By: Haddy Touray
The Governor of the Central Bank of The Gambia (CBG), Hon. Buah Saidy, has said the Gambian economy continues its resilience, registering a growth rate above the average for sub-Saharan Africa.
Speaking on Tuesday at the 89th Meeting of the Monetary Policy Committee of the apex bank, Governor Saidy revealed that real GDP growth stood at 4.8 percent supported by agriculture and services sectors, quoting data from the Gambia Bureau of Statistics (GBoS).
The Central Bank forecast economic growth at 5.4 percent for 2024, representing a 0.1 percentage point upward revision from the November 2023 forecast.
“Public and private consumption and investments are expected to sustain aggregate demand as well as recovery in tourism and stable inflows of remittances,” Governor Saidy told commercial bank managers and journalists. He, however, pointed out thatthis outlook is surrounded by significant headwinds, including the still elevated inflation, uncertainties surrounding global commodity prices, and structural holdups in the domestic economy.
He enthused that the results from the Central Bank’s latest Business Sentiment Survey revealed that sentiments about the prospects of the Gambian economy have improved.
He reported that most of the businesses expressed optimism about the near-term growth outlook, adding that businesses also expect to hire more people with the expectation of increased production.
However, Governor Saidy pointed out that near-term inflation expectations remain high as survey respondents believe inflation will rise in the next three months.
According to him, the effect of geopolitical developments, especially its impact on global supply chains, increase in domestic pump prices, and depreciation pressures shaped the sentiments of businesses on the inflation outlook.
He disclosed that preliminary balance of payments estimates show that the current account balance deteriorated in 2023, registering a deficit of US$204.1 million (7.0 percent of GDP), from a deficit of US$90.3 million (4.4 percent of GDP) in 2022.
“The goods account balance widened to a deficit of US$940.4 million (32.2 percent of GDP) in 2023, compared to a deficit of US$642.4 million (31.5 percent of GDP). The services account balance registered a surplus of US$204.2 million in 2023, higher than US$80.2 million, benefiting from the strong recovery in tourism activity.
“The Central Bank continues to implement reforms to enhance the efficiency of the foreign exchange market. In December 2023, the Bank published a new foreign exchange policy and revised the foreign exchange bureau guidelines. These reforms were necessary to ensure transparency and the smooth functioning of the market.
“The foreign exchange market remains vibrant with stable activity volumes. The cumulative volume of transactions in the domestic foreign exchange market in 2023 stood at US$2.0 billion, slightly lower than the US$2.5 billion in 2022. Total remittance inflows increased by 3.5 percent in 2023 to stand at US$737.1 million. The increase in private remittances and significant inflows from grants helped ease foreign currency supply conditions and considerably supported the stability of the dalasi during the review period,” the CBG boss explained. He added: “The Dalasi continues to be stable, depreciating only modestly year-on-year against major international trading currencies in 2023. It depreciated against 4 the US Dollar by 3.8 percent, the Euro by 10.8 percent, GBP by 12.7 percent, and CFA by 14.2 percent. CBG continues to hold comfortable levels of international reserves amounting to US$475.3 million in January 2024 sufficient to finance over 5 months of prospective imports of goods and services.”
Governor Saidy said preliminary estimates of government fiscal operations indicated that the overall deficit (including grants) narrowed from D6.9 billion (5.7 percent of GDP) in 2022 to D4.4 billion (3.1 percent of GDP) in 2023.
He, however, disclosed that the overall budget deficit (excluding grants) widened to D18.5 billion (12.9 percent of GDP) in 2023, from D15.3 billion (12.5 percent of GDP) a year ago.
“Total revenue and grants mobilized in 2023 amounted to D31.9 billion (22.2 percent of GDP); an increase of 39.4 percent compared to last year. The increase in the total revenue and grants mirrors the increase in both domestic revenue and grants.
“Total expenditure and net lending between 2022 and 2023 increased by 21.8 percent to stand at D36.3 billion (25.3 percent of GDP) from D29.8 billion (24.3 percent of GDP) driven by the increase in development expenditures that were largely externally financed,” Governor Saidy told commercial bank officials and reporters.
