- 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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