The Government of The Gambia owes the Social Security and Housing Finance Corporation (SSHFC) D816,706,067, a debt primarily incurred on behalf of the National Water and Electricity Company (NAWEC). This substantial financial obligation was revealed in the National Assembly’s Public Enterprises Committee (PEC) report on the scrutiny of the 2022 accounts, financial statements, and management letters of State-Owned Enterprises (SOEs). The PEC report noted that this debt was formally recognized through an agreement signed between the Gambian government and SSHFC in 2020. This 2020 agreement did not only acknowledge the outstanding amount but also established a structured plan for the debt's repayment. The government's failure to adhere to this agreed repayment schedule has brought the issue to public attention, noting ongoing fiscal challenges within State-Owned Enterprises.
Debt and Repayment Details
The repayment plan stipulated annual payments of D163,341,213.40, which were to be disbursed in two equal installments each year. This structure was intended to systematically reduce the principal debt over time. For the review period of 2022, the government made a payment of D81,670,606.70. This amount was half of the expected annual payment of D163,341,213.40. The shortfall meant that an outstanding amount of D81,670,606.70 remained unpaid for that specific payment period, directly contributing to the accumulation of the principal debt. The government's failure to adhere to the agreed-upon schedule for these payments has contributed to the ongoing accumulation of the principal debt owed to the Social Security and Housing Finance Corporation, showing challenges in fiscal discipline.
PEC Report Findings
The National Assembly’s Public Enterprises Committee (PEC) report on the scrutiny of the 2022 accounts, financial statements, and management letters of State-Owned Enterprises (SOEs) revealed this outstanding debt. The report served as a critical assessment of the financial health and operational adherence of these public entities. The PEC report additionally examined an agreement between the Social Security and Housing Finance Corporation (SSHFC) and the National Water and Electricity Company (NAWEC) for the settlement of utility bills owed by the Gambia Tourism Services Company (GTSC), Ocean Bay Hotel, and Sun Beach Hotel. For this arrangement, SSHFC maintained two separate general ledger accounts. One of these accounts reflected a negative balance, which indicated possible overpayments made by SSHFC in connection with these utility settlements. SSHFC management confirmed that reconciliation between the Corporation and NAWEC regarding these accounts was still ongoing and had not yet been finalized, raising questions about the accuracy of financial records.
Committee Recommendations
The Public Enterprises Committee (PEC) recommended that the government undertake a full reconciliation between expected and actual payments made to the Social Security and Housing Finance Corporation (SSHFC). This reconciliation is key to ascertain the precise outstanding amount and to ensure transparency in financial dealings. The committee further advised that direct engagement should occur between SSHFC and the relevant government authorities. This engagement aims to ensure that future payments align with the terms specified in the signed agreement for the D816 million debt, thereby preventing further accrual of arrears. Additionally, the PEC recommended that the reconciliation process between SSHFC and the National Water and Electricity Company (NAWEC) be completed without delay. This reconciliation pertains to the settlement of utility bills for the Gambia Tourism Services Company (GTSC), Ocean Bay Hotel, and Sun Beach Hotel, where SSHFC managed two general ledger accounts, one of which showed a negative balance suggesting potential overpayments. The timely completion of this reconciliation is essential to resolve discrepancies and ensure accurate financial reporting between the two entities.
