GOV’T TO FOOT D1.8 BLN LOANS OF DEFAULTING SOES
A recent report by the National Assembly’s Public Finance Accounts Committee (FPAC) has revealed a concerning trend of state-owned enterprises (SOEs) failing to repay loans guaranteed by the government.
According to the report, which covers the year 2020 audited accounts of the Government of the Gambia, SOEs have consistently defaulted on loan repayments, leaving the government to bear the burden.
The report highlights two specific cases, the Gambia Civil Aviation Authority (GCCA) and Gambia Telecommunications Company,Gamtel.
It said the GCCA borrowed $10 million (D512.2 million) for the Banjul International Airport Improvement Project, while Gamtel borrowed $25 million (D1.285 billion), making the total amount for both at D1,792,700,000.
The report said both institutions failed to repay the loans on their respective due dates with Gamtel, for example, making only two interest payments before defaulting on the loan, forcing the government to pay D43,371,523.30 in interest on the loan to the creditor, Exim Bank of China.
Responding to the issue, the public finance committee demanded that the Directorate of Debts and Loans at the Ministry of Finance and Economic Affairs (MoFEA) provide it with the status of loans on-lent to parastatals and their repayment status.
FPAC also recommended that MoFEA develop a framework in consultation with the SOE Commission on the on-lending, guarantees, and subsidy arrangements to SOEs, to ensure their ability to meet their obligations when they are due.
Source: The Standard
