may employ to prolong their rule. African leaders have access to two types of resources: domestic (by virtue of their access to the state) and external (foreign aid, loans, and so forth). Given states’ widely disparate levels of domestic resources, with some possessing valuable mineral deposits and others confined to agricultural production, generalizations are unwise, although an accurate case-by-case assessment of a leader’s domestic resource base is clearly an important factor when explaining political survival.