By Dr Lamin K. Janneh
Brikama Area Council’s reported decision to seek a D50 million Ecobank facility deserves careful scrutiny, but not partisan judgement. A Council resolution dated 28 July 2026 states that the proposed facility would be repayable over five years and used principally to settle an outstanding debt owed to Espace Motors in respect of garbage trucks and heavy-duty machinery. Public reporting also confirms that BAC commissioned a waste-management fleet supplied by Espace Motors in August 2025, placing the present financing question within a wider effort to improve sanitation and service delivery.
The resolution, however, does not disclose the amount of the outstanding Espace Motors liability, the proposed Ecobank interest rate, fees, security, repayment profile, total financing cost, BAC’s current debt stock, annual debt-service burden or the alternative arrangements considered. Those omissions matter. On the evidence presently available in the public domain, it is not possible to conclude responsibly that the proposed refinancing is either prudent or imprudent. What can be assessed is the standard of fiscal governance against which such a decision should be judged.
That standard should be demanding. The issue is not whether local government should ever borrow. It is whether borrowing strengthens the institution’s capacity to provide services and finance development over time, or whether it merely transfers an existing financial pressure into a new contractual obligation.
Borrowing is a financing instrument, not a development strategy
Public debt is not inherently undesirable. When properly structured, borrowing can allow a local authority to acquire durable infrastructure, productive municipal assets or essential service capacity whose benefits extend across several years. A waste-management fleet can, in principle, fall within that category because sanitation is a core public service and the useful life of heavy equipment extends beyond a single financial year.
The relevant distinction is therefore not between borrowing and non-borrowing. It is between borrowing that creates or protects durable public value and refinancing that does not correct the structural conditions that produced the original liability. For analytical purposes, this commentary describes the latter risk as fiscal substitution: new borrowing principally replaces an existing obligation without, by itself, expanding fiscal capacity or preventing recurrence.
Refinancing can nevertheless be rational. If the existing liability carries higher financing costs, accumulated penalties, imminent enforcement risk or a repayment structure that threatens essential services, a five-year bank facility could improve liquidity and reduce financial stress. The correct test is comparative: does the proposed facility reduce the present and future fiscal burden, preserve service continuity and fit within BAC’s demonstrated repayment capacity? Without the underlying financial terms, that question remains open.
Socioeconomic vulnerability raises the opportunity cost of fiscal error
The wider socioeconomic environment strengthens the case for caution. The World Bank reported that The Gambia’s economy grew by an estimated 5.9 per cent in 2025 and that extreme poverty declined to about 20.3 per cent. Yet vulnerability remains substantial: around 81 per cent of workers operate in the informal economy, while 41.3 per cent of people aged 15 to 34 are neither in employment, education nor training (World Bank, 2026a; 2026b). These are national statistics and should not be mechanically attributed to BAC’s jurisdiction, but they establish the broader context within which local fiscal choices are made.
In such a setting, every dalasi committed to debt service has an opportunity cost. Debt repayment competes with drainage, sanitation, roads, markets, environmental management, community infrastructure and institutional investment. Fiscal discipline is therefore not an argument for austerity for its own sake. It is the protection of scarce public resources so that present commitments do not unnecessarily narrow future development choices.
The first leadership test is diagnostic: why did the liability arise?
Before replacing one obligation with another, BAC should establish the causal history of the debt. Four tests are particularly important.
First is the origin test: what contractual arrangement produced the liability, what was the original purchase price, what payment schedule was agreed, and why was the obligation not discharged as planned?
Second is the asset test: what equipment was obtained, what proportion remains operational, what service value has it produced, and what are its maintenance, fuel and replacement costs?
Third is the affordability test: what share of recurrent revenue would the proposed debt service consume, and what happens under a weaker revenue scenario?
Fourth is the recurrence test: what financial, procurement, revenue or asset-management reforms will prevent the same position arising again?
These questions matter because an essential asset can still become fiscally unsustainable if acquisition is separated from lifecycle financing. Municipal machinery should be budgeted not only for purchase, but for operation, preventive maintenance, spare parts, downtime and eventual replacement.
Public reporting from the fleet’s commissioning suggests that the vehicles were not conceived solely as a cost centre. BAC linked the Seneyaa initiative to a household waste-collection model involving user charges and publicly described the fleet as capable of generating revenue. This makes the financial performance of the underlying service model particularly relevant. Before refinancing the acquisition liability, the Council should establish the actual operating revenues, collection costs, utilisation rates and net financial contribution of the fleet since commissioning.
BAC may have an underdeveloped revenue system before it has a borrowing problem
The most important evidence in the current public record concerns BAC’s revenue base. The Ministry of Finance and Economic Affairs’ third-quarter 2024 Public Finance Management assessment reported that fewer than 50,000 properties had previously been documented across the West Coast Region, while new data collection had identified more than 124,000 properties in Kombo North alone. The same assessment reported 25 sub-treasuries, 21 assessment teams and the recruitment of more than 100 staff to strengthen revenue collection, while also identifying deficiencies in data management, capacity and political will (Ministry of Finance and Economic Affairs, 2024a).
This finding should alter the policy conversation. It suggests a potentially significant expansion in the assessable revenue base, although it does not mean that every identified property is taxable or that the full potential can be collected immediately. Actual yield depends on valuation, exemptions, legal liability, billing accuracy, affordability, compliance, enforcement and administrative capacity.
The statutory framework reinforces this point. Section 21(3) of the Local Government Finance and Audit Act 2004 requires councils to prepare a comprehensive list of their revenue sources and maintain data on total potential collectable revenue. The Act also recognises rates, local taxes, licences, permits, dues, charges, fees, rents, grants and other lawful receipts as components of local government finance.
The policy priority should therefore be broader and fairer coverage before repeatedly raising burdens on those already paying. A credible municipal revenue system should know what is legally due, from whom, on what basis, when it is billed, whether it is paid, and how arrears are managed.
Digital transformation can strengthen fiscal capacity, but only when institutions change with it
BAC has already participated in national public-finance digitalisation. Official PFM reporting presents a mixed but useful picture. The 2024 Annual Progress Report described BAC as the only council at that stage fully using IFMIS to print financial statements and input its 2024 budget. The 2026 end evaluation, however, reported that BAC continued to operate parallel manual systems and that some connectivity and operationalisation issues remained.
These findings are not necessarily contradictory. They indicate that adoption can advance in one function while full institutionalisation remains incomplete. They also provide an important warning against treating technology as a substitute for governance.
A digital fiscal register should integrate properties, businesses, markets, licences, permits and other lawful revenue sources. Rateable properties and other liable entities should, where appropriate, have unique identifiers linked to verified ownership, occupancy or liability records. Billing and payment should be traceable. Arrears should be categorised and managed systematically. Revenue performance should be visible by source and administrative area.
Yet the effectiveness of such systems depends on data quality, staff capability, cybersecurity, process redesign, appeals mechanisms, internal control and political commitment. Digital transformation is therefore an institutional reform programme, not merely an ICT procurement exercise.
A better alternative: a five-year Municipal Fiscal Recovery and Development Plan
The strongest alternative to treating commercial debt as the principal response is a phased Municipal Fiscal Recovery and Development Plan. Such a plan would not automatically exclude the Ecobank facility. It would place borrowing within a wider strategy designed to strengthen BAC’s fiscal position over the five-year repayment horizon.
Phase I should focus on fiscal diagnosis and stabilisation. BAC should independently verify all material liabilities, reconcile creditor balances, model the present-value cost of the existing Espace Motors obligation against the proposed Ecobank facility, examine restructuring or phased settlement options, quantify existing debt service, and identify avoidable expenditure, control weaknesses and potential financial leakage. No refinancing decision should be taken without a documented comparison of alternatives.
Phase II should strengthen revenue and financial administration. The Council should complete its property and economic-base mapping, improve valuation and billing, maintain a verified register of potential collectable revenue, strengthen collection and arrears management, complete IFMIS institutionalisation, improve bank reconciliation, maintain a current asset register and strengthen internal audit and procurement controls.
Phase III should shift the Council towards developmental financing. This should include a formal asset-replacement policy, a legally compliant sanitation maintenance reserve or equivalent mechanism where permissible, grant mobilisation, development partnerships and carefully structured private-sector participation for suitable projects. The Council should also develop investment criteria so that future borrowing is linked to demonstrable service or economic value rather than used as a routine response to cash pressure.
The law already makes repayment capacity central
Gambian public-finance law provides a clear discipline. Section 54 of the Public Finance Act 2014 states that a local government authority may borrow only within The Gambia and only up to a limit determined by the Minister. The annual borrowing limit is to be prescribed after consultation with the minister responsible for local government and must be based on the authority’s capacity to repay, together with other relevant considerations. Borrowing above the prescribed limit requires prior ministerial approval. Section 55 further requires local authorities to report borrowing to the Ministry and to provide data on outstanding debt when requested.
The Local Government Finance and Audit Act 2004 also permits councils to raise loans for the discharge of their functions, subject to the statutory framework, while providing that no council shall operate a recurrent budget deficit. Together, these provisions make the central principle difficult to dispute: borrowing must be connected to institutional purpose, budgetary legality and repayment capacity.
What BAC should disclose before final commitment
A D50 million principal figure alone tells the public very little about affordability. Before final commitment, BAC should publish, subject to legitimate commercial confidentiality, sufficient information for citizens and councillors to assess the transaction responsibly. At minimum, this should include the verified Espace Motors balance being refinanced; the Ecobank principal, effective interest rate, fees and security; total repayment over five years; annual and monthly debt-service obligations; the revenue sources designated for repayment; BAC’s existing debt stock; the debt-service ratio relative to recurrent revenue; the net operating surplus or recurring free cash available for debt service; the alternatives considered; the projected financing savings or benefits; and a sensitivity analysis showing the effect of weaker-than-expected revenue.
This is not an argument for disclosing commercially sensitive negotiating information before terms are settled. It is an argument that a public institution assuming a multi-year liability should be able to demonstrate why the selected structure represents value for money and how repayment will be sustained.
The strongest case for the loan should be taken seriously
A balanced assessment must acknowledge the strongest argument in favour of the proposed facility. BAC has a genuine sanitation mandate. Public reporting confirms that the Council acquired and commissioned a substantial waste-management fleet from Espace Motors in 2025.
If the outstanding liability is due or otherwise creates material fiscal, contractual or service-continuity risk, if the vehicles are essential to continued service delivery, if the existing obligation is more expensive or less manageable than the proposed bank facility, and if BAC can service the new debt without undermining essential functions, refinancing may be the most prudent option available. The decisive point is therefore conditional. A loan should not be rejected because it is a loan. It should be accepted only if the evidence demonstrates that it is affordable, less costly or more sustainable than the alternatives, and accompanied by reforms that reduce the probability of returning to the same position when the five-year term ends.
The larger question is whether BAC is becoming a developmental municipality
Brikama Area Council governs one of The Gambia’s most economically and demographically significant local government areas. Its long-term challenge is not simply to find D50 million. It is to convert the economic activity within its jurisdiction into sustainable and legitimate municipal capacity. A developmental municipality has at least five characteristics. It can identify and collect lawful revenue fairly. It disciplines recurrent expenditure and manages liabilities transparently. It maintains productive public assets over their full lifecycle. It directs finance towards services and investments that expand public value. And it remains democratically accountable for the resources it controls.
This perspective also guards against an overly narrow interpretation of local fiscal failure. Municipal performance depends not only on local collection effort but also on the wider architecture of fiscal decentralisation, intergovernmental transfers, statutory responsibilities and the extent to which local authorities receive adequate resources for devolved functions. BAC should therefore be judged both on what it controls and on the structural financing environment within which it operates. The statutory financing architecture itself recognises that local government sustainability is not based exclusively on own-source revenue, but also incorporates central government grants and equalisation mechanisms.
Forward-looking leadership leaves greater institutional capacity behind
The debate should not be reduced to party competition. The same fiscal tests should apply to every council, every administration and every political leadership.
The relevant questions are straightforward: Why is the borrowing necessary?
What problem produced the existing liability?
Can the Council afford the proposed terms?
Is there a lower-cost alternative?
What public value will the transaction protect or create?
What revenue will service the obligation?
What reforms will prevent recurrence?
BAC may ultimately establish that the D50 million Ecobank facility is the financially superior option. If a transparent comparative analysis supports that conclusion, the decision should be judged on its merits. But the facility should then be treated as one element of a broader fiscal-recovery programme, not as the programme itself. The more ambitious objective is to leave BAC with a broader and fairer revenue base, more accurate financial information, stronger controls, better-maintained assets, credible reserves, disciplined borrowing and greater capacity to finance development from within its own institutional system.
That is the appropriate standard for forward-looking local leadership: fiscal discipline before debt dependence, productive value before financial commitment, transparency before obligation, and institutional resilience before short-term expediency.