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GAMBIA: MEMBERS OF THE CEMENT IMPORTERS AND TRADERS CALL TO ACTION GAMBIA: IMPORT DUTY MADNESS AND POLITICAL FAVOURITISM

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Dear Gambians,

We are reaching out to Gambians to shed light on a concerning policy that threatens to hamper

purchasing power and impede economic growth. As small business owners deeply invested in

the nation’s welfare and staunch advocates for The Gambia and her people, we approach this

issue from multiple perspectives.

Today, the Gambian government has introduced a significant policy shift: a staggering 500%

increase in import duties on cement imported via road networks from Senegal, which accounts

for a substantial share of the cement in The Gambia. This move seemingly favours cement

importation via vessels, a domain predominantly controlled by three bagging operators: Jah Oil,

Salam and Gacem employ a fraction of the workforce of small-scale importers. The

import duty has skyrocketed from D30 per bag to an exorbitant D180.

To disguise their cronyism, Salam argues that they encountered difficulties exporting their

imported cement into Senegal. However, the reality is that they neglected to comply with

standard export procedures, obligatory for all countries, including when importing cement into

The Gambia. The government would like you to believe this was the catalyst for a policy they’ve

been colluding with the three bag operators on for months.

The government’s failure to comprehensively analyse its strategy to recuperate or compensate for the estimated daily loss of D6,000,000 in revenue generated by small-scale importers through duties raises significant concerns. This lack of transparency regarding their plan raises doubts about the potential economic consequences of favouring a select few with the proposed policy change. Moreover, the absence of competition and variety inevitably leads to price hikes, underscored by the notable price surge following the implementation of

the first import duties in 2019.

This surge is a stark reminder of the detrimental impact of monopolistic practices on consumer costs. Despite these concerns, it remains unclear why the government is seemingly aligning its interests with those of Hamidou Jah and Muhammed Sillah to the detriment of the average Gambian. Hamidou Jah and Muhammed Sillah have attempted such measures previously, but every trade minister rejected them based on free market principles and consumer protection.

All the cement is imported except for the current trade minister, Baboucarr Joof. How can Mr Joof

accept such a raw deal for Gambian youths, who have invested in a fleet of over 500 long-haul

trucks? Particularly, Hamidou Jah continues to exploit his government connections to

monopolise various industries, including the banana trade, iron rods, gas stations, water

bottling, and cement bagging, providing Gambians with inferior products. We are still

investigating how Hamidou Jah secured a $50 million rice cultivation project over other viable

options.

The youth of the country rejected yet another unreasonable duty increase since 2019,

from D8,000 to D30,000 to D180,000, solely because cement bagging operators cannot manage their costs. If they cannot compete, they should fail, but the burden should not fall on the

Gambian people through price hikes. The irony of this episode is that Jah Oil proposed a sole–

source contract to procure cement from Senegalese factories, which was rejected.

This decision raises critical questions: How can such a drastic hike in import duties be justified,

especially when the current cement price stands at D375.

The only conclusion is that the

the government intends to ban the importation of Senegalese cement, an ECOWAS member state,

for the benefit of three bagging operators and its citizens’ detriment. The implications

of this policy on businesses, consumers, and overall economic health demand thorough

consideration and urgent action.

Concerns Regarding Increases in Cement Import Duties in The Gambia.

1. Cement Import Dependency: There is one fact that the Gambia government would like

you to overlook: Gambia does not manufacture cement. All cement consumed in the

country is imported. The Gambia lacks local cement manufacturing capacity,

necessitating reliance on imports. The three bagging operators, Jah Oil, Salam, and

Gacem imports loose cement via vessels, and smaller-scale importers bring in bagged cement

via road networks.

2. Blocking Senegalese Cement Imports: The new import duty hikes specifically targeting

imports from Senegal, effectively blocking this crucial import channel, would ultimately

pressure construction costs.

3. Risk of Trade Conflict: Given The Gambia’s dependence on Senegal for various

construction materials, like basalt and iron rods, instigating a trade conflict could result

in elevated construction expenses for ordinary Gambians. Additionally, imposing these

duties contradicts the essence of promoting trade within the ECOWAS. It’s concerning

that the Gambian government is enforcing this policy at a time when Senegal is

undergoing a presidential transition. Moreover, considering Senegal’s role as an ECOWAS

member providing security assistance to The Gambia, this move appears particularly ill–

timed and in poor taste.

4. Supply Chain Vulnerability: Restricting road-based cement imports poses a significant

risk of supply disruptions, particularly evident during emergencies like the COVID-19

pandemic. Sole reliance on vessel imports also leaves The Gambia vulnerable to cost

fluctuations driven by geopolitical tensions, such as the ongoing conflict in the Middle

East. Notably, small-scale importers emerged as the only cement suppliers for an

entire year during the COVID-19 crisis, demonstrating their crucial role in maintaining

supply chains. Moreover, their resilience enabled transporters to deliver other

perishable goods within the region during this critical period. Meanwhile, the three

bagging operators remained inactive during this time.

5. Consumer Preference and Quality: Gambian consumers consistently favour Senegalese

cement’s superior quality over other imported alternatives, highlighting potential

dissatisfaction if forced to switch. Despite lower prices, the imported loose cement,

especially Jah Oil’s Tiger brand, often falls short in quality as consumers continue to

reject the Tiger brand and opt for more expensive, lower-grade alternatives. If Jah Oil and

Salam were confident in their products, they wouldn’t need lousy government policies

to prop up their businesses.

6. Supply Shortfalls: Senegal supplies a significant share of The Gambia’s cement

demand. Blocking imports from Senegal would exacerbate supply shortages, especially

considering projected population growth (Per UN statistics, The Gambia’s population will

grow by more than 80% by 2050). The three local bagging operators cannot

bridge this gap cost-effectively and are ill-equipped to meet the expected growth in

demand.

7. Impact on Construction Costs: With Senegalese cement imports blocked, the three local

bagging operators would monopolise the market, leading to increased prices and stifling

economic growth by raising construction costs for consumers. Several studies examined the impact of the 2019 tariff increment, and cement prices in

some areas jumped from D230 to D307. Today, retail for a bag of cement is between

D375 – D395. The tariffs did exactly what economists feared; they raised the price for the

consumer. The price of many products and services continues to climb due to

high inflation and the devaluing dalasi. However, this is partially driven by similar

misguided policies which marginalise small businesses in The Gambia in favour of politically

propped-up monopolies and oligopolies. How can the country have a tax base when the

only companies left standing are large importers, some of whom are exempt from

import duties? This vicious cycle has resulted in a ridiculous debt burden,

which devalues the dalasi. Currently, The Gambia is significantly dependent on imports; thus, we need a higher-value currency.

8. Support for Free Market Principles: The government’s intervention to protect inefficient

local bagging operators undermines free market dynamics. The previous import duties

established in 2019 failed to address underlying cost overruns by the three bagging

operators, and further bailouts would only burden average Gambians with higher costs.

9. Unintended Consequences: Claims of protecting local employment overlook the larger

employment pool of small-scale importers. Additionally, eliminating small-scale imports

would disrupt the trucking industry, leading to higher fuel costs for consumers as petrol

stations seek to offset consumption losses. Moreover, retailers continue to reject Jah Oil’s

Tiger Cement since Jah Oil undercuts its cement in the marketplace by selling directly

to consumers at a lower cost than what it sells to retailers. Favouring certain cement

producers over others risks market distortion and retailer losses. Finally, the costs of

local hauling and transport would be pressured as more small-scale transport operators

exit the market.

Sincerely,

Members of the Cement Importers and Traders Association (CITA)!

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