Gambia Monthly Eco Bulletin July 2009- Part Two

8/14/2019 Gambia Monthly Eco Bulletin July 2009- Part Two

1/28

The Gambia Monthly Economic Bulletin- July 2009

THE GAMBIA QUARTERLY

ECONOMIC BULLETIN1

PART-TWO

July 2009

Institutional Support Project for Economic and Financial Governance (ISPEFG)Department of State for Finance and Economic Affairs (DOSFEA)

The Republic of GambiaThe Quadrangle, Banjul, the Gambia

1The Gambia Monthly/ Quarterly Economic Bulletinprovides an update on recent economicdevelopments and policies in the Republic of the Gambia. The Bulletin is prepared by a research teamcomprising Tamsir Cham, Director; Momodou Taal, Principal Economist, Amie Khan, Senior Economist,

Yaya Drammeh, Senior Economist and Ceesay Chiel, Economist in the Economic Management and

Planning Unit (EMPU) and Tarun Das, Macroeconomic Adviser (ISPEFG); Ministry of Finance and

Economic Affairs (MOFEA); with key inputs from the Debt Management Adviser, Fiscal/Financial

Adviser, the Central Bank of Gambia (CBG), the Gambian Bureau of Statistics (GBOS), and the Gambian

Revenue Authority (GRA).

Any questions and feedback can be addressed to: Either Tamsir Cham ([email protected]) or

Tarun Das ([email protected])

25
mailto:[email protected]:[email protected]:[email protected]:[email protected]


2/28


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 DecemberItems (Year) Units Value Rank in the World

from topin descending order

Area (2009) Sq. km. 11,300 171 out of 248countries

Population (2008) Million 1.735 148 out of 241countries

GDP PPP (2004) Million US$ 3284 167 out of 224countriesGDP Nominal (2006) Million US$ 511 199 out of 229

countriesGDP PPP per capita (2004) US$ 1945 177 out of 223

countriesGDP per capita (2006) US$ 329 192 out of 207

countries

26


3/28


Poverty Ratio (% of peoplebelow One-US$) (2000)

Percent 59 7 out of 59 countries

Source:http://www.nationmaster.com

27
http://www.nationmaster.com/http://www.nationmaster.com/http://www.nationmaster.com/


4/28


____________________________________________________________

Contents

PART-I Page

ISPEFG Project/ Research Team and Document History 4

Highlights 5-7

At a Glance 8-11

1. Global Economic Outlook and Global Public Policy

1.1Global stabilization is uneven and recovery is slow1.2 Risks have moderated but remain to the downside1.3 Global Commodity Prices and Inflation1.4Trends of international crude oil prices

12-1712141516

2. Current State of the Gambian Economy

2.1Overall and Sectoral GDP Growth Rates2.2Growth Rates of Selected Indicators for Trade and Transport2.3Consumer Price Index (CPI) and Inflation2.4Factors affecting inflation and Anti-inflationary Measures2.5Projection of CPI inflation for the year 2009

18-41

1820212324

PART-II Page

2.6Government Fiscal Performance2.7Projections of Fiscal Outturn for 20092.8External Debt Situation2.9Domestic Debt and Outstanding Treasury Bills2.10Treasury Bills Yields2.11Money Supply2.12Sectoral Distribution of Bank Credits2.13Commercial Banks Assets2.14Commercial Banks Liabilities2.15Interest Rates and CBG Policy Rates2.16Balance of Payments and Foreign Exchange Reserves2.17Exchange Rates

283032333536373839404146

3. Assessment of Quantitative Targets agreed with IMF under MEFP 47-48

28


5/28


2.6Government Fiscal Performance in Jan-June 2009

Columns (4), (5) and (6) of Table-2.6.1 present major item-wise revenue realization andexpenditure of the government in the first half (i.e. Jan-June) of 2007, 2008 and 2009respectively. Column (8) indicates annual percentage changes of major items of revenuesand expenditure in Jan-June 2009 compared with those in Jan-June 2008 (column 7).

It may be observed from the table that, the governments fiscal performance has been tosome extent better in Jan-June 2009 than in Jan-June 2008, but still it is under pressure. InJan-June 2008 total revenues and grants declined by 1.2%, as tax revenues decreased by3.8% and non-tax revenues declined by 26.3% over Jan-June 2007. On contrast, Jan-June2009 has witnessed 15.5% increase in total revenue and grants aided by 13.3% increase intaxes, 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 capitalexpenditure 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 inJan-June 2008.

Table-2.6.1 Govt Financial Performance in Jan-June2009 compared with Jan-June2008

Items2008Actual

Mln Dal.

2009Budget

EstimateMln. Dal.

2007Jan-June

ActualMln Dal.

2008Jan-June

ActualMln Dal.

2009Jan-June

ActualMln Dal.

% changeIn Jan-

Jun 2008over Jan-Jun 2007

% changeIn Jan-

Jun 2009over Jan-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 13.3Nontax 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 20.4Current Expenditure 3011 3838 1194 1544 1640 29.3 6.3Personnel 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 6.3External 154 147 104 80 98 -23.5 22.7Domestic 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 55.2Net Lending 107 57 66 65 159 -0.8 144.4

Overall Bal Inc. grants -490 -781 194 -86 -198 -144.4 129.7Basic balance -156 -268 590 70 158 -88.1 125.3Basic 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 externallyfinanced capital expenditure; (3) Basic primary balance= Basic balanceplus interestpayments

29


6/28


Column (2) of Table-2.6.2 indicates the item-wise actual fiscal performance in 2008 aspercentage of GDP and the column (3) indicates the item-wise budget estimates in 2009 aspercentage of GDP. It is observed from these columns that 2009 budget estimates assumebetter performance of grants and expenditure as percentages of GDP. Overall fiscal deficitfor 2009 is estimated as 3.9% of GDP compared to 2.7% of GDP in 2008.

Columns (4), (5) and (6) of Table-2.6.2 present the major item-wise performance ofrevenues 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 andexpenditures 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-June2009 as compared with the 2009 budget estimates (given in column-5).

Table-2.6.2 Govt Financial Performance in Jan-June2009 compared with Jan-June2008

Items

2008Actual

as % ofGDP

2009Budget

as % ofGDP

2007Jan-Jun

as % ofGDP

2008Jan-Jun

as % ofGDP

2009Jan-Jun

as % ofGDP

2008Jan-Jun

as % ofActual

2009Jan-Jun

as % ofBudget

(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 48.4External 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 61.0 281.0Overall BalInc.grants2

-2.7 -3.9 1.2 -0.5 -1.0 17.6 25.3

Basic balance3 -0.9 -1.3 3.7 0.4 0.8 -45.2 -59.1

Basic Prim. Balance4 3.1 2.9 6.2 2.5 2.8 82.2 98.2

Source: Economic Planning and Management Unit (EMPU), DODFEA.

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

30


7/28


2.7 Projection of Fiscal Outturn for the Year 2009

Column (2) of the Table-2.6.3 below presents detailed item-wise revenues and expenditure inJan-June 2009. We have estimated the ratios of actual realization for any item in Jan-June tothe final outturn for the item during the complete year for the last five years viz. 2004, 2005,2006, 2007 and 2009. Item-wise average ratios (as percentage to the actual outturn for the

year) for these five years are presented in column (3) of the Table-2.6.3. Taking these ratios asnorms to take care of seasonality, expected revenue and expenditure outcomes for the full year2009 are estimated by the following formula and are presented in column (4).

Expected outturn for an item in 2009 = 100 X (actual realization in Jan-June 2009) /average realization ratio (in percentage) in Jan-June in the last five years (2004-2008)

Comparison of the expected outcome with the budget estimates given in Column (5) leads tothe following conclusions:

(a) Total domestic revenue and tax revenue targets as given in the Appropriation Budget for2009 are not expected to be realized by actual collections in 2009.

(b) There is likely to be shortfall in grants realization unless the subsequent disbursementsare significantly augmented.

(c) There is also expected shortfall in non-tax revenues.

(d) There is likely to be expenditure overrun of capital expenditure, while actual currentexpenditure is expected to show some surplus over the budgeted expenditure.

(e) Overall, it is expected to have a fiscal deficit of D1118 million (amounting to 5.6% ofnominal GDP under IMF Program estimate) compared to budget estimate of fiscal deficitat D780.7 million (amounting to 3.9 percent of GDP).

2.6.3 Government Financial and Fiscal Performance in Jan-June 2009 and Expected Outturn for 2009

Items 2009-

Jan-June

Actual

Ratio of Jan-Apr performance in

Annual Outturn (in Percentage)2004-

Ja-Jun2005-

Ja-Jun2006-

Ja-Jun2007-

Ja-Jun2008-

Ja-Jun

Avera

ge2004-2009

2009

Proj.Out-turn5

2009

BudgetEsti-mate

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)1.Rev & grants (2+5) 2215.9 55.7 52.6 51.2 53.0 51.7 4473.1 4582.22.Dom. Revenue (3+4) 2054.6 52.4 51.8 51.5 54.6 52.5 3876.1 3771.13.Tax Rev (3.1+3.2) 1849.0 52.7 52.1 52.2 53.6 51.9 3506.2 3390.63.1 Direct Tax (a to e) 544.0 58.8 53.4 56.0 59.3 52.8 940.8

(a) Personal 230.9 61.3 64.0 59.2 45.5 57.2 57.4 402.1(b) Corporate 247.8 56.0 45.3 53.7 66.4 50.9 54.5 454.9(c) Capital Gains 12.0 63.8 56.5 40.5 66.3 34.9 52.4 23.0(d) Payroll 35.3 85.3 86.2 87.6 89.0 71.2 83.8 42.2(e) Other 17.9 - 93.5 95.5 98.0 97.1 96.0 18.6

31


8/28


2.6.3 Government Financial and Fiscal Performance in Jan-June 2009 and Expected Outturn for 2009

Items 2009Jan-June

Actual

Ratio of Jan-Apr performance inAnnual Outturn (in Percentage)

2004-Ja-Jun

2005-Ja-Jun

2006-Ja-Jun

2007-Ja-Jun

2008-Ja-Jun

Average

2004-2009

2009Proj.Out-turn6

2009Budget

Esti-mate

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

3.2 Indirect Tax 1305.0 50.5 51.5 50.6 51.3 51.3 2565.4

3.2.1 Dom Tax on G&S 312.7 50.8 56.3 51.4 55.8 56.3 584.1(a) Stamp Duties 9.0 58.1 48.3 60.2 53.2 73.9 58.7 15.3(b) Excise Duties 80.6 50.9 45.7 47.2 49.4 53.2 49.3 163.6(c) Dom Sales Tax 223.1 50.5 58.4 52.3 58.3 55.9 55.1 405.1

3.2.2 Tax on Ext Trade 992.3 50.4 50.1 50.3 49.8 49.0 1981.3(a) Duty (i+ii) 603.1 51.9 51.2 54.7 48.6 49.3 1176.3

(i) Oil 361.7 59.5 44.6 60.6 46.9 45.7 51.4 703.1(ii) Non-oil 241.3 49.5 53.7 51.3 49.5 51.1 51.0 473.2

(b) Sale tax on imp (i+ii) 389.2 48.6 48.9 45.3 51.0 48.7 805.1(i) Oil 63.9 51.3 47.3 49.8 51.5 51.7 50.4 126.9(ii) Non-oil 325.3 48.1 49.3 43.9 50.9 47.6 48.0 678.2

4. Nontax Rev (a to d) 205.6 49.7 49.7 44.1 61.6 59.4 52.9 369.8 380.5(a) Govt Charges 107.3 48.2 62.6 60.9 74.6 78.8 65.0 165.0(b) NTR from CRD 2.1 - 65.3 66.1 57.7 54.6 60.9 3.5(c) NTR from CED 51.0 - 50.4 - 45.5 51.5 49.1 103.7(d) Others 45.2 55.0 37.2 50.0 46.1 43.3 46.3 97.6

5. Grants 161.3 70.2 61.6 45.3 25.0 40.3 48.5 597.0 811.16. Exp & Net Lend (7+8) 2413.6 57.0 54.8 54.0 48.1 47.5 5590.9 5362.97. Cur. .Exp (7.1 to 7.3) 1640.5 46.4 53.4 54.1 46.2 49.9 3314.4 3838.07.1 Pers. Emoluments 530.5 47.6 49.6 48.0 49.3 45.8 48.0 1104.1 1035.2

7.2 Other Charges 701.1 44.0 47.2 53.5 41.2 50.8 47.3 1481.5 1957.57.3 Interest (a+b) 408.9 49.1 59.1 59.1 50.2 53.9 728.8 845.3

(a) External 97.6 54.4 54.7 50.6 45.0 51.8 51.3 165.0 147.3(b) Domestic 311.2 47.2 60.3 61.9 52.2 54.5 55.2 563.8 698

8. Cap Exp & Net Lend. 773.1 70.8 54.0 53.9 52.8 41.0 2276.5 1524.9

8.1 Capital Exp. (a+b) 613.8 70.3 53.8 56.1 50.1 38.9 2006.0 1468.2(a) Ext. Financed (i+ii) 355.8 74.3 54.5 57.5 57.1 50.4 58.7 1558.0(i) Loans 194.5 74.5 53.8 59.1 67.7 46.0 961.0

(ii) Grants 161.3 73.8 58.3 45.3 25.0 59.5 597.0(b) GLF Capital 258.0 31.2 44.3 28.7 22.1 27.5 30.7 448.0

8.2 Net lending 159.2 43.1 44.6 - 86.8 61.0 58.9 270.5 56.79. Overall fis. bal (1-6) -197.6 -1118 -780.710. Basic balance 158.2 440.1 -267.711. Basic Primary Bal. 567.0 1168.9 577.6

Memorandum Items: As percentage of IMF Program Nominal GDP (equal to D19904 million)

12. Overall fis. bal (1-6) -1.0 -5.6 -3.913. Basic balance 0.8 2.2 -1.314. Basic Primary Bal. 2.8 5.9 2.9

5Expected outturn for an item in 2009 = 100 X (actual realization in Jan-June 2009) / average realization ratio (inpercentage) during the last five years (2004-2008)

32


9/28


2.8 External Debt

As per the latest Joint Fund-Bank Debt Sustainability Analysis (DSA)7, the stock of external debtdeclined substantially at end-2007 following HIPC and MDRI debt relief. At the end of 2006,prior to completion point, the stock of nominal external public debt was US$676.7 million (133.1percent of GDP). Multilateral creditors accounted for 84 percent of this debt, with IDA as the

largest creditor (39 percent of total outstanding debt). At end-2007, post-completion point, thestock of external public debt fell to US$299.4 million (46.0 percent of GDP).

In January 2008, Paris Club creditors agreed to cancel outstanding claims (US$13 million in PVterms at end-2006) on The Gambia. Bilateral agreements have been signed with Paris Clubcreditors and Kuwait. Agreements on the delivery of debt relief have also been reached with theEU/EC, OPEC Fund for International Development (OFID), the Islamic Development Bank(IsDB), and the International Fund for Agricultural Development (IFAD) but are still pending withthe Economic Community of West African States (ECOWAS), Saudi Arabia, Taiwan Province ofChina, Libya, China, and India.

The current DSA concludes that The Gambia remains at a high risk of debt distress after HIPC

and MDRI debt relief due to the high level of debt as well as the countrys vulnerability toshocks. The World Banks Country Policy and Institutional Assessment (CPIA), classifies TheGambia as a poor performer based on an average of the ratings for the preceding threeyears and the table below presents the policy-dependent debt burden thresholds. The PV ofdebt-to-GDP and the PV of debt-to-revenue ratios remain comfortable. Debt service paymentsremain manageable throughout the projection period, rising no higher than 10 percent of exportsand revenue. But, the PV of debt-to-exports ratio breaches the debt-burden threshold fora protracted period.

Given continuing risks, the staffs urge authorities to prepare a medium-term debtmanagement strategy (including the debt of public enterprises and contingent liabilities). Staffsalso recommend that the authorities continue to rely on a combination of grants and highly

concessional borrowing in external financing and exercise restraint in contracting new loans.The major risks to The Gambias debt sustainability include lower than expected economic andexport growth, higher than expected new borrowing, and a deterioration in fiscal balance. In lightof these risks, staffs underline the importance of sustained policy and governance reforms.

Table2.7: Policy Dependent Debt Burden Thresholds under Debt Sustainability AnalysisIndicators Strong

PerformerModeratePerformer

WeakPerformer

The Gambia2008

NPV of External Debt to GDP Ratio (%) 50 40 30 22NPV of External Debt to Exports Ratio (%) 200 150 100 117NPV of External Debt to Revenue Ratio (%) 300 250 200 117

6

Expected outturn for an item in 2009 = 100 X (actual realization in 2009-Q1) / average realization ratio (inpercentage) during the last five years (2004-2008)

7 Joint IMF/World Bank Debt Sustainability Analysis, Prepared by the Staffs of theInternational Monetary Fund and the International Development Association, Approved byEmilio Sacerdoti and Dominique Desruelle (IMF) and Sudhir Shetty and Carlos Alberto Braga(IDA), February 3, 2009.

33


10/28


Debt service to Exports Ratio (%) 25 20 15 9Debt Service to Revenue Ratio (%) 35 30 25 9

2.9 Domestic Debt and Treasury Bills Outstanding

At the end of June 2009, outstanding domestic debt stood at D5.7 billion (amounting to28.8% 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 theend of June 2009, share of Sukuk Al-Salam from 0.8% to 1.5% and that of Governmentbonds 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% to9.5% over the period

Table-2.8.1: Outstanding Domestic Public Debt as on 30 June 2009Type of debt Million Dalasi

30 June2008 30 June2009

% change inJune2009

over June 2008

Composition(in percentage)

30 June2008

30 June2009

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 equalsD17959 for 2008 and D19904 for 2009)

As % of nominalGDP

33.4 28.8

Domestic Debt Sustainability

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

Table-2.8.2 Primary Benchmarks for Domestic Debt Sustainability Ratios (%)Item Threshold 2006 2007 2008 2009

Projected1. Debt service torevenue ratio

28-63 142 124 118 91

2. Debt to GDP ratio 20-25 33 30 27 313. Debt to revenueratio

92-167 180 158 166 147

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. Thethresholds used here are those used by the Debt Relief International (DRI) for many HIPC countries.

Source: Central Bank of Gambia

34


11/28


Holders of Domestic Debt: As regards holders of total outstanding domestic debt, commercialbanks held 65.5% followed by parastatals 20.7%, other non-banks 13.8% and CBG 5.3% at theend of June 2009.

Instruments of Debt: At end June 2009, Treasury Bills were the major instrument accountingfor 92.9% of interest bearing domestic debt, followed by government bonds (5.3%) and Sukuk Al

Salam (1.8%). Commercial banks were the major purchasers of Treasury Bills (68.6%) followedby Parastatals (16.6%) and other non-banks (14.8%) at the end of June 2009.

Maturity profile of Treasury Bills: At the end of June 2009, 91-day SAS, 91-d TB, 182-d TBand 360-d TBs accounted for 1.4%, 16.4%, 16.3% and 65.5% of outstanding debt respectively.

PERCENTAGE OF INTEREST-BEARING DOMESTIC DEBT BY HOLDER30 June 2008 30 June 2008 30 June 2009 30 June 2009Face Value Book Value Face Value Book Value

Central Bank 4.9% 5.4% 4.8% 5.3%Comm Banks 61.1% 60.8% 65.4% 65.5%Parastatals 18.5% 18.0% 20.8% 20.7%

Other Non Banks 15.6% 15.8% 13.8% 13.8%Total 100.0% 100.0% 100.0% 100.0%DEBT INSTRUMENT AS PERCENTAGE OF INTEREST-BEARING DOMESTIC DEBT -

30 June 2008 30 June 2008 30 June 2009 30 June 2009Face Value Book Value Face Value Book Value

Treasury Bills 94.2% 93.6% 93.5% 92.9%Sukuk Al Salaam 0.9% 1.0% 1.6% 1.8%Government Bonds 4.9% 5.4% 4.8% 5.3%Total 100.0% 100.0% 100.0% 100.0%PERCENTAGE OF TOTAL TREASURY BILLS BY HOLDER - 30 May 2009


Central Bank 0.0% 0.0% 0.0% 0.0%

Comm Banks 63.8% 63.9% 68.2% 68.6%Parastatals 19.7% 19.2% 17.1% 16.6%Other Non Banks 16.5% 16.9% 14.6% 14.8%Total 100.0% 100.0% 100.0% 100.0%PERCENTAGE OF TOTAL SUKUK AL SALAAM BILLS BY HOLDER - 30 May 2009


Central Bank 0.0% 0.0% 0.0% 0.0%Comm Banks 100.0% 100.0% 95.3% 95.3%Parastatals 0.0% 0.0% 0.0% 0.0%Other Non Banks 0.0% 0.0% 4.7% 4.7%Total 100.0% 100.0% 100.0% 100.0%Maturity Profile of Treasury Bills (Million Dalasi) at end June 2009

CBG Banks Parastatals

Others Total % toTotal

SAS 91 0.0 81.4 0.0 4.0 85.4 1.7%

Tbill 91 0.0 681.9 5.0 123.8 810.7 16.4%

182 0.0 599.6 1.0 206.9 807.4 16.3%

35


12/28


364 0.0 2030.7 824.8 380.0 3235.6 65.5%

Total 0.0 3393.6 830.8 714.6 4939.1 100.0%

Source: Central Bank of Gambia

36


13/28


2.10 Treasury Bills Yields

Yields on treasury bills fluctuated widely in recent months. Despite stability in depositrates and significant decline of CPI inflation from 7% in January 2009 to 5.4% in June2009, Average yield on the 91-day increased from 10.5% in Jan 2009 to 13% in June2009, 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 areincreasing over time and need to be corrected by adopting appropriate monetarypolicies.

Table 2.9 Interest Rates (yields on treasury bills in percentage per annum)

2007 2008 20093-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 14.4Feb 12.0 13.4 13.8 10.9 11.9 13.7 11.1 12.8 14.4Mar 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 14.6May 12.8 13.3 13.8 10.2 11.3 13.0 12,.5 13.8 15.3Jun 12.6 13.1 13.9 10.0 11.2 13.3 13.0 13.8 15.6Jul 12.5 13.2 13.9 9.6 10.6 12.6Aug 12.6 12.9 13.6 8.8 10.2 12.1Sep 11.6 12.2 12.9 8.9 11.0 13.1Oct 10.6 11.7 12.5 10.3 11.4 13.6Nov 10.5 11.5 12.5 10.1 13.4 13.7Dec 10.4 11.6 13.6 9.9 12.5 14.0

Trends of Yields of Treasury Bills during 2007-2009

37


14/28


2.11 Money Supply

Annual growth rate of broad money supply (M3) accelerated from 8.5% in June 2008 to21.2% 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 by18.1% growth in currency, 23% growth in demand deposits, 12.8% growth in savingsdeposits and 33.8% growth in time deposits.

On the demand side, growth was mainly due to 31.7% growth in domestic credits, whilenet 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 publicentities and 18.2% growth in credits to the private sector, over a year ago.

Table-2.10: Money Supply in June 2009

Components Jun 2007MillionDalasi

Jun 2008MillionDalasi

Jun 2008MillionDalasi

Jun 2008% share Jun 2008% share Jun 2008% changeover Jun

2007

Jun 2009% changeover Jun

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 46.33.2 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 10.6Source: Economic Research and Statistics Department of CBG.

38


15/28


2.12 Sectoral Distribution of Bank Credits

Bank credits increased by 40.2% in March 2009 over March 2008. There was significantincrease across all sectors. While credits to agriculture increased by 66.2%, manufacturingcredits increased by 76.9%, building credits by 39.3%, transport credits by 27.4% anddistributive trade credits by 27.5% in March 2009 over March 2008. Credits to financial

institutions and other commercial credits also registered significant increases, while tourismcredits recorded the lowest increase by 16.5% among all the sectors.

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

Sectors Outstanding credits(Million Dalasi)

March-2008 March 2009

Annual GRin Mar 2009

(%)

Composition of bank credits(in percentage)

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

39


16/28


17/28


2.14 Commercial Banks Liabilities

As mentioned earlier, Gambian banks do not have large exposure to foreign liabilities.At end-June 2009, external sector related liabilities constituted only 2.6% of totalliabilities (non-residents deposits 1.2%, balances with banks abroad 0.3% and externaldebt 1.1%), down from 3.9% a year ago (non-residents deposits 1%, balances withbanks abroad 0.7% and external debt 2.2%).

In June 2009 banks total deposits increased by 21.9% over a year, aided by a growth of23% in demand deposits, 12.8% in savings deposits and 33.8% in time deposits.

At end-June 2009 banks capital and reserves increased by 4% and bank balancesincreased by 258%, while borrowings declined by 47% over end-June 2008.

At end-June 2009, direct contingent liabilities (i.e. guarantees) of banks increased by39.1% over end-June 2008 and constituted 13.8% of total liabilities.

Table-2.13: Commercial Banks Liabilities at the end-June 2009 (MillionDalasi)

Jun-2008 Jun-2009

1. Capi tal and reserves 1,113.7 1,457.1 1,514.8 12.9 11.5 30.8 4.0

2. Demand deposits 2,328.3 2,647.8 3,255.5 23.4 24.7 13.7 23.0

i Residents 2,077.6 2,363.4 2,712.1 20.9 20.6 13.8 14.8

ii Non residents 42.1 16.7 18.8 0.1 0.1 -60.4 12.8

iii Government entities 208.7 267.8 524.6 2.4 4.0 28.3 95.9

3. Savings deposits 2,700.6 2,603.1 2,935.2 23.1 22.2 -3.6 12.8

i Residents 2,614.8 2,520.6 2,844.7 22.3 21.6 -3.6 12.9

ii Non residents 81.0 74.8 79.1 0.7 0.6 -7.7 5.8


4. Time deposits 1,159.5 1,759.8 2,354.4 15.6 17.8 51.8 33.8

i Residents 768.4 1,283.0 1,674.6 11.4 12.7 67.0 30.5

ii Non residents 14.9 17.2 65.4 0.2 0.5 15.4 280.1


Total deposits 6,188.4 7,010.7 8,545.2 62.1 64.7 13.3 21.9

5. Bank Balances 3.8 80.6 288.3 0.7 2.2 2046.8 257.6

i Head office & branche 3.5 2.4 273.5 0.0 2.1 -31.7 11394.5

ii Other banks abroad 0.3 78.2 14.8 0.7 0.1 28874.8 -81.0

iii. Banks locally - - - 0.0 0.0 -

6. Borrowings from 125.0 278.5 148.5 2.5 1.1 122.7 -46.7

i Cent. bank of Gambia - - - 0.0 0.0

ii Other banks locally - 31.2 - 0.3 0.0

iii Head office & branch 45.2 113.8 123.5 1.0 0.9 151.7 8.6iv Other banks abroad 66.3 133.5 25.0 1.2 0.2 -81.3

v. Other sources 13.6 - - 0.0 0.0

7. Guarantees 1,329.5 1,311.3 1,824.5 11.6 13.8 -1.4 39.1

8. Other liabilities 1,136.4 1,153.3 876.1 10.2 6.6 1.5 -24.0

9. Total l iabi li ties (1 to 8 9,896.8 11,291.5 13,197.3 100.0 100.0 14.1 16.9

10. Net balance (9-7) 8,567.3 9,980.2 11,372.8 88.4 86.2 16.5 14.0

% ch. Jn09

over Jn08

Composition (%)Liabilities (Million

Dalasi)

Jun-2007 Jun-2008 Jun-2009 % ch. Jn08

over Jn07

41


18/28


2.15Interest Rates and Central Bank Policy Rates

Interest rate on government treasury bills declined from 31% in 2003 to 14.9% in 2006 and

further to 13.7 per cent in 2007. It ranged in between 13.1% to 14.7% during 2008. The bank

rate of the CBG declined from 29% in 2003 to 9% in 2007, but was raised to 10% at the end of

2007 to check effective demand and inflationary pressures on the economy.

In response to tight monetary conditions and against a backdrop of falling inflation, the CBG

reduced the statutory minimum reserve requirement of banks from 16% to 14% in March 2008.

The CBG rediscount rate declined from 34% in 2003 to 14% in 2004. In order to counter

emerging inflationary pressures, the CBG raised its rediscount rate by one percentage point

from 14% to 15% in June 2007, and further to 16.0% in October 2008. The rediscount rate has

remained unchanged at 16% since then.

Despite significant fall of the yields on treasury bills in recent years, maximum short-term

deposit rates and commercial banks lending rates remain very high, and there exist wide

interest rate spreads. Successful disinflation allowed the weighted yield on treasury bills to fall

from over 25% in early 2005 to 14.6% in January 2009. By contrast, commercial banks lending

rates remained sticky above 20% due to high operating costs and risks of bank credits.

Appropriate monetary policies are necessary to reduce the maximum short-term deposit

rates and the lending rates.

Table-2.14: Trends of Nominal Interest rates (per cent per annum, end period)Items 2000 2001 2002 2003 2004 2005 2006 2007 2008Bank lending rare- min 18 18 17 21 21 21 18 18 18Bank lending rare- max 24 24 24 36.5 36.5 30 28 27 27Deposit rate (SB) min 8 8 8 8 10 5 5 5 4Deposit rate (SB) max 10 10 10 17 17 10 7 7 7Time dep (3 months) min 9.5 9.5 6 7 8 5 5 5 5

Time dep (3 months) max 12.5 12.5 13 22 22 14 8.5 12.9 13.6Time dep (6 months) min 10 10 6 8 8 7 6 6 6Time dep (6 months) max 12.5 12.5 13 22 22 15 13 12.9 13.6Time dep (12 month) min 11 11 7 10 12 7 6 7 7Time dep (12 month) max 12.5 12.5 13 22 23 13 13 12.9 13.6Govt treasury bills 12 15 20 31 30 16 12.8 13.7 13.6CBG Bank Rate 10 13 18 29 28 14 9 10 10CBG Rediscount Rate 15 18 23 34 33 19 14 15 16

Range = Maximum Minimum

Bank lending rate 6 6 7 15.5 15.5 9 10 9 9Deposit rate (SB) 2 2 2 9 7 5 2 2 3Time deposits (3 months) 3 3 7 15 14 9 3.5 7.9 8.6Time deposits (6 months) 2.5 2.5 7 14 14 8 7 6.9 7.6Time deposits (12 month) 1.5 1.5 6 12 11 6 7 5.9 6.6

Some important factors influencing interest rates

Inflation (GDP-Deflator) 3.6 15.2 16.1 23.8 17.6 4.2 2.0 5.0 4.1CPI-Inflation 0.9 4.5 8.6 17.0 14.3 5.0 2.1 5.4 4.9Real GDP-Growth Rate 5.5 5.8 0.7 2.4 -0.7 2.0 6.6 6.3 7.2Exchange rate change (%) 12.2 22.7 27.0 43.2 5.3 -4.8 -1.8 -11.4 -9.8

Source: Central Bank of Gambia (CBG)

2.16Balance of Payments (BOP) and Foreign Exchange Reserves

42


19/28


(i) BOP Situation in 2008

(a) Overall BOP outcome in 2008 was not as bad as they were anticipated earlier. Year endforeign exchange reserves at US$125.2 million were still equal to 5.7 months of c.i.f. importscompared 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 ($29.8million), amounting to 3.6 percent of GDP in 2007, reflecting the deterioration in both thecurrent and the capital and financial accounts. The Net Usable Reserve of the CBG stood atUS$95.6 million at end-March 2009 and was above the IMF Program target (floor) by US$3.6million.

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

(d) Exports of goods at D3.18 billion amounted to 14% of GDP in 2008 compared to D3.29 billionamounting 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 fromUS$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 to7.2 percent of GDP, in 2007 to (-) D1.11 billion, amounting to 4.9 percent of GDP in 2008.

(ii) 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 D234.3million compared to a surplus of D4.94 million a year ago. The capital and financial accountwidened from a deficit of D12.36 million in the first quarter of 2008 to D234.53 million in the firstquarter 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. Thecurrent account deficit, including official transfers is expected to widen to D3.8 billion (19% ofGDP) in 2009 from D3.6 billion (17.8% of GDP) in 2008. The capital and financial accountbalance is expected to improve from a surplus of D2.7 billion in 2008 to D3.8 billion in 2009.

(iii) 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. Atend-May 2009, gross international reserves stood at D2.6 billion (US$119.7 million) equivalent to4.0 months of import cover.

43


20/28


Table 2.16-A Quarterly BOP Summary Table for 2008-2009 (Million Dalasi)

(Million Dalasi) 2008-Q1 2008-Q2 2008-Q3 2008-Q4 2009-Q1

1 Goods balance (1.1-1.2)

-934.7 -747.1 -729.4 -1087.9 -845.5

1.1 Exports of goods(a+b+c)

804.9 788.2 699.4 883.3 934.5

a. Exports of goods intrade stat

69.0 125.1 80.3 56.0 239.1

b. Re-exports 639.6 571.8 542.0 735.7 660.9

c. Other goods 96.3 91.3 77.1 91.6 34.5

1.2 Imports of goodsc.i.f.

1739.6 1535.3 1428.9 1971.2 1780.0

2 Services, net (2.1 to2.7)

715.9 192.1 32.2 353.4 531.9

2.1 Travel 800.9 196.3 143.9 483.0 615.7

2.2 Communications 49.2 79.4 44.8 41.0 52.4

2.3 Construction 3.2 55.9 2.5 14.3 12.92.4 Information technology 0.0 -2.0 -21.5 -47.4 -23.6

2.5 Others business -137.5 -137.5 -137.5 -137.5 -125.5

3 Income, net (3.1 +3.2)

-233.1 -176.0 -176.8 -171.5 -74.8

3.1 Investment income -275.8 -219.6 -223.8 -212.2 -115.2

3.2 Compensation to labor 42.7 43.6 47.0 40.7 40.3

4 Transfers, net(4.1+4.2+4.3)

456.9 450.0 499.5 403.0 154.1

4.1 Official transfer 42.7 40.5 29.0 25.0 108.3

4.2 Remittances 219.2 249.1 370.7 356.7 290.2

4.3 Other transfer 195.0 160.4 99.7 21.3 -244.45 Current account

balance5.1 Including official

transfers (1+2+3+4)

4.9 -281.0 -374.6 -503.0 -234.4

5.2 Excluding officialtransfers (5.1 - 4.1)

-37.7 -321.5 -403.5 -528.0 -342.6

6 Capital Account 0.0 19.1 3.2 2.0 0.0

7 Financial Account(7.1+7.2)

-12.4 -107.2 26.5 411.0 -234.5

7.1 Foreign direct investment 411.4 411.4 366.5 366.5 262.7

7.2 Other investment -865.0 -351.5 60.5 -273.6 -311.17.3 Reserve change 441.2 -167.1 -400.5 318.2 -186.2

8 Capital and Financial A/C(6+7)

-12.4 -88.1 29.7 413.0 -234.5

9 Overall BOP Balance(5.1+8)

-7.4 -369.1 -344.9 -89.9 -468.9

Foreign Exchange Reserve 4428.2 4059.1 3714.2 3624.3 3155.4

Equi to months of importsc.i.f

6.6 6.9 6.8 4.8 4.6

44


21/28


Ave. Exchange rate (D/$) 21.23 20.47 21.81 25.90 26.19

GDP at cmp (Million Dalasi) 18001.1 18001.1 18001.1 18001.1 19916.1


45


22/28


Table 2.16-B Quarterly BOP Summary Table for 2008-2009 (Million US$)

(Million US$) 2008-Q1 2008-Q2 2008-Q3 2008-Q4 2009-Q1

1 Goods balance (1.1-1.2) -44.0 -36.5 -33.4 -42.0 -32.3


37.9 38.5 32.1 34.1 35.7


3.2 6.1 3.7 2.2 9.1

b. Re-exports 30.1 27.9 24.9 28.4 25.2

c. Other goods 4.5 4.5 3.5 3.5 1.3

1.2 Imports of goods c.i.f. 81.9 75.0 65.5 76.1 68.0


33.7 9.4 1.5 13.6 20.3

2.2 Travel 37.7 9.6 6.6 18.6 23.5

2.3 Communications 2.3 3.9 2.1 1.6 2.0

2.5 Construction 0.2 2.7 0.1 0.6 0.5

2.6 Information technology 0.0 -0.1 -1.0 -1.8 -0.9

2.7 Others business -6.5 -6.7 -6.3 -5.3 -4.8

3 Income, net (3.1 + 3.2) -11.0 -8.6 -8.1 -6.6 -2.9




21.5 22.0 22.9 15.6 5.9


4.2 Remittances 10.3 12.2 17.0 13.8 11.1

4.3 Other transfer 9.2 7.8 4.6 0.8 -9.3

5 Current account

balance

0.0 0.0 0.0 0.0 0.0

5.1 Including officialtransfers (1+2+3+4)

0.2 -13.7 -17.2 -19.4 -8.9


-1.8 -15.7 -18.5 -20.4 -13.1

6 Capital Account 0.0 0.9 0.1 0.1 0


-0.6 -5.2 1.2 15.9 -9.0

7.1 Foreign directinvestment

19.4 20.1 16.8 14.1 10.0

7.2 Other investment -40.7 -17.2 2.8 -10.6 -11.9

7.3 Reserve change 20.8 -8.2 -18.4 12.3 -7.1

8 Capital and FinancialA/C (6+7)

-0.6 -4.3 1.4 15.9 -9.0


-0.3 -18.0 -15.8 -3.5 -17.9


Equi to months of importsc.i.f

6.6 6.9 6.8 4.8 4.6


46


23/28


Table 2.16-C Quarterly BOP Summary Table for 2008-2009(As percentage of GDP at current market prices)

BOP as % of GDP 2008-Q1 2008-Q2 2008-Q3 2008-Q4 2009-Q1

1 Goods balance (1.1-1.2) -5.2 -4.2 -4.1 -6.0 -4.2


4.5 4.4 3.9 4.9 4.7


0.4 0.7 0.4 0.3 1.2

b. Re-exports 3.6 3.2 3.0 4.1 3.3

c. Other goods 0.5 0.5 0.4 0.5 0.2

1.2 Imports of goods c.i.f. 9.7 8.5 7.9 11.0 8.9


4.0 1.1 0.2 2.0 2.7

2.2 Travel 4.4 1.1 0.8 2.7 3.1

2.3 Communications 0.3 0.4 0.2 0.2 0.3

2.5 Construction 0.0 0.3 0.0 0.1 0.1

2.6 Information technology 0.0 0.0 -0.1 -0.3 -0.1

2.7 Others business -0.8 -0.8 -0.8 -0.8 -0.6

3 Income, net (3.1 + 3.2) -1.3 -1.0 -1.0 -1.0 -0.4




2.5 2.5 2.8 2.2 0.8


4.2 Remittances 1.2 1.4 2.1 2.0 1.5

4.3 Other transfer 1.1 0.9 0.6 0.1 -1.2

5 Current accountbalance

5.1 Including officialtransfers (1+2+3+4)

0.0 -1.6 -2.1 -2.8 -1.2


-0.2 -1.8 -2.2 -2.9 -1.7

6 Capital Account 0.0 0.1 0.0 0.0 0.0


-0.1 -0.6 0.1 2.3 -1.2

7.1 Foreign directinvestment

2.3 2.3 2.0 2.0 1.3

7.2 Other investment -4.8 -2.0 0.3 -1.5 -1.6

7.3 Reserve change 2.5 -0.9 -2.2 1.8 -0.9

8 Capital and FinancialA/C (6+7)

-0.1 -0.5 0.2 2.3 -1.2


0.0 -2.1 -1.9 -0.5 -2.4

47


24/28




Table 2.16-D Quarterly BOP Summary Table for 2008-2009(Percentage change over the corresponding quarter of previous year)

Items 2009-Q1 over2008-Q1

(% change inDalasi)

2009-Q1 over2008-Q1

(% change inUS$)

1 Goods balance (1.1-1.2) -9.5 -26.7

1.1 Exports of goods (a+b+c) 16.1 -5.9

a. Exports of goods in trade stat 246.6 181.0

b. Re-exports 3.3 -16.2

c. Other goods -64.2 -71.01.2 Imports of goods c.i.f. 2.3 -17.1

2 Services, net (2.1 to 2.7) -25.7 -39.8

2.2 Travel -23.1 -37.7

2.3 Communications 6.5 -13.6

2.5 Construction 297.2 222.0

2.6 Information technology -- --

2.7 Others business -8.7 -26.0

3 Income, net (3.1 + 3.2) -67.9 -74.0

3.1 Investment income -58.2 -66.1

3.2 Compensation to labor -5.5 -23.44 Transfers, net (4.1+4.2+4.3) -66.3 -72.7

4.1 Official transfer 153.7 105.7

4.2 Remittances 32.4 7.3

4.3 Other transfer -225.3 -201.6

5 Current account balance

5.1 Including official transfers(1+2+3+4)

-4834.3 -3937.7

5.2 Excluding official transfers (5.1- 4.1)

808.1 636.1

6 Capital Account

7 Financial Account (7.1+7.2) 1797.6 1438.27.1 Foreign direct investment -36.1 -48.2

7.2 Other investment -64.0 -70.8

7.3 Reserve change -142.2 -134.2

8 Capital and Financial A/C (6+7) 1797.6 1438.2

9 Overall BOP Balance (5.1+8) 6227.8 5029.4

Foreign Exchange Reserve -28.7 -42.2

Equi to months of imports c.i.f -30.4 -30.4

48


25/28


Ave. Exch. Rate (Dalasi/ US$) 23.4 23.4

GDP at cmp 10.6 -10.3

49


26/28


2.17 Exchange Rate

During Jan-April 2009, every month the Dalasi depreciated against major internationalcurrencies (viz. US$, CHF, EURO and CFA) traded in the inter-bank market except theUK, reflecting the ADVERSE impact of the global financial crisis on remittances andtourism 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 CFAover end-July 2008.

Table-2.17 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 32.89 252.85Feb 42.58 21.88 19.57 32.28 243.98

Mar 40.87 19.46 19.15 30.83 239.16Apr 39.52 20.12 19.16 31.43 235.95May 40.25 20.64 19.46 32.1 245.84June 40.77 20.65 19.27 32.07 245.51July 41.65 20.94 19.9 32.21 251.05Aug 40.73 21.37 20.08 32.23 249.47Sept 41.65 23.12 19.86 33.02 249.30Oct 40.49 24.89 20.15 32.89 258.09Nov 40.56 26.26 20.07 33.28 258.31Dec 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 35.22 259.30Apr 39.05 26.80 23.00 35.32 262.17May 41.40 26.74 22.40 37.00 265.98June 43.13 26.87 21.96 37.03 272.87July 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 3.9Feb -12.2 19.3 12.6 4.1 5.7Mar -6.6 35.6 21.7 14.2 8.4Apr -1.2 33.2 20.1 12.4 11.1May 2.9 29.5 15.1 15.3 8.2June 5.8 30.1 14.0 15.5 11.1July 5.3 27.3 24.7 17.4 11.5


50


27/28


3. Assessment of Quantitative Targets agreed with IMF under

The Gambias three-year Poverty Reduction and Growth Facility (PRGF) arrangement wasapproved by the IMFs Executive Board in February 2007. The third review was completed onSeptember 8, 2008 and the Fourth Review was done in February 2009. The updated Letter ofIntent (LOI) and Memorandum of Economic and Financial Policies (MEFP), and Technical

Memorandum of Understanding (TMU) were signed jointly by the honorable Mousa Gibril Bala-Gaye, Secretary of State (Finance and Economic Affairs) and honorable Momodou BambaSaho, Governor, Central Bank of Gambia on February 3, 2009.

The MEFP reviewed progress in implementing the Governments PRGF supported program in2008, and set out the policies that the Government will pursue in 2009. The Government ofGambia committed that the program, as usual, will continue to be monitored based on agreedquantitative targets and a set of structural performance criteria and benchmarks indicated in theMEFP as per program reviews.

The quantitative financial targets for endMarch 2009 and end-September 2009 areperformance criteria; and those for endDecember 2008, endJune 2009, and end-December

2009 are indicative targets. The Performance criteria for end March 2009 and the actualperformance are indicated in the following table 3.1.

It may be observed from the table that all quantitative targets have been satisfied at theend of March 2009.

Performance Targets Stock end-Dec 2006

Target atend-Mar

2009

Status atend-Mar

2009Net domestic assets of the central bank (ceiling)adjusted for privatization proceeds (Million Dalasi)

38.7 797.7 127.3

Basic balance (floor) defined as domestic revenueminus expenditure and net lending, excluding externallyfinanced capital expenditure. Adjusted downward by thedalasi equivalent of the amount of external budgetsupport in excess of the projected levels up to acumulative maximum in of US$10 million in 2009

--- 616.9 738.1

New external payments arrears of the centralgovernment (ceiling)

0.0 0.0 0.0

Net usable international reserves (floor) adjusted forprivatization proceeds. Adjusted upward(downward) by the extent to which actualreceipts exceed (fall short of) projected level ofprivatization receipts (Million US$)

94.9 92 95.6

New non-concessional debt contracted or guaranteedby the government with original maturity of more thanone year (ceiling)

0.0 0.0 0.0

Outstanding stock of external public debt with originalmaturity of one year or less (ceiling)

0.0 0.0 0.0

51


28/28

Gambia Monthly Eco Bulletin July 2009- Part Two

Documents

Transcript of Gambia Monthly Eco Bulletin July 2009- Part Two