Economic Boom in the Gambia, West Africa
afrol News, 7 September - The Gambian economy has been projected
to grow at a robust 7%, the country's acting Central Bank
Governor, Bamba Saho, disclosed.
Governor Saho told a news conference that the robust growth
will be "underpinned by plentiful and well distributed
rainfall which should increase agricultural production, expanding
the services sector, including banking, tourism and communications
and the continuing boom in construction.”
The International Monetary Fund (IMF) was satisfied with
the country's first review of the economic performance, which
was supported by a three-year Poverty Reduction and Growth
Facility (PRGF) programme.
The Gambia was also praised for attaining macro-economic
stability and higher economic growth. Consequently, the IMF
has approved the release of US 3.1 million to the country.
Between December 2006 and July 2007, the Gambian currency
[the dalasi] appreciated against the US dollar, pound sterling,
euro and CFA franc respectively by 9.7%, 3.8%, 2.2% and 4,9%,
which according to the Governor, reflected an “improved
macro-economic fundamentals including robust output growth,
increased foreign inflows from foreign direct investment,
private remittances, re-exports, travel receipts and cashew
exports as well as confidence in the Gambian economy and healthy
reserves.”
He said inflation is yet to show a convincing results, with
highest consumer price index rising to 9.7% in food while
non-food items show the lowest of 2.5%. Saho predicted that
inflation will decline by 5% by end of December this year.
Backed by improving financial conditions, Saho expected sustainability
of the "robust economic expansion" in the near future.
He however warned against the risks posed by volatile oil
prices and rising global aggregate demand and their possible
“knock on” effect on general prices.
The banking sector had remained robust with an average capital
adequacy ratio of 26.1%, which is higher than the required
minimum of 8%. By the end of June 2006, the total assets of
banks rose to 17.3%.
Saho further disclosed that the Central Bank's operating
targeted money reserve grew by 6.6%, lower than 16.2% the
previous year. By the end of December 2006, the “reserve
money growth was a negative 10.5%.”
Central Bank expected money supply and reserve money to grow
below the targets of 13.3% and 10.6% respectively by end of
December.
“The public finances performed better than projected
in the first half of 2007," Mr Saho said. "Domestic
revenue exceeded the target by US $8.5 million, owing to higher
than projected tax and non tax revenue. Total expenditure
and net lending on the other hand was below projection (ceiling)
by about US $0.2 billion. The overall fiscal balance (on cash
basis) recorded a surplus of US $17.30 million, compared to
the projected deficit of US $4.02 million.”
Due to decrease in external borrowing, the capital and financial
account balance is projected to decline to a surplus in 2007.
The first quarter of 2007 indicates an overall deficit of
US $2.1, the current account deficit is estimated at US $2.0
million while the capital and financial account deficit at
US $0.2 million.
As at 24 August, 2007, gross official reserves amounted to
US $120.5 million, which totalled to five months import cover.
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