The Gambia’s Central Bank has opened bids for the sale of a three-year bond worth 2 billion dalasi ($36.8 million) to finance its fiscal deficit, maturing bonds and re-profile debt, according to a prospectus published by the Ministry of Finance.
The sale of the bond began Wednesday by a multiple price auction, with bids placed at a minimum half a million dalasi ($9,209) and in multiples of 50, 000 dalasi ($920).
The country’s budget deficit widened to 2.8% of GDP in the first half of this year, compared with 2.5% of GDP in the same period last year, the Central Bank’s Monetary Policy Committee (MPC) said in a September 1 statement.
Interest rates are to be paid to bondholders semi-annually from the issue date (Sept. 14, 2022) on the following calendar:
– March 15 and September 13, 2023;
– March 13 and September 11, 2024;
– March 12 and September 10, 2025
At the beginning of this month, the MPC raised interest rates by 100 basis points to 12%, and revised the forecast for economic growth this year to 5.2%, from 4.7% forecast in May.
The upward revision is based on “better-than-anticipated recovery in tourism, private sector credit, public sector investment and steady private remittance inflows”, according to the Central Bank.
The D2 billion bond is issued at a fixed coupon rate (the annual income investors can expect) to be determined at the auction. The sale of the government’s treasury bonds will be based on a 365-day count for a year and 182-day for half year.
Gambia’s domestic debt rose by D1.2 billion to D38.4 billion in July 2022, the Bank said.
Inflation reached 12.3% in July, up from 11.7% in June, while inflationary pressures remain elevated, and inflation expectations have risen, fueled by surging energy and food
prices.
