By: Nyima Sillah
Momodou Sabally, an economist has emphasised that the new transport tariffs will have pervasive inflationary on the economy.
“The new tariff will have a pervasive inflationary effect in an economy that is already severely affected by double-digit inflation. An increase in transport costs affects the prices of commodities across the board.
“We are already being squeezed by the wage-price inflationary spiral that I earlier cautioned the government about,” Sabally told this medium.
He said Government should be blamed for this situation because of its sustained expansionary fiscal policy stance. Noting that, the government is spending way above its earnings in terms of revenue and grants.
However, he added “that is why they levied a high tax rate on the price of fuel. They also refused to reduce fuel prices even when world market prices were going down some two years ago. That is all due to their desire to collect more tax money on fuel.
“Now that The Gambia Transport Union has demanded either a reduction in fuel price and other charges or an increase in fares, the government has decided to take the easier route of passing the burden on the citizens.”
More so, Sabally, suggested that Government could have mitigated this issue by reducing the tax rate on fuel instead of worsening the already high level of inflation in the country by increasing transport tariffs.