The Crisis Threatening GAMTEL: D197 Million in Unpaid Debts

OIC Gamtel Stall © Gamtel

By Edward Francis Dalliah

The Gambia Telecommunications Company (GAMTEL) is grappling with a severe financial crisis, burdened by nearly D197 million in unpaid debts. This staggering amount includes arrears from State-Owned Enterprises (SOEs), government institutions, private businesses, and individuals, according to the April 2024 Performance Audit Report by the National Audit Office.

The audit reveals that as of February 2023, GAMTEL was owed D152 million by government Ministries, Departments, and Agencies (MDAs), while SOEs accounted for an additional D45 million. These debts, accumulated between 2015 and 2020, remain largely unpaid due to GAMTEL’s ineffective debt recovery efforts, as highlighted in the audit findings.

Beyond institutional debts, GAMTEL faces significant losses from unpaid bills by private customers. However, due to poor record-keeping and the absence of a reliable debt management system, auditors were unable to determine the exact amount owed by these private and business customers.

Financial Struggles Amid Growing Competition

Established in 1955, GAMTEL is a state-owned company, with 99% of its shares held by the Government of The Gambia and 1% by the Gambia Ports Authority (GPA). Since its inception, GAMTEL has played a crucial role in developing the country's telecommunications infrastructure and providing essential communication services.

However, as private telecom companies like QCell and Africell continue to expand, GAMTEL has struggled to maintain its market position. Increasing competition, coupled with internal financial mismanagement and outdated infrastructure, has exacerbated the company’s financial challenges and contributed to poor service delivery.

A Flawed Debt Recovery System

The audit highlights a critical issue: GAMTEL lacks a structured debt recovery strategy. The company does not have a formal credit control policy, allowing customers—particularly public institutions—to continue using its services without making payments. While GAMTEL has occasionally disconnected services to defaulting institutions, these actions are often overturned by executive directives, restoring services without requiring debt settlement. According to auditors, such interference has further destabilized the company’s financial position.

Billing System Failures Worsen the Crisis

The audit also identified major flaws in GAMTEL’s billing system, which hinder its ability to track customer payments effectively. For instance, in 2020, web hosting customers were not invoiced at all, resulting in a direct revenue loss of D229,000. Additionally, due to financial constraints, GAMTEL has been unable to renew its billing software license, leading to inaccurate billing and further complicating debt recovery efforts.

Rising Debt and Escalating Losses

GAMTEL’s failure to recover outstanding debts is severely impacting its financial health. As a telecommunications provider, the company incurs high operational costs, including payments to private operators for cross-network calls. However, with revenue collection faltering, GAMTEL is forced to absorb these costs while continuing to provide services to non-paying customers—pushing the company deeper into debt.

According to the Ministry of Finance and Economic Affairs (MoFEA), GAMTEL’s total debt owed to other institutions stood at D8.7 million as of the March 2024 Internal Audit review. This includes arrears owed to the Gambia National Petroleum Company (GNPC) and the Social Security and Housing Finance Corporation (SSHFC), which total D3.8 million and D49.2 million, respectively. The amount owed to SSHFC is shared between Gamtel and Gamcel.

The SOE Commission’s Biannual Financial Report for 2024 revealed that from January to June, GAMTEL generated D261 million in revenue. However, high operational expenses—particularly administrative and staff costs—resulted in an operating loss of D44 million and a net loss of D64 million by the end of the period.

Urgent Reform Needed to Prevent Collapse

In light of these mounting financial difficulties, the National Audit Office has called for immediate reforms. The report urges GAMTEL, in collaboration with its oversight ministries, to prioritize debt recovery and implement a formal credit control policy. Ensuring that all customers, including public institutions, pay for services rendered is crucial to preventing further financial deterioration.

Additionally, auditors stress the urgent need to overhaul GAMTEL’s billing and accounting systems to improve payment tracking and prevent the accumulation of more bad debts.

If these issues remain unaddressed, GAMTEL’s growing debt crisis could jeopardize its survival as a state-owned enterprise. Immediate action is essential to recover outstanding payments, strengthen financial controls, and restore public confidence in the company’s management.