Gambia’s Domestic Debt Stocks Increases to D38.1 billion–CBG Governor

By Kebba Ansu Manneh

Mr. Bauh Saidy, Governor of the Central Bank of The Gambia has disclosed that the domestic debt stock of the country has increased to thirty-eight billion, one million dalasi as of December 2022, noting that this increment represents 2.5 percent of debt increment lower than average growth of 5.8 percent for the past 5years.

Governor Saidy made this disclosure at the press briefing of the Monetary Policy Committee (MPC) meeting held on Tuesday, February 28, 2023, at the Central Bank of The Gambia.

“The stock of government domestic debt increased in 2022 but at a decreasing rate. The nominal debt stock stood at D38.1 billion, representing an annual increase of 2.5 percent, lower than average growth of 5.8 percent for the past 5 years,” GBG Governor disclosed.

According to him, the domestic debt-to-GDP ratio declined from 34.7 percent in 2021 to 31.7 percent in 2022.

He noted that the stock of the Treasury bonds increased by 15.7 percent to D19.8 billion during the period under review.”

Governor Saidy pointed out that short-term Treasury bills and Sukuk Al Salam have contracted by 9.0 percent to D19.8 billion, noting that the decline in short-term instruments is consistent with the government’s debt management strategy to reprofile the domestic debt to reduce the refinancing.

He stated that in the year end-December, 2022, the dalasi has weakened against the US dollar by 17.8percent, the Euro by 5.8 percent, and the Great Britain Pound by 4.8 percent, adding that in the same period, the dalasi has strengthened against the CFA franc by 3.7 percent.

“Inflation remained elevated in 2022, driven by both demand pressures and supply shocks,” he said

He said the latest data indicate a decline in headline inflation to 13.1 percent in January 2023, from 13.7 percent in December 2022, due to a decline in both food and non-food inflation.

   “Food inflation decreased by 0.8 percentage points to 17.5 percent in January 2023, from 18.3 percent in December 2022, attributed to the slowdown in the price indices of Bread and Cereals, Sugar, and Dairy Products. Non-Food inflation declined by 8.6 percent in January 2023, relative to 9.4 percent in December 2022, supported by the decline of all subcomponents during the period except for housing, water, electricity, gas, and other fuels,” he said in Banjul on Tuesday.

 He pointed out the banking system continued to be well-capitalized, highly liquid, and profitable, noting that the risk-weighted capital adequacy ratio at 24.8 percent in end-December, 2022, was higher than the regulatory requirement of 10.0 percent.

He revealed that the liquidity ratio at 63.7 percent was also above the prudential requirement of 30 percent, adding that the ratio of non-performing loans to gross loans improved to 4.6 percent in December 2021. 

“Growth in monetary aggregates is moderating. Annual money supply growth slowed to 7.7 percent in 2022, compared to 21.7 percent in 2021, owing to moderation in the Net Foreign Assets of both the Central Bank and Commercial Banks.

Private sector credit expanded by 24.4 percent year to year in end-December, 2022, higher than 23.0 percent a year ago. Reserve Money growth decreased by 0.9 percent in 2022, relative to 13.6 percent in the previous year,” Governor Saidy, further explained.

He added that yields on government securities continue to rise, mirroring the tight monetary policy stance of the Bank.

He also said the weighted average interest rate on Treasury bills increased from 1.8 percent in December 2021 to 11.2 percent in December 2022.