Gambia Monthly Economic Bulletin March 2010

The Gambia Monthly Economic Bulletin- March 2010
THE GAMBIA MONTHLY

ECONOMIC BULLETIN1
March 2010
Institutional Support Project for Economic and Financial Governance (ISPEFG)

Ministry of Finance (MOF)
The Republic of Gambia
The Quadrangle, Banjul, the Gambia
1
The Gambia Monthly Economic Bulletin provides an update on the recent economic developments and
policies in the Republic of the Gambia. This Bulletin has been prepared, under the overall guidance of the
Honorable Permanent Secretary Mr. Serign Cham, by a research team comprising Tarun Das,
Macroeconomic Adviser (ISPEFG), Momodou Taal, Principal Economist; and Ms. Ceesay Chiel,
Economist in the Statistics and Special Studies Unit, Ministry of Finance; with key inputs from the
Ministry of Finance (MOF), the Central Bank of Gambia (CBG), the Gambian Bureau of Statistics
(GBOS), and the Gambian Revenue Authority (GRA).
It is needless to point out that the views expressed in this Bulletin solely indicate the views of the
Research Team, which need not necessarily imply the views of the MOF, the other budgetary agencies or
the organizations they are associated with.
Any questions and feedback can be addressed to: Tarun Das (das.tarun@hotmail.com)
1
Political and Administrative Structure
The Gambia is divided into seven regions comprising two Municipalities namely, Banjul City
Council (BCC) and the Kanifing Municipal Council (KMC) and five provincial administrative
regions namely, Western Region (WR), North Bank Region (NBR), Lower River Region (LRR),
Central River Region (CRR) and Upper River Region (URR). Politically, the relevant units are
Local Government Areas (urban), Districts, Wards and Villages. The Gambia has 35 districts
and about 1870 villages with an average of 13 compounds.
Basic Facts about Gambia:
Fiscal year: 1st January to 31st December
Items (Year) Units Value Rank in the World
from top
in descending order
Area (2009) Sq. km. 11,300 171 out of 248
countries
Population (2008) Million 1.735 148 out of 241
countries
GDP PPP (2006) Million US$ 2061 184 out of 229
countries
GDP Nominal (2006) Million US$ 511 199 out of 229
countries
GDP PPP per capita (2006) US$ 1921 140 out of 169
countries
GDP per capita (2006) US$ 329 192 out of 207
countries
Poverty Ratio (% of people Percent 59 7 out of 95 countries
below One-US$ per day) (2004)
2
Source: http://www.nationmaster.com
3
Concluding Paragraphs of
The Budget 2010 Speech by
Honorable Abdou Kolley,
Minister of Finance,
The Republic of the Gambia
117. “The zero-rating of sales tax on rice in 2008 to minimize the impact of
the food crisis on the poor people and the implicit subsidy on the price of
oil by leaving the pump price unchanged, when international oil prices
were rising, were policy measures that resulted in revenue losses
equivalent to 2 percent of GDP. These developments, coupled with the
financial and economic crises that ensued, have made 2008 a very
difficult year. In 2009, however, the Gambian economy performed better
than expected because of strong growth in agriculture.”
118. “In spite of the positive growth registered in 2009, the Gambia still
faces a heavy debt burden. Interest on government debt is expected to
consume nearly 20% of government revenues in 2009, mostly in interests
on domestic debt. This is why in the 2010 budget, Government intends to
lower the domestic debt, ease pressure on Treasury bill yields, generate
savings from lower interest payments and strengthen public financial
management.”
119. “Achieving these goals call for strict discipline in budget execution.
This is a challenge that we face as a country with limited resources but
together, with our dynamic leader’s guidance, Sheikh Professor Dr. Alhaji
Yahya A.J.J. Jammeh, we will thrive and demonstrate that we have the
people, the will and commitment, and with Allah’s Blessing, to navigate
through difficult times.”
120. “As we confront these formidable challenges, I call on our

development partners, bilateral and multilateral, whose efforts in support
of our development we so cherish, to continue to accompany us with
renewed vigour and a common sense of purpose.”
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Contents
Items Page
Basic Facts about the Gambia 2
Concluding paragraphs of the Budget 2010 Speech by Honorable Abdou 3

Kolley, Minister for Finance and Economic Affairs
Contents 4
ISPEFG Project/ Research Team and Document History 5
Highlights 6-7
At a Glance 8
1. Global Economic Outlook 9-15

1.1 Global recovery is uneven, weak, slow and painful 9
1.2 Global Commodity Prices and Inflation 14
2. Current State of the Gambian Economy 16-36

2.1 Overall and Sectoral GDP Growth Rates 16
2.2 Consumer Price Index (CPI) and Inflation 18
2.3 Projection of CPI inflation for the year 2010 20
2.4 Government Fiscal Performance in January 2010 21

2.5 Projections of Fiscal Outturn for 2010 23
2.6 Domestic Debt and Outstanding Treasury Bills 25
2.7 Treasury Bills Yields 26
2.8 Money Supply 27
2.9 Performance of Commercial Banks 28
2.10 Commercial Banks’ Assets 29
2.11 Commercial Banks’ Liabilities 30
2.12 Interest Rates and Central Bank’s Policy Rates 31
2.13 BOP, Foreign Exchange Reserves and Exchange Rates 32
2.14 Exchange Rates 36
3. Recent Policy Developments and Development Issues 37-40

3.1 Highlights of the 2010 Budget 37
3.2 Tax Measures announced in the 2010 Budget 38
3.3 IMF Executive Board Completes Sixth Review of PRGF 39
3.4 Assessment of Quantitative Targets agreed with IMF under PRGF 40
5
ISPEFG Project and Monthly Economic Bulletin Research Team
Project Supervisor Honorable Mr. Serign Cham,

Permanent Secretary
Project Coordinator Mr. Momodou Cham
Macroeconomic Adviser Dr. Tarun Das

Principal Economist Momodou Taal
Economist Ms. Ceesay Chilel
Document History:
This report is an update of the following reports prepared by the Research Team:
1. The Gambia Quarterly Economic Bulletin, pp.1-30, 31 March 2009.

2. The Gambia Monthly Economic Abstract, pp.1-16, 31 March 2009.
3. The Gambia Monthly Economic Bulletin, pp.1-40, 30 April 2009.
4. The Gambia Monthly Economic Abstract, pp.1-16, 30 April 2009.
5. The Gambia Monthly Economic Bulletin, pp.1-39, 31 May 2009.
6. The Gambia Monthly Economic Abstract, pp.1-15, 31 May 2009.
7. The Gambia Monthly Economic Bulletin, Part-1, pp.01-22, June 2009.
8. The Gambia Monthly Economic Bulletin, Part-2, pp.23-46, June 2009.
9. The Gambia Monthly Economic Abstract, pp.1-16, June 2009.
10. The Gambia Monthly Economic Bulletin, Part-1, pp.01-22, July 2009.
11. The Gambia Monthly Economic Bulletin, Part-2, pp.23-46, July 2009.
12. The Gambia Monthly Economic Abstract, pp.1-16, July 2009.
13. The Gambia Monthly Economic Abstract, pp.1-16, August 2009.
14. The Gambia Monthly Economic Abstract, pp.1-16, September 2009.
15. The Gambia Monthly Economic Bulletin, pp.1-25, October 2009.
16. The Gambia Monthly Economic Bulletin, pp.1-37, November 2009.
17. The Gambia Monthly Economic Bulletin, pp.1-37, December 2009.
18. The Gambia Monthly Economic Bulletin, pp.1-36, January 2010.
19. The Gambia Monthly Economic Bulletin, pp.1-40, February 2010.
6
HIGHLIGHTS
Impact of Global Financial Crisis and Economic Slowdown
• As per the IMF projections made in the WEO Update Jan 2010, global output is expected to
contract by (-) 0.8% in 2009 followed by a positive growth of 3.9% in 2010. IMF concludes that although
the global economy has started to pull out of the unprecedented recession witnessed since the World
War-II, recovery is uneven, slow, and jobless. In African developing economies, growth is projected to
slow down significantly from 5.2% in 2008 to 1.9% in 2009.
Global Food and Oil Prices
• Due to sluggish demand and economic slowdown, there were significant decline of world
commodity prices including food and petroleum since August 2008. However, since March 2009
commodity prices have started rising again in response to some increase in global demand,
.
• Average Brent crude oil prices declined to $74.31 per barrel in Feb 2010 from $76.37 per barrel
in Jan 2010. IMF’s baseline petroleum price projection is unchanged at US$76 a barrel for 2010 and
revised up to $82 a barrel in 2011. Looking ahead, commodity prices are expected to rise due to
increasing global demand, especially from emerging economies.
Impact on the Gambian Economy
• A global crisis of this magnitude is bound to have adverse impact on any country. The Gambian
economy was not an exception and witnessed a decline in exports, remittances, foreign
investment, tourist arrivals, manufacturing production and wholesale and retail trade in 2008.
• However, thanks to bumper crops and very good performance by electricity, telecom and financial
sectors, the real GDP growth at constant market prices improved from 6% in 2007 to 6.3% in
2008, supported by a spectacular growth of 26.6% in agriculture GDP and a growth of 4.2% in
services GDP despite decline by 1.2% in industrial GDP.
• Due to fall in tourist’s income and foreign investment and deceleration of agricultural growth, real
GDP growth rate in 2009 is estimated to decelerate to 5%, aided by a growth of 5.5% in
agriculture production, 3.5% in industry and 5.7% in services production.
CPI Inflation
• Annual point-to-point CPI inflation declined significantly from 7% (food 8.8% and non-food 4.8%)
in Feb 2009 to 3.8% (food 4.6% and non-food 2.6%) in Feb 2010. The 12-month average inflation
rate also declined from 4.8% in Feb 2009 to 4.1% in Feb 2010.
• Among other groups, transport recorded an inflation of 2.4%, utilities 2.3%, restaurants and hotels
4% and miscellaneous goods and services 8.2% in Feb 2010.
Government Fiscal Performance
• Government’s fiscal performance in Jan-Feb 2010 was not satisfactory compared with Jan-Feb
2009. Tax revenues declined by 7.5% in Jan-Feb 2010 over Jan-Feb 2009 compared with a growth of
17.1% in Jan-Feb 2009 over Jan-Feb 2008. However, there was better performance of non-tax
revenues in Jan-Feb 2010 than in Jan-Feb 2009. Basic surplus at 0.2% of GDP in Jan-Feb 2010 was
significantly lower than 0.8% of GDP in Jan-Feb 2009.
7
Domestic Debt and Treasury Bills Yields
• At the end of February 2010, outstanding domestic debt stood at D6.1 billion (amounting to
21.7% of GDP), compared to the outstanding domestic debt at D5.9 billion (amounting to 23.4%
of GDP) a year ago. Including CBG support, the total outstanding domestic debt increased to
D7.1 billion at end-Feb 2010, from D6.6 billion a year ago.
• The share of Treasury bills increased from 79.4% at end-Feb 2009 to 84.2% at end-Feb 2010,
that of Sukuk Al-Salam from 1.6% to 2.3% and that of Govt. bonds from 4.2% to 4.5%, while the
share of NIB treasury bills declined from 14.8% to 9% over the same period.
• Yields on treasury bills fluctuated widely in recent months. As expected, the higher the maturity
of treasury bills, the higher is the yield. However, despite stability in deposit rates and significant
decline of annual point-to-point CPI inflation rate from 7% in Jan 2009 to 2.8% in Dec 2009,
average yields on the 91-day bills increased from 10.5% in Jan 2009 to 11% in Dec 2009 and
yield on 182-day bills from 12.1% in Jan 2009 to 12.9% in Dec 2009.
• In view of the declining trend of inflation rates, the Monetary Policy Committee reduced the policy
rate by 2 percentage points to 14% with effect from December 2009. As a result, average yields
of the 91-day, 182-day and 364-day bills fell from 11%, 12.9% and 14.3% respectively in
December 2009 to 10.3%, 12% and 13.6% respectively in Jan 2010 and to 10.7%, 11.7% and
13.2% respectively in February 2010.
Money Supply and Bank Credits
• Broad money supply (M2) recorded an annual growth of 17.9% in Jan 2010, compared to 19.3%
a year ago. While quasi money increased by a faster pace of 27.3%, narrow money increased by
8.8 percent. On the supply side, 17.9% growth of broad money in January 2010 was supported
by 7.7% growth in currency in circulation outside banks, 9.5% growth in demand deposits, 20.1%
growth in savings deposits and 37% growth in time deposits.
• On the demand side, growth was due to 13.3% growth in net foreign assets and 19.3% growth in
net domestic assets over a year.
• Domestic credit increased by 8.9% from D6.7 billion in Jan 2009 to D7.3 billion in Jan 2010,
supported by 6.1% growth in government borrowing, 44.2% growth in credits to public entities
and 14.7% growth in credits to the private sector, over a year.
Balance of Payments, Foreign Exchange Reserves and Exchange Rate
• The overall BOP outcome in 2009 was not as bad as it was anticipated earlier. Preliminary BOP
estimates by the CBG for 2009 indicate an overall deficit of D144 million compared to a deficit of
D767 million in 2008. Current account balance including transfers showed a surplus of D1.54
billion compared to a deficit of D1.11 billion in 2008, but the capital and financial account balance
worsened to a deficit of D1.68 billion compared to a surplus of D342 million in 2008.
• As at end-January 2010, gross international reserves totaled US$183.3 million, equivalent to 7.2
months of import cover.
• In Jan-Feb 2010, the Dalasi started appreciating against the UK£, CHF and Euro and remained
unchanged against US$ compared with the exchange rates in Dec 2009. However, over one year
period, in February 2010, Dalasi depreciated against UK£ by 13.2%, against US$ by 3.2%, CHF
by 14.6%, CFA by 10.3% and Euro by 16.1%.
At a Glance- March 2010
8
Economic Latest Status in the Status in the Outlook for 2010

Indicators Reference latest reference Corresponding
Period period period a year ago
Real GDP (MP) 2009 Overall 5.0 Overall 6.3 Overall 5.4
Growth rate (%) Agriculture 5.5 Agriculture 26.6 Agriculture 4.2
Industry 3.5 Industry (-) 1.2 Industry 4.5
Services 5.7 Services 4.2 Services 6.2
CPI inflation (%) Feb 2010 Overall 3.8 Overall 7.0 Expected to remain
Food 4.6 Food 8.8 moderate in the range of
Non-food 2.6 Non-food 4.8 3.7 to 5.8 percent.
Brent crude oil Feb 2010 Average Average May stabilize around
price (US$/ brl) US$74.31 US$44.60 US$76 in 2010
Growth rate (%) of Jan-Feb 2010 4.7 14.4
Revenue & grants Overall fiscal performance
Growth rate (%) of Jan-Feb 2010 28.1 1.3 in 2010 is projected to be
Exp & Net Lending better than in 2009 due to
Revenue & grants Jan-Feb 2010 2.9 3.0 significant budgeted
as % of GDP deceleration in expenditure.
Exp & Net Lending Jan-Feb 2010 2.9 2.6 Overall fiscal deficit is
as % of GDP budgeted at 1.1% of GDP
Overall fiscal bal. Jan-Feb 2010 0.0 0.4 in 2010.
as % of GDP However, fiscal
Basic balance as Jan-Feb 2010 0.2 0.8 performance in Jan-Feb
% of GDP 2010 was not better than
Basic Primary bal. Jan-Feb 2010 0.6 1.2 Jan-Feb 2009.
as % of GDP
Domestic debt Feb 2010 21.7 23.4 Likely to decline in 2010.
as % of GDP
Yield on 91-days Feb 2010 10.7 11.1 Yields may come down
TBs (%) further as CPI inflation is
Yield on 182- Feb 2010 11.7 12.8 moderate.
days TBs (%)
Yield on 364- Feb 2010 13.2 14.4
days TBs (%)
GR of Money Jan 2010 17.9 19.3 Money growth rate is
supply (M2) (%) likely to remain high.
Banks’ assets End-Dec 2009 18.7 19.6 Likely to increase
(Billion Dalasi)
CBG policy rate March 2010 14 16 MPC reduced policy
(%) rate to 14% in Dec 2009.
Overall BOP 2009 (-) 144 (-) 767 BOP situation is likely to
Balance (Mln D) remain comfortable in
Current A/C 2009 1540 (-) 1110 2010 due to revival of
Balance (Mln D) exports, tourist income,
Capital-Fin. A/C 2009 (-) 1684 342 remittances and foreign
Balance (Mln D) investment.
Dalasi/ UK£ End-Feb 2010 42.32 37.38 Dalasi is expected to
Dalasi/ US$ End-Feb 2010 26.94 26.11 depreciate against major
Dalasi/ CHF End-Feb 2010 25.27 22.04 currencies in 2010.
Dalasi/ CFA5000 End-Feb 2010 284.26 257.78
Dalasi/ Euro End-Feb 2010 39.02 33.6
1. Global Economic Outlook
9
1.1 Policy-Driven and Multi-speed Recovery, but it is Painful and Sluggish
As per the IMF latest projections made in the World Economic Outlook Update January 2010, the
global economy has started recovery at a faster speed than anticipated earlier but the recovery is
uneven over regions (Table 1.1). Following the deepest global downturn in recent history, economic
growth broadened to advanced economies in the second half of 2009. In 2010, world output is
expected to rise by 4 percent. This represents an upward revision of ¾ percentage point from the
October 2009 World Economic Outlook. But in the most advanced economies, the recovery is weak,
painful and slow by past standards, whereas in many emerging and developing economies, activity is
relatively vigorous, largely driven by buoyant internal demand. Policies need to foster a rebalancing of
global demand, remaining supportive where recoveries are not yet well sustained.
Prospects of African Economies
In recent years African economies in general experienced an economic boom contributed by two
favorable factors: namely (a) rising exports driven by high commodity prices, and (b) increasing inflows
of remittances and foreign investment. The ongoing financial crisis and economic slowdown in the
developed countries have led to reversal of these positive factors and imposed serious adverse impact
on the African economies. Real GDP growth in Africa as a whole is projected to decline from an
average of 6% in 2004–08 to 1.9% in 2009, before accelerating to 4.3% in 2010 and 5.3% in 2011.
Growth projections for Sub-Saharan Africa have been revised upward to 1.6 percent in 2009 and
4.3 percent in 2010 while growth projection for 2011 remains unchanged at 5.5 percent (see Table 1.1).
This growth performance, while disappointing in light of the experience of the mid-2000s, is still
encouraging given the severity of the external shocks. An important factor behind this outcome has
been that many governments in the region have been able to use fiscal balances as shock absorbers,
sustaining domestic demand and helping contain employment losses.
10
Source: World Economic Outlook- Sustaining the recovery, October 2009, International Monetary Fund, Washington D.C.
11
Box 1.1
IMF Outlook for Sub-Saharan Africa

Published on October 3, 2009 Expresses Cautious Optimism
The International Monetary Fund (IMF) released the Regional Economic Outlook:
Sub-Saharan Africa on October 3, 2009. Ms. Antoinette Monsio Sayeh, Director of
the IMF's African Department summarized the report's main findings as follows:
“The global economic crisis has hit sub-Saharan Africa hard, reducing economic
growth to just 1 percent in 2009 after a period of sustained high economic growth.
Oil exporters and middle income countries in the region have been particularly badly
affected and most low-income countries somewhat less so. In all SSA countries,
however, the crisis will likely slow, if not reverse, progress on poverty reduction.
Unemployment and under-employment, already endemic, have likely risen across
the region. But playing-off the global economic recovery, we expect growth in sub-
Saharan Africa to rise to 4 percent in 2010 and 5 percent in 2011.
“In many countries the prudent macroeconomic policies pursued in recent years
have provided some policy space to counter the effects of the slowdown.
Accordingly, most countries have been able to maintain or even raise public
spending, allowing fiscal deficits to widen temporarily. Where possible, monetary
policy has also played a supportive role.
“There are significant downside risks, however. Therefore, wherever possible, IMF
staff recommends that fiscal and monetary policies remain supportive until the
economic recovery is well-established. As the recovery gains strength, the emphasis
of fiscal policy will need to shift from stabilization to medium-term considerations,
including debt sustainability. In countries with binding financing constraints, the
room for fiscal policy is more limited and the primary focus will need to remain on
reducing macroeconomic imbalances. Financial sectors have been for the most part
resilient, but prudential supervision will need to remain vigilant in the face of the
impact of the economic slowdown on the quality of banks’ portfolios.
“Scaled-up financial support from the IMF has buttressed countries’ policy response.
The doubling of lending limits and more flexible policies have facilitated a rapid
response to countries’ needs, and new IMF commitments to sub-Saharan Africa have
reached over US$3 billion so far this year, compared to some US$1.1 billion for the
whole of 2008 and only US$0.1 billion in 2007. Looking ahead, it will be critical that
other development partners support this effort and those of other international
financial institutions.”
12
13
Figure 1.1 Sub-Saharan Africa: Projected GDP Growth, 2008–11
Source: IMF, African Department database.

Note: The country borders or names in this map do not necessarily reflect the IMF’s official
position.
14
Box 1.2 IMF-World Bank Debt Sustainability Analysis for African Economies
The objective of the IMF-World Bank debt sustainability framework, which was introduced in
2005, is to support low-income countries in their efforts to achieve their development goals
without creating future debt problems (see The Debt Sustainability Framework for Low-Income
Countries, Occasional Paper 266, IMF (2008). A debt sustainability analysis using the DSF looks at
five debt burden indicators to evaluate the risk of external debt distress: the ratios of (i)
present value (PV) of debt-to-GDP; (ii) PV of debt-to-exports; (iii) PV of debt-to-revenues;
(iv) debt service-to-revenues; and (v) debt service-to-exports. The risk of debt distress is
derived by reviewing the evolution of debt burden indicators compared to their indicative
policy-dependent debt-burden thresholds using a baseline scenario, alternative scenarios, and
stress tests. The thresholds depend on the quality of a country’s policies and institutions as
measured by the three-year average of the World Bank’s Country Policy and Institutional
Assessment (CPIA) index.
15
1.2 World Commodity Prices
Inflation pressures will remain subdued in most economies
The global recession caused a large drop in inflation and rising concern about mild deflation.
The still-low levels of capacity utilization and well-anchored inflation expectations are expected
to contain inflation pressures (Figure 3) However, the decline in inflation pressures has been
limited among some emerging economies. In the advanced economies, headline inflation is
expected to pick up from zero in 2009 to 1¼ percent in 2010, as rebounding energy prices
more than offset slowing labor costs. In emerging and developing economies, inflation is
expected to edge up to 6¼ percent in 2010, as some of these economies may face growing
upward pressures due to more limited economic slackness and increased capital flows.
Commodity prices are rebounding
Commodity prices have rebounded ahead of the recovery (Table 1.2). Average Brent crude oil
prices declined to $74.31 per barrel in February 2010 from $76.37 per barrel in January 2010.
Looking ahead, commodity prices are expected to rise a bit further supported by the strength of
global demand, especially from emerging economies. However, this upward pressure is
expected to be modest, given the above-average inventory levels and substantial spare
capacity in many commodity sectors. Accordingly, the IMF’s baseline petroleum price projection
is unchanged at $76 a barrel for 2010 and revised up to $82 a barrel in 2011. Other non-fuel
commodity prices have also been marked up modestly by the IMF WEO Update.
Table-1.2 Trends of World Commodity Prices

16
Source: World Bank Pink Sheet March 2010
17
Source: World Bank Pink Sheet March 2010
18
2. Current State of the Gambian Economy

2.1 Overall and Sectoral GDP Growth Rates
• The sharp decline in global economic activity had adverse impact on the Gambian
economy in 2008 leading to decline of exports and remittances and decline of
manufacturing production and wholesale and retail trade.
• However, thanks to bumper crops contributed by favorable monsoon at home and high
international prices of food grains, and very good performance by electricity, telecom
and financial sectors, the real GDP growth at constant 2004 market prices improved
from 6% in 2007 to 6.3% in 2008 (Table-2.1 and Figure-2.1).
• As per the Preliminary Estimates of the GBOS, real GDP growth in 2009 at constant
market prices is expected to be 5% supported by a growth of 5.5% in agricultural
production, 3.5% by industrial production and 5.7% in services production.
• Share of agriculture increased from 21.6% in 2007 to 25.3% in 2009, while share of
industry declined from 14.7% to 13.2% and that of services declined from 63.7% to
61.5% during the same period. Increase of agricultural share was contributed by
increase in share of crops, while decline of services share was mainly due to decline of
share of wholesale and retail trade, and transport and communications.
GDP Composition(%) in 2009

Others
Business 7%
11%
Agriculture
Transport 26%
12% Mining
2% Manufacturing
Hotels 6%
4% Trade
26% Utilities
2% Construction
4%
19
Figure-2.1: Trends of sectoral growth rates during 2000-2009 (in percentage)
30.0
20.0
10.0
0.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
-10.0
-20.0
-30.0
GDPMP Agriculture Industry Services
Table-2.1: Sectoral Growth Rates and Shares in GDP in the Gambia in 2005-2009 (in %)
Sectoral GDP Growth Rates Sectoral Shares in GDP
(in percentage) (in percentage)
Items 2006 2007 2008 2009 2010 2006 2007 2008 2009
Actual Actual Actual Estd. Proj Actual Actual Actual Estd.
GDP at 2004 basic price 3.1 6.0 6.3 5.0 5.4 100.0 100.0 100.0 100
Agriculture and allied -14.3 -1.9 26.6 5.5 4.2 23.1 21.6 25.3 25.3
-- Crops -26.3 -15.2 55.2 5.5 4.5 11.8 9.5 13.6 13.7
-- Livestock 2.4 11.9 4.3 4.5 3.9 8.8 9.4 9.0 9.0
-- Forestry 3.0 -4.0 1.0 0.7 2.0 0.7 0.6 0.6 0.5
-- Fishing 7.8 18.0 3.5 11.3 3.9 1.9 2.1 2.0 2.1
Industry 4.5 2.5 -1.2 3.5 4.5 15.1 14.7 13.4 13.2
-- Mining and quarrying 1.2 -14.1 8.8 8.8 10.0 2.4 1.9 1.9 2.0
-- Manufacturing 4.1 3.9 -8.3 0.4 3.3 7.0 7.0 5.9 5.6
-- Electricity, gas, water 8.7 59.1 1.7 10.0 10.7 1.1 1.6 1.5 1.6
-- Construction 6.0 -4.3 5.0 3.0 1.0 4.6 4.2 4.1 4.0
Services 10.0 8.3 4.2 5.7 6.2 61.8 63.7 61.3 61.5
-- Wholesale/retail trade 16.1 9.7 -2.3 1.0 1.0 28.2 29.5 26.6 25.5
-- Hotels/ restaurants 15.7 14.3 2.9 3.0 3.8 3.6 3.9 3.7 3.6
-- Transport / telecom 2.7 7.0 -8.0 8.0 8.8 12.8 13.0 11.0 11.3
-- Financial 5.7 -0.9 28.2 3.0 8.0 7.5 7.0 8.3 8.2
-- Real est., business -3.9 1.4 0.0 2.5 3.4 3.4 3.3 3.0 3.0
-- Public administration 11.1 12.9 42.1 2.0 3.4 2.6 2.8 3.7 3.6
-- Other service 11.0 17.8 27.0 37.1 24.8 3.7 4.1 4.9 6.3
Source: Gambian Bureau of Statistics (GBOS) http://www.gbos.gm for the years 2006-2009 and
projections for 2010 are made by the Research Team.
20
2.2 Consumer Price Index and Inflation
• As measured by the Consumer Price Index (CPI), annual point-to-point CPI inflation
decelerated significantly from 7% in Feb 2009 to 3.8% in Feb 2010. The 12-month
average inflation rate also decelerated from 4.8% in Feb 2009 to 4.1% in Feb 2010.
• Food and drinks (with weights of 55.1% in overall CPI) recorded an annual point-to-point
inflation rate of 4.6% in Feb 2010, down from 8.8% a year ago, and contributed 70.9% to
overall inflation in Feb 2010.
• Non-food items (with weights of 44.9% in overall CPI) recorded annual inflation rate of
2.6% in Feb 2010, down from 4.8% a year ago and contributed 29.1% to total inflation.
• Among other groups, transport recorded an inflation of 2.4%, utilities 2.3%, restaurants
and hotels 4% and miscellaneous goods and services 8.2% in Feb 2010.
Table-2.2 CPI Inflation Rates in February 2010 (in percentage)

Items Weights
Feb 2009 Feb 2010 Inflation Wi (CPIi1 – Contributio
Wi (%) Index Index (%) CPIi0) n2 (%)
Overall 100.0 120.25 124.78 3.8 447.9 100.0
Food 55.1 125.57 131.34 4.6 317.7 70.9
Tobacco 0.7 105.68 106.64 0.9 0.6 0.1
Clothing 11.2 110.98 113.14 1.9 24.3 5.4
Utilities 3.4 121.18 124.02 2.3 9.7 2.2
Furnishing 5.2 114.87 116.37 1.3 7.8 1.8
Health 1.2 101.77 101.82 0.0 0.1 0.0
Transport 4.4 119.93 122.85 2.4 12.9 2.9
Telecom 3.0 101.95 102.5 0.5 1.6 0.4
Recreation 8.1 104.50 105.74 1.2 10.0 2.2
Education 1.5 102.24 102.99 0.7 1.1 0.3
Hotels 0.4 115.89 120.53 4.0 1.7 0.4
Misc. 5.9 124.28 134.49 8.2 60.5 13.5
Non-food 44.9 113.79 116.73 2.6 132.1 29.1
Source of basic data: Gambian Bureau of Statistics (GBOS). http://www.gbos.gm
2
Contribution of an item to overall inflation is estimated by the following formula:
Contribution of Item (i) = Wi (CPIi1 – CPIi0) / ∑ Wi (CPIi1 – CPIi0) expressed as a percentage.
where CPIi1 = Consumer Price Index for Item (i) in the current period
CPIi0 = Consumer Price Index for Item (i) in the previous period
Wi = Weights for Item (i) and
W = Total weights = Σ Wi
For example, contribution of food is estimated as 100 X 317.7 / 447.9 = 70.9%.
21
22
2.3 Projection of CPI inflation for the year 2010
We have made three alternative projections of inflation rates for the year 2010, on the basis of
the following assumptions:
(1) Alternative-1: It is assumed that the CPI variation for a month over the previous month
in 2010 will be the average CPI variation for the month over the previous month in last
two years (2009 and 2008). Thus, Mar 2010 CPI is estimated by the following formula:
Projected CPI for Mar 2010 = Feb 2010 CPI + [Mar 2009 CPI – Feb 2009 CPI + Mar 2008 CPI–
Feb 2008 CPI]/ 2. For subsequent months, CPI is projected by the similar formula.
(2) Alternative-2: It is assumed that the variation of CPI for a month over the previous
month in 2010 will be the same as that for the respective month over the previous month
in 2009. For example, CPI for Mar 2010 is estimated by the following formula:
Projected CPI for Mar 2010 = Feb 2010 CPI+ (Mar 2009 CPI – Feb 2009 CPI). For the
subsequent months, CPI is projected by the similar formula.
(3) Alternative-3: Average of inflation rates under Alternatives 1 and 2.
Results are presented in Table 2.3 which indicates that inflation rate is expected to remain
moderate in the range of 3.7% to 5.8% during 2010, and the year-end 12-month average
inflation rate is expected to be around 4.3%.
Table-2.3: Projections of CPI inflation for the year 2010 (in percentage)
2007 2008 2009 2010- 2010- 2008 2009 2010- 2010- 2010
Index Index Index Alt1 Alt2 Inf.rate Inf.rate Alt1 Alt2 Alt3
Jan 106.86 112.31 120.13 124.4 124.4 5.1 7.0 3.6 3.6 3.6
2 2
Feb 107.01 112.34 120.25 124.7 124.7 5.0 7.0 3.8 3.8 3.8
8 8
Mar 109.36 112.73 120.30 125.0 124.8 3.1 6.7 3.9 3.8 3.8
0 3
Apr 111.64 113.21 120.36 125.27 124.89 1.4 6.3 4.1 3.8 3.9
May 112.05 113.83 120.51 125.66 125.04 1.6 5.9 4.3 3.8 4.0
Jun 111.98 114.48 120.61 126.03 125.14 2.2 5.4 4.5 3.8 4.1
July 111.95 116.21 120.84 127.01 125.37 3.8 4.0 5.1 3.7 4.4
Aug 112.09 117.65 121.15 127.89 125.68 5.0 3.0 5.6 3.7 4.6
Sep 111.86 118.96 121.75 128.84 126.28 6.3 2.3 5.8 3.7 4.8
Oct 111.95 119.29 121.99 129.13 126.52 6.6 2.3 5.8 3.7 4.8
Nov 112.13 119.54 122.7 129.6 127.23 6.6 2.6 5.6 3.7 4.7
1
Dec 112.26 119.93 123.19 130.0 127.72 6.8 2.7 5.6 3.7 4.6
5
Q1 107.7 112.5 120.2 124.7 124.7 4.4 6.9 3.7 3.7 3.7
Q2 111.9 113.8 120.5 125.7 125.0 1.7 5.8 4.3 3.8 4.0
Q3 112.0 117.6 121.2 127.9 125.8 5.0 3.1 5.5 3.7 4.6
Q4 112.1 119.6 122.6 129.6 127.2 6.7 2.5 5.7 3.7 4.7
Ave 110.9 115.9 121.1 127.0 125.7 4.5 4.6 4.8 3.7 4.3
23
Note: Projections are made by the Research Team. Alternative projections 1, 2 and 3 are defined in the
text above.
24
2.4 Government Fiscal Performance in January-February 2010
• Columns (4), (5) and (6) of Table-2.4.1 present major item-wise revenue realization and
expenditure of the government in the first two months (i.e. Jan-Feb) of 2008, 2009 and 2010
respectively. Columns (7) and (8) indicate annual percentage changes of major items of
revenues and expenditure in Jan-Feb 2009 and Jan-Feb 2010 respectively over those in the
corresponding period of the previous year.
• Government’s fiscal performance was not satisfactory in Jan-Feb 2010 compared with
Jan-Feb 2009. Tax revenues declined by 7.5% in Jan-Feb 2010 over Jan-Feb 2009
compared with a growth of 17.1% in Jan-Feb 2009 over Jan-Feb 2008. However, there was
better performance of non-tax revenues in Jan-Feb 2010 than in Jan-Feb 2009.
• In Jan-Feb 2010, total expenditures & net lending increased significantly by 28.1% over
Jan-Feb 2009 due to 17.7% increase in current expenditure and 55.8% increase of capital
expenditure and net lending over Jan-Feb 2009.
• There was a fiscal deficit of (-) D8.5 million in Jan-Feb 2010 compared to a fiscal
surplus of D107.1 million in Jan-Feb 2009. There was a Basic surplus of D61.4 million and
Basic Primary surplus of D167.9 million in Jan-Feb 2010, lower than Basic surplus of D199.6
million and basic primary surplus of D304 million in Jan-Feb 2009.
Table-2.4.1 Govt Financial Performance in Jan-Feb 2010 (Million Dalasi)

Items 2009 2010 2008 2009 2010 Ja-Fb-09 Ja-Fb-10
Actual Budget Jan-Feb Jan-Feb Jan-Feb % ch over % ch over
Ja-Fb 08 Ja-Fb-09
(1) (2) (3) (4) (5) (6) (7) (8)
Revenue and grants 4893.0 5474.1 658.2 752.8 818.4 14.4 8.7
Domestic Revenue 3904.9 4413.2 616.0 713.3 684.1 15.8 -4.1
Tax Revenue 3517.5 3991.3 559.8 655.7 606.6 17.1 -7.5
Nontax Revenue 387.4 421.9 56.3 57.6 77.5 2.4 34.5
Grants 988.1 1061.0 42.2 39.5 134.4 -6.5 240.3
Exp & Net Lending 5631.9 5772.9 637.5 645.7 826.9 1.3 28.1
Current Expenditure 3625.1 4455.6 477.1 469.9 553.1 -1.5 17.7
Personnel Emoluments 1191.8 1499.3 147.7 175.5 236.9 18.8 35.0
Other Charges 1691.9 2193.9 191.1 190.0 209.6 -0.6 10.3
Interest 741.4 762.4 138.3 104.4 106.5 -24.5 2.0
External 153.2 176.3 56.1 25.7 32.8 -54.1 27.4
Domestic 588.3 586.1 82.2 78.6 73.7 -4.3 -6.3
Cap Exp & Net Lending 2006.8 1317.3 160.5 175.8 273.8 9.6 55.8
Capital Expenditure 1889.1 1255.3 133.4 192.8 273.8 44.5 42.0
Externally financed 1300.1 1360.0 82.4 132.0 204.2 60.2 54.7
Net Lending 117.7 62.0 27.0 -17.0 0.0 -162.9 -100.0
Overall Fiscal Balance -739.0 -298.7 20.7 107.1 -8.5 417.1 -107.9
Basic Balance -427.0 0.3 60.9 199.6 61.4 227.7 -69.2
Basic Primary Balance 314.5 762.7 199.2 304.0 167.9 52.6 -44.8
Nominal GDP (GBOS) 25286 28046 22978 25286 28046 10.0 10.9
Source: Statistics and Special Studies Unit, MOF.
Notes: (1) Overall balance = (Revenue and Grants) minus (Expenditure and Net Lending);
(2) Basic Balance = (Domestic Rev) less (Exp. and Net Lending excluding externally financed capital exp) and
(3) Basic Primary Balance = Basic Balance plus interest payments
25
• Column (2) to (6) of Table-2.4.2 indicates the item-wise fiscal performance of the
government, as percentage of GDP, for 2009-outturn, 2010-Budget, Jan-Feb 2008, Jan-Feb
2009 and Jan-Feb 2010 outturn respectively.
• It is observed from the table that the fiscal performance in Jan-Feb 2010 is not better
than in Jan-Feb 2009 in terms of percentages of GDP. Basic surplus at 0.2% of GDP in Jan-
Feb 2010 is significantly lower than 0.8% of GDP in Jan-Feb 2009.
• The Budget for 2010 has targeted at total revenue and grants amounting to 19.5% of
GDP (marginally higher than 19.4% of GDP in 2009-Outturn) and total expenditure and net
lending amounting to 20.6% of GDP (significantly lower than 22.3% of GDP in 2009-Outturn)
resulting in an overall fiscal deficit amounting to 1.1% of GDP, significantly lower than 2.9%
of GDP recorded in 2009-Outturn.
• Significant reduction in total expenditure is sought to be achieved through drastic cut in

capital expenditure from 7.5% of GDP in 2009-Outturn to 4.5% of GDP in 2010 Budget.
Such a cut in capital expenditure may be good to maintain fiscal sustainability, but may
affect adversely development activities unless funds are supplemented by donors’
assistance.
Table-2.4.2 Govt Financial Performance in 2009 and Jan-Feb 2010

(As % of GDP at current market prices)
Items 2009 2010 2008 2009 2010
Actual Budget Jan-Feb Jan-Feb Jan-Feb
(1) (2) (3) (4) (5) (6)
Revenue and grants 19.4 19.5 2.9 3.0 2.9
Domestic Revenue 15.4 15.7 2.7 2.8 2.4
Tax Revenue 13.9 14.2 2.4 2.6 2.2
Nontax Revenue 1.5 1.5 0.2 0.2 0.3
Grants 3.9 3.8 0.2 0.2 0.5
Exp & Net Lending 22.3 20.6 2.8 2.6 2.9
Current Expenditure 14.3 15.9 2.1 1.9 2.0
Personnel Emoluments 4.7 5.3 0.6 0.7 0.8
Other Charges 6.7 7.8 0.8 0.8 0.7
Interest 2.9 2.7 0.6 0.4 0.4
External 0.6 0.6 0.2 0.1 0.1
Domestic 2.3 2.1 0.4 0.3 0.3
Cap Exp & Net Lending 7.9 4.7 0.7 0.7 1.0
Capital Expenditure 7.5 4.5 0.6 0.8 1.0
Externally financed 5.1 4.8 0.4 0.5 0.7
Net Lending 0.5 0.2 0.1 -0.1 0.0
Overall Bal Inc. grants -2.9 -1.1 0.1 0.4 (-) 0.0
Basic Balance -1.7 0.0 0.3 0.8 0.2
Basic Primary Balance 1.2 2.7 0.9 1.2 0.6
Source: Statistics and Special Studies Unit, MOF.
Notes: (1) Overall balance = (Revenue and Grants) minus (Expenditure and Net Lending);
(2) Basic Balance = (Domestic Revenue) less (Expenditure and Net Lending excluding externally
financed capital expenditure) and
(3) Basic Primary Balance = Basic Balance plus interest payments
26
2.5 Projection of Fiscal Outturn for the Year 2010
Column (2) of the Table-2.5.3 below presents detailed item-wise revenues and expenditure in
Jan-Feb 2010. The ratios of actual realization for any item in Jan-Feb to the final outturn for the
item during the last five years viz. 2005, 2006, 2007, 2008 and 2009 are presented in columns
(3) to (7) respectively. Item-wise average ratios for these five years are presented in column (8).
Taking these ratios as norms to take care of monthly seasonality over the year, expected
revenue and expenditure outcomes for the full year 2010 are estimated by the following formula
and are presented in column (9) of the Table-2.5.3.
Expected outturn for an item in 2010 = 100 X (actual realization in Jan-Feb 2010) /
average realization ratio (in percentage) in Jan-Feb in the last five years (2005-2009)
Comparison of the expected outcome given in Column (9) with the budget estimates given in
Column (10) leads to the following conclusions:
(a) Tax revenue target given in the Budget 2010 may not be realized, unless tax revenue
collections improve significantly in the subsequent months in 2010.
(b) Non-tax revenue realization may also fall short of targets by marginal amounts.
(c) Grants may also fall short of budget estimates unless their inflows and disbursement are
augmented significantly in the subsequent months in 2010.
(d) Both the current and capital expenditure are expected to remain within budget estimates.
(e) Although capital expenditure has been drastically pruned down in the 2010 Budget, its
utilization needs to be augmented significantly in the subsequent months.
(f) Overall, it is expected to have a fiscal deficit of D204 million (0.7% of GDP) compared to
budgeted fiscal deficit at D299 million (1.1% of GDP).
(g) It is a matter of serious concern that the Basic balance is likely to generate a deficit of
(-) 2.7% of GDP compared to budget target of nearly 0% of GDP. Primary balance is
likely to be (-) 0.2% of GDP, compared to Budget target at 2.7% of GDP.
2.5.3 Government Fiscal Performance in Jan-Feb 2010 and Expected Outturn for 2010
Items 2010- Ratio of Jan performance in Ave. 2010 2010
Ja-Fb Annual Outturn (in Percentage) ratio Proj. Budget
Actual 2005- 2006- 2007- 2008- 2009- 2005- Out- Esti-
mate
Ja-Fb Ja-Fb Ja-Fb Ja-Fb Ja-Fb 2009 turn3
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
1.Rev & grants (2+5) 818.5 19.1 17.2 17.6 17.6 15.4 4527.3 5474.1
2.Dom. Revenue (3+4) 684.1 16.8 17.7 18.0 17.6 18.3 3751.5 4413.2
3.Tax Rev (3.1+3.2) 606.6 16.9 18.2 18.0 17.8 18.6 3355.3 3991.3
3.1 Direct Tax (a to e) 217.7 17.6 18.7 19.7 17.9 21.2 1106.3
(a) Personal 91.7 17.1 15.6 15.9 16.5 21.8 17.4 527.8
(b) Corporate 74.4 15.5 18.5 19.1 14.4 15.9 16.7 446.1
(c) Capital Gains 9.3 12.7 11.3 8.4 24.4 14.3 14.2 65.1
(d) Payroll 27.4 58.3 60.6 57.2 51.0 55.9 56.6 48.5
(e) Other 14.9 78.9 76.1 82.6 80.4 77.7 79.1 18.8
3
Expected outturn for an item in 2010 = 100 X (actual realization in Jan 2010) / average realization ratio
(in percentage) in Jan in the last five years (2005-2009).
27
2.5.3 Government Fiscal Performance in Jan-Feb 2010 and Expected Outturn for 2010
Items 2010- Ratio of Jan performance in Ave. 2010 2010
Ja-Fb Annual Outturn (in Percentage) ratio Proj. Budget
Actual 2005- 2006- 2007- 2008- 2009- 2005- Out- Esti-
mate
Ja-Fb Ja-Fb Ja-Fb Ja-Fb Ja-Fb 2009 turn4
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
3.2 Indirect Tax 388.9 16.7 18.0 17.2 17.7 17.7 2249.0
3.2.1 Dom Tax on G&S 101.0 18.3 16.4 18.4 17.2 19.0 575.2
(a) Stamp Duties 2.9 8.8 10.4 8.4 4.6 23.8 11.2 26.3
(b) Excise Duties 25.3 9.3 13.9 19.0 22.7 17.3 16.4 154.1
(c) Dom Sales Tax 72.7 20.2 17.6 18.5 16.3 19.5 18.4 394.9
3.2.2 Tax on Ext Trade 287.9 16.2 18.5 16.9 17.9 17.3 1673.8
(a) Duty (i+ii) 151.8 18.5 21.9 16.6 17.9 18.7 806.8
(i) Oil 74.4 23.9 26.6 19.4 12.7 22.2 20.9 355.4
(ii) Non-oil 77.3 16.4 19.3 15.0 20.5 14.5 17.1 451.4
(b) Sale tax on imp (i+ii) 136.2 13.7 14.5 17.1 18.0 15.2 867.0
(i) Oil 34.0 14.4 15.6 16.4 16.2 14.7 15.4 219.9
(ii) Non-oil 102.2 13.6 14.1 17.3 18.6 15.3 15.8 647.1
4. Nontax Rev (a to d) 77.5 15.6 12.1 18.1 15.9 14.9 396.2 421.9
(a) Govt Charges 32.2 23.6 18.2 13.3 24.2 27.2 21.3 151.2
(b) NTR from CRD 0.8 27.2 20.0 23.5 16.4 29.6 23.3 3.6
(c) NTR from CED 16.0 14.0 14.3 18.0 15.0 15.3 104.1
(d) Others 28.5 22.0 21.0 30.8 15.0 15.0 20.8 137.3
5. Grants 134.4 46.2 8.6 10.5 17.3 4.0 17.3 775.8 1061.0
6. Exp & Net Lend (7+8) 826.9 19.9 11.8 18.3 14.7 11.5 4731.7 5772.9
7. Cur. .Exp (7.1 to 7.3) 553.1 17.1 12.5 14.3 15.0 13.0 3830.8 4455.6
7.1 Pers. Emoluments 236.9 20.4 16.6 15.7 15.0 14.7 16.5 1435.9 1499.3
7.2 Other Charges 209.6 16.5 8.6 13.1 12.8 11.2 12.4 1684.1 2193.9
7.3 Interest (a+b) 106.5 9.3 5.2 8.8 11.3 8.1 710.8 762.4
(a) External 32.8 23.7 24.6 22.3 36.5 16.8 24.8 132.2 176.3
(b) Domestic 73.7 13.7 10.4 11.6 14.7 13.4 12.7 578.6 586.1
8. Cap Exp & Net Lend. 273.8 43.7 10.5 28.2 14.0 8.8 900.8 1317.3
8.1 Capital Exp. (a+b) 273.8 39.5 10.9 22.3 13.0 10.2 900.8 1255.3
(a) Ext. Financed (i+ii) 204.2 46.4 11.5 26.3 16.3 10.2 224.5 1360
(i) Loans 69.9 0.0 11.9 31.6 11.8 14.7 91.0 76.8
(ii) Grants 134.4 46.4 8.6 10.5 25.5 5.9 91.0 147.7
(b) GLF Capital 69.6 25.1 0.1 6.2 9.8 10.3 10.3 676.4
8.2 Net lending 0.0 0.0 0.0 103.1 22.9 -14.4 22.3 0.0 62.0
9. Overall fiscal bal (1-6) -8.4 -204.4 -298.7
10.Basic balance 61.4 -755.7 0.3
11. Basic Primary Bal. 167.9 -44.8 762.7
Memorandum Items: As percentage of IMF Program Nominal GDP (equal to D19904 million)
12. Fiscal bal (1-6)5 (-) 0.0 -0.7 -1.1
13.Basic balance 0.2 -2.7 0.0
14. Basic Primary Bal. 0.6 -0.2 2.7
4
Expected outturn for an item in 2010 = 100 X (actual realization in Jan 2010) / average realization ratio (in
percentage) in Jan in the last five years (2005-2009).
5
(1) Overall balance = (Revenue and Grants) minus (Expenditure and Net Lending); (2) Basic Balance = (Domestic
Revenue) less (Expenditure and Net Lending excluding externally financed capital expenditure) and (3) Basic
Primary Balance = Basic Balance plus interest payments
28
The Gambia Monthly Economic Bulletin- February 2010
2.6 Domestic Debt and Treasury Bills Outstanding
(a) At the end of February 2010, outstanding domestic debt stood at D6.1 billion (amounting
to 21.7% of GDP), compared to the outstanding domestic debt at D5.9 billion (amounting
to 23.4% of GDP) a year ago.
(b) Including CBG support, the total outstanding domestic debt increased to D7.1 billion at
end-Feb 2010, from D6.6 billion a year ago. Outstanding Treasury bills increased by 9.2
percent to D5.1 billion and accounted for 84.2 percent of the stock (excluding overdraft)..
(c) The share of Treasury bills increased from 79.4% at end-Feb 2009 to 84.2% at end-Feb
2010, that of Sukuk Al-Salam increased from 1.6% to 2.3% and that of Govt. bonds
increased from 4.2% to 4.5%, while the share of NIB treasury bills declined from 14.8% to
9% over the same period.
Table-2.6-A Outstanding Domestic Public Debt as on 31 January 2010

Type of debt Million Dalasi % change Composition (in %)
28 Feb 28 Feb in Feb 2010 28 Feb 28 Feb
2009 2010 over Feb 2009 2009 2010
Treasury bills 4,696 5,128 9.2 79.4 84.2
Sukuk Al-Salam 92 142 54.9 1.6 2.3
Government Bonds 250 275 10.0 4.2 4.5
NIB Treasury Notes 873 547 -37.4 14.8 9.0
Total dom. Debt 5,911 6,092 3.1 100 100
Total incl. overdraft 6,619 7,118
Nominal GDP 25286 28046
As % of GDP 23.4 21.7
Including overdraft 26.2 25.4
Domestic Debt Sustainability
As per the analysis made by the CBG, the current level of Gambia’s domestic debt is not
sustainable. Out of three sustainability indicators given in Table-2.6.B, one indicator viz. debt
service to revenue ratio is not satisfied.
Table-2.6-B Primary Benchmarks for Domestic Debt Sustainability Ratios (%)

Item Threshold 2006 2007 2008 2009
Estimated
1. Debt service to 28-63 142 124 118 91
revenue ratio
2. Debt to GDP ratio 20-25 33 30 27 25.4
3. Debt to revenue 92-167 180 158 166 147
ratio
Note: (1) Debt service is the sum of interest payments plus the amortization (i.e. repayment of principal)
including the rollover of treasury Bills. (2) There are no internationally agreed levels of thresholds. The
thresholds used here are those used by the Debt Relief International (DRI) for many HIPC countries.
Source: Central Bank of Gambia
29
2.7 Treasury Bills Yields
• Yields on treasury bills fluctuated widely in recent months. As expected, the higher the
maturity of treasury bills, the higher is the yield. However, despite stability in deposit
rates and significant decline of annual point-to-point CPI inflation rate from 7% in Jan
2009 to 2.8% in Dec 2009, average yields on the 91-day bills increased from 10.5% in
Jan 2009 to 11% in Dec 2009 and yield on 182-day bills from 12.1% in Jan 2009 to
12.9% in Dec 2009.
• In view of the declining trend of inflation rates, the Monetary Policy Committee reduced
the policy rate by 2 percentage points to 14% with effect from December 2009. As a
result, average yields of the 91-day, 182-day and 364-day bills fell from 11%, 12.9% and
14.3% respectively in December 2009 to 10.3%, 12% and 13.6% respectively in Jan
2010 and to 10.7%, 11.7% and 13.2% respectively in February 2010.
Table-2.7 Average yields on treasury bills (in percentage per annum)

2008 2009 2010
91-D 162-D 364-D 91-D 182-D 364-D 91-D 182-D 364-D
Jan 10.6 11.4 13.6 10.5 12.1 14.4 10.3 12.0 13.6
Feb 10.9 11.9 13.7 11.1 12.8 14.4 10.7 11.7 13.2
Mar 11.0 12.1 13.6 11.4 12.7 14.4
Apr 10.9 11.9 13.3 12.0 13.0 14.6
May 10.2 11.3 13.0 12.5 13.8 15.3
Jun 10.0 11.2 13.3 13.0 13.8 15.6
Jul 9.6 10.6 12.6 11.5 12.0 14.4
Aug 8.8 10.2 12.1 10.2 11.2 13.3
Sep 8.9 11.0 13.1 10.4 11.7 14.3
Oct 10.3 11.4 13.6 10.8 12.1 14.2
Nov 10.1 13.4 13.7 10.8 12.3 14.0
Dec 9.9 12.5 14.0 11.0 12.9 14.3
Trends of Yields of Treasury Bills during 2007-2010
30
2.8 Money Supply
• Broad money supply (M2) recorded an annual growth of 17.9% in January 2010,
compared to 19.3% a year ago. While quasi money increased by a faster pace of 27.3%,
narrow money increased by 8.8 percent.
• On the supply side, 17.9% growth of broad money in January 2010 was supported by
7.7% growth in currency in circulation outside banks, 9.5% growth in demand deposits,
20.1% growth in savings deposits and 37% growth in time deposits.
• On the demand side, growth was due to 13.3% growth in net foreign assets and 19.3%
growth in net domestic assets over a year.
• Domestic credit increased by 8.9% from D6.7 billion in Jan 2009 to D7.3 billion in Jan
2010, supported by 6.1% growth in government borrowing, 44.2% growth in credits to
public entities and 14.7% growth in credits to the private sector, over a year.
Table-2.8 Money Supply and Demand in January 2010
Components Jan Jan Jan Jan Jan Jan-09 Jan-10

2008 2009 2010 2009 2010 % ch. % ch.
Million Million Million % % over over Jan-
Dalasi Dalasi Dalasi share share Jan-08 09
1.Money Supply (M3) (2+3) 8095 9656 11388 100 100 19.3 17.9
2.Narrow Money (2.1+2.2) 4077 4900 5333 51 47 20.2 8.8
2.1 Currency 1577 1,867 2,011 19 18 18.4 7.7
2.2 Demand deposits 2500 3032 3,321 31 29 21.3 9.5
3.Quasi money (3.1+3.2) 4018 4757 6055 49 53 18.4 27.3
3.1 Savings deposits 2510 2,722 3,267 28 29 8.4 20.1
3.2 Time deposits 1508 2,035 2,788 21 24 35.0 37.0
Demands for money (1+2) 8095 9656 11388 100 100 19.3 17.9
1.Net foreign assets (1.1+1.2) 3942 3243 3740 34 33 -17.7 15.3
1.1 Monetary Authorities 2,914 2,577 3222 27 28 -11.6 25.0
1.2 Commercial banks 1028 667 518 7 5 -35.1 -22.3
2.Net Dom. Assets (2.1+2.2) 4153 6413 7648 66 67 54.4 19.3
2.1 Domestic credit 4645 6704 7303 69 64 44.3 8.9
(a) Credits to government 1681 2,717 2883 28 25 61.6 6.1
(b) Credits to public entities 284 200 288 2 3 -29.5 44.2
(c) Credits to private sector 2497 3604 4132 37 36 44.3 14.7
(d) Credits to forex bureau 183 183 0 2 0 0.0 -100.0
2.2 Other items, net -492 -291 345 -3 3 -41.0 -218.8
31
2.9 Performance by Commercial Banks
(a) The Gambian banking industry consists of 13 banks with highly skewed distribution of
assets. The industry is dominated by three large banks holding almost two-thirds of the
total assets, although their share has declined over the years.
(b) The industry’s total assets increased to D14.8 billion in Dec 2009, up by 18.7% over a
year, and the asset quality is satisfactory. The average risk-weighted capital adequacy
ratio declined from 33.2% in Sep 2009 to 18.1% in Dec 2009, but it was well above the
statutory norm at 8% and all the banks satisfied the minimum requirement. However, the
ratio of non-performing loans to gross loans was 8% in Dec 2009 compared to 7% in Sep
2009, and profitability of banks declined during 2009.
(c) Bank loans to economic sectors increased by 25.3% to D4.4 billion in Dec 2009 from 3.5
billion a year ago. Credit to manufacturing increased by 105%, followed by agriculture
(87%), financial (29%), distributive trade (23%), construction (13%), other commercial
(19.3%) and others (31%).
Table-2.9 Sectoral Distribution of Bank Loans (Million Dalasi)

2008 2009 Annual GR Composition (%)
2009 2008 2009
Agriculture 140.4 262.5 86.9 4.0 5.9
Fishing 15.9 16.9 6.7 0.5 0.4
Manufacturing 106.0 217.4 105.0 3.0 4.9
Construction 441.5 499.0 13.0 12.5 11.3
Transportatio 288.9 312.7 8.2 8.2 7.1
n
Trade 946.1 1160.7 22.7 26.9 26.3
Tourisum 196.8 211.2 7.3 5.6 4.8
Financial 113.5 146.4 29.0 3.2 3.3
Other com 684.6 816.8 19.3 19.4 18.5
Others 588.2 769.3 30.8 16.7 17.4
Total 3521.9 4413.0 25.3 100.0 100.0
Composition of Sectoral Loans in 2009 (%) Source: CBG
32
2.10 Commercial Banks’ Assets
• Total assets of the commercial banks increased by 18.7% on year-on-year basis from
D12.5 billion at end-Dec 2008 to D14.8 billion at end-Dec 2009.
• Gambian banks do not have large exposure to foreign assets or foreign liabilities. At
end-Dec 2009, foreign assets constituted only 9.9% of total assets (foreign exchange
2.4%, balances abroad 6.5% and foreign investment 1.1%), down from 10.4% a year
ago (foreign exchange 3.2%, balances abroad 6.1% and foreign investment 1.1%).
• Gambian banks also do not have large contingent liabilities. At end-Dec 2009 contingent
liabilities constituted only 11.9% of total liabilities, compared to 11.5% a year ago.
• At end-Dec 2009, loans and advances increased by 25.7% over a year and constituted
27.7% of total assets, compared to 26.2% a year ago.
• At end-Dec 2009, investments in government Treasury Bills by the banks increased by

24.9% over a year and constituted 24.9% of their total assets. As expected, three large
banks had the dominant share.
• At end-Dec 2009, loans and advances to the public sector increased by 108.8% over a
year, while those to the private sector increased by only 16.5% over a year ago.
Table-2.10 Commercial Banks Assets at the end-December 2009 (Million

Dalasi)
Assets (Million Dec-2007 Dec-2008 Dec-2009 Composition (%) % ch. Dc08 % ch. Dc09
Dalasi) Dec-2008 Dec-2009 over Dc07 over Dc08
1. Notes and coins 204.3 217.3 211.9 1.7 1.4 6.4 -2.5
2. Foreign exchange 118.1 401.3 348.0 3.2 2.4 239.7 -13.3
3. Local Bank balance 918.2 854.7 1,221.9 6.9 8.3 -6.9 43.0
ii. CBG 884.5 851.9 999.2 6.8 6.7 -3.7 17.3
iii. Banks locally 33.7 2.8 222.6 0.0 1.5 -91.7 7874.5
4. Balances abroad 1,186.6 758.4 959.1 6.1 6.5 -36.1 26.5
5. Bills purchased 9.3 40.9 74.3 0.3 0.5 338.1 81.6
6. Loans and advances 2,446.6 3,263.1 4,101.8 26.2 27.7 33.4 25.7
i. Public sector 91.7 325.7 679.9 2.6 4.6 255.3 108.8
ii. Private sector 2,355.0 2,937.4 3,421.9 23.6 23.1 24.7 16.5
7. Investments 2,958.8 3,231.1 3,998.2 25.9 27.0 9.2 23.7
i. Govt Treasury Bills 2,605.7 2,949.5 3,683.9 23.7 24.9 13.2 24.9
ii. Others 198.9 139.9 152.3 1.1 1.0 -29.6 8.9
iii Foreign Invest. 154.2 141.6 161.9 1.1 1.1 -8.2 14.3
8. Fixed assets 548.8 840.1 1,140.8 6.7 7.7 53.1 35.8
9. Guarantees 1,201.6 1,435.8 1,764.2 11.5 11.9 19.5 22.9
10. Other assets 835.3 1,425.5 985.4 11.4 6.7 70.7 -30.9
11. Total assets (1 to 10) 10,427.7 12,468.2 14,805.6 100.0 100.0 19.6 18.7
12. Net Balance (11-9) 9,226.1 11,032.4 13,041.4 88.5 88.1 19.6 18.2
Memo: Foreign Assets 1,459.0 1,301.4 1,469.1 10.4 9.9 -10.8 12.9
Source: Central Bank of Gambia.
33
2.11 Commercial Banks’ Liabilities
• As mentioned earlier, Gambian banks do not have large exposure to foreign liabilities.
At end-Dec 2009, external sector related liabilities constituted only 4.9% of total liabilities
(non-residents deposits 4%, balances with banks abroad 0.1% and external debt 0.8%),
up from 3.1% a year ago (non-residents deposits 1.1%, balances with banks abroad
0.4% and external debt 1.6%).
• At end-Dec 2009 bank deposits increased by 21.7% over a year, aided by a growth of
9.4% in demand deposits, 19.8% in savings deposits and 45.1% in time deposits.
• At end-Dec 2009 banks capital and reserves increased by 9.5% and bank balances
increased by 70.4%, while borrowings increased by 43.4% over a year.
• At end-Dec 2009, direct contingent liabilities (i.e. guarantees) of banks increased by

22.9% over a year and constituted 11.9% of total liabilities.
Table-2.11 Commercial Banks Liabilities at the end-December 2009 (Million

Dalasi)
Liabilities (Million Dec-2007 Dec-2008 Dec-2009 Composition (%) % ch. Dc08 % ch. Dc09
Dalasi) Dec-2008 Dec-2009 over Dc07 over Dc08
1. Capital and reserves 1,219.2 1,448.0 1,586.1 11.6 10.7 18.8 9.5
2. Demand deposits 2,519.3 3,286.7 3,595.0 26.4 24.3 30.5 9.4
i Residents 2,271.9 2,653.5 2,737.1 21.3 18.5 16.8 3.1
ii Non residents 28.0 39.5 443.9 0.3 3.0 41.1 1023.2
iii Government entities 219.4 593.6 413.9 4.8 2.8 170.5 -30.3
3. Savings deposits 2,612.3 2,737.9 3,281.0 22.0 22.2 4.8 19.8
i Residents 2,503.6 2,638.8 3,181.3 21.2 21.5 5.4 20.6
ii Non residents 74.2 75.0 90.7 0.6 0.6 1.1 20.9
iii Government entities 34.5 24.0 9.0 0.2 0.1 -30.4 -62.4
4. Time deposits 1,453.1 1,938.9 2,814.2 15.6 19.0 33.4 45.1
i Residents 1,096.4 1,386.2 2,058.2 11.1 13.9 26.4 48.5
ii Non residents 15.4 18.1 63.8 0.1 0.4 17.7 251.9
iii Government entities 341.3 534.6 692.2 4.3 4.7 56.6 29.5
Total deposits 6,584.7 7,963.5 9,690.2 63.9 65.4 20.9 21.7
5. Bank Balances 161.0 137.0 233.5 1.1 1.6 -14.9 70.4
i HO & branches 20.7 86.7 189.7 0.7 1.3 318.9 118.7
ii Other banks abroad 140.3 50.3 8.8 0.4 0.1 -64.2 -82.5
iii. Banks locally - - 35.0 0.0 0.2 -
6. Borrowings from 324.9 414.6 594.7 3.3 4.0 27.6 43.4
i Cent. bank of Gambia - - 20.0 0.0 0.1
ii Other banks locally - 12.0 10.0 0.1 0.1
iii HO & branches 255.9 201.1 451.9 1.6 3.1 -21.4 124.8
iv Other banks abroad 69.0 201.5 112.8 1.6 0.8 -44.0
v. Other sources - - - 0.0 0.0
7. Guarantees 1,201.6 1,435.8 1,764.2 11.5 11.9 19.5 22.9
8. Other liabilities 936.3 1,069.3 936.9 8.6 6.3 14.2 -12.4
9. Total liabilities (1 to 8) 10,427.7 12,468.2 14,805.6 100.0 100.0 19.6 18.7
10. Net balance (9-7) 9,226.1 11,032.4 13,041.4 88.5 88.1 19.6 18.2
Memo: Foreign
Source: Centralliabl. 326.9
Bank of Gambia 384.5 720.0 3.1 4.9 17.6 87.3
34
2.12 Interest Rates and Central Bank Policy Rates
Interest rate on treasury bills declined from 31% in 2003 to 14.9% in 2006 and further to 13.7%
in 2007. It ranged in between 13.1% to 14.7% in 2008 and between 12.3% to 14.3% in 2009.
The bank rate of the CBG declined from 29% in 2003 to 9% in 2007, but was raised to 10% at
the end of 2007 to check effective demand and inflationary pressures on the economy. It has
remained at 10% since then. However, with the introduction of the Monetary Policy Committee
(MPC) Policy Rate, the Bank rate has become ineffective and non-operational.
In response to tight monetary conditions and against a backdrop of falling inflation, the CBG
reduced the statutory minimum reserve requirement of banks from 16% to 14% in March 2008.
The CBG rediscount rate declined from 34% in 2003 to 14% in 2004. In order to counter
emerging inflationary pressures, the CBG raised its rediscount rate by one percentage point
from 14% to 15% in June 2007, and further to 16% in October 2008. The rediscount rate
remained unchanged at 16% since then until November 2009. In view of the declining trend of
inflation rates, the MPC reduced the policy rate by 2 percentage points to 14% with effect from
December 2009. As a result, average yields of the 91-day, 182-day and 364-day bills fell from
11%, 12.9% and 14.3% respectively in December 2009 to 10.3%, 12% and 13.6% respectively
in Jan 2010 and further to 10%, 11% and 12.9% respectively in February 2010.
Despite significant fall of the yields on treasury bills in recent years, maximum short-term
deposit rates and commercial banks’ lending rates remain very high, and there exist wide
interest rate spreads. Successful disinflation allowed the weighted yield on treasury bills to fall
from over 25% in early 2005 to 11.3% in February 2010. By contrast, commercial banks’ lending
rates remained sticky above 20% due to high operating costs and high risks of bank credits.
Table-2.12 Trends of Nominal Interest rates (per cent per annum, end period)
Items 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Bank lending rare- min 18 18 17 21 21 21 18 18 18 18
Bank lending rare- max 24 24 24 36.5 36.5 30 28 27 27 27
Deposit rate (SB) min 8 8 8 8 10 5 5 5 4 4
Deposit rate (SB) max 10 10 10 17 17 10 7 7 7 7
Time dep (3 months) min 9.5 9.5 6 7 8 5 5 5 5 5
Time dep (3 months) max 12.5 12.5 13 22 22 14 8.5 12.9 13.6 15.5
Time dep (6 months) min 10 10 6 8 8 7 6 6 6 6
Time dep (6 months) max 12.5 12.5 13 22 22 15 13 12.9 13.6 15.5
Time dep (12 month) min 11 11 7 10 12 7 6 7 7 6
Time dep (12 month) max 12.5 12.5 13 22 23 13 13 12.9 13.6 15.5
Govt. treasury bills 12 15 20 31 30 16 12.8 13.7 13.6 14.2
CBG Bank Rate 10 13 18 29 28 14 9 10 10 10
CBG Rediscount Rate 15 18 23 34 33 19 14 15 16 16
Range = Maximum-Minimum
Bank lending rate 6 6 7 15.5 15.5 9 10 9 9 9
Deposit rate (SB) 2 2 2 9 7 5 2 2 3 3
Time deposits (3 months) 3 3 7 15 14 9 3.5 7.9 8.6 9.5
Time deposits (6 months) 2.5 2.5 7 14 14 8 7 6.9 7.6 9.5
Time deposits (12 month) 1.5 1.5 6 12 11 6 7 5.9 6.6 9.5
Factors Influencing Interest Rates
Inflation (GDP-Deflator) 3.6 14.9 15.0 22.9 13.6 3.9 0.0 2.0 8.0 4.7
CPI-Inflation 0.9 4.5 8.6 17.0 14.3 5.0 2.1 5.4 4.9 4.5
Real GDP-Growth Rate 5.5 5.7 0.7 2.4 2.1 -0.1 3.1 6.3 6.3 5.0
Exch. Rate change (%) 12.2 22.7 27.0 43.2 5.3 -4.8 -1.8 -11.4 -9.8 15.9
35
2.13 BOP, Foreign Exchange Reserves and Exchange Rates

(a) BOP Situation in 2009
(a) Preliminary Balance of Payments estimates by the CBG for Jan-Sep 2009 indicated an
overall deficit of D1066.6 million compared with a deficit of D721.6 million in Jan-Sep
2008. There was significant improvement in the BOP situation in the fourth quarter and
the overall BOP outcome in 2009 was not as bad as it was anticipated earlier.
(b) Preliminary BOP estimates by the CBG for 2009 indicate an overall deficit of D144
million compared to a deficit of D767 million in 2008.
(c) Current account balance including transfers showed a surplus of D1.54 billion compared
to a deficit of D1.11 billion in 2008, but the capital and financial account balance
worsened to a deficit of D1.68 billion compared to a surplus of D342 million in 2008.
(d) The goods account balance improved from a deficit of D2.92 billion in 2008 to D2.28
billion in 2009 attributed to the surge in exports, which more than offset the increase in
imports. Exports, including re-exports, increased from D3.18 billion in 2008 to D4.65
billion in 2009, while imports increased from D6.10 billion to D6.93 billion over the
period, resulting in narrowing down the trade deficit.
(e) Net factor income deficit decreased from D757 million in 2008 to D217 million in 2009,
while non-factor services surplus improved marginally from D757 million in 2008 to D770
million in 2009 and net transfers improved significantly from D1.81 billion in 2008 to
D3.27 billion in 2009.
(f) In terms of percentages to GDP there was significant improved in BOP situation as
summarized in the following table:
.
Table-2.13: Balance of Payments in 2008-2009 (As % of GDP)
Items 2008 2009
1 Goods balance (1.1-1.2) -12.7 -9.0
1.1 Exports of goods 13.8 18.4
1.2 Imports of goods fob 26.5 27.4
2 (Non-factor) Services, net 3.3 3.0
3 (Factor) Income, net -3.3 -0.9
4 Transfers, net 7.9 12.9
5 Current account balance (1+2+3+4) -4.8 6.1
6 Capital Account 0.1 0.0
7 Financial Account 1.4 -6.7
8 Capital & Financial A/C (6+7) 1.5 -6.7
9 Overall BOP Balance (5+8) -3.3 -0.6
(b) Foreign Exchange Reserves
(a) At end-Jan 2010, gross international reserves totaled US$183.3 million, equivalent to 7.2
months of import cover. Volume of transactions in the domestic foreign exchange market
remained virtually unchanged at US$1.54 billion in January 2010 from a year earlier.
36
Table-2.13-A Balance of Payments during 2008 and 2009 (Million Dalasi)
(Million Dalasi) 2008 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2009
1 Goods balance (1.1-1.2) -2919.2 -683.9 -399.0 -565.0 -635.0 -2282.8

1.1 Exports of goods (a+b+c) 3175.7 934.5 1331.6 1294.8 1084.8 4645.7
a. Exports of goods in trade stat 330.4 239.1 597.8 503.1 366.1 1706.1
b. Re-exports 2489.1 660.9 706.8 759.5 702.4 2829.6
c. Other goods 356.2 34.5 27.0 32.2 16.3 110.0
1.2 Imports of goods fob 6094.9 1618.4 1730.6 1859.8 1719.8 6928.6
2 Services, net (2.1 to 2.7) 757.5 370.3 34.7 -58.6 423.4 769.8
2.1 Transport -434.1 -123.6 -93.3 -157.0 -106.3 -480.2
2.2 Travel 1624.1 615.7 190.1 151.8 626.1 1583.6
2.3 Communications 214.4 52.4 82.9 80.6 84.8 300.7
2.4 Insurance -146.0 -38.0 -42.8 -45.3 -39.8 -165.9
2.5 Construction 120.0 12.9 14.8 45.6 -7.0 66.3
2.6 Information technology -70.9 -23.6 7.5 -9.8 -9.8 -35.8
2.7 Others business -550.0 -125.5 -124.5 -124.5 -124.5 -499.0
3 Income -757.4 -74.9 -57.6 -35.9 -48.1 -216.5
3.1 Investment income -931.4 -115.2 -101.2 -74.3 -85.7 -376.4
3.2 Compensation to labor 174.0 40.3 43.7 38.4 37.5 159.9
4 Transfers, net (4.1+4.2+4.3) 1809.4 154.1 834.6 1160.8 1120.3 3269.8
4.1 Official transfer 137.2 108.3 151.9 289.6 248.8 798.7
4.2 Remittances 1195.8 290.2 434.2 333.9 333.9 1392.3
4.3 Other transfer 476.4 -244.4 248.5 537.2 537.6 1078.9
5 Current account balance -1109.7 -234.4 412.8 501.3 860.6 1540.3
6 Capital Account 24.4 0.0 0.0 0.0 0.0 0.0
7 Financial Account (7.1+7.2) 317.9 -234.6 -277.4 -1242.1 69.9 -1684.2
7.1 Foreign direct investment 1555.7 262.7 262.7 262.7 262.7 1050.8
7.2 Other investment -1429.6 -311.1 -484.2 -139.3 84.9 -849.7
7.3 Reserve change 191.8 -186.2 -55.9 -1365.5 -277.7 -1885.3
8 Capital & Financial A/C (6+7) 342.3 -234.6 -277.4 -1242.1 69.9 -1684.2
9 Overall BOP Balance (5+8) -767.4 -469.0 135.4 -740.8 930.5 -143.9
Foreign Exchange Reserve 3624.4 3155.4 3290.8 2549.9 3480.5 3336.5
Equi to months of imports 7.1 7.8 7.6 5.5 8.1 5.8
Ave.Exch.rate(D/$) 22.4 26.2 26.8 26.8 26.8 26.7
GDP at cmp (Million Dalasi) 22978.3 25285.8 25285.8 25285.8 25285.8 25285.8
37
Table-2.13-B Balance of Payments in 2008-2009 (As % of GDP)
BOP as % of GDP 2008 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2009
1 Goods balance (1.1-1.2) -12.7 -2.7 -1.6 -2.2 -2.5 -9.0

1.1 Exports of goods (a+b+c) 13.8 3.7 5.3 5.1 4.3 18.4
a. Exports of goods in trade stat 1.4 0.9 2.4 2.0 1.4 6.7
b. Re-exports 10.8 2.6 2.8 3.0 2.8 11.2
c. Other goods 1.6 0.1 0.1 0.1 0.1 0.4
1.2 Imports of goods fob 26.5 6.4 6.8 7.4 6.8 27.4
2 Services, net (2.1 to 2.7) 3.3 1.5 0.1 -0.2 1.7 3.0
2.1 Transport -1.9 -0.5 -0.4 -0.6 -0.4 -1.9
2.2 Travel 7.1 2.4 0.8 0.6 2.5 6.3
2.3 Communications 0.9 0.2 0.3 0.3 0.3 1.2
2.4 Insurance -0.6 -0.2 -0.2 -0.2 -0.2 -0.7
2.5 Construction 0.5 0.1 0.1 0.2 0.0 0.3
2.6 Information technology -0.3 -0.1 0.0 0.0 0.0 -0.1
2.7 Others business -2.4 -0.5 -0.5 -0.5 -0.5 -2.0
3 Income -3.3 -0.3 -0.2 -0.1 -0.2 -0.9
3.1 Investment income -4.1 -0.5 -0.4 -0.3 -0.3 -1.5
3.2 Compensation to labor 0.8 0.2 0.2 0.2 0.1 0.6
4 Transfers, net (4.1+4.2+4.3) 7.9 0.6 3.3 4.6 4.4 12.9
4.1 Official transfer 0.6 0.4 0.6 1.1 1.0 3.2
4.2 Remittances 5.2 1.1 1.7 1.3 1.3 5.5
4.3 Other transfer 2.1 -1.0 1.0 2.1 2.1 4.3
5 Current account balance -4.8 -0.9 1.6 2.0 3.4 6.1
6 Capital Account 0.1 0.0 0.0 0.0 0.0 0.0
7 Financial Account (7.1+7.2) 1.4 -0.9 -1.1 -4.9 0.3 -6.7
7.1 Foreign direct investment 6.8 1.0 1.0 1.0 1.0 4.2
7.2 Other investment -6.2 -1.2 -1.9 -0.6 0.3 -3.4
7.3 Reserve change 0.8 -0.7 -0.2 -5.4 -1.1 -7.5
8 Capital & Financial A/C (6+7) 1.5 -0.9 -1.1 -4.9 0.3 -6.7
9 Overall BOP Balance (5+8) -3.3 -1.9 0.5 -2.9 3.7 -0.6
Foreign Exchange Reserve 15.8 12.5 13.0 10.1 13.8 13.2
38
Table-2.13-C: Quarterly BOP Summary Table 2008-2009

Percentage change over same quarter of previous year (%)
Items 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2009
(Dalasi) (Dalasi) (Dalasi) (Dalasi) (Dalasi)
1 Goods balance (1.1-1.2) -10.2 -34.8 -10.0 -30.8 -21.8
1.1 Exports of goods (a+b+c) 16.1 68.9 85.1 22.8 46.3
a. Exports of goods in trade stat 246.6 377.8 526.4 553.6 416.3
b. Re-exports 3.3 23.6 40.1 -4.5 13.7
c. Other goods -64.2 -70.4 -58.2 -82.2 -69.1
1.2 Imports of goods fob 3.3 23.6 40.1 -4.5 13.7
2 Services, net (2.1 to 2.7) -31.7 -39.1 -15.6 130.7 1.6
2.1 Transport -10.1 -3.1 119.7 -17.6 10.6
2.2 Travel -23.1 -3.1 5.5 29.6 -2.5
2.3 Communications 6.5 4.4 80.0 106.7 40.2
2.4 Insurance 5.4 10.3 49.8 -2.8 13.6
2.5 Construction 298.1 -73.5 1704.0 -149.2 -44.7
2.6 Information technology - - - - -
2.7 Others business -8.7 -9.5 -9.5 -9.5 -9.3
3 Income -67.9 -67.3 -79.7 -71.9 -71.4
3.1 Investment income -58.2 -53.9 -66.8 -59.6 -59.6
3.2 Compensation to labor -5.6 0.2 -18.3 -7.8 -8.1
4 Transfers, net (4.1+4.2+4.3) -66.3 85.5 132.4 178.0 80.7
4.1 Official transfer 153.7 275.2 899.8 894.1 482.2
4.2 Remittances 32.4 74.3 -9.9 -6.4 16.4
4.3 Other transfer -225.3 54.9 438.6 2429.8 126.5
5 Current account balance -4835.4 -246.9 -233.8 -271.1 -238.8
6 Capital Account - - - - -
7 Financial Account (7.1+7.2) 1798.1 158.8 -4796.0 -83.0 -629.8
7.1 Foreign direct investment -36.1 -36.1 -28.3 -28.3 -32.5
7.2 Other investment -64.0 37.7 -330.3 -131.0 -40.6
7.3 Reserve change -142.2 -66.5 240.9 -187.3 -1083.1
8 Capital and Financial A/C (6+7) 1798.1 214.9 -4283.6 -83.1 -592.0
9 Overall BOP Balance (5+8) 6229.3 -136.7 114.8 -1134.6 -81.2
Foreign Exchange Reserve -28.7 -18.9 -31.3 -4.0 -7.9
Equi to months of imports 5.7 0.6 -24.9 54.2 -6.9
Ave.Exch.rate(D/$) 23.4 31.1 23.1 3.6 19.4
GDP at cmp 10.0 10.0 10.0 10.0 10.0
39
2.14 Exchange Rate
In 2009, the Dalasi depreciated against the British Pound by 7.2 percent, the US Dollar by 9.8
percent, the CFA by 11.2 percent and the Euro by 11.8 percent. However, in January and
February 2010, the Dalasi started appreciating against the British Pound, CHF and Euro and
remained unchanged against US$ compared with the exchange rates at end-Dec 2009.
In February 2010, Dalasi depreciated against UK£ by 13.2%, against US$ by 3.2%, CHF by
14.6%, CFA by 10.3% and Euro by 16.1% over February 2009.
Table-2.14 End-period mid-market exchange rates (Dalasi per unit of

foreign currency)
Year Month UK£ US$ CHF CFA (5000) Euro
2009 Jan 37.25 26.07 20.85 262.81 33.52

Feb 37.38 26.11 22.04 257.78 33.6
Mar 38.18 26.38 23.31 259.30 35.22
Apr 39.05 26.80 23.00 262.17 35.32
May 41.40 26.74 22.40 265.98 37.00
June 43.13 26.87 21.96 272.87 37.04
July 43.31 26.79 24.42 277.53 38.06
Aug 43.80 26.63 24.36 281.45 37.68
Sept 42.99 26.95 25.47 283.58 38.61
Oct 43.48 26.91 26.07 297.13 39.61
Nov 43.88 26.93 26.65 295.53 40.15
Dec 43.04 26.94 25.81 288.26 39.87
2010 Jan 43.01 26.94 25.29 289.32 39.03
Feb 42.32 26.94 25.27 284.26 39.02
Annual Rate of appreciation (-) / depreciation (+) of Dalasi (in % over same month in 2008)
2009 Jan -15.9 16.7 4.7 1.9 3.9

Feb -12.2 19.3 12.6 4.1 5.7
Mar -6.6 35.6 21.7 14.2 8.4
Apr -1.2 33.2 20.1 12.4 11.1
May 2.9 29.5 15.1 15.3 8.2
June 5.8 30.1 14.0 15.5 11.1
July 4.0 27.9 22.7 18.2 10.6
Aug 7.5 24.6 21.3 16.9 12.8
Sept 3.2 16.6 28.2 16.9 13.7
Oct 7.4 8.1 29.4 20.4 15.1
Nov 8.2 2.5 32.8 20.6 14.4
Dec 7.2 1.5 12.5 11.8 11.2
2010 Jan 15.5 3.3 21.3 10.1 16.4
Feb 13.2 3.2 14.6 10.3 16.1
Source: Central Bank of Gambia (CBG)
40
3. Recent Policy Developments and Development Issues
3.1 Highlights of the Budget-2010
The Budget is based on sound macroeconomic policy framework to support inclusive growth, to
maintain low inflation and improve debt sustainability.
102. “The 2010 Budget represents a decisive step by Government to tackle The Gambia’s
heavy debt burden, in particular interest payments on domestic debt. This budget aims
to reduce debt and create savings that could become an important resource for other
non-interest expenditures. Working closely with the Central Bank of The Gambia,
Government believes that with sound budget implementation, T-bill yields can be
significantly reduced in the months ahead.”
103. “Total revenue and grants is expected to increase from its budget of D4.582
billion in 2009 to D5.474 billion in 2010. This increase is driven mainly by increases in
tax revenues, project grants and budget support. Tax revenue is projected to increase
from its budget figure of D3.39 billion in 2009 to D3.991 billion in 2010, representing
18.58% of GDP. The overall increase in grants from a budget of D811 million in 2009 to
D1.061 billion in 2010 is mainly due to expected increases in project disbursements from
D513 million to D636 million and additional HIPC and EU budget support of D425
million.”
104. “Expenditure and Net Lending is projected to increase from D5.363 billion in
2009 to D5.772 billion in 2010. Interest payments on debt are projected to decline from
a budget of D845 million in 2009 to D762 million in 2010. Other current expenditures,
including externally financed, are projected to rise from D4.461 billion in 2009 D4.948
billion in 2010, of which Personnel Emoluments is expected to increase from D1.035
billion to D1.499 billion in 2009 to D1.499 billion in 2010.”
105. “The budget deficit for 2010 is projected at D298.7 million representing 1.39% of
GDP. This deficit will be fully financed through domestic and external resources. The
net-external financing is estimated at D354.7 million while net domestic financing, which
includes repayment of arrears and domestic loans is in the sum of D120 million.
Proceeds from capital revenue is equivalent to D64 million.”
41
42
3.2 Taxation Measures Announced in the Budget for 2010

109. “The corporate tax will be gradually reduced, starting with a 2 percent reduction
from 35 percent to 33 percent for 2010. Similarly, the turnover tax will be reduced
by 0.5 percent. .... Meanwhile, the implementation of the tax on interest income has
been differed.”
110. “Furthermore, following the completion of a nationwide Rental Property Survey,

GRA will embark on a more rigorous collection of taxes on rented properties within
the taxable threshold.”
111. “In 2008, Government zero-rated the sales tax on rice as a policy measure to
minimize the impact of the food crisis, thus foregoing significant revenues. Now that
we have passed the episode of high food prices and in a bid to encourage local
agricultural production, Government would restore the sales tax on imported rice to
the 5% level.”
112. “Excise tax on alcoholic products and unmanufactured tobacco will be increased
in the following order: Unmanufactured tobacco from D26.04/kilo to D75/kilo; Wine
from D100/litre to D150/litre; Spirits from D150/litre to D175/litre; and Beer from
D75/litre to D100/litre.”
113. “Significant investment is being made to enhance the security features of our
national identification documents by going biometric, and as a result, the cost of
these documents will be increased as follows: Drivers License from D300 to D500;
Provisional Learner’s License from D50 to D100; International Drivers License from
D500 to D1000; Passport from D500 to D1000. Furthermore, Personalised Number
Plates will also be increased from D2500 to D5000.”
114. “The Road Tax Private and the Motor Vehicle Yearly License Private were last
reviewed fifteen years ago. Consequently, Road Tax Private will be increased as
follows: Less than 1 ton from D163 to D300; 1 to 2.5 tons from D205 to D400; and
2.5 tons and above from D251 to D500. The Motor Vehicle Yearly License Private
will be increased as follows: Less than 1 ton from D221 to D400; 1 to 2.5 tons from
D342 to D600; and 2.5 tons and above from D506 to D1000.”
115. “Although the Police will still be responsible for the technical aspects of issuing
vehicle number plates and motor vehicle licences, all payments for road tax, vehicle
licenses and number plates will henceforth be made with the Gambia Revenue
Authority. The licence and the plates will only be issued by the Police upon
presentation of a GRA payment receipt. This will enhance revenue administration,
while allowing the Police to concentrate on their core functions.”
116. “The personal income tax structure is being reviewed to bring it in line with the
prevailing economic conditions and to make it more progressive, fairer and revenue
productive. Also, the audit and enforcement capacity of the Department of Domestic
Taxes of GRA is being strengthened in anticipation of the planned introduction of a
value added tax (VAT) system in place of sales tax on or before January 2013.
These reform measures are aimed at ensuring that our tax system remains efficient
and equitable.”
43
3.3 IMF Executive Board Completes Sixth Review Under The Gambia’s ECF Arrangement
and Approves a 12-Month Extension and US$ US$7.1 Million Augmentation
As per the Press Release No. 10/55 dated February 19, 2010, posted on the International
Monetary Fund (IMF) Website, the Executive Board of the IMF completed the sixth review of
The Gambia’s economic performance under a program supported by the Extended Credit
Facility (ECF)6. The Board approved a waiver for the non-observance of the fiscal performance
criterion based on corrective actions, notably the government’s 2010 budget approved by the
National Assembly, which aims for a near-zero basic balance. The Board’s decision allows the
government to request a further disbursement amounting to SDR 2.0 million (about US$ 3.0
million), bringing total disbursements under the ECF to The Gambia to SDR 20.2 million (about
US$30.8 million).
The Executive Board approved an extension for one year and an augmentation by SDR 4.67
million (about US$ 7.1 million) of The Gambia's ECF arrangement, originally approved on
February 21, 2007 (vide Press Release No. 07/28).
The IMF Board complemented the Gambian authorities for pursuing satisfactory economic
policies which contributed to robust economic growth and low inflation despite ongoing global
economic crisis. However, they observed that even after extensive debt relief, The Gambia
remains at high risk of debt distress. Besides the yields on Treasury Bills are ruling high mainly
due to fiscal slippages and the government’s recourse to domestic borrowing. The government’s
efforts to strengthen its debt management strategy are, therefore, welcome. Until the debt
burden is reduced, Government should continue to limit external borrowing to highly
concessional loans.
The government’s budget for 2010 appropriately targets a near-zero basic balance that will
return The Gambia to a path of declining domestic debt. Fiscal restraint will ease pressure on T-
Bill yields and eventually generate fiscal savings for other spending priorities. However,
disciplined budget execution will be key to achieve these results, and the government’s new
action plan to improve public financial management is in the right direction to achieve such fiscal
discipline.
The IMF appreciates the government’s commitment to maintain low inflation and to take steps to
ease pressures on interest rates. The reinforced banking supervisory framework, including the
phased-in increase in the minimum capital requirement, will contribute to the development of the
sound and efficient banking system.
6
The Extended Credit Facility (ECF) has replaced the Poverty Reduction and Growth Facility (PRGF) as the Fund’s
main tool for medium-term financial support to low-income countries by providing a higher level of access to
financing, more concessional terms, enhanced flexibility in program design features, and more focused streamlined
conditionality. Financing under the ECF currently carries a zero interest rate, with a grace period of 5½ years, and a
final maturity of 10 years. The Fund reviews the level of interest rates for all concessional facilities every two years.
44
3.4 Assessment of Quantitative Targets agreed with IMF under PRGF
The Gambia’s three-year Poverty Reduction and Growth Facility (PRGF) arrangement was
approved by the IMF’s Executive Board in February 2007. The third review was completed on
September 8, 2008 and the Fourth Review was done in February 2009. The updated Letter of
Intent (LOI) and Memorandum of Economic and Financial Policies (MEFP), and Technical
Memorandum of Understanding (TMU) were signed jointly by the then honorable Finance
Minister Mr. Mousa Gibril Bala-Gaye and honorable Governor, Central Bank of Gambia, Mr.
Momodou Bamba Saho, on February 3, 2009.
The MEFP reviewed progress in implementing the Government’s PRGF supported program in
2008, and set out the policies that the Government will pursue in 2009. The Government of
Gambia committed that the program, as usual, will continue to be monitored based on agreed
quantitative targets and a set of structural performance criteria and benchmarks indicated in the
MEFP as per program reviews.
The quantitative financial targets for end–March 2009 and end-September 2009 are
performance criteria; and those for end–December 2008, end–June 2009, and end-December
2009 are indicative targets.
Performance of Monitored Variables at the end of December 2009
With regard to the performance of the monitored variables under the PRGF vis-à-vis their end-
December 2009 targets, the CBG through pro-active, consistent and prudent use of various
monetary policy instruments, was able to meet comfortably all the quantitative targets. The Net
useable reserves (NUR) totaled US$148.9 million at end-December 2009 and were above the
end-December target (floor) by US$0.13 million. Similarly, the Net Domestic Assets (NDA) of
the Central Bank amounting to D1.4 billion was below target ceiling by D50.9 million.
The target for basic fiscal balance (floor) was fixed at D685.6 million for the end of December
2009. However, despite good revenue realization, Government failed to achieve this target due
to expenditure pressures. Government achieved a basic balance of (-) D426.9 million at the end
of December 2009, which was well below the target.
Government did not default on the payment of debt services on any external debt. As agreed
under the Program, the government did not contract or guarantee any new non-concessional
external loan having maturity exceeding one year. There is also no non-concessional external
debt outstanding on government account having original maturity exceeding one year.
45

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The Gambia Monthly Economic Bulletin- March 2010

THE GAMBIA MONTHLY

Institutional Support Project for Economic and Financial Governance (ISPEFG)

Political and Administrative Structure

120. “As we confront these formidable challenges, I call on our

Basic Facts about the Gambia 2

Concluding paragraphs of the Budget 2010 Speech by Honorable Abdou 3

ISPEFG Project/ Research Team and Document History 5

1. Global Economic Outlook 9-15

2. Current State of the Gambian Economy 16-36

2.4 Government Fiscal Performance in January 2010 21

3. Recent Policy Developments and Development Issues 37-40

ISPEFG Project and Monthly Economic Bulletin Research Team

Project Supervisor Honorable Mr. Serign Cham,

Project Coordinator Mr. Momodou Cham

Macroeconomic Adviser Dr. Tarun Das

1. The Gambia Quarterly Economic Bulletin, pp.1-30, 31 March 2009.

Impact of Global Financial Crisis and Economic Slowdown

Global Food and Oil Prices

Impact on the Gambian Economy

Government Fiscal Performance

Domestic Debt and Treasury Bills Yields

Money Supply and Bank Credits

Balance of Payments, Foreign Exchange Reserves and Exchange Rate

Economic Latest Status in the Status in the Outlook for 2010

1.1 Policy-Driven and Multi-speed Recovery, but it is Painful and Sluggish

Prospects of African Economies

IMF Outlook for Sub-Saharan Africa

Figure 1.1 Sub-Saharan Africa: Projected GDP Growth, 2008–11

Source: IMF, African Department database.

1.2 World Commodity Prices

Inflation pressures will remain subdued in most economies

Commodity prices are rebounding

Table-1.2 Trends of World Commodity Prices

Source: World Bank Pink Sheet March 2010

Source: World Bank Pink Sheet March 2010

2. Current State of the Gambian Economy

GDP Composition(%) in 2009

Figure-2.1: Trends of sectoral growth rates during 2000-2009 (in percentage)

GDPMP Agriculture Industry Services

2.2 Consumer Price Index and Inflation

Table-2.2 CPI Inflation Rates in February 2010 (in percentage)

2.3 Projection of CPI inflation for the year 2010

(3) Alternative-3: Average of inflation rates under Alternatives 1 and 2.

2.4 Government Fiscal Performance in January-February 2010

Table-2.4.1 Govt Financial Performance in Jan-Feb 2010 (Million Dalasi)

• Significant reduction in total expenditure is sought to be achieved through drastic cut in

Table-2.4.2 Govt Financial Performance in 2009 and Jan-Feb 2010

2.5 Projection of Fiscal Outturn for the Year 2010

2.6 Domestic Debt and Treasury Bills Outstanding

Table-2.6-A Outstanding Domestic Public Debt as on 31 January 2010

Domestic Debt Sustainability

Table-2.6-B Primary Benchmarks for Domestic Debt Sustainability Ratios (%)

2.7 Treasury Bills Yields

Table-2.7 Average yields on treasury bills (in percentage per annum)

2.8 Money Supply

Table-2.8 Money Supply and Demand in January 2010

Components Jan Jan Jan Jan Jan Jan-09 Jan-10

2.9 Performance by Commercial Banks

Table-2.9 Sectoral Distribution of Bank Loans (Million Dalasi)

2.10 Commercial Banks’ Assets

• At end-Dec 2009, investments in government Treasury Bills by the banks increased by

Table-2.10 Commercial Banks Assets at the end-December 2009 (Million