By: Musa S. Sheriff
London, Based auditing firm Ernst & Young LLP- has revealed that GAMCEL – Gambia Cellular Company had been struggling to stay profitable since it was incorporated in 2000 as a fully-owned subsidiary of GAMTEL.
According to Special Audit of seven State Owned Enterprises in The Gambia made available to The Voice, GAMCEL retained earnings balance has been negative since 2013, and is continuing to decline.
“GAMCEL has had a continually declining Net Assets balance since 2010 and a Net Liability position from 2014 onwards.
Fixed Assets is by far the largest proportion of assets, accounting for 71%, while Trade Receivables represent the other significant balance at 19%. Inventory accounts for a small portion of the total Assets balance (4%), and staff loans account for 3%. Liabilities consist mainly of Trade Payables (59%), Accruals and Similar Payables (11%), and Other Liabilities (16%). The latter consists mainly of loan repayments due within 1 year.
“GAMCEL’s revenue and billing capabilities were significantly impacted during 2017. The disruption transpired when Redknee abruptly switched off GAMCEL’s billing system following MGI’s demand for payment from GAMCEL for USD 1.7m,”.” Ernst & Young LLP revealed a Special Audit of Seven State Owned Enterprises in The Gambia, final of August 19 2019 and signed by Maryam Hussain, Partner for and on behalf of Ernst & Young LLP.
The report also pointed out that the demand for payment took place soon after the Government had terminated MGI’s contract as the Gateway manager, adding that consequently, GAMCEL reverted to its old billing system and only managed to restore some of its core services to customers three weeks later.
The report stated that this event had a significant effect on GAMCEL’s revenue, as it resorted to making all calls free of charge for a three-week period, until a new billing system was put into place, noting as a result, GAMCEL’s revenue dropped by 80% during August 2017.
The auditors were able to confirmed that that GAMCEL were increasingly acquiring long-term syndicated loans from the commercial banks (Trust Bank and Guaranty Trust) and SSHFC at a rate of interest ranging from 17% to 25% annually, revealing that these loans were secured by properties of GAMTEL
