Domestic Debt at D20.7 Billion- CBG

By Amie Sanneh

The Governor of Central of the Gambia, Amadou Colley, has said that the country’s domestic debt in the year to end-SeptemberCBG Governor Colley 2015, rose to D20.7 billion (54.2 percent of GDP), or 23.8 percent from a year earlier. Outstanding Treasury bills, which accounted for 69 percent of the domestic debt according to Governor Colley, increased by 4.4 percent whilst the stock of outstanding Sukuk Al Salaam (SAS) contracted by 11.2 percent. The Central Bank Governor was speaking yesterday during the Monetary Policy Committee meeting held at the bank’s conference hall in Banjul.

On Government fiscal operations, the CBG Boss said provisional data on government fiscal operations for the first nine months of 2015 indicates that total revenue and grants amounted to 06.2 billion (16.0 percent of GDP) compared to D6.0 billion   (17.0 percent of GDP) in the corresponding period a year ago. Domestic revenue, comprising tax and non-tax revenue, rose to 05.7 billion (14.8 percent of GDP), or 18.9 percent from the corresponding period in 2014, he said. Tax revenue he explained increased to 05.1 billion, or 25.6 percent. Non-tax revenue, on the other hand, contracted to D622.0 million, or 16.8 percent.

Total expenditure and net lending amounted to 08.2 billion (21.2 percent of GDP} compared to 07.5 billion (21.4 percent of GDP} in the first nine months of 2014, he said. He added that recurrent expenditure increased to 06.4 billion, or 19.3 percent attributed mainly to the 59.3 percent increase in interest payments. “In contrast, capital expenditure declined to 01.8 billion, lower than the 02.1 billion in the first nine months of 2014,” he said.

Overall budget deficit on cash basis, including grants, is estimated at 01.9billion (5.1 percent of GDP}, slightly higher than the deficit of 01.6 billion (4.4 percent of GDP} in the first nine months of 2014, he said.

On the Domestic Economy, the CBG Governor said, Gambian economy is forecast to grow by 4.7 percent in 2015 compared to 0.5 percent in 2014 premised on the expected rebound in tourism and agriculture.

Volume of transactions in the domestic foreign exchange market decreased to US$1.1 billion, or 23.7 percent from a year earlier, he said. In the year to end-September 2015, he said, the Dalasi appreciated against the US dollar by 7.35 percent, Euro (22.43 percent} and British Pound (11.46 percent}

On the Inflation Outlook, he said consumer price inflation, measured by the National Consumer Price lndex (NCPI), accelerated to 6.6 percent in September 2015, from 6.3 percent in September 2014. “The sole driver of consumer price inflation was food prices which increased to 8.05 percent from 7.34 percent in September 2014. In contrast, non-food inflation decelerated slightly to 4.35 percent from 4.84 percent in September 2014. Core inflation, which excludes utilities and energy prices, declined to 6.32 percent from 6.92 percent in September 2014,” he said.

According to him, the MPC expects that the end-December 2015 inflation target of 5.0 percent would be breached and inflationary expectations to remain elevated. “However, the confluence of the sharp deceleration in the growth of monetary aggregates, the expected rebound in agriculture and the tight monetary policy stance should reduce inflationary pressures starting in 2016, he said.

Against this backdrop the CBG Governor said, the MPC judges the current stance of monetary policy to be appropriate and decided to maintain the policy rate unchanged at 23.0 percent. The committee would continue to monitor price developments closely and would not hesitate to act appropriately when deemed necessary, he said.

On External Sector Developments, Governor Colley noted that provisional balance of payments   (BOP} estimates for the first nine months of 2015 indicate that the current account deficit widened to US$75.9 million compared to the deficit of US$47.9 million in the first nine months of 2014. He explained that of the components of the current account, the goods account deficit rose to US$186.10 million compared to the deficit of US$160.90 million in the corresponding period in 2014. Imports according to him, rose to US$276.80 million or 6.5 percent   while exports declined to US$76.5 million, or 7.8 percent.

Volume of transactions in the domestic foreign exchange market decreased to US$1.1 billion, or 23.7 percent from a year earlier, he said. In the year to end-September 2015, he said, the Dalasi appreciated against the US dollar by 7.35 percent, Euro (22.43 percent} and British Pound (11.46 percent}