The Gambia’s cancelled debts

Edmund Woodfield reports on the cancellation of $140 million of The Gambia’s debt and its conditions

The Gambia is home to 1.5 million people, 60% of whom live on less than a dollar a day often controversial conditions must be fulfilled in order to qualify for debt cancellation, often involving the privatisation of national industries

You have to look quite hard at the map to find the Gambia. Tucked inside Senegal, it is the smallest country on mainland Africa. It’s only slightly larger than Devon and Cornwall and not exactly bulging with natural resources: the main export commodities are peanuts and fish. The Gambia is, however, home to 1.5 million people, 60% of whom live on less than a dollar a day.

For those living in the Gambia, then, the recent agreement to cancel $140 million will be great news, especially as this total should rise to $514 million following further negotiations. The potential benefits of the cancellation are clear, with President Jammeh beginning 2008 by announcing a 20% increase in pay for civil servants and the government now investing in health and education to greatly help tackle poverty across the country.

The Gambia has, however, had to fight for seven hard years in order to fulfil the criteria laid out in the Heavily Indebted Poor Countries initiative (HIPC). Often controversial economic conditions must be fulfilled in order to qualify for debt cancellation, often involving the privatisation of national industries. Many argue that the conditions under which debt cancellations are achieved undermine the autonomy of African countries, pointing to Gambia’s earlier attempt to privatise the peanut industry which had disastrous effects, resulting in the loss of $2 million, and 10,000 jobs.

The Gambian government have since successfully resisted pressure to attempt a second full privatisation, but The Gambia still faces many difficulties, with the latest cancellation only amounting to just under 28% of The Gambia’s external debt, and less than a sixth of Africa’s total debt. The cancellation, however, will be a great relief to the country’s economy, providing a space where the pressures of poverty are eased and the Gambia has a chance to help build on the education and essential needs of its people.