Rédaction Africa Links 24 with babucarr balajo
Published on 2024-02-29 09:19:00
The governor of the Central Bank of The Gambia, Buah Saidy, recently shared key financial insights regarding the country’s economic performance in 2023. According to Saidy, the government’s overall budget deficit expanded to D18.5 billion, equivalent to 12.9 percent of the GDP, marking a substantial increase from the previous year’s D15.3 billion, which accounted for 12.5 percent of the GDP.
Furthermore, Saidy highlighted that the government’s fiscal operations showed an improvement as the overall deficit, including grants, decreased from D6.9 billion in 2022 to D4.4 billion in 2023. Total revenue and grants also saw a significant uptick, reaching D31.9 billion in 2023, representing a 39.4 percent increase from the previous year. On the expenditure side, total government spending and net lending experienced a 21.8 percent rise, amounting to D36.3 billion or 25.3 percent of the GDP.
The increase in government expenditure was primarily driven by a surge in development expenditures, with a substantial portion being financed externally. The governor emphasized that this growth in spending was crucial for driving economic development in the country.
In terms of domestic debt, the Central Bank of The Gambia reported that the government’s domestic debt had risen by 8.4 percent to D41.3 billion, comprising 29 percent of the GDP. This upsurge from the previous year’s D38.1 billion was attributed to increased issuance of treasury bills and medium-term government bonds for maturities settlement and budget financing purposes. Notably, short-term debt constituted 58.5 percent of the total domestic debt, posing refinancing risks, as a significant portion of the debt matures in less than a year.
The report also highlighted a positive trend in inflation, with a decline observed for the second consecutive month. Headline inflation dropped from 17.3 percent to 16.2 percent in January 2024, while food inflation decreased from 23.8 percent to 21 percent in December 2023. This decline was mainly driven by lower food prices globally and a favorable cropping season. Non-food inflation also saw a decrease, contributing to the overall decline in inflation.
Despite these positive developments, the Central Bank of The Gambia maintains a tighter monetary policy to sustain the downward trajectory of inflation. Key monetary policy rates, such as the Monetary Policy Rate (MPR), required reserve ratio, and standing deposit and lending facility rates, remain unchanged to support this objective.
Looking at the performance of the Gambian currency, the dalasi has remained relatively stable but experienced modest depreciation against major international currencies in 2023. The Central Bank reported that the dalasi depreciated against the US dollar, Euro, pounds sterling, and CFA by varying percentages. Additionally, the country’s international reserves stood at US$475.3 million in January 2024.
Lastly, the report highlighted a slowdown in private sector credit growth, attributed to businesses and individuals curbing borrowing from financial institutions. This trend is partially influenced by rising interest rates as the Central Bank tightens monetary policy to control inflation. As of December 2023, credit to the private sector grew at a slower pace of 12.2 percent compared to the previous year’s 25.4 percent.
Overall, the Central Bank of The Gambia’s report provides valuable insights into the country’s economic performance and the measures being taken to address key challenges and sustain growth in the future.
Read the original article on The Standard
