The Governor, Central Bank of The Gambia (CBG), Mr. Buah Saidy, has informed journalists at the Monetary Policy Committee (MPC) media briefing that, the overall budget deficit (including grants), expanded to D4.2 billion (4.3 percent of GDP) in 2020 from a deficit of D2.7 billion (3.1 percent of GDP) in 2019.
“Similarly, budget deficit (excluding grants) rose to D13.4 billion (13.6 percent of GDP) in the review period, relative to a deficit of D7.5 billion (8.6 percent of GDP),” Governor Saidy disclosed on Thursday, 4th March 2021, at the apex bank complex in the capital city, Banjul.
He further told his audience, which included banking officials, that total revenue and grants amounted to D22.6 billion (23 percent of GDP) and rose by 3.5 percent in the twelve months of 2020, compared to D16.6 billion (19.0 percent of GDP) in the preceding year of 2019, whilst both tax and non-tax revenue increased by 3.7 percent and 67.0 percent to D10.3 billion and 3.1 billion respectively during the period.
According to Saidy, the deficit in goods account is estimated to have widened to US$512.71 million in December 2020 from a deficit of US$379.01 million in the corresponding period in 2019, and that the continued deterioration of the deficit in the goods account, mirrors import expenses for COVID-19 related medical materials and declined in exports.
“Capital expenditure increased by a significant margin of D63.6 percent to D10.6 billion (10.8 percent of GDP), while recurrent expenditure rose by 26.1 percent to D16.2 billion (16.5 percent of the GDP),” he stated.
The audience heard that, the gross official reserves reached US$33.21 million on 12th February 2021, from US$352.07 million in December 2020; that total foreign assets of the bank, amounted to US$364.36 million at end November 2020. “The services account balance deteriorated to a deficit US$4.78 million in 2020, from a surplus of US$100.33 a year ago.”
The country apex bank chief went on to explain that the deterioration could be attributed to a decrease in personal travels associated with the collapse in the tourism sector due to the pandemic. He added that annual reserve money growth accelerated in January 2021, due to the increase in oils and fats sub-components of food inflation, whereas headline inflation, rose to 7.6 percent in January 2020, from 5.7 percent in December and by 0.2 percentage points from a year ago.
Governor Saidy continued: “Food inflation increased to 9.1 percent in January 2021 from 8.1 percent in the corresponding period in 2020. This rise in food prices is explained by the increase in all the sub-components of the food basket except for few.” He also informed that non-food inflation, declined to 6.1 percent in January 2021 from 6.8 percent in the same period last year, on account of a drop in the prices of housing, water, electricity, as well as other fuels and communication services.
He indicated that government expenditure and net lending in 2020 increased to D26.8 billion (27.3 percent of GDP) or by 38.7 percent from D19.3 billion (220 percent GDP in 2019), and that both capital and recurrent expenditure bolstered the expansion in government expenditure and net lending.
As per the information Mansa Banko Online obtained from the CBG website, the Monetary Policy Committee (MPC) was formed in July 2004 as the apex monetary policy decision-making body of the Bank.
“The maiden meeting of the Committee was held on July 26, 2004. The Committee was formerly established by the revised Central Bank of The Gambia Act (2005).”
The Act was revised again in 2018 and listed the following as the responsibilities of Committee: setting the policy interest rate to achieve the objectives of the Bank; deciding on the provision of credit to government, purchasing and selling Government securities (Treasury Bills) in accordance with the Act; delegating specific tasks under defined terms and conditions to the executive board or Central Bank staff; adopting its own rules of procedure; and receiving the statistical data and advice necessary for the formation of monetary policies.
It’s further stated that, “Pursuant to the Central Bank of The Gambia Act 2018, the MPC shall communicate the results of its deliberations to the public immediately after every meeting.”
