According to the 2024 Auditor General’s Report released this week, key state-owned enterprises (SOEs) in The Gambia have not repaid a total of GMD 1.82 billion in government loans. The findings highlight issues regarding the government’s supervision of public funds and the financial administration of these organizations.
The report indicates that the National Water and Electricity Company (NAWEC) had an outstanding principal of GMD 1,116,575,842.37, along with accrued interest amounting to GMD 169,917,346.49. Even with payments amounting to GMD 53,993,372.40, the company continues to owe GMD 1,232,499,816.45.
In a similar vein, the Gambia Civil Aviation Authority (GCAA) has an outstanding principal amount of GMD 129,481,708.50, along with accrued interest totaling GMD 302,490,423.31, resulting in total arrears of GMD 431,972,131.81. GAMTEL, the national telecommunications company, has an outstanding principal of GMD 160,207,781.25 that is still completely unpaid.
The Auditor General’s report indicates that the defaults can be partially attributed to insufficient monitoring systems within the Ministry of Finance and Economic Affairs (MoFEA), which is responsible for overseeing on-lending agreements with these enterprises.
“This weakness delays the detection of defaults, increasing the risk of financial loss. It also undermines compliance with statutory requirements and impairs the transparency and accountability of the portfolio management process,” the report states.
The report suggests that MoFEA enhance its controls by implementing automated tracking of loans, conducting regular evaluations of borrowers, and adopting a more proactive approach to managing arrears. It also encourages SOEs to restructure their obligations or pursue market-based financing instead of depending on automatic government bailouts. It is recommended that the government diversify its credit portfolio as a means to mitigate exposure to high-risk loans.
In response to the report, the Permanent Secretary at MoFEA highlighted that a significant portion of the on-lending took place prior to the establishment of the current framework for monitoring loans.
“Nonetheless, we are monitoring them, and a formal request was sent,” he said.
The findings highlight the persistent difficulties in handling public sector debt and maintaining accountability in state-owned enterprises, which are essential to The Gambia’s infrastructure and services.
