Vous êtes sur la page 1sur 17

The Gambia Monthly Economic Bulletin- July 2009

THE GAMBIA MONTHLY


ECONOMIC ABSTRACT1

July 2009

Institutional Support Project for Economic and Financial Governance (ISPEFG)


Department of State for Finance and Economic Affairs (DOSFEA)
The Republic of Gambia
The Quadrangle, Banjul, the Gambia

1
The Gambia Monthly Economic Abstract is an abridged version of the Gambia Monthly/
Quarterly Economic Bulletin published every month. It provides a brief account of the current
state of the Gambian economy. The Abstract has been prepared jointly by Dr. Tamsir Cham,
Director, the Economic Management and Planning Unit (EMPU) and Dr. Tarun Das,
Macroeconomic Adviser (ISPEFG); Ministry of Finance and Economic Affairs (MOFEA) under
the overall direction and supervision by Mr. Mod A. K. Secka, Honorable Permanent Secretary-I
and Mr. Serign Cham, Honorable Permanent Secretary-II.

Any questions and feedback can be addressed to: Either Tamsir Cham (tamsirc@hotmail.com)
or Tarun Das (das.tarun@hotmail.com)

1
The Gambia Monthly Economic Bulletin- July 2009

Political and Administrative Structure

The Gambia is divided into seven regions comprising two Municipalities namely, Banjul City
Council (BCC) and the Kanifing Municipal Council (KMC) and five provincial administrative
regions namely, Western Region (WR), North Bank Region (NBR), Lower River Region (LRR),
Central River Region (CRR) and Upper River Region (URR).

Politically, the relevant units are Local Government Areas (urban), Districts, Wards and Villages.
The Gambia has 35 districts and about 1870 villages with an average of 13 compounds.
Basic Facts about Gambia:
Fiscal year: 1st January to 31st December
Items (Year) Units Value Rank in the World
from top
in descending order
Area (2009) Sq. km. 11,300 171 out of 248
countries
Population (2008) Million 1.735 148 out of 241
countries
GDP PPP (2004) Million US$ 3284 167 out of 224
countries
GDP Nominal (2006) Million US$ 511 199 out of 229
countries
GDP PPP per capita (2004) US$ 1945 177 out of 223
countries
GDP per capita (2006) US$ 329 192 out of 207
countries
Poverty Ratio (% of people Percent 59 7 out of 59 countries

2
The Gambia Monthly Economic Bulletin- July 2009

below One-US$) (2000)


Source: http://www.nationmaster.com

3
The Gambia Monthly Economic Bulletin- July 2009

HIGHLIGHTS
CPI Inflation

• Annual point-to-point CPI inflation accelerated significantly from 2.2% (food 2.6% and non-food
1.8%) in June 2008 to 5.4% (food 6.5% and non-food 3.9%) in June 2009, and the 12-month
average inflation rate accelerated to 6.1% in June 2009 from 4.6% a year ago.

• Given global economic slowdown, global crude oil prices were projected to remain soft and rule
around $51 per barrel in 2009. However, since April 2009 petroleum prices started rising and
increased to $60/barrel in May 2009 and S$70/barrel in June 2009. Recent forward markets
project oil prices around $74 for 2010, which is not much above current price.

Government Financial Performance

• Government Financial Performance in Jan-June 2009 was better than in Jan-June 2008. In Jan-
June 2009 revenue and grants increased by 15.5% aided by 13.3% increase in taxes, 8.9%
increase in non-taxes and 63.7% increase in grants over Jan-June 2008.

• Overall, there was a fiscal deficit of 198 million Dalasi (1% of GDP) in Jan-June 2009, higher than
the fiscal deficit of 86 million Dalasi (0.5% of GDP) in Jan-June 2008, due to significant increase
of capital expenditure by 55.2% in Jan-June 2009 over Jan-June 2008.

Domestic Debt and Treasury Bills Yields

• At the end of June 2009, outstanding domestic debt stood at D5.7 billion (28.8% of GDP),
compared to D6 billion (33.4% of GDP) a year ago. The share of Treasury bills increased from
80.5% at the end of June 2008 to 84.6% at the end of June 2009,

• Despite significant decline of CPI inflation from 7% in Jan 2009 to 5.4% in June 2009, average
yield on 91-day increased from 10.5% in Jan 2009 to 13% in June 2009, yield of 182-day bills
from 12.1% to 13.8% and that of 364-day bills from 14.4% to 15.6% over the period.

Money Supply and Bank Credits

• Annual growth rate of money supply (M3) increased from 8.5% in June 2008 to 21.2% in June
2009, aided by 18.1% growth in currency, 23% growth in demand deposits, 12.8% growth in
savings deposits and 33.8% growth in time deposits. On the demand side, growth was mainly
due to 31.7% growth in domestic credits, while net foreign assets decreased by 4.8%.

• Domestic credit increased from D5.3 billion in June 2008 to D6.9 billion in June 2009, supported
by 45.9% growth in government borrowing, 119.4% growth in credits to public entities and 18.2%
growth in credits to the private sector, over a year ago.

• Gambian banks were least affected by global financial crisis as the Gambian banks do not have
large exposure to foreign assets or liabilities. At end-June 2009, foreign assets constituted only
8.8% of total assets and external sector related liabilities constituted only 2.6% of total liabilities.

Foreign Exchange Reserves and Exchange Rate

• At end-May 2009, international reserves stood at $119.7 million equal to 4 months of imports.

• At end-July 2009, Dalasi has depreciated by 5.3% against British Pound, by 27.3% against US$,
by 24.7% against CHF, by 17.4% against Euro and by 11.5% against CFA over end-July 2008.

4
The Gambia Monthly Economic Bulletin- July 2009

At a Glance- July 2009


Economic Latest Status in the Status in the Outlook for 2009
Indicators Reference latest reference Corresponding
Period period period in the
previous year
Real GDP (FC) Calendar year Overall 7.2 Overall 6.1 Overall 3.6 to 4.5
Growth rate (%) 2008 Agriculture 28.4 Agriculture 3.9 Agriculture 4.0 to 6.0
Industry 0.7 Industry (-) 3.1 Industry 2.0 to 2.4
Services (-) 0.6 Services 10.4 Services 2.4 to 4.4
CPI inflation (%) June 2009 Overall 5.4 Overall 2.2 Expected to decline in
Food 6.5 Food 2.6 the remaining months of
Non-food 3.9 Non-food 1.7 the year
Brent crude oil July 2009 Average Average US$133 May stabilize around
price (US$/ brl) US$68.50 US$70 by the end-2009
Growth rate (%) of Jan-June 2009 15.5 -1.2 Overall fiscal performance
Revenue & grants in 2009 may not be better
Growth rate (%) of Jan- June 2009 20.4 14.7 than 2008.
Exp & Net Lending
Overall fiscal bal. Jan-June 2009 -1.0 -0.5
as % of GDP
Basic Balance as Jan-June 2009 0.8 0.4
% of GDP
Primary Bas. Bal, Jan-June 2009 2.8 2.5
as % of GDP
Domestic debt June 2009 28.8 33.4 Likely to decline in 2009.
as % of GDP
Yield on 91-days June 2009 Yields may come down
TBs (%) 13.0 10.0 as CPI inflation has
Yield on 182- June 2009 started decelerating.
days TBs (%) 13.8 11.2
Yield on 364- June 2009
days TBs (%) 15.6 13.3
GR of Money June 2009 21.2 8.5 Money growth rate is
supply (M3) (%) likely to decelerate.
CBG Rediscount June 2009 16 15
rate (%)
Banks Foreign May 2009 7.5 11.7 Likely to remain stable
assets as % of
total assets
Foreign liabilities May 2009 1.5 2.8
as % of total
Dalasi/ UK £ End-July 2009 43.85 41.65 Dalasi is likely to
Dalasi/ US$ End-July 26.65 20.94 depreciate against major
2009 currencies during the
Dalasi/ CHF End-July 24.83 19.90 year 2009.
2009
Dalasi/ Euro End-July 37.80 32.21
2009
Dalasi/ CFA End-July 280.00 251.05
(5000) 2009
Foreign Exch. End-May 2009 119.7 140.4 Likely to remain under
Reserve (US$) pressure.

5
The Gambia Monthly Economic Bulletin- July 2009

1. Consumer Price Index and Inflation

• As measured by the Consumer Price Index (CPI), annual point-to-point CPI inflation
accelerated significantly from 2.2% in June 2008 to 5.4% in June 2009, and the 12-
month average inflation rate accelerated to 6.1% in June 2009 from 4.6% a year ago.

• Food and drinks (with weights of 55.2% in overall CPI) recorded average inflation of
6.5% in June 2009, up from 2.6% a year ago, and contributed 71.2% to overall inflation
in June 2009.

• Non-food items (with weights of 44.8% in overall CPI) recorded annual inflation of 3.9%
in June 2009 compared to 1.8% a year ago and contributed 28.8% to inflation.

• Among other groups, in June 2009, clothing and textiles recorded annual inflation of 4%,
housing and utilities 5.1%, restaurants and hotels 5.9% and miscellaneous goods and
services 10.9%.

Table-2.3 CPI Inflation Rates in June 2009 (in percentage)


Items Weights
June-2008 June-2009 Inflation Wi (CPIi1 – Contributio
Wi (%) Index Index (%) CPIi0) n2 (%)
Overall 100.0 114.48 120.61 5.4 597.4 100.0
Food 55.2 118.17 125.87 6.5 425.1 71.2
Tobacco 0.7 104.64 106.16 1.5 1.1 0.2
Clothing 11.3 107.10 111.35 4.0 47.9 8.0
Utilities 3.4 116.38 122.3 5.1 20.1 3.4
Furnishing 5.2 112.13 115.11 2.7 15.6 2.6
Health 1.0 101.10 101.78 0.7 0.7 0.1
Transport 4.4 118.87 119.77 0.8 4.0 0.7
Telecom 3.0 101.55 101.97 0.4 1.2 0.2
Recreation 8.0 104.13 104.84 0.7 5.7 1.0
Education 1.5 101.87 102.25 0.4 0.6 0.1
Hotels 0.4 110.10 116.58 5.9 2.3 0.4
Misc. 5.9 113.59 125.93 10.9 73.2 12.2
non-food 44.8 109.99 114.23 3.9 189.9 28.8
Source of basic data: Gambian Bureau of Statistics (GBOS).

2
Contribution of an item to overall inflation is estimated by the following formula:
Contribution of Item (i) = Wi (CPIi1 – CPIi0) / ∑ Wi (CPIi1 – CPIi0) expressed as a percentage.
where CPIi1 = Consumer Price Index for Item (i) in the current period
CPIi0 = Consumer Price Index for Item (i) in the previous period
Wi = Weights for Item (i) and
W = Total weights = Σ Wi
For example, contribution of food is estimated as 100 X 425.1 / 597.4 = 71.2%.

6
The Gambia Monthly Economic Bulletin- July 2009

7
The Gambia Monthly Economic Bulletin- July 2009

2. World Commodity Prices and Inflation

As a result of the sharp downturn in global demand, commodity prices, especially for energy,
declined significantly since the last quarter of 2008. Inflation will continue to retreat due to the
combination of lower commodity prices and increasing economic slackness, with deflation risks
growing in advanced economies. IMF forecasts indicate that G-7 deflation vulnerability has risen
above its previous peak, reflecting high risks in Japan and the United States and moderate risks
in several euro area members— including Germany, Italy and France.

Commodity prices have rebounded ahead of the recovery. The recent rally in commodity prices
was strong and broad-based, reflecting improved market sentiment, U.S. dollar depreciation,
and commodity-specific supply-demand conditions.

2.1 Trends of International Crude Oil Prices

During 2008 Brent crude oil prices ruled very high until July 2008 when prices increased to $147
per barrel. However, due to global financial crisis and economic slowdown oil prices started
declining thereafter. A recent report from the Paris based International Energy Agency (IEA) has
projected that the world oil demand in 2009 will decline by half a million barrels per day (bpd).

Given weakness in the Chinese demand and negative growth in the US and EU in March-April
2009 Brent crude oil prices ranged around US$47 per barrel. However, oil prices responded
strongly to improved demand prospects and OPEC members’ strict observance of lower
production quotas, and increased to an average of $58 per barrel in May 2009 and further to an
average of $69 per barrel in June 2009. Recent forward markets project oil prices at $74.50 for
2010, not much above current levels, with high excess capacity expected to buffer growing
demand.

Trends of Monthly Brent Crude Oil Prices (US$/ barrel)

140

120
US$ per Barrel

100

80

60

40

20

0
9

9
1

7
9

Ja 0

8
-9

-0

-0

-0

-0

-0

0
0
-9

-0

-0

-0

-0

l-0

-0

-0

l-0

-0
n-

n-

n-

n-
n-
an

an

an

an

an

an
ul

ul

ul

ul

ul

ul

ul

ul
u

u
a

a
J

J
J

Months and Years 1999-2009

Series1

8
The Gambia Monthly Economic Bulletin- July 2009

Table-2 Trends of World Commodity Prices


Quarterly averages Monthly averages
Apr- Jul- Oct- Jan- Apr-
Jun Sep Dec Mar Jun Apr May Jun
Commodity Unit 2008 2008 2008 2009 2009 2009 2009 2009
Energy
Coal, Australia a/ $/mt 138.65 162.80 92.97 71.93 66.48 63.56 64.50 71.38
Crude oil, Brent a/ $/bbl 122.39 115.60 55.89 44.98 59.13 50.85 57.94 68.62
Crude oil, Dubai a/ $/bbl 116.67 113.47 53.67 44.56 58.93 50.18 57.40 69.21
Natural gas, Europe a/ $/mmbtu 12.40 14.62 15.75 11.94 8.18 8.51 8.09 7.95
Natural gas, US a/ $/mmbtu 11.35 9.03 6.40 4.57 3.71 3.50 3.81 3.81
Beverages
Cocoa b/ ¢/kg 276.4 282.6 224.1 259.7 258.7 258.1 247.5 270.4
Coffee, Arabica b/ ¢/kg 315.1 321.2 267.8 283.9 320.2 297.4 332.9 330.2
Tea, Mombasa auctions b/ ¢/kg 221.6 252.8 190.8 214.9 228.0 221.0 222.3 240.8
Fats and Oils
Coconut oil b/ $/mt 1,499 1,246 772 677 781 747 843 754
Copra $/mt 1,013 817 520 447 513 499 559 480
Groundnut oil b/ $/mt 2,328 2,417 1,773 1,283 1,165 1,187 1,157 1,151
Palm oil b/ $/mt 1,198 928 512 577 744 702 801 730
Soybean oil b/ $/mt 1,466 1,353 830 755 859 801 892 885
Soybeans b/ $/mt 585 566 377 394 460 414 465 502
Grains
Barley b/ $/mt 239.1 216.6 129.5 116.3 129.5 111.3 128.7 148.5
Maize b/ $/mt 259.0 244.7 168.4 166.9 176.0 168.5 179.9 179.5
Rice, Thailand, 35% $/mt n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Sorghum $/mt 246.9 214.7 151.0 145.3 148.1 154.1 160.1 130.0
Wheat, US, HRW b/ $/mt 346.5 317.7 228.1 231.6 250.5 234.2 262.3 255.1
Wheat US SRW $/mt 277.8 241.5 182.7 187.4 195.6 182.6 202.5 201.7
Other Food
Bananas EU $/mt 1,263 1,123 944 1,142 1,280 1,292 1,286 1,262
Fishmeal $/mt 1,185 1,198 1,023 1,013 1,096 1,040 1,103 1,146
Meat, beef b/ ¢/kg 332.7 372.4 268.0 245.2 262.8 255.5 263.7 269.2
Meat, chicken b/ ¢/kg 167.9 177.1 174.7 173.5 174.1 171.2 174.5 176.7
Meat, sheep ¢/kg 493.2 477.3 410.0 378.5 428.8 404.4 427.7 454.4
Oranges b/ $/mt 1,322 1,163 842 799 864 905 888 798
Shrimp, Mexico b/ ¢/kg 1,109 1,048 1,014 976 970 970 970 970
Sugar EU domestic b/ ¢/kg 77.59 74.70 51.97 51.44 53.75 52.09 53.84 55.34
Sugar, world b/ ¢/kg 27.01 31.14 26.28 28.85 33.89 30.09 35.36 36.22
Raw Materials
Logs, Cameroon $/cum 554.4 548.5 473.8 426.8 394.6 382.5 395.4 406.0
Plywood ¢/sheets 647.3 648.6 645.5 572.8 565.5 567.7 565.9 562.7
Sawnwood, Cameroon $/cum 1,052.3 974.5 770.8 689.2 721.4 684.3 717.6 762.5
Cotton Memphis ¢/kg 171.6 170.0 130.1 129.8 142.4 135.6 150.2 141.4
Rubber RSS1, US ¢/kg 311.7 329.1 202.8 165.8 187.0 183.6 189.8 187.6
Fertilizers
DAP b/ $/mt 1,191.6 1,153.7 663.3 362.2 303.6 335.4 297.5 277.8
Phosphate rock b/ $/mt 367.5 409.2 371.3 193.3 113.3 125.5 117.5 96.9
Potassium chloride b/ $/mt 511.1 635.0 766.7 865.2 726.7 745.0 717.5 717.5
Urea b/ $/mt 575.7 745.4 292.2 267.3 241.1 245.2 240.8 237.4
Metals and Minerals
Aluminum b/ $/mt 2,940 2,787 1,821 1,360 1,485 1,421 1,460 1,574
Copper b/ $/mt 8,443 7,680 3,905 3,428 4,663 4,407 4,569 5,014
Gold $/toz 896 870 795 909 922 890 929 946
Iron ore b/ ¢/dmtu 140.6 140.6 140.6 101.0 101.0 101.0 101.0 101.0
Lead b/ ¢/kg 230.7 191.2 124.5 115.7 149.9 138.3 144.0 167.4
10,84 10,47 12,92 12,63
Nickel b/ $/mt 25,682 18,961 3 1 0 11,166 5 14,960
Silver ¢/toz 1,720 1,495 1,020 1,265 1,376 1,252 1,411 1,466
Steel cr coilsheet c/ $/mt 900 1,100 1,100 1,033 700 700 700 700
Steel, rebar c/ $/mt 838 934 630 473 450 425 450 475
Steel wire rod c/ $/mt 950 1,135 1,200 1,200 1,007 1,100 1,020 900
Tin b/ ¢/kg 2,265 2,051 1,310 1,103 1,351 1,174 1,379 1,499
Zinc b/ ¢/kg 211.3 177.0 118.5 117.2 147.3 137.9 148.4 155.7
Source: World Bank Pink Sheet July 2009

9
The Gambia Monthly Economic Bulletin- July 2009

3. Government Fiscal Performance in Jan-June 2009

• Columns (4), (5) and (6) of Table-3.1 present major item-wise revenue realization and
expenditure of the government in the first half (i.e. Jan-June) of 2007, 2008 and 2009
respectively. Column (8) indicates annual percentage changes of major items of revenues
and expenditure in Jan-June 2009 compared with those in Jan-June 2008 (column 7).

• It may be observed from the table that, the government’s fiscal performance has been to
some extent better in Jan-June 2009 than in Jan-June 2008, but still it is under pressure. In
Jan-June 2008 total revenues and grants declined by 1.2%, as tax revenues decreased by
3.8% and non-tax revenues declined by 26.3% over Jan-June 2007. On contrast, Jan-June
2009 has witnessed 15.5% increase in total revenue and grants aided by 13.3% increase in
taxes, 8.9% increase in non-tax revenues and 64% increase in grants.

• During Jan-June 2009, total expenditures and net lending has increased by 20.4% over Jan-
June 2008 due to 18% increase in personnel emoluments, 55.2% increase of capital
expenditure and 6.3% increase by interest payments over Jan-June 2008.

• Overall, there is a fiscal deficit of D197.7 million, and basic surplus of D70.2 million in Jan-
June 2009, compared to a fiscal deficit of D86 million and basic surplus of D70.2 million in
Jan-June 2008.

Table-3.1 Govt Financial Performance in Jan-June 2009 compared with Jan-June 2008
2008 2009 2007 2008 2009 % change % change
Items Actual Budget Jan-June Jan-June Jan-June In Jan- In Jan-
Mln Dal. Estimate Actual Actual Actual Jun 2008 Jun 2009
Mln. Dal. Mln Dal. Mln Dal. Mln Dal. over Jan- over Jan-
Jun 2007 Jun 2008
(1) (2) (3) (4) (5) (6) (7) (8)
Revenue and grants 3645 4582 1941 1919 2216 -1.2 15.5
Domestic Revenue 3479 3771 1893 1820 2055 -3.8 12.9
Tax Revenue 3161 3391 1637 1631 1849 -0.3 13.3
Nontax Revenue 318 380 256 189 206 -26.3 8.9
Grants 166 811 49 99 161 102.5 63.7
Exp & Net Lending 4135 5363 1748 2005 2414 14.7 20.4
Current Expenditure 3011 3838 1194 1544 1640 29.3 6.3
Personnel Emoluments 906 1035 336 450 531 34.0 18.0
Other Charges 1398 1958 450 710 701 57.7 -1.2
Interest 708 845 409 385 409 -5.9 6.3
External 154 147 104 80 98 -23.5 22.7
Domestic 555 698 305 305 311 0.1 2.1
Cap Exp & Net Lending 1123 1525 553 461 773 -16.7 67.8
Capital Expenditure 1017 1468 488 396 614 -18.9 55.2
Net Lending 107 57 66 65 159 -0.8 144.4
Overall Bal Inc. grants -490 -781 194 -86 -198 -144.4 129.7
Basic balance -156 -268 590 70 158 -88.1 125.3
Basic Primary Bal 553 577 999 455 567 -54.5 24.7
Nominal GDP (IMP Prg) 17959 19904 16007 17859 19904 11.6 11.5
Notes: (1) Overall balance= (Revenue and grants) minus (expenditure and net lending).
(2) Basic balance= Domestic revenue minus (expenditure and net lending) plus externally
financed capital expenditure; (3) Basic primary balance= Basic balance plus interest
payments

10
The Gambia Monthly Economic Bulletin- July 2009

• Column (2) of Table-3.2 indicates the item-wise actual fiscal performance in 2008 as
percentage of GDP and the column (3) indicates the item-wise budget estimates in 2009 as
percentage of GDP. It is observed from these columns that 2009 budget estimates assume
better performance of grants and expenditure as percentages of GDP. Overall fiscal deficit
for 2009 is estimated as 3.9% of GDP compared to 2.7% of GDP in 2008.

• Columns (4), (5) and (6) of Table-3.2 present the major item-wise performance of revenues
and expenditure in the first half (Jan-June) of 2007, 2008 and 2009 respectively, as
percentages of the corresponding nominal GDP (IMF Program estimate) for the full year. It is
observed from the table that, in terms of the percentages of GDP, the total revenues and
expenditures have performed better in Jan-June 2009 than those in Jan-June 2008.

• The revenue and expenditure ratios to GDP are also observed to be on track in Jan-June
2009 as compared with the 2009 budget estimates (given in column-5).

Table-3.2 Govt Financial Performance in Jan-June 2009 compared with Jan-June 2008
2008 2009 2007 2008 2009 2008 2009
Actual Budget Jan-Jun Jan-Jun Jan-Jun Jan-Jun Jan-Jun
Items as % of as % of as % of as % of as % of as % of as % of
GDP GDP GDP GDP GDP Actual Budget
(1) (2) (3) (4) (5) (6) (7) (8)
Revenue and grants 20.3 23.0 12.1 10.7 11.1 52.6 48.4
Domestic Revenue 19.4 18.9 11.8 10.2 10.3 52.3 54.5
Tax Revenue 17.6 17.0 10.2 9.1 9.3 51.6 54.5
Nontax Revenue 1.8 1.9 1.6 1.1 1.0 59.4 54.0
Grants 0.9 4.1 0.3 0.6 0.8 59.5 19.9
Exp & Net Lending 23.0 26.9 10.9 11.2 12.1 48.5 45.0
Current Expenditure 16.8 19.3 7.5 8.6 8.2 51.3 42.7
Personnel Emoluments 5.0 5.2 2.1 2.5 2.7 49.7 51.2
Other Charges 7.8 9.8 2.8 4.0 3.5 50.8 35.8
Interest 3.9 4.2 2.6 2.2 2.1 54.3 48.4
External 0.9 0.7 0.7 0.4 0.5 51.8 66.3
Domestic 3.1 3.5 1.9 1.7 1.6 55.0 44.6
Cap Exp & Net Lending 6.3 7.7 3.5 2.6 3.9 41.0 50.7
Capital Expenditure 5.7 7.4 3.0 2.2 3.1 38.9 41.8
Net Lending 0.6 0.3 0.4 0.4 0.8 61.0 281.0
Overall Bal -2.7 -3.9 1.2 -0.5 -1.0 17.6 25.3
Inc.grants3
Basic balance4 -0.9 -1.3 3.7 0.4 0.8 -45.2 -59.1
Basic Prim. Balance5 3.1 2.9 6.2 2.5 2.8 82.2 98.2
Source: Economic Planning and Management Unit (EMPU), DODFEA.

3
(1) Overall balance= (Revenue and grants) minus (expenditure and net lending).
4
(2) Basic balance= Domestic revenue minus (expenditure and net lending) plus externally
financed capital expenditure;
5
(3) Basic primary balance= Basic balance plus interest payments

11
The Gambia Monthly Economic Bulletin- July 2009

4. Domestic Debt and Treasury Bills Outstanding

• At the end of June 2009, outstanding domestic debt stood at D5.7 billion (amounting to
28.8% of GDP), down by 4.4% from the outstanding domestic debt at D6 billion
(amounting to 33.4% of GDP) a year ago.

• The share of Treasury bills increased from 80.5% at the end of June 2008 to 84.6% at the
end of June 2009, share of Sukuk Al-Salam from 0.8% to 1.5% and that of Government
bonds increased from 4.2% to 4.4% over the period.

• On the contrary, the share of Non-interest bearing Treasury Notes declined from 14.6% to
9.5% over the period

Table-4.1: Outstanding Domestic Public Debt as on 30 June 2009


Type of debt Million Dalasi % change in Composition
30 June 30 June June2009 (in percentage)
2008 2009 over June 2008 30 June 30 June
2008 2009
Treasury bills 4,829 4,854 0.5 80.5 84.6
Sukuk Al-Salam 48 85 79.3 0.8 1.5
Government Bonds 250 250 0.0 4.2 4.4
NIB Treasury Notes 873 547 -37.4 14.6 9.5
Total 6,000 5,736 -4.4 100 100
Memo Item: Domestic debt as % of nominal GDP (As per IMF Program, nominal GDP equals
D17959 for 2008 and D19904 for 2009)
As % of nominal 33.4 28.8
GDP

Domestic Debt Sustainability

As per the analysis made by the CBG, the Gambia’s domestic debt is unsustainable. Out of
three sustainability indicators given in Table-2.8.2, only one indicator viz. debt to revenue ratio is
satisfied. However, debt to GDP ratio may be satisfied during 2009.

Table-4.2 Primary Benchmarks for Domestic Debt Sustainability Ratios (%)


Item Threshold 2006 2007 2008 2009
Projected
1. Debt service to 28-63 142 124 118 91
revenue ratio
2. Debt to GDP ratio 20-25 33 30 27 31
3. Debt to revenue 92-167 180 158 166 147
ratio
Note: (1) Debt service the sum of interest payments plus the amortization (i.e. repayment of principal)
including the rollover of treasury Bills. (2) There are no internationally agreed levels of thresholds. The
thresholds used here are those used by the Debt Relief International (DRI) for many HIPC countries.
Source: Central Bank of Gambia

12
The Gambia Monthly Economic Bulletin- July 2009

5. Treasury Bills Yields

• Yields on treasury bills fluctuated widely in recent months. Despite stability in deposit
rates and significant decline of CPI inflation from 7% in January 2009 to 5.4% in June
2009, Average yield on the 91-day increased from 10.5% in Jan 2009 to 13% in June
2009, yield of 182-day bills increased from 12.1% to 13.8% and that of 364-day bills
increased from 14.4% to 15.6% over the period.

• This implies that the margins of yields over inflation rates or over deposit rates are
increasing over time and need to be corrected by adopting appropriate monetary
policies.

Table-5. Interest Rates (yields on treasury bills in percentage per annum)


2007 2008 2009
3-M 6-M 12-M 3-M 6-M 12-M 3-M 6-M 12-M
Jan 10.5 12.7 13.6 10.6 11.4 13.6 10.5 12.1 14.4
Feb 12.0 13.4 13.8 10.9 11.9 13.7 11.1 12.8 14.4
Mar 12.6 13.4 13.7 11.0 12.1 13.6 11.4 12.7 14.4
Apr 13.0 13.4 13.8 10.9 11.9 13.3 12.0 13.0 14.6
May 12.8 13.3 13.8 10.2 11.3 13.0 12,.5 13.8 15.3
Jun 12.6 13.1 13.9 10.0 11.2 13.3 13.0 13.8 15.6
Jul 12.5 13.2 13.9 9.6 10.6 12.6
Aug 12.6 12.9 13.6 8.8 10.2 12.1
Sep 11.6 12.2 12.9 8.9 11.0 13.1
Oct 10.6 11.7 12.5 10.3 11.4 13.6
Nov 10.5 11.5 12.5 10.1 13.4 13.7
Dec 10.4 11.6 13.6 9.9 12.5 14.0

Trends of Yields of Treasury Bills during 2007-2009

13
The Gambia Monthly Economic Bulletin- July 2009

6. Money Supply

• Annual growth rate of broad money supply (M3) accelerated from 8.5% in June 2008 to
21.2% in June 2009. Reserve money increased by 10.6% in June 2009 over June 2008.

• On the supply side, 21.2% growth in money supply in June 2009 was supported by
18.1% growth in currency, 23% growth in demand deposits, 12.8% growth in savings
deposits and 33.8% growth in time deposits.

• On the demand side, growth was mainly due to 31.7% growth in domestic credits, while
net foreign assets decreased by 4.8% over a year ago.

• Domestic credit increased from D5.3 billion in June 2008 to D6.9 billion in June 2009,
supported by 45.9% growth in government borrowing, 119.4% growth in credits to public
entities and 18.2% growth in credits to the private sector, over a year ago.

Table-6: Money Supply in June 2009


Components Jun 2007 Jun 2008 Jun 2008 Jun 2008 Jun 2008 Jun 2008 Jun 2009
Million Million Million % share % share % change % change
Dalasi Dalasi Dalasi over Jun over Jun
2007 2008
1.Money Supply (M3) (2+3) 7832 8495 10298 100.0 100.0 8.5 21.2
2.Narrow Money (2.1+2.2) 3972 4132 5009 48.6 48.6 4.0 21.2
2.1 Currency 1644 1484 1753 17.5 17.0 -9.7 18.1
2.2 Demand deposits (a+b) 2328 2648 3256 31.2 31.6 13.7 23.0
(a) Private sector 2120 2380 2731 28.0 26.5 12.3 14.7
(b) Official 209 268 525 3.2 5.1 28.3 95.9
3.Quasi money (3.1+3.2) 3860 4363 5290 51.4 51.4 13.0 21.2
3.1 Savings deposits (a+b) 2701 2603 2935 30.6 28.5 -3.6 12.8
(a) Private sector 2696 2595 2924 30.6 28.4 -3.7 12.7
(b) Official 5 8 11 0.1 0.1 61.8 46.3
3.2 Time deposits (a+b) 1160 1760 2354 20.7 22.9 51.8 33.8
(a) Private sector 783 1300 1740 15.3 16.9 66.0 33.8
(b) Official 376 460 615 5.4 6.0 22.2 33.7
Demands for money (1+2) 7832 8495 10298 100.0 100.0 8.5 21.2
1.Net foreign assets (1.1+1.2) 4471 3627 3453 42.7 33.5 -18.9 -4.8
1.1 Monetary Authorities 2636 2746 2727 32.3 26.5 4.2 -0.7
1.2 Commercial banks 1834 881 726 10.4 7.0 -52.0 -17.6
2.Net Dom. Assets (2.1+2.2) 3361 4867 6845 57.3 66.5 44.8 40.6
2.1 Domestic credit 4009 5261 6929 61.9 67.3 31.2 31.7
(a) Credits to government 1327 1959 2858 23.1 27.7 47.7 45.9
(b) Credits to public entities 212 381 835 4.5 8.1 79.9 119.4
(c) Credits to private sector 2287 2738 3236 32.2 31.4 19.7 18.2
(d) Credits to forex bureau 183 183 0 2.2 0.0 0.0 -100.0
2.2 Other items, net -647 -394 -83 -4.6 -0.8 -39.2 -78.9
Reserve Money 2636 2572 2844 -2.5 10.6
Source: Economic Research and Statistics Department of CBG.

14
The Gambia Monthly Economic Bulletin- July 2009

7. Sectoral Distribution of Bank Credits

Bank credits increased by 40.2% in March 2009 over March 2008. There was significant
increase across all sectors. While credits to agriculture increased by 66.2%, manufacturing
credits increased by 76.9%, building credits by 39.3%, transport credits by 27.4% and
distributive trade credits by 27.5% in March 2009 over March 2008. Credits to financial
institutions and other commercial credits also registered significant increases, while tourism
credits recorded the lowest increase by 16.5% among all the sectors.

As regards composition of bank credits, trade had the largest share (23%), followed
by other commercial credits (17%), miscellaneous sectors (16%), building (11%),
transport (9%), agriculture (8%), tourism (7%), manufacturing (5%), and financial
institutions (4%) in 2008.

Table-7. Sectoral Distribution of Bank Credits


Sectors Outstanding credits Annual GR Composition of bank credits
(Million Dalasi) in Mar 2009 (in percentage)
March-2008 March 2009 (%) Mar-2008 Mar-2009
Agriculture 178.507 296.65 66.2 6.7 7.9
Fishing 16.268 19.156 17.8 0.6 0.5
Manufacturing 99.959 176.846 76.9 3.7 4.7
Building 286.313 398.95 39.3 10.7 10.7
Transportation 253.027 322.375 27.4 9.5 8.6
Trade 679.72 866.5 27.5 25.5 23.2
Tourism 214.237 249.526 16.5 8.0 6.7
Financial Inst. 84.225 135.869 61.3 3.2 3.6
Other comm. 529.002 657.543 24.3 19.8 17.6
Others 327.238 617.467 88.7 12.3 16.5
Total credits 2668.496 3740.882 40.2 100.0 100.0

15
The Gambia Monthly Economic Bulletin- July 2009

8. Balance of Payments (BOP) and Foreign Exchange Reserves

8.1BOP Situation in 2008

(a) Overall BOP outcome in 2008 was not as bad as they were anticipated earlier. Year end
foreign exchange reserves at US$125.2 million were still equal to 5.7 months of c.i.f. imports
compared to US159.4 million equal to 6.2 months at end-2007

(b) BOP estimates indicate an overall deficit of D767.3 billion (-) $34.2 million), amounting to (-)
3.4 percent of GDP in 2008 compared to an estimated surplus of D741.7 million ($29.8
million), amounting to 3.6 percent of GDP in 2007, reflecting the deterioration in both the
current and the capital and financial accounts. The Net Usable Reserve of the CBG stood at
US$95.6 million at end-March 2009 and was above the IMF Program target (floor) by US$3.6
million.

(c) The goods account deficit improved from a deficit of D3.52 billion, amounting to 17.2 percent
of GDP in 2007 to a deficit of D2.92 billion, amounting to 12.8 percent of GDP in 2008, or a
decline by 17.14%.

(d) Exports of goods at D3.18 billion amounted to 14% of GDP in 2008 compared to D3.29 billion
amounting to 16.1% of GDP- a decline by only 3.4%. However, due to appreciation of
average exchange rate of dalasi per US$, goods exports in terms of US$ increased from
US$132.2 million in 2007 to US$141.6 in 2008.

(e) The c.i.f. import bill declined by 10.1% from D7.43 billion, amounting to 36.4 percent of GDP,
in 2007 to D6.67 billion, amounting to 29.3 percent of GDP, in 2008.

(f) Current account deficit including official transfer declined from (-) D1.46 billion, amounting to
7.2 percent of GDP, in 2007 to (-) D1.11 billion, amounting to 4.9 percent of GDP in 2008.

8.2 BOP Situation in 2009

• Provisional balance of payments estimates for the first quarter of 2009 indicate an overall deficit
of D468.9 million (US $17.9 million) compared to D7.42 million (US $0.34 million) in the first
quarter of 2008. The current account deficit, including official transfers, amounted to D234.3
million compared to a surplus of D4.94 million a year ago. The capital and financial account
widened from a deficit of D12.36 million in the first quarter of 2008 to D234.53 million in the first
quarter of 2009.

• Revised balance of payments projections for 2009 by the CBG indicate an overall deficit of D13.8
million (US$0.5 million) in 2009 compared to D811.30 million (US$30.3 million) in 2008. The
current account deficit, including official transfers is expected to widen to D3.8 billion (19% of
GDP) in 2009 from D3.6 billion (17.8% of GDP) in 2008. The capital and financial account
balance is expected to improve from a surplus of D2.7 billion in 2008 to D3.8 billion in 2009.

8.3 Foreign Exchange Reserves

• The volume of transactions in the inter-bank foreign exchange market totaled D33.3 billion
(US$1.4 billion) in January-May 2009 compared to D36.5 billion (US$1.7 billion) a year ago. At
end-May 2009, gross international reserves stood at D2.6 billion (US$119.7 million) equivalent to
4.0 months of import cover.

16
The Gambia Monthly Economic Bulletin- July 2009

9. Exchange Rate

• During Jan-April 2009, every month the Dalasi depreciated against major international
currencies (viz. US$, CHF, EURO and CFA) traded in the inter-bank market except the
UK£, reflecting the ADVERSE impact of the global financial crisis on remittances and
tourism and increased demand for foreign exchange to meet the high cost of imports.
Since May 2009 Dalasi has also started depreciating against UK£.

• At end-July 2009, Dalasi has depreciated by 5.3% against British Pound, by 27.3%
against US$, by 24.7% against CHF, by 17.4% against Euro and by 11.5% against CFA
over end-July 2008.

Table-9. Inter-bank exchange rates - end period mid-market rates


(Dalasi per unit of foreign currency)

Year Month UK US$ CHF Euro CFA (5000)


2008 Jan 44.27 22.34 19.91 32.89 252.85
Feb 42.58 21.88 19.57 32.28 243.98
Mar 40.87 19.46 19.15 30.83 239.16
Apr 39.52 20.12 19.16 31.43 235.95
May 40.25 20.64 19.46 32.1 245.84
June 40.77 20.65 19.27 32.07 245.51
July 41.65 20.94 19.9 32.21 251.05
Aug 40.73 21.37 20.08 32.23 249.47
Sept 41.65 23.12 19.86 33.02 249.30
Oct 40.49 24.89 20.15 32.89 258.09
Nov 40.56 26.26 20.07 33.28 258.31
Dec 40.14 26.54 22.94 35.67 259.15
2009 Jan 37.25 26.07 20.85 33.52 262.81
Feb 37.38 26.11 22.04 33.6 257.78
Mar 38.18 26.38 23.31 35.22 259.30
Apr 39.05 26.80 23.00 35.32 262.17
May 41.40 26.74 22.40 37.00 265.98
June 43.13 26.87 21.96 37.03 272.87
July 43.85 26.65 24.83 37.80 280.00
Annual Rate of appreciation (-) / depreciation (+) of Dalasi (in % over same month in 2008)
2009 Jan -15.9 16.7 4.7 1.9 3.9
Feb -12.2 19.3 12.6 4.1 5.7
Mar -6.6 35.6 21.7 14.2 8.4
Apr -1.2 33.2 20.1 12.4 11.1
May 2.9 29.5 15.1 15.3 8.2
June 5.8 30.1 14.0 15.5 11.1
July 5.3 27.3 24.7 17.4 11.5
Source: Central Bank of Gambia (CBG)

17