As economic hardship takes toll on citizens, businesses
By Sanna Camara
Reports reaching Gambia Beat has revealed that foreign nationals operating businesses in the Gambia have been packing and leaving the country, following the new tax sweep that saw many rounded up and detained last week.
Foreign business operators have been asked to pay between D15, 000 and D17, 000 as annual sales tax by the country’s revenue agency. Last week, a rounding up exercise began at Banjul Albert market, spreading to Serre Kunda market and other parts of the Kanifing Municipality, and West Coast Region.
“I have been compelled to go away and set up my business in Cassamance. There is less taxation and consistent economic policies,” a Guniean shopkeeper told Gambia Beat yesterday.
‘Businesses are struggling’
Gambia Beat has learnt that many import-based businesses are struggling with losses on sales due to the exchange-rate-fixing instituted by government.
Another Nigerian dealer in second hand car parts is also planning to go to Guinea Bissau to set up import trade.
“My next container of goods is being diverted to Bissau Guinea on my instructions… I can no more continue to do business in this environment,” Michael, as he prefers to be called, said.
Government has artificially pegged the Dollar exchange rate at D35 per Dollar, against the international rate of over D50. It has ordered all financial and other business operators to duly conduct business based on the D35 per Dollar bench mark.
‘We are forced to sell at losses’
“As a result, we are buying goods at a higher price internationally and forced to sell at loss,” an importer of consumer goods told Gambia Beat yesterday.
Last week, the International Monetary Fund (IMF) had warned that over-valuing the Dalasi will impact negatively on the country’s international competitiveness… However; there hasn’t been any lifting of the free trade in currencies to date.
Gambia Beat asked a development analyst what this exchange rate fixing of the Dollar means for the country:
Buy goods at high Dollar rate, resell at lower
“Businesses will buy goods at high Dollar rate internationally, and resell at lower Dollar rate in The Gambia,” he said. As a result, he confirms that this could lead businesses to be operating at an all-time loss.
“Some will even be unable to pay their staffs, or their rents as is becoming the case in the past few months. If it continues, they will be forced to lay off staff or even close shop,” he added.
More businessmen leaving the country
“I am closing my shop at Serre Kunda market and going back to Senegal. I cannot pay D15,000… I am forced to close shop even though I love this country,” a Senegalese trader said.
The issue of the economic hardship has become the talk on the streets, offices and vous around the country. Especially after the recent rounding up of business operators for defaulting to pay the new tax obligations levied by the state…
The consumer population is also hard hit by the imposition of the so-called Value Added Tax (VAT) on businesses since January. Prices of basic commodities have since gone up by considerable percentage since then.