By: Haddy Touray
Economist Dr. Ousman Gajigo has contended that finance minister Mr. Seedy Keita has lost The Gambia more than $100M in the deal that the government of The Gambia signed with Africa50 on the Senegambia Bridge.
The deal, Dr.Gajigo opined, should forever live in infamy.
“Upon further inspection and reconstruction of the financial model, I can now say with confidence that the Minister of Finance, Mr. Seedy Keita, has lost the country more than $100 million,” he commented.
“To refresh everyone’s memory, the Adama Barrow government mortgaged the Senegambia Bridge to Africa50, which it erroneously referred to as an “asset recycling” scheme. The government of The Gambia is expected to receive a lump sum payment of $100 million. Africa50 would then take control of the bridge for 25 years. In their haste to receive the $100 million from Africa50, I can now show that the government committed far more blunders than I previously mentioned,” recalled Gajigo.
According to him, the $100 million the government is expected to receive is a significant undervaluation of the bridge.
“The appropriate valuation of the Senegambia Bridge should be based on the net present value of the future stream of income it can generate over its economic life. Its future stream of income is based on toll revenue, and toll revenue generation is based solely on traffic flow. So, the present and projected traffic flow is the most important parameter in determining the value of the bridge. The average annual vehicle traffic between 2019 and 2023 at the Senegambia Bridge was about 530,000—ranging from 340,000 in 2019 to 670,000 in 2023. These figures include all traffic, from motorcycles to heavy trucks. The average annual revenue reported at the bridge during this period was about D327 million,” he stated.
Dr. Gajigo, who is also an international consultant on economic and financial affairs, recalled that prior to the agreement, Africa50 hired a consultant who conducted a traffic study and constructed a model with traffic projections.
“In that financial model, they included traffic projections all the way to 2048. By contrast, the government of The Gambia, represented by the Minister of Finance, Seedy Keita, never conducted their own traffic study or projection. They relied completely on their negotiating counterpart—a major abdication of responsibility.
“I reconstructed a traffic model based on known facts. Based on the growth of traffic in its first five years of operation, it is straightforward to determine that annual traffic volume on the bridge would exceed 800,000 by 2025. By 2035, annual traffic volume should exceed 1 million, and by 2048, the traffic should reach close to 1.4 million. Knowing the existing tolls for different classes of vehicles, which range from D50 to D2,000 per crossing, and accounting for adjustments in toll rates during the 25-year period, it is easy to arrive at a reasonable estimate of what the bridge can generate in total toll revenue,” he added.
Dr. Gajigo pointed out that the estimated total value of revenue from the bridge between 2023 and 2048 should be about $500 million.
“After subtracting the $100 million that Africa50 is supposed to pay to the government, you are left with about $400 million. But we are talking about an essentially brand-new bridge that would still not have reached the end of its economic life even at the conclusion of the 25-year agreement. Accounting for operations and maintenance costs would only subtract a tiny percentage from that amount. Even taking into account that the country would have a share in the operating company of the bridge still shows that the country has been heavily fleeced in this deal. The government of The Gambia should have received a lumpsum, at the very least, $200 million from the deal,” he explained, adding: “Mr. Seedy Keita, our incompetent Minister of Finance who committed the country to this deal, should be a shining example of the kind of official that no country should have the misfortune of ever having as a minister.”