By Landing Ceesay
The Governor of the Central Bank of The Gambia, Mr. Buah Saidy, has announced that the country’s domestic debt has increased from D41.3 billion in December 2023 to D42.1 billion in June 2024.
During a press conference held on Tuesday to discuss the outcomes of the 91st meeting of the Monetary Policy Committee (MPC), the Central Bank of The Gambia provided an update on the nation’s economic status.
The quarterly MPC meeting, which serves as the Central Bank’s primary decision-making body for monetary policy, reviewed both domestic and global economic conditions.
In his address, Governor Saidy highlighted the ongoing growth of The Gambia’s economy and its efforts to combat inflation. He also shared the latest figures, revealing an increase in the country’s domestic debt to D42.1 billion in June 2024, up from D41.3 billion at the end of 2023.
“The Gambian economy continues its strong performance in the second quarter of 2024, with encouraging signs in the fight against inflation. Recent data released by the Gambia Bureau of Statistics (GBOS) indicates that the Gambian economy grew by 4.8 percent in 2023, compared to the revised growth of 5.5 percent in 2022. Growth was mainly supported by a pickup in the services and industry sectors, reflecting the buoyant private and public construction activities.” Governor Saidy stated.
He added that the stock of domestic debt now stands at D42.1 billion, which accounts for 27 percent of the GDP as of June 2024, compared to D41.3 billion, or 29.4 percent of the GDP, in December 2023. Short-term government securities with a maturity of one year or less make up 47.5 percent of this total. The yields on these short-term securities rose in June 2024, reflecting increased government borrowing from the domestic market, with the weighted average treasury bill rate climbing from 6.1 percent in March 2024 to 10.4 percent in June 2024.
“The stock of domestic debt increased to D42.1 billion (27 per cent of GDP) in June 2024, from D41.3 billion (29.4 percent of GDP) in December 2023. Short-term government Securities with a maturity of one year or less accounted for 47.5 percent of the total domestic debt stock. Yields on short-term government Securities increased in June 2024, largely reflecting government borrowing from the domestic market. The weighted average treasury bill rate increased from 6.1 per cent in March 2024 to 10.4 per cent in June 2024,” Governor Saidy told Journalists.
Governor Saidy also shared the Central Bank’s projection for The Gambia’s economic growth in 2024, forecasting a growth rate of 5.7 percent, an upward revision of 0.2 percentage points from the May 2024 forecast. This growth is expected to be supported by robust public and private investment, household consumption, and a rebound in tourism.
However, he cautioned that significant risks remain, including geo-economic fragmentation, ongoing geopolitical tensions, volatility in commodity prices, and domestic climate-related challenges.
“However, significant risks continue to shroud this growth outlook including geo-economic fragmentation, ongoing geopolitical tensions, volatility in commodity prices, and domestic climate-related risks. The Central Bank’s latest Business Sentiment Survey for the second quarter of 2024 indicated a slight improvement in business confidence.
“Most respondents expect economic activity to expand Over the next three months. Despite this optimism, businesses remain concerned about inflation, with a significant portion of businesses surveyed expecting a further rise in inflationary pressures in the near term. Looking ahead, the continuous decline in inflation is expected to stabilize these expectations,” he said.
Governor Saidy noted that the country’s overall budget deficit for 2024 is projected to be D5.1 billion, equivalent to 3.9 percent of the GDP.
He further addressed external sector challenges, reporting that the current account balance deteriorated to a deficit of US$16.0 million in the second quarter of 2024, following a surplus of US$1.4 million in the first quarter. The goods account balance showed a moderate deficit of US$244 million (11.2 percent of GDP), compared to US$257.9 million (8.8 percent of GDP) in the first quarter, due to a slight decrease in imports.
“Preliminary estimates of government fiscal operations indicate an Overall deficit, excluding grants, of D9.3 billion (6.5 percent of GDP) in the first half of 2024, compared to a deficit of D8.9 billion (6.2 percent of GDP) recorded in the corresponding period of 2023. Similarly, the overall budget deficit, including grants, amounted to D5.1 billion in the first half of 2024, higher than the D4.8 billion (3.3 percent of GDP) reported in the same period of 2023,” Governor Saidy stated.
Governor Saidy provided detailed statistics on the depreciation of the Gambian Dalasi against foreign currencies, stating that the Dalasi remained relatively stable, with slight depreciations against major traded currencies between March and June 2024—0.5 percent against the US dollar, 1.2 percent against the euro, 1.2 percent against the British pound sterling, and 3.9 percent against the CFA franc.
“The Dalasi continues to be relatively stable, depreciating slightly against major traded currencies in the domestic foreign exchange market. From March 2004 to June 2024, the Dalasi depreciated against the US dollar by 0.5 percent and the euro by 1. 2 percent and British pound sterling by 1.2 percent and the CFA franc by 3.9 per cent,” Governor Saidy revealed.
Governor Saidy also reported that the foreign exchange market continues to operate smoothly, with total transaction volumes in the domestic market amounting to US$563.0 million in the second quarter of 2024, compared to US$600.9 million in the first quarter. The decline in activity volumes is primarily due to the lean period in tourism and a drop in remittance inflows.
“Meanwhile, the Central Bank continues to hold comfortable levels of international reserves amounting to US$452.7 million in July 2024, which is sufficient to finance over 4.6 months of prospective imports of goods and services,” he said.