Gambia Monthly Eco Bulletin May 2009

The Gambia Monthly Economic Bulletin- May 2009
THE GAMBIA MONTHLY

ECONOMIC BULLETIN1
May 2009
Institutional Support Project for Economic and Financial Governance (ISPEFG)

Department of State for Finance and Economic Affairs (DOSFEA)
The Republic of Gambia
The Quadrangle, Banjul, the Gambia
1
The Gambia Monthly/ Quarterly Economic Bulletin provides an update on recent economic
developments and policies in the Republic of the Gambia. The Bulletin is prepared by a research team
comprising Tamsir Cham, Director; Momodou Taal, Principal Economist and Ami Khan, Senior
Economist, in the Economic Management and Planning Unit (EMPU) and Tarun Das, Macroeconomic
Adviser (ISPEFG); Ministry of Finance and Economic Affairs (MOFEA); with key inputs from the Debt
Management Adviser, Fiscal/Financial Adviser, the Central Bank of Gambia (CBG), the Gambian Bureau
of Statistics (GBOS), and the Gambian Revenue Authority (GRA). Any questions and feedback can be
addressed to: Either Tamsir Cham (tamsirc@hotmail.com) or 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 (2004) Million US$ 3284 167 out of 224
countries
GDP Nominal (2006) Million US$ 511 199 out of 229
countries
GDP PPP per capita (2004) US$ 1945 177 out of 223
countries
GDP per capita (2006) US$ 329 192 out of 207
countries
Poverty Ratio (% of people Percent 59 7 out of 59 countries
2
below One-US$) (2000)

Source: http://www.nationmaster.com
3
____________________________________________________________
Contents
Items Page
ISPEFG Project/ Research Team and Document History 4
Highlights 5-6
At a Glance 7-10
1. Global Economic Outlook and Global Public Policy 11-15

1.1Sustained weakness and risk in global output and trade in 2009 11
1.2Global Commodity Prices and Inflation 14
1.3 Trends of international crude oil prices 14
2. Current State of the Gambian Economy 16-37

2.1Overall and Sectoral GDP Growth Rates 16
2.2Growth Rates of Selected Indicators for Trade and Transport 18
2.3Consumer Price Index (CPI) and Inflation 19
2.4Factors affecting inflation and Anti-inflationary Measures 21
2.5Projection of CPI inflation during May-December 2009 22
2.6Government Fiscal Performance in January-April 2009 23
2.7 External Debt Situation 27
2.8Domestic Debt and Outstanding Treasury Bills 28
2.9Treasury Bills Yields 29
2.10Money Supply in March 2009 30
2.11Sectoral Distribution of Bank Credits in March 2009 31
2.12Commercial Banks’ Assets in April 2009 32
2.13Commercial Banks’ Liabilities in April 2009 33
2.14Interest Rates and CBG Policy Rates in May 2009 34
2.15Balance of Payments and Foreign Exchange Reserves 35
2.16Exchange Rates in May 2009 37
3. Assessment of Quantitative Targets agreed with IMF under MEFP 38-39
4
ISPEFG Project and Monthly Report Research Team
Project Supervisors Honorable Mr. Mod A. K. Secka,

Permanent Secretary-I
and
Honorable Mr. Serign Cham,
Permanent Secretary-II
Project Coordinator Mr. Momodou Cham
Director (EMPU) Mr. Tamsir Cham

Principal Economist Mr. Momodou Alagie Taal
Senior Economist Ms. Ami Khan
Technical Assistant (Debt Management) Mr. Adam Aikuta
Technical Assistant (Fiscal/ Financial) Mr. Dan Mambule Mwanje
Technical Assistant (Macroeconomic) Mr. Tarun Das
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 Report, pp.1-18, 31 March 2009.
3. Fiscal Performance in the First Quarter of 2009, pp.1-4, 16 April 2009.
4. The Gambia Quarterly Economic Bulletin-An Update, pp.1-40, 30 April 2009.
5. The Gambia Monthly Economic Report, pp.1-38, 30 April 2009.
6. The Gambia Monthly Economic Report, pp.1-39, 31 May 2009.
7. The Gambia Monthly Economic Abstract, pp.1-15, 31 May 2009.
5
HIGHLIGHTS
Impact of Global Financial Crisis and Economic Slowdown
• In recent years African countries in general experienced an economic boom contributed by three
favorable factors namely increased donors funding, rising exports driven by high commodity
prices, and inflows of remittances and foreign investment.
• Since the middle of 2008 the US housing bubbles had led to severe financial crisis and economic
slowdown in the developed countries, which in turn led to reversal of the positive factors
mentioned above and imposed serious adverse impact on the African economies.
• As per the latest IMF World Economic Outlook (April 2009) projections, world output is projected
to decline by 1.3 percent in 2009 as a whole and to recover gradually in 2010, growing by only
1.9 percent. In African developing economies, growth is projected to slow down significantly from
5.2 percent in 2008 to 2 percent in 2009
Food and Oil Prices
• Due to sluggish demand and economic slowdown, there had been significant decline of world
commodity prices including food and petroleum since August 2008.
• Given weakness in the Chinese demand and negative growth in the US and EU and OPEC’s
decision to have no supply cuts, global crude oil prices were projected to remain soft and rule
around $51 per barrel in 2009. However, since April 2009 petroleum prices started rising and
increased to US$60 per barrel in May 2009.
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 sharp decline in exports, remittances,
manufacturing production and wholesale and retail trade during 2008.
• However, thanks to bumper crops contributed by favorable monsoon and very good performance
by electricity, telecom and financial sectors, the real GDP growth improved from 6.1% in 2007 to
7.2% in 2008, supported by a spectacular growth of 28.4% in agriculture output.
• Real GDP growth rate in 2009 is expected to be around 4.5% aided by a growth of 6% in
agriculture value added, 2% in industry and 4.4% in services.
CPI Inflation
• Annual point-to-point CPI inflation accelerated from 1.4% (Food 1.7% and non-food 1%) in April
2008 to 6.3% (Food 7.7% and non-food 4.5%) in April 2009. The 12-month average inflation rate
accelerated marginally to 5.5% in April 2009 from 5.4% a year ago.
Government Financial Performance
• Government Financial Performance is significantly better in Jan-April 2009 than in Jan-April 2008.
In Jan-April 2009 revenue and grants increased by 15.5% aided by 16.7% increase in taxes,
4.7% increase in non-taxes and 16.9% increase in grants over Jan-April 2008.
6
• Overall, there is a fiscal surplus of 35 million Dalasi in Jan-April 2009, lower than the fiscal
surplus of 75 million Dalasi in Jan-April 2008, due to significant increase of capital expenditure by
88% in Jan-April 2009 over Jan-April 2008.
Domestic Debt and Treasury Bills Yields
• At the end of April 2009, outstanding domestic debt stood at D5.7 billion (amounting to 28.4% of
GDP), down by 5.9% from the outstanding domestic debt at D6 billion (amounting to 33.5% of
GDP) a year ago. Treasury bills accounted for 84.4% of total domestic debt at the end of April
2009, compared to 80.3% a year ago.
• Yields on treasury bills fluctuated widely in recent months. Despite significant decline of CPI
inflation from 7% in January 2009 to 6.3% in April 2009, Average yield on the 91-day increased
from 10.5% in Jan 2009 to 12% in April 2009, yield of 182-day bills increased from 12.1% to 13%
and that of 364-day bills increased from 14.4% to 14.6% over the period.
Money Supply and Bank Credits
• Annual growth rate of broad money supply (M3) accelerated from 3.7% in April 2008 to 18.8% in
April 2009, supported by 17.8% growth in currency, 19.6% growth in demand deposits, 11.6%
growth in savings deposits and 29.1% growth in time deposits. On the demand side, growth was
mainly due to 31.9% growth in domestic credits.
• Domestic credit increased from D5.1 billion in April 2008 to D6.7 billion in April 2009, supported
by 46% growth in government borrowing, 103.3% growth in credits to public entities and 24.1%
growth in credits to the private sector.
Commercial Banks Assets’ and Liabilities
• Gambian banks were least affected by global financial crisis as the Gambian banks do not have
large exposure to foreign assets or liabilities. At end-April 2009, foreign assets constituted only
8.9% of total assets and external liabilities constituted only 1.8% of total liabilities.
Interest Rates and Central Bank Policy Rates
• Given the acceleration in inflation and the weakening of the Dalasi, the MPC decided to increase
the Rediscount Rate by one percentage point to 16.0% in October 2008. Since then policy rate
remained unchanged at 16% until the end of March 2009.
• Despite significant fall of the inflation rate since January 2009, Treasury bill yields, short-term
deposit rates and commercial banks’ lending rates remain very high leading to wide interest rate
spreads and high cost economy. Appropriate monetary measures are necessary to reduce the
short-term deposit rates and the lending rates.
Balance of Payments and Exchange Rate
• Balance of Payments estimates indicate an overall deficit of D767.3 billion (-) $34.2 million) in
2008 compared to surplus of D741.7 million ($29.8 million) in 2007, reflecting the deterioration in
both current and capital accounts. The Net Usable Reserve of the CBG stood at US$95.6 million
at end-March 2009 and was above the IMF Program target (floor) by US$3.6 million.
• Projections for 2009 BOP accounts indicate deterioration in the overall balance emanating from
the on-going slowdown in global economic activity which is expected to adversely impact
remittances, foreign direct investment and tourism income.
7
• In 2008, the Dalasi depreciated against major international currencies except the British Pound.
Since Jan 2009, Dalasi has appreciated against major international currencies.
8
At a Glance- May 2009

Economic Latest Status in the Status in the Outlook for 2009
Indicators Reference latest reference Corresponding
Period period period in the
previous year
1. Real Sector Growth Rates (in percentage)
Real GDP (FC) Calendar year Overall 7.2 Overall 6.1 Overall 4.5
Growth rate (%) 2008 Agriculture 28.4 Agriculture 3.9 Agriculture 6.0
Industry 0.7 Industry (-) 3.1 Industry 2.0
Services (-) 0.6 Services 10.4 Services 4.4
Growth rates of selected indicators for transport and communication (in percentage)
Ports cargo Calendar year 9.5 11.8

unloaded 2008 Growth rate of ports
Ports cargo 2008 20.9 -9.8 cargo may decline.
loaded
Total cargo 2008 10.6 9.3
handled at ports
Quantity of rice 2008 30.9 166.8 Growth rates of rice and
imports cement may decelerate,
Quantity of flour 2008 -100.0 -10.9 while growth rates of
imports sugar and POL may
Quantity of sugar 2008 -10.8 83.4 improve.
imports
Quantity of 2008 28.7 19.3
cement imports
Quantity of POL 2008 6.5 -8.2
imports
Total cargo 2008 -3.2 -31.1 Growth rates of air cargo
handled by air and passenger traffic
Total mail 2008 -53.8 65.6 may improve by the end
handled by air of 2009 if the developed
2008 -5.4 -6.4 countries start
Total air-flights recovering in the quarter
Arriving 2008 -21.9 19.0 of 2009.
passengers
Originating 2008 -15.7 14.8
passengers
Total air 2008 -18.9 16.9
passengers
Total tourist 2008 -5.0 14.3 Tourists arrivals may go
arrivals down.
Vehicles 2008 -27.0 18.4
imported Likely to remain stable.
Total licensed 2008 2.5 2.8
vehicles
Fixed telephone 2008 4.5 4.8 Likely to remain stable.
subscribers
9
At a Glance- May 2009 Continued

Economic Latest Status in the Status in the Outlook for 2009
Indicators Reference latest reference Corresponding
Period period period in 2008
in 2009
2. Inflation rate (in percentage) and Crude Oil price (in US$/ barrel)
CPI inflation (%) April 2009 Overall 6.7 Overall 3.1 Expected to rise in May
Food 8.2 Food 4.5 2009, but decline
Non-food 4.8 Non-food 1.2 thereafter
Brent crude oil April 2009 Average US$47 Average US$109 May rise to US$50
price (US$/ brl) By the end of 2009
3. Government fiscal operations - Percentage change over previous period
Revenue & grants Jan-Apr 2009 16.2 -2.2 Fiscal performance in
Dom. Revenue Jan-Apr 2009 15.4 -4.9 the first four months of
Tax Revenue Jan-Apr 2009 16.5 0.1 2009 i.e. Jan-April 2009
Nontax Rev Jan-Apr 2009 4.7 -35.9 can be considered to be
Grants Jan-Apr 2009 30.0 107.8 on track as per the
Exp & Net Lending Jan-Apr 2009 19.6 0.7 Budget estimates.
Current Exp Jan-Apr 2009 5.1 21.4
Better performance by
Per. Emoluments Jan-Apr 2009 17.6 39.1
revenue items in Jan-
Other Charges Jan-Apr 2009 0.7 31.3
Interest Jan-Apr 2009 -2.3 -1.8
April 2009 compared to
External Jan-Apr 2009 -19.5 -24.9 that in Jan-April 2008.
Domestic Jan-Apr 2009 2.7 8.0 Overall Fiscal surplus of
Cap Exp & NL Jan-Apr 2009 72.8 -38.0 D35 million, despite
Cap. Expenditure Jan-Apr 2009 87.9 -32.8 significant increase of
Net Lending Jan-Apr 2009 -56.7 -62.8 capital expenditure by
Overall Bal Jan-Apr 2009 -41.0 -33.8 88% in Jan-April 2009
Basic balance Jan-Apr 2009 46.4 -61.5 over Jan-April 2008.
Basic Pr. Balance Jan-Apr 2009 14.9 -36.5
4. Government fiscal operations as percentage of GDP at current market prices
Rev. and grants Jan-Apr 2009 7.7 7.4 As % of GDP at current
Exp & Net Lending Jan-Apr 2009 7.5 7.0 market prices, revenues,
Interest Jan-Apr 2009 1.4 1.6 expenditures and basic
Overall fiscal bal. Jan-Apr 2009 0.2 0.4 balance are on-track.
Basic Balance Jan-Apr 2009 1.2 0.9
Primary Bas. Bal, Jan-Apr 2009 2.6 2.5
5. Outstanding Domestic Public Debt in Million Dalasi
Treasury bills April 2009 4776 4826 Outstanding treasury
Sukuk Al-Salam April 2009 86 64 bills are expected to
Govt Bonds April 2009 250 250 decline.
NIB Treas. Notes April 2009 547 873
Total (Million D) April 2009 5659 6013
As % of GDP April 2009 28.4% 33.5% Likely to decline in 2009.
6. Composition of Outstanding Domestic Public Debt (Percentage share in total)
Treasury bills April 2009 84.4 80.3 Share of non-interest
Sukuk Al-Salam April 2009 1.5 1.1 bearing Treasury notes
Govt Bonds April 2009 4.4 4.2 is expected to decline.
NIB Treas. Notes April 2009 9.7 14.5
Total April 2009 100 100
10

Economic
Indicators
Latest
Reference
Period
Status in the
latest reference
period
in 2009
Status in the
Corresponding
period in 2008
Outlook for
2009
7. Maturity Composition of Treasury Bills (in Percentage)

91-days April 2009 14 9 Expected to remain
182-days April 2009 13 22 stable
364-days April 2009 72 69
8. Yields of Treasury Bills (in Percentage)
91-days April 2009 12.0 10.9 Yields may come down

182-days April 2009 13.0 11.9 as CPI inflation has
364-days April 2009 14.6 13.3 started decelerating.
9. Annual Growth Rate of Money Supply (Percentage)
Broad Money April 2009 18.8 3.7 Broad money growth

supply (M3) rate is likely to
Reserve Money April 2009 11.1 -6.0 decelerate.
10. CBG Policy Rates and Banks’ Lending rates (Percentage per annum)
CBG Bank rate April 2009 10 10 Banks’ lending rates may

Rediscount rate April 2009 16 15 decline if the credit rating
Bank lending April 2009 18 to 27 18 to 27 system is strengthened.
rate
11. Share of Banks Foreign Assets/ Liabilities in Total Assets/ Liabilities (%)
Foreign assets April 2009 8.9 10.9 Likely to remain stable

Foreign liabilities April 2009 1.8 3.6
11
12. Sectoral distribution of bank credits (in percentage)
Agriculture March 2009 6.7 7.9 Bank credits to

Fishing March 0.6 0.5 agriculture and
2009 manufacturing are rising
Manufacturing March 3.7 4.7 at faster rate in 2009,
2009 while trade, commercial
Building March 10.7 10.7 activities, and
2009 construction attract
Transportation March 9.5 8.6 major shares of bank
2009 credits, indicating some
March revival of economic
Trade 25.5 23.2
2009 activities in 2009.
Tourism March 8.0 6.7
2009
Financial Inst. March 3.2 3.6
2009
Other comm. March 19.8 17.6
2009
Others March 12.3 16.5
2009
Total credits March 100.0 100.0
2009
12

Economic
Indicators
Latest
Reference
Period
Status in the
latest reference
period
in 2009
Status in the
Corresponding
period in 2008
Outlook for
2009
13. Balance of Payments (Million US Dollar)
Goods A/C Bal. 2008 (-) 156.0 (-) 166.3

Goods exports 2008 141.6 132.2
Goods imports 2008 297.6 298.5 Likely to remain under
Services, net 2008 59.6 66.8 pressure.
Tourism 2008 72.4 75.1
Official transfer 2008 6.1 5.2
Remittances 2008 53.3 38.8
Income, net 2008 (-) 33.8 (-) 44.6
Current A/C Bal 2008 (-) 49.5 (-) 58.8
Overall BOP Bal 2008 (-)34.2 29.8
Foreign Exch. End Dec 125.2 159.4
Reserve 2008 Likely to deteriorate
Equi. to months End Dec 5.7 6.2 further in 2009.
of imports c.i.f. 2008
14. Inter-bank Exchange Rate- End Period Mid-Market Rates

Dalasi per unit of foreign currency
UK £ May 2009 40.20 40.25 Dalasi is likely to

US$ May 2009 26.78 20.64 depreciate against major
CHF May 2009 22.75 19.46 currencies during the
Euro May 2009 36.09 32.10 year 2009.
CFA (5000) May 2009 256.38 245.84
15. Annual Appreciation (-)/ Depreciation of Dalasi per unit of foreign currency
At the End of the period
13
UK £ May 2009 -0.1 -24.6 Dalasi is likely to

US$ May 2009 29.7 -24.5 depreciate against major
CHF May 2009 16.9 -12.0 currencies in the second
quarter.
Euro May 2009 12.4 -11.9
CFA (5000) May 2009 4.3 -11.9
16. Foreign Exchange Reserves (US$ Million)
FER End-Jan 116.8 140.4 Likely to remain under

2009 pressure.
14
1. Global Economic Outlook and Global Public Policies

1.1 Sustained weakness and risk in global output and trade in 2009
The global economy is presently passing through a critical conjecture affected adversely by a
massive financial crisis and severe recession. As per the projections made by the IMF in their
latest World Economic Outlook: Crisis and Recovery April 20092, world output is projected to
decline by 1.3 percent in 2009 as a whole and to recover only gradually in 2010, growing by
only 1.9 percent (Table-1.1). Achieving this turnaround will depend on stepping up efforts to
heal the financial sector, while continuing to support demand with monetary and fiscal easing.
This is the first global contraction in the last 60 years since the great depression in 1930s.
Global real sectors and financial markets continue to weaken both in advanced and emerging
economies. Trade volumes continue to shrink rapidly, while production and employment data
suggest that the global activity continues to contract in the current quarter. Recent data point to
sustained weakness in the period ahead (Figure-1).
Africa and the Middle East: In African developing economies, growth is also projected to slow
significantly from 5.2 percent in 2008 to 2 percent, while growth in the Middle East is projected
to decline from 5.9 percent in 2008 to 2.5 percent in 2009 (Table-1.2). In Africa, growth is
expected to moderate particularly in commodity exporting countries, and several countries are
experiencing declining exports and lower inflows of tourism income, remittances, and foreign
direct investment (FDI), while aid flows are under threat. In the Middle East, the effects of the
financial crisis have been more limited so far. Despite the sharp drop in oil prices, government
spending is largely being sustained to cushion the toll on economic activity.
Prospects of the Gambian Economy: As per the IMF estimates, the real GDP growth in the
Gambia decelerated from 6.3 percent in 2007 to 5.9 percent in 2008 and is projected to
decelerate further to 4 percent in 2009 (Table-1.2) due to adverse impact of the global financial
crisis and economic slowdown.
Figure-1: Trends of Global Growth Rates and World Trade
2
World Economic Outlook: Crisis and Recovery, April 2009, IMF Washington D.C.
15
16
Table 1.2 Growth Prospects of African Economies
17
1.2 World Commodity Prices and Inflation
As a result of the sharp downturn in global demand, commodity prices, especially for energy,
declined significantly since the last quarter of 2008. Inflationary pressures had subsided in the
major advanced economies. There are also significant declines of housing prices in some
advanced countries, showing signs of deflation.
Inflation will continue to retreat due to the combination of lower commodity prices and increasing
economic slackness, with deflation risks growing in advanced economies. IMF forecasts
indicate that G-7 deflation vulnerability has risen above its previous peak, reflecting high risks in
Japan and the United States and moderate risks in several euro area members— including
Germany, Italy and France.
Inflationary pressures also subsided in the low and income economies. Although commodity
prices recorded some increase in January 2009, they declined again since Feb 2009 (Table-2).
1.3 Trends of International Crude Oil Prices
During 2008 Brent crude oil prices ruled very high until July 2008 when prices increased to $147
per barrel. However, due to global financial crisis and economic slowdown oil prices started
declining thereafter.
A recent report from the Paris based International Energy Agency (IEA) has projected that the
world oil demand in 2009 will decline by half a million barrels per day (bpd). In their last meeting,
the OPEC has decided not to have any cut in oil supply. Accordingly, oil prices are expected to
remain soft in the rest of the year 2009.
In March-April 2009 Brent crude oil prices ranged around US$47 per barrel. Given weakness in the
Chinese demand and negative growth in the US and EU and OPEC’s decision to have no supply cuts,
global crude oil prices were projected to remain soft and rule around $51 per barrel in 2009. However,
since April 2009 petroleum prices started rising and increased to US$60 per barrel in May 2009.
Trends of Monthly Brent Crude Oil Prices (US$/ barrel)
140
120
US$ per Barrel
100
80
60
40
20
0
9
9
1
7
9
Ja 0
8
-9
-0
-0
-0
-0
-0
0
0
-9
-0
-0
-0
-0
l-0
-0
-0
l-0
-0
n-
n-
n-
n-
n-
an
an
an
an
an
an
ul
ul
ul
ul
ul
ul
ul
ul
u
u
a
a
J
J
J
Months and Years 1999-2009
Series1
18
Table-2 Trends of World Commodity Prices
Quarterly averages Monthly averages

Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Feb Mar Apr
Commodity Unit 2008 2008 2008 2008 2009 2009 2009 2009
Energy
Coal, Australia $/mt 114.00 138.65 162.80 92.97 71.93 75.38 61.00 63.56
Crude oil, Brent $/bbl 96.67 122.39 115.60 55.89 44.98 43.24 46.84 50.85
Crude oil, Dubai $/bbl 91.30 116.67 113.47 53.67 44.56 43.14 45.58 50.18
Natural gas Index 2000=1 235.3 286.0 284.1 266.2 198.3 187.4 177.7 144.7
00
Natural gas, Europe $/mmbt 10.86 12.40 14.62 15.75 11.94 11.04 10.90 8.51
u
Agriculture
Coffee, Arabica ¢/kg 328.5 315.1 321.2 267.8 283.9 285.5 283.3 297.4
Tea, Mombasa auctions ¢/kg 221.8 221.6 252.8 190.8 214.9 211.8 213.8 222.5
Coconut oil $/mt 1,379 1,499 1,246 772 677 673 625 747
Groundnut oil $/mt 2,007 2,328 2,417 1,773 1,283 1,293 1,214 1,188
Soybean oil $/mt 1,384 1,466 1,353 830 755 748 727 800
Barley $/mt 216.8 239.1 216.6 129.5 116.3 112.5 114.8 110.9
Maize $/mt 220.4 259.0 244.7 168.4 166.9 163.4 164.6 168.5
Rice, Thailand, 25% $/mt 182.2 n.a. 669.5 449.9 469.4 472.8 471.5 446.0
Wheat, US, HRW $/mt 411.8 346.5 317.7 228.1 231.6 224.7 230.9 233.6
Wheat US SRW $/mt 384.1 277.8 241.5 182.7 187.4 183.4 183.7 182.6
Fishmeal $/mt 1,126 1,185 1,198 1,023 1,013 1,001 1,030 1,038
Meat, beef ¢/kg 282.1 332.7 372.4 268.0 245.2 236.2 247.7 255.5
Meat, chicken ¢/kg 158.8 167.9 177.1 174.7 173.5 173.8 171.9 171.1
Meat, sheep ¢/kg 453.6 493.2 477.3 410.0 378.5 380.3 374.6 396.1
Shrimp, Mexico ¢/kg 1,103 1,109 1,048 1,014 976 970 970 970
Sugar, world ¢/kg 28.42 27.01 31.14 26.28 28.85 29.26 29.54 30.09
Raw Materials
Logs, Cameroon $/cum 530.8 554.4 548.5 473.8 426.8 421.9 388.2 382.5
Plywood ¢/sheets 640.4 647.3 648.6 645.5 572.8 573.0 570.8 567.7
Sawnwood, Cameroon $/cum 1,035.5 1,052.3 974.5 770.8 689.2 690.2 679.9 684.3
Cotton Memphis ¢/kg 174.2 171.6 170.0 130.1 129.8 131.4 123.3 135.6
Rubber RSS1, US ¢/kg 292.6 311.7 329.1 202.8 165.8 165.8 161.8 183.6
Fertilizers
DAP $/mt 860.2 1,191.6 1,153.7 663.3 362.2 367.9 367.6 335.4
Phosphate rock $/mt 234.4 367.5 409.2 371.3 193.3 157.5 157.5 125.5
Potassium chloride $/mt 367.7 511.1 635.0 766.7 865.2 872.5 870.0 745.0
Urea $/mt 357.6 575.7 745.4 292.2 267.3 273.3 265.4 245.2
Metals and Minerals
Aluminum $/mt 2,743 2,940 2,787 1,821 1,360 1,330 1,336 1,421
Copper $/mt 7,796 8,443 7,680 3,905 3,428 3,315 3,750 4,407
Gold $/toz 927 896 870 795 909 943 924 890
Steel cr coilsheet $/mt 763 900 1,100 1,100 1,033 1,100 900 700
Steel hr coilsheet $/mt 700 833 1,000 1,000 933 1,000 800 600
Steel, rebar $/mt 639 838 934 630 473 485 470 425
Steel wire rod $/mt 754 950 1,135 1,200 1,200 1,200 1,200 1,100
Tin ¢/kg 1,778 2,265 2,051 1,310 1,103 1,104 1,068 1,174
Zinc ¢/kg 243.0 211.3 177.0 118.5 117.2 111.2 121.7 137.9
Source: World Bank Pink Sheet May 2009
19
2. Current State of the Gambian Economy

2.1 Overall and Sectoral GDP Growth Rates
• The sharp decline in global economic activity had also 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 factor cost improved from 6.1%
in 2007 to 7.2% in 2008 (Table-2.1 and Figure-2.1).
Figure 2.1 Trends of Sectoral Growth Rates 1998-2009
40.0
30.0
Growth Rate (%)
20.0
10.0
0.0
-10.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
-20.0
-30.0
Year 1998-2009
GDP Agriculture Industry Services
20
• As per the Provisional Estimates of the GBOS, the 7.2% growth in real GDP in 2008 was
supported by a spectacular growth of 28.4% in agriculture value added and a marginal
growth of 0.7% by industry while services value added declined by (-) 0.6% due to poor
performance by trade and public administration.
• Share of agriculture increased from 26.3 percent in 2007 to 31.5 percent in 2008, while
share of industry declined from 15.1 percent in 2007 to 14.2 percent in 2008 and share
of services declined from 58.6 percent in 2007 to 54.3 percent in 2008. 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.
• Agriculture is expected to perform well in 2009, but due to higher base in 2008 the
agricultural growth will be moderate in 2009. It is projected that real GDP growth rate in
2009 is likely to be around 4.5% aided by 6% growth in agriculture, 2% in industry and
4.4% in services. However, the general increase in civil servant salaries, introduction of
work efforts’ incentives and donors’ commitment to provide financial support to Gambia
under PRGF and to help Gambia to mitigate adverse impact would boost both consumer
spending and investment and might enhance economic growth in the range of 5%.
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 2006 2007 2008 2009
Actual Actual Actual Proj. Actual Actual Actual Proj.
GDP at 2004 FC 6.6 6.1 7.2 4.5 100.0 100.0 100.0 100.0
Agriculture and allied 3.9 3.9 28.4 6.0 26.9 26.3 31.5 32.0
-- Crops 4.1 4.3 45.7 7.4 16.0 15.7 21.3 21.9
-- Livestock 3.0 4.0 3.0 3.1 8.5 8.4 8.0 7.9
-- Forestry 3.0 -4.0 1.0 2.7 0.6 0.6 0.5 0.5
-- Fishing 7.3 3.2 3.5 3.5 1.8 1.7 1.7 1.6
Industry 18.5 -3.1 0.7 2.0 16.6 15.1 14.2 13.8
-- Mining and quarrying 7.7 6.9 6.0 7.5 1.7
1.7 1.7 1.7
-- Manufacturing -0.5 1.4 -2.5 -2.2 4.5
5.6 5.3 4.8
-- Electricity, gas, water 6.0 17.0 15.0 10.0 1.0
0.8 0.9 1.0
-- Construction 40.0 -9.8 0.0 2.5 6.6
8.6 7.3 6.8
Services 5.7 10.4 -0.6 4.4 56.4 58.6 54.3 54.2
-- Wholesale/retail trade -1.5 7.1 -12.9 -1.8 24.5 24.6 20.0 18.8
-- Hotels/ restaurants 0.9 1.7 3.0 3.0 2.5 2.4 2.3 2.3
-- Transport / storage 5.7 8.5 6.0 4.4 3.6 3.7 3.6 3.6
-- Telecom 18.0 25.0 10.0 10.0 9.4 11.1 11.4 12.0
-- Financial 18.2 12.8 14.5 12.0 8.2 8.7 9.3 10.0
-- Real est., business 6.9 3.1 3.0 4.1 3.7 3.5 3.4 3.4
-- Public administration 0.0 8.0 0.0 2.0 2.1 2.1 2.0 1.9
-- Other service 11.1 4.5 2.4 3.1 2.4 2.4 2.3 2.2
Source: Gambian Bureau of Statistics (GBOS) for the years 2006-2008 and projections for 2009 by the
Macroeconomic Adviser.
21
2.2 Growth Rates of Selected Indicators for Trade and Transport
Table 2.2 presents growth rates for selected indicators in transport and communications sectors
during the years 2005 to 2008. It is evidenced by the table that the Gambian economy was
adversely affected to some extent by the global financial crisis and economic slowdown in 2008.
However, there was mixed performance for the ports traffic.
(1) While the growth rate of ports cargo unloaded decelerated, that of ports cargo loaded
and total cargo handled at the Banjul seaport improved in 2008 indicating some
improvements in re-exports.
(2) There were significant imports of rice, cement and petroleum products in 2008, whereas
sugar and vehicles imports declined and there was no imports of flour as a result of
bumper agricultural production at home.
(3) Both the cargo and passengers handled at the Banjul airport declined in 2008. The
tourist arrivals to the Gambia also declined in 2008.
(4) Growth rates of vehicles registered and fixed telephone connections decelerated
marginally in 2008.
Table 2.2 Growth rates of selected indicators for transport and communications (%)
Items 2005 2006 2007 2008
(1) Ports cargo unloaded 4.4 2.7 11.8 9.5

(2) Ports cargo loaded -11.6 41.1 -9.8 20.9
(3) Total cargo handled at ports 2.8 6.0 9.3 10.6
(4) Quantity of rice imports 53.3 -77.5 166.8 30.9
(5) Quantity of flour imports 15.8 21.2 -10.9 -100.0
(6) Quantity of sugar imports -37.1 -5.8 83.4 -10.8
(7) Quantity of cement imports 31.9 -26.2 19.3 28.7
(8) Quantity of POL imports -13.0 26.9 -8.2 6.5
(9) Total cargo handled by air -25.7 14.0 -31.1 -3.2
(10)Total mail handled by air -1.8 -13.9 65.6 -53.8
(11)Total Airflights -8.2 7.2 -6.4 -5.4
(12)Arriving passengers -0.3 14.7 19.0 -21.9
(13)Originating passengers 6.2 3.3 14.8 -15.7
(14)Total air passengers 3.0 8.7 16.9 -18.9
(15)Total tourist arrivals 19.8 15.7 14.3 -5.0
(16)Vehicles imported -18.6 480.5 18.4 -27.0
(17)Total licensed vehicles 2.5 2.9 2.8 2.5
(18)Fixed telephone subscribers 4.8 20.5 4.8 4.5
Source: Gambian Bureau of Statistics (GBOS)
22
2.3 Consumer Price Index and Inflation
• As measured by the Consumer Price Index (CPI), annual point-to-point CPI inflation
accelerated from 1.4% April 2008 to 6.3% in April 2009. The 12-month average inflation
rate accelerated marginally to 5.5% in April 2009 from 5.4% a year ago.
• Food and drinks (with weights of 55.2% in overall CPI) recorded average inflation of
7.7% in April 2009, up from 1.7% a year ago, and contributed 70.8% to overall inflation in
April 2009.
• Non-food items (with weights of 44.8% in overall CPI) recorded annual inflation of 4.5%
in April 2009 compared to 1% a year ago and contributed 29.2% to inflation.
• Among other groups, in April 2009, clothing and textiles recorded annual inflation of
4.6%, housing and utilities 5.4%, restaurants and hotels 6.8% and transport 4.2%.
Table-2.3 CPI Inflation Rates in April 2009 (in percentage)
Items Weights April- Apriil-2009 Inflation Wi (CPIi1 – Contributio

Wi (%) 2008 Index (%) CPIi0) n3 (%)
Index
Overall 100.0 113.21 120.36 6.3 700.9 100.0
Food 55.2 116.61 125.6 7.7 496.3 70.8
Tobacco 0.7 104.19105.78 1.5 1.1 0.2
Clothing 11.3 106.19111.08 4.6 55.1 7.9
Utilities 3.4 115.38121.64 5.4 21.3 3.0
Furnishing 5.2 111.50114.97 3.1 18.2 2.6
Health 1.0 101.00101.77 0.8 0.8 0.1
Transport 4.4 115.14119.95 4.2 21.2 3.0
Telecom 3.0 101.54101.98 0.4 1.3 0.2
Recreation 8.0 103.94104.67 0.7 5.8 0.8
Education 1.5 101.87 102.25 0.4 0.6 0.1
Hotels 0.4 108.86 116.24 6.8 2.7 0.4
Misc. 5.9 112.46 125.37 11.5 76.5 10.9
non-food 44.8 109.08 114.03 4.5 221.7 29.2
Source of basic data: Gambian Bureau of Statistics (GBOS).
3
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 525.0 / 746.7 = 70.3%.
23
Sub-group wise inflation in April 2009 (%)

Misc.
Education
Telecom
Health
Series1
Utilities
Tobacco
Overall
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0
Contribution to Inflation in April 2009 (%)

Transport Others
3% 13%
Furnishing
3%
Utilities
3%
Clothing
8%
Food
70%
18.0
16.0
14.0
12.0
10.0
All
8.0
Food
6.0
4.0
2.0
0.0
07- Mar May J ul Sp Nv 08- Mar May J ul Sp Nv 09- Mar
Ja Ja Ja
24
2.4 Factors affecting inflation and Anti-inflationary Measures
• Due to combined result of various fiscal and monetary measures undertaken by the
government and the Central Bank of Gambia, the 12-month average CPI inflation rate
moderated to 4.5% in 2008, compared to 5.4% in 2007, despite a significant rise of
international prices of food and petroleum products and substantial increase of salaries
of civil services at home in 2008.
• Hardening of international prices of food products and petroleum oil, and disruptions in
the supply of foodstuffs from the neighboring countries put pressures on consumer
prices in the Gambia since 2007.
• Government responded by reducing the sales tax on rice imports from 15% to 5% in July
2007 and eliminating it altogether in May 2008.
• To compensate for revenue loss, the authorities increased other taxes (on car parts and
used vehicles). Pump prices of petroleum products were increased in May 2008 by 10–
24% to remove an implicit budget subsidy that had emerged in the preceding months
and to bring them in line with import costs.
• To check effective demand and inflationary pressures on the economy the

CBG raised the bank rate from 9% to 10% in June 2007 and raised its
rediscount rate from 14% to 15% in June 2007 and further to 16% in October 2008.
• In March 2008, 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%.
• Appreciation of the dalasi helped cushion the impact on inflation to some extent in 2008,
but this exchange rate advantage has been lost in 2009 due to Dalasi depreciation.
25
CPI Inflation in Gambia (%)
8.0
2006 7.0
2007 6.0
2008
5.0
2009
4.0
3.0
Jan 2.0
4.0
1.0
2.0
5.1 0.0
Nov
J an
J un
7.0
J uly
Mar
Apr
Feb
Oct
Aug
Sep
May
Dec
Feb 2006 2007 2008 2009
2.8
2.1
5.0
7.0
Mar
3.8
4.2
3.1
6.7
Apr
2.7
6.3
1.4
6.3
May
2.7
6.6
1.6
Jun
2.2
6.4
2.2
July
1.5
6.3
3.8
26
27
2.5 Projection of CPI inflation during May-December 2009
Two alternative projections of inflation rates during the remainder of the year 2009 have been
done under the following assumptions:
(1) Alternative-1: It is assumed that the variation of CPI for a month over the previous
month in 2009 will be the average variation of the CPI for the respective month over the
previous month during last two years (2008 and 2007). For example, CPI for May 2009
is estimated by the following formula:
Projected CPI for May 2009 = Actual CPI for April 2009 + (May 2008 CPI + May 2007 CPI –
April 2008 CPI – April 2007 CPI)/ 2. CPI for the subsequent months 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 2009 will be the same as the variation of the CPI for the respective month over
the previous month in 2008. For example, CPI for April 2009 is estimated by the
following formula:
Projected CPI for May 2009 = Actual CPI for April 2009 + (May 2008 CPI – April 2008 CPI). CPI
for the subsequent months is projected by the similar formula.
(3) Alternative-3: Average of inflation rates under Allternatives 1 and 2.
Results are presented in Table 2.5 which indicates that inflation is expected to decelerate
continuously during the remaining month of the year 2009 and the year-end inflation is
expected to range around 4.7 percent.
Table-2.5: Projections of CPI inflation during May-December 2009 (in percentage)

2007 2008 2009- 2009- 2007 2008 2009- 2009- Ave-
Alt1 Alt2 Alt1 Alt2 rage
Jan 106.86 112.31 120.13 120.13 2.0 5.1 7.0 7.0 7.0
Feb 107.01 112.34 120.25 120.25 2.1 5.0 7.0 7.0 7.0
Mar 109.36 112.73 120.3 120.3 4.2 3.1 6.7 6.7 6.7
Apr 111.64 113.21 120.36 120.36 6.3 1.4 6.3 6.3 6,3
May 112.05 113.83 120.88 120.98 6.6 1.6 6.2 6.3 6.2
Jun 111.98 114.48 121.17 121.63 6.4 2.2 5.8 6.2 6.0
July 111.95 116.21 122.02 123.36 6.3 3.8 5.0 6.2 5.6
Aug 112.09 117.65 122.81 124.80 6.4 5.0 4.4 6.1 5.2
Sep 111.86 118.96 123.35 126.11 6.0 6.3 3.7 6.0 4.8
Oct 111.95 119.29 123.56 126.44 6.0 6.6 3.6 6.0 4.8
Nov 112.13 119.54 123.77 126.69 6.0 6.6 3.5 6.0 4.8
Dec 112.26 119.93 124.03 127.08 6.0 6.8 3.4 6.0 4.7
Q1 107.7 112.5 120.2 120.2 2.8 4.4 6.9 6.9 6.9
Q2 111.9 113.8 120.8 121.0 6.4 1.7 6.1 6.3 6.2
Q3 112.0 117.6 122.7 124.8 6.2 5.0 4.3 6.1 5.2
Q4 112.1 119.6 123.8 126.7 6.0 6.7 3.5 6.0 4.7
2.6 Government Financial Performance in Jan-April 2009
28
• Columns (5) and (6) of Table-2.6.1 present major item-wise revenue realization and
expenditure of the government in the first four months of 2009 (i.e. Jan-April 2009) and Jan-
April 2008 respectively. Columns (7) and (8) indicate the percentage changes of major items
of revenues and expenditure in Jan-April 2009 compared with those in Jan-April 2008.
• It may be observed from the table that, in terms of percentage increases, the government’s
fiscal performance has been significantly better in Jan-April 2009 than in Jan-April 2008.
• In Jan-April 2008 total revenues and grants declined by 2.2%, as tax revenues increased by
only 0.1% while non-tax revenues declined by 35.9% over Jan-Apr 2007. On contrast, Jan-
April 2009 has witnessed 16.2% increase in total revenue and grants aided by 16.5%
increase in taxes, 4.7% increase in non-tax revenues and 30% increase in grants.
• During Jan-Apr 2009, total expenditures and net lending has increased by 19.6% over Jan-
Apr 2008 due to 17.6% increase in personnel emoluments and 88% increase of capital
expenditure while interest payments declined by 2.3% over Jan-Apr 2008.
• Overall, there is a fiscal surplus of D43.9 million, and basic surplus of D230.3 million in Jan-
Apr 2009, despite significant increase of capital expenditure in Jan-Apr 2009.
Table-2.6.1 Govt Financial Performance in Jan-Apr 2009 compared with Jan-Apr 2008
% change over
2008 2008 BE 2009 BE 2009 2008 Prev. period
Items Actual Mln Dal. Mln. Dal. Jan-Apr Jan-Apr 2009 2008
Mln Dal. Actual Actual Jan-Apr Jan-Apr
(1) (2) (3) (4) (5) (6) (7) (8)
Revenue and grants 3644.6 4,475.5 4582.2 1537.1 1323.0 16.2 -2.2
Domestic Revenue 3479 3,770.9 3771.1 1449.8 1255.9 15.4 -4.9
Tax Revenue 3161.3 3,362.6 3390.5 1327.7 1139.3 16.5 0.1
Nontax Revenue 317.7 408.3 380.5 122.1 116.6 4.7 -35.9
Grants 165.6 704.7 811.1 87.3 67.2 30.0 107.8
Exp & Net Lending 4134.8 5,205.1 5362.9 1493.2 1248.5 19.6 0.7
Current Expenditure 3011.4 2,812.3 3838.0 1029.9 980.4 5.1 21.4
Personnel Emoluments 905.5 917.5 1035.2 356.0 302.6 17.6 39.1
Other Charges 1397.5 1,143.4 1957.5 392.8 390.0 0.7 31.3
Interest 708.4 622.3 845.3 281.1 287.8 -2.3 -1.8
External 153.5 72.3 147.3 52.6 65.3 -19.5 -24.9
Domestic 554.9 550.0 698.0 228.5 222.5 2.7 8.0
Cap Exp & Net Lending 1123.4 2,332.8 1524.9 463.3 268.1 72.8 -38.0
Capital Expenditure 1016.6 2,223.2 1468.2 451.1 240.1 87.9 -32.8
Net Lending 106.8 109.6 56.7 12.1 28.0 -56.7 -62.8
Overall Bal Inc. grants -495.1 -729.5 -780.7 43.9 74.5 -41.0 -33.8
Basic balance -155.5 259.3 -267.7 230.3 157.3 46.4 -61.5
Basic Primary Bal 557.8 881.6 577.6 511.4 445.2 14.9 -36.5
Nominal GDP (IMP Prg) 17959 17859 19904 17959 17859 11.5 11.6
Notes: (1) Overall balance= (Revenue and grants) minus (expenditure and net lending).
(2) Basic balance= Domestic revenue minus (expenditure and net lending) plus externally
financed capital expenditure; (3) Basic primary balance= Basic balance plus interest
payments
29
• Columns (2) and (3) of Table-2.6.2 present the major item-wise performance of revenues
and expenditure in Jan-Apr 2009 and Jan-Apr 2008 respectively as percentages of the
corresponding budget estimates for the full year. It is evidenced from the table that as
percentages of the respective budget estimates, government revenue collections and
expenditures have performed better in Jan-Apr 2009 than those in Jan-Apr 2008.
• Columns (7) and (8) of Table-2.6.2 present the major item-wise performance of revenues
and expenditure in Jan-Apr 2009 and Jan-Apr 2008 respectively, as percentages of the
corresponding nominal GDP (IMF Program estimate) for the full year. It is observed from the
table that, in terms of the percentages of GDP, the total reveues and expenditures have also
performed better in Jan-Apr 2009 than those in Jan-Apr 2008.
• The revenue and expenditure ratios to GDP are also observed to be on track in Jan-Apr
2009 as compared with the 2009 budget estimates (given in column-5).
Table-2 .6.2 Govt Financial Performance in Jan-Apr 2009 compared with Jan-Apr 2008
2009 2008 2008 2009 BE 2008 AC 2009 2008
Jan-Apr Jan-Apr Jan-Apr Full Year Full Year Jan-Apr Jan-Apr
Items as % of as % of as % of as % of as % of as % of as % of
Budget Budget actual GDP GDP GDP GDP
(1) (2) (3) (4) (5) (6) (7) (8)
Revenue and grants 33.5 29.6 36.3 23.0 20.3 7.7 7.4
Domestic Revenue 38.4 33.3 36.1 18.9 19.4 7.3 7.0
Tax Revenue 39.2 33.9 36.0 17.0 17.6 6.7 6.4
Nontax Revenue 32.1 28.6 36.7 1.9 1.8 0.6 0.7
Grants 10.8 9.5 40.5 4.1 0.9 0.4 0.4
Exp & Net Lending 27.8 24.9 30.2 26.9 23.0 7.5 7.0
Current Expenditure 26.8 36.5 32.6 19.3 16.8 5.2 5.5
Personnel Emoluments 34.4 33.0 33.4 5.2 5.0 1.8 1.7
Other Charges 20.1 34.1 27.9 9.8 7.8 2.0 2.2
Interest 33.3 46.3 40.6 4.2 3.9 1.4 1.6
External 35.7 90.4 42.6 0.7 0.9 0.3 0.4
Domestic 32.7 40.5 40.1 3.5 3.1 1.1 1.2
Cap Exp & Net Lending 30.4 11.5 23.9 7.7 6.3 2.3 1.5
Capital Expenditure 30.7 10.8 23.6 7.4 5.7 2.3 1.3
Net Lending 21.4 25.6 26.3 0.3 0.6 0.1 0.2
Overall Bal -5.6 -13.8 -15.2 -3.9 -2.7 0.2 0.4
Inc.grants4
Basic balance5 -86.0 60.7 -101.2 -1.3 -0.9 1.2 0.9
Basic Prim. Balance6 88.6 50.5 80.5 2.9 3.1 2.6 2.5
Source: Economic Planning and Management Unit (EMPU), DODFEA.
Column (2) of the Table-2.6.3 below presents detailed item-wise revenues and expenditure in
Jan-Apr 2009. We have estimated the ratios of actual realization for any item in Jan-Apr to the
final outturn for the item during the complete year for the last five years viz. 2004, 2005, 2006,
4
(1) Overall balance= (Revenue and grants) minus (expenditure and net lending).
5
(2) Basic balance= Domestic revenue minus (expenditure and net lending) plus externally
financed capital expenditure;
6
(3) Basic primary balance= Basic balance plus interest payments
30
2007 and 2009. Item-wise average ratios (as percentage to the actual outturn for the year) for
these five years are presented in column (3) of the Table-2.6.3. Taking these ratios as norms for
the seasonality, expected revenue and expenditure outcomes for the full year 2009 are
estimated by the following formula and are presented in column (4).
Expected outturn for an item in 2009 = 100 X (actual realization in Jan-Apr 2009) / average
realization ratio (in percentage) in Jan-Apr during the last five years (2004-2008)
Comparison of the expected outcome with the budget estimates given in Column (5) leads to
the following conclusions:
(a) Total domestic revenue and tax revenue targets as given in the Appropriation Budget for
2009 are expected to be exceeded by actual collections in 2009.
(b) However, there is likely to be shortfall in grants realization unless the subsequent
disbursements are significantly augmented.
(c) There is also expected shortfall in non-tax revenues.
(d) There is likely to be expenditure overrun of capital expenditure, while actual current
expenditure is expected to show some surplus over the budgeted expenditure.
(e) Overall, it is expected to have a fiscal deficit of D569 million (amounting to 2.9% of
nominal GDP (IMF Program estimate) compared to budget estimate of fiscal deficit at
D780.7 million (amounting to 3.9 percent of GDP).
2.6.3 Government Financial and Fiscal Performance in Jan-Apr 2009 and Expected Outturn for 2009
Items 2009- Ratio of Jan-Apr performance in Avera 2009 2009
Ja-Apr Annual Outturn (in Percentage) ge Proj. Budget
Actual 2004- 2005- 2006- 2007- 2008- 2004- Out- Esti-
mate
Ja-Ap Ja-Ap Ja-Ap Ja-Ap Ja-Ap 2009 turn7
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
1.Rev & grants (2+5) 1537.1 39.4 34.4 33.2 36.9 36.5 4677.3 4582.2
2.Dom. Revenue (3+4) 1449.8 34.9 32.4 33.8 38.1 36.3 4080.3 3771.1
3.Tax Rev (3.1+3.2) 1327.7 35.1 32.5 34.2 37.3 36.2 3762.0 3390.6
3.1 Direct Tax (a to e) 430.2 36.5 33.3 33.1 40.9 36.8 1180.3
(a) Personal 171.2 31.6 34.1 30.9 30.3 33.7 32.1 533.1
(b) Corporate 200.3 37.6 30.3 32.4 44.4 38.0 36.5 548.2
(c) Capital Gains 8.8 38.7 32.1 25.5 49.6 28.9 34.9 25.2
(d) Payroll 32.6 75.6 77.0 76.7 0.0 65.1 58.9 55.5
(e) Other 17.2 .. 89.4 92.2 95.9 95.8 93.3 18.5
2.6.3 Government Financial and Fiscal Performance in Jan-Apr 2009 and Expected Outturn for 2009
Items 2009 Ratio of Jan-Apr performance in Avera 2009 2009
Ja-Apr Annual Outturn (in Percentage) ge Proj. Budget
Actual 2004- 2005- 2006- 2007- 2008- 2004- Out- Esti-
mate
Ja-Apr Ja-Apr Ja-Apr Ja-Apr Ja-Apr 2009 turn8
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
3.2 Indirect Tax 897.5 34.6 32.1 34.7 35.8 35.9 2581.6
(3.2.1+3.2.2)
7
Expected outturn for an item in 2009 = 100 X (actual realization in 2009-Q1) / average realization ratio (in
percentage) during the last five years (2004-2008)
31
3.2.1 Dom Tax on G&S 220.5 34.9 34.7 34.3 39.7 40.0 613.6
(a) Stamp Duties 6.3 41.8 21.3 39.2 31.9 64.5 39.7 15.9
(b) Excise Duties 56.0 29.1 26.3 30.9 35.6 38.4 32.1 174.5
(c) Dom Sales Tax 158.2 35.5 36.7 35.1 41.5 38.2 37.4 423.1
3.2.2 Tax on Ext Trade 677.0 34.5 31.3 34.8 34.5 34.0 1968.1
(a+b)
(a) Duty (i+ii) 419.0 34.8 33.0 39.8 33.6 34.7 1167.9
(i) Oil 258.4 40.6 31.2 48.4 32.1 32.1 36.9 701.0
(ii) Non-oil 160.6 32.9 33.6 34.9 34.4 36.1 34.4 466.9
(b) Sale tax on imp (i+ii) 258.0 34.2 29.6 28.9 35.5 33.1 800.2
(i) Oil 35.0 33.5 30.2 31.0 33.7 33.0 32.3 108.3
(ii) Non-oil 223.0 34.3 29.5 28.3 35.9 33.2 32.2 691.8
4. Nontax Rev (a to d) 122.1 32.7 31.8 31.0 43.7 36.7 318.3 380.5
(a) Govt Charges 56.9 36.8 46.0 41.7 58.0 56.2 47.7 119.1
(b) NTR from CRD 1.8 .. 43.4 46.8 40.1 32.8 40.8 4.4
(c) NTR from CED 35.2 .. 33.8 25.6 31.8 33.8 31.2 112.7
(d) Others 28.2 .. .. 25.0 51.5 26.5 34.3 82.1
5. Grants 87.3 59.5 58.6 23.1 16.6 40.5 39.7 597.0 811.1
6. Exp & Net Lend (7+8) 1760.5 40.5 39.7 31.5 34.1 29.6 5246.2 5362.9
7. Cur. .Exp (7.1 to 7.3) 1029.9 29.2 36.9 33.5 31.2 31.7 3194.7 3838.0
7.1 Pers. Emoluments 356.0 33.8 35.3 31.8 32.0 30.8 32.7 1087.5 1035.2
7.2 Other Charges 392.8 26.8 39.6 31.8 27.2 27.9 30.7 1281.0 1957.5
7.3 Interest (a+b) 281.1 28.7 35.9 36.7 36.0 40.3 826.2 845.3
(a) External 52.6 37.0 41.8 33.3 37.7 42.6 38.5 165.0 147.3
(b) Domestic 228.5 25.7 34.3 37.8 35.3 39.7 34.6 661.2 698
8. Cap Exp & Net Lend. 730.6 55.3 41.1 28.2 41.3 23.9 2051.5 1524.9
8.1 Capital Exp. (a+b) 718.5 54.6 40.3 29.4 36.7 23.6 2006.0 1468.2
(a) Ext. Financed (i+ii) 541.0 58.4 40.5 30.0 42.1 29.7 40.1 1558.0
(i) Loans 340.0 53.6 37.9 30.9 50.5 24.4 961.0
(ii) Grants 201.0 69.8 55.1 23.1 16.6 40.5 597.0
(b) GLF Capital 177.5 14.0 36.3 17.4 15.0 17.6 20.0 448.0
8.2 Net lending 12.1 7.5 0.0 0.0 99.7 26.3 26.7 45.5 56.7
9. Overall fis. bal (1-6) -223.4 47.7 57.6 26.1 405.9 -12.7 -568.9 -780.7
10. Basic balance 317.6 0.0 1149.2 49.3 66.6 -63.4 989.1 -267.7
11. Basic Primary Bal. 598.7 0.0 0.0 0.0 19.6 95.7 1815.4 577.6
Memorandum Items: As percentage of IMF Program Nominal GDP (equal to D19904 million)
12. Overall fis. bal (1-6) -1.1 -2.9 -3.9
13. Basic balance 1.6 5.0 -1.3
14. Basic Primary Bal. 3.0 9.1 2.9
8
Expected outturn for an item in 2009 = 100 X (actual realization in 2009-Q1) / average realization ratio (in
percentage) during the last five years (2004-2008)
32
2.7 External Debt
As per the latest Joint Fund-Bank Debt Sustainability Analysis (DSA)9, the stock of external debt
declined substantially at end-2007 following HIPC and MDRI debt relief. At the end of 2006,
prior to completion point, the stock of nominal external public debt was US$676.7 million (133.1
percent of GDP). Multilateral creditors accounted for 84 percent of this debt, with IDA as the
largest creditor (39 percent of total outstanding debt). At end-2007, post-completion point, the
stock of external public debt fell to US$299.4 million (46.0 percent of GDP).
In January 2008, Paris Club creditors agreed to cancel outstanding claims (US$13 million in PV
terms at end-2006) on The Gambia. Bilateral agreements have been signed with Paris Club
creditors and Kuwait. Agreements on the delivery of debt relief have also been reached with the
EU/EC, OPEC Fund for International Development (OFID), the Islamic Development Bank
(IsDB), and the International Fund for Agricultural Development (IFAD) but are still pending with
the Economic Community of West African States (ECOWAS), Saudi Arabia, Taiwan Province of
China, Libya, China, and India.
The current DSA concludes that The Gambia remains at a high risk of debt distress after HIPC
and MDRI debt relief due to the high level of debt as well as the country’s vulnerability to
shocks. The World Bank’s Country Policy and Institutional Assessment (CPIA), classifies The
Gambia as a “poor performer” based on an average of the ratings for the preceding three
years and the table below presents the policy-dependent debt burden thresholds. The PV of
debt-to-GDP and the PV of debt-to-revenue ratios remain comfortable. Debt service payments
remain manageable throughout the projection period, rising no higher than 10 percent of exports
and revenue. But, the PV of debt-to-exports ratio breaches the debt-burden threshold for
a protracted period.
Given continuing risks, the staffs urge authorities to prepare a medium-term debt
management strategy (including the debt of public enterprises and contingent liabilities). Staffs
also recommend that the authorities continue to rely on a combination of grants and highly
concessional borrowing in external financing and exercise restraint in contracting new loans.
The major risks to The Gambia’s debt sustainability include lower than expected economic and
export growth, higher than expected new borrowing, and a deterioration in fiscal balance. In light
of these risks, staffs underline the importance of sustained policy and governance reforms.
Table2.7: Policy Dependent Debt Burden Thresholds under Debt Sustainability Analysis
Indicators Strong Moderate Weak The Gambia
Performer Performer Performer 2008
NPV of External Debt to GDP Ratio (%) 50 40 30 22
NPV of External Debt to Exports Ratio (%) 200 150 100 117
NPV of External Debt to Revenue Ratio (%) 300 250 200 117
Debt service to Exports Ratio (%) 25 20 15 9
Debt Service to Revenue Ratio (%) 35 30 25 9
2.8 Domestic Debt and Treasury Bills Outstanding
9
Joint IMF/World Bank Debt Sustainability Analysis, Prepared by the Staffs of the
International Monetary Fund and the International Development Association, Approved by
Emilio Sacerdoti and Dominique Desruelle (IMF) and Sudhir Shetty and Carlos Alberto Braga
(IDA), February 3, 2009.
33
• At the end of April 2009, outstanding domestic debt stood at D5.7 billion (amounting to
28.4% of GDP), down by 5.9% from the outstanding domestic debt at D6 billion
(amounting to 33.5% of GDP) a year ago.
• The share of Treasury bills increased from 80.3% at the end of April 2008 to 84.4% at the
end of April 2009, share of Sukuk Al-Salam from 1.1% to 1.5% and that of Government
bonds increased from 4.2% to 4.4% over the period.
• On contrary, the share of Non-interest bearing Treasury Notes declined from 14.5% to
9.7% over the period
Table-2.8.1: Outstanding Domestic Public Debt as on 30 April 2009

Type of debt Million Dalasi % change in Composition (in
30-Apr-08 30-Apr-09 April 09 percentage)
over April 2008 30-Apr-08 30-Apr-09
Treasury bills 4826 4776 -1.0 80.3 84.4

Sukuk Al-Salam 64 86 34.6 1.1 1.5
Government Bonds 250 250 0.0 4.2 4.4
NIB Treasury Notes 873 547 -37.4 14.5 9.7
Total 6013 5659 -5.9 100 100
Memo Item: Domestic debt as % of nominal GDP (As per IMF Program, nominal GDP equals
D17959 for 2008 and D19904 for 2009)
As % of nominal 33.5 28.4
GDP
Domestic Debt Sustainability
As per the analysis made by the CBG, the Gambia’s domestic debt is unsustainable. Out of
three sustainability indicators given in Table-2.8.2, only one indicator viz. debt to revenue ratio is
satisfied. However, debt to GDP ratio may be satisfied during 2009.
Table-2.8.2 Primary Benchmarks for Domestic Debt Sustainability Ratios (%)

Item Threshold 2006 2007 2008 2009
Projected
1. Debt service to 28-63 142 124 118 91
revenue ratio
2. Debt to GDP ratio 20-25 33 30 27 31
3. Debt to revenue 92-167 180 158 166 147

ratio
Note: (1) Debt service 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: The Central Bank of Gambia (CBG)
34
2.9 Treasury Bills Yields
• Yields on treasury bills fluctuated widely in recent months. Despite significant decline of
CPI inflation from 7% in January 2009 to 6.3% in April 2009, Average yield on the 91-day
increased from 10.5% in Jan 2009 to 12% in April 2009, yield of 182-day bills increased
from 12.1% to 13% and that of 364-day bills increased from 14.4% to 14.6% over the
period.
• This implies that the margins of yields over inflation rates are increasing over time and
need to be corrected by adopting appropriate monetary policies.
Table 2.9 Interest Rates (yields on treasury bills in percentage per annum)
2007 2008 2009
3-M 6-M 12-M 3-M 6-M 12-M 3-M 6-M 12-M
Jan 10.5 12.7 13.6 10.6 11.4 13.6 10.5 12.1 14.4
Feb 12.0 13.4 13.8 10.9 11.9 13.7 11.1 12.8 14.4
Mar 12.6 13.4 13.7 11.0 12.1 13.6 11.4 12.7 14.4
Apr 13.0 13.4 13.8 10.9 11.9 13.3 12.0 13.0 14.6
May 12.8 13.3 13.8 10.2 11.3 13.0
Jun 12.6 13.1 13.9 10.0 11.2 13.3
Jul 12.5 13.2 13.9 9.6 10.6 12.6
Aug 12.6 12.9 13.6 8.8 10.2 12.1
Sep 11.6 12.2 12.9 8.9 11.0 13.1
Oct 10.6 11.7 12.5 10.3 11.4 13.6
Nov 10.5 11.5 12.5 10.1 13.4 13.7
Dec 10.4 11.6 13.6 9.9 12.5 14.0
Trends of Yields of Treasury Bills during 2007-2009
35
2.10 Money Supply in April 2009
• Annual growth rate of broad money supply (M3) accelerated from 3.7% in April 2008 to
18.8% in April 2009.
• On the supply side, 18.8% growth in money supply in April 2009 was supported by
17.8% growth in currency, 19.6% growth in demand deposits, 11.6% growth in savings
deposits and 29.1% growth in time deposits.
• On the demand side, growth was mainly due to 31.9% growth in domestic credits, while
net foreign assets increased by only 1.6% over a year ago.
• Domestic credit increased from D5.1 billion in April 2008 to D6.7 billion in April 2009,
supported by 46% growth in government borrowing, 103.3% growth in credits to public
entities and 24.1% growth in credits to the private sector, over a year ago.
Table-2.10: Money Supply in April 2009
Components Apr 2007 Apr 2008 Apr 2009 Apr 2008 Apr 2009 Apr 2008 Apr 2009
Mill.D. Mill.D. Mill.D. % Share % Share % change % change
over Ap07 over Ap08
1.Broad Money Supply (M3) 8008.72 8306.73 9869.66 100.0 100.0 3.7 18.8
(2+3)
2.Narrow Money (2.1+2.2) 4258.97 4041.47 4805.75 48.7 48.7 -5.1 18.9
2.1 Currency 1822.92 1534.52 1807.69 18.5 18.3 -15.8 17.8
2.2 Demand deposits (a+b) 2436.05 2506.95 2998.06 30.2 30.4 2.9 19.6
(a) Private sector 2249.21 2248.46 2616.33 27.1 26.5 0.0 16.4
(b) Official 186.84 258.49 381.74 3.1 3.9 38.3 47.7
3.Quasi money (3.1+3.2) 3749.75 4265.26 5063.91 51.3 51.3 13.7 18.7
3.1 Savings deposits (a+b) 2636.74 2529.54 2822.76 30.5 28.6 -4.1 11.6
(a) Private sector 2633.12 2514.65 2790.85 30.3 28.3 -4.5 11.0
(b) Official 3.62 14.89 31.91 0.2 0.3 311.3 114.3
3.2 Time deposits (a+b) 1113.01 1735.72 2241.15 20.9 22.7 55.9 29.1
(a) Private sector 826.53 1272.75 1657.06 15.3 16.8 54.0 30.2
(b) Official 286.48 462.97 584.094 5.6 5.9 61.6 26.2
Demands for money (1+2) 8008.72 8306.73 9869.66 100.0 100.0 3.7 18.8
1.Net foreign assets (1.1+1.2) 4860.16 3327.63 3379.89 40.1 34.2 -31.5 1.6
1.1 Monetary Authorities 2557.55 2616.82 2590.39 31.5 26.2 2.3 -1.0
1.2 Commercial banks 2302.61 710.81 789.5 8.6 8.0 -69.1 11.1
2.Net Domestic Assets 3148.56 4979.1 6489.77 59.9 65.8 58.1 30.3
(2.1+2.2)
2.1 Domestic credit 4032.49 5053.83 6665.28 60.8 67.5 25.3 31.9
(a) Credits to government 1435.24 1843.84 2692.67 22.2 27.3 28.5 46.0
(b) Credits to public entities 240.04 272.56 554.18 3.3 5.6 13.5 103.3
(c) Credits to private sector 2173.92 2754.14 3418.43 33.2 34.6 26.7 24.1
(d) Credits to forex bureau 183.29 183.29 0 2.2 0.0 0.0 -100.0
2.2 Other items, net -883.93 -74.73 -175.51 -0.9 -1.8 -91.5 134.9
Source: Economic Research and Statistics Department of CBG.
36
2.11 Sectoral Distribution of Bank Credits
Bank credits increased by 40.2% in March 2009 over March 2008. There was significant
increase across all sectors. While credits to agriculture increased by 66.2%, manufacturing
credits increased by 76.9%, building credits by 39.3%, transport credits by 27.4% and
distributive trade credits by 27.5% in March 2009 over March 2008. Credits to financial
institutions and other commercial credits also registered significant increases, while tourism
credits recorded the lowest increase by 16.5% among all the sectors.
As regards composition of bank credits, trade had the largest share (23%), followed
by other commercial credits (17%), miscellaneous sectors (16%), building (11%),
transport (9%), agriculture (8%), tourism (7%), manufacturing (5%), and financial
institutions (4%) in 2008.
Sectors Outstanding credits Annual GR Composition of bank credits

(Million Dalasi) in Mar 2009 (in percentage)
March-2008 March 2009 (%) Mar-2008 Mar-2009
Agriculture 178.507 296.65 66.2 6.7 7.9
Fishing 16.268 19.156 17.8 0.6 0.5
Manufacturing 99.959 176.846 76.9 3.7 4.7
Building 286.313 398.95 39.3 10.7 10.7
Transportation 253.027 322.375 27.4 9.5 8.6
Trade 679.72 866.5 27.5 25.5 23.2
Tourism 214.237 249.526 16.5 8.0 6.7
Financial Inst. 84.225 135.869 61.3 3.2 3.6
Other comm. 529.002 657.543 24.3 19.8 17.6
Others 327.238 617.467 88.7 12.3 16.5
Total credits 2668.496 3740.882 40.2 100.0 100.0
37
2.12 Commercial Banks’ Assets
• The banking industry remains sound. Total industry assets increased by 21% on year-
on-year basis from D9.4 billion at end-April 2008 to D11 billion at end-April 2009.
• Gambian banks do not have large exposure to foreign assets or foreign liabilities. At
end-April 2009, foreign assets constituted only 8.9% of total assets (foreign exchange
1.7%, balances abroad 6.3% and foreign investment 0.9%), down from 10.3% a year
ago (foreign exchange 1.9%, balances abroad 7.5% and foreign investment 0.9%).
• At end-April 2009, loans and advances to the public sector increased by almost 3.5
times, while those to the private sector increased by 18.8% over April-2008.
• At end-April 2009, investments in government Treasury Bills by the banks increased by

2.3% while banks’ other investment increased by almost 12.5%.
• The risk-weighted capital adequacy ratio stood at 35.9% in Dec 2008, well above the
statutory requirement of 8%.
• Non-performing loans rose from 7.3% in Sep 2008 to 9.5% in Dec 2008, but declined to
7.1% in March 2009 and were adequately provisioned in compliance with the statutory
norms and requirements.
• However, commercial banks’ Return on Assets (ROA) declined from 2.10% in March
2008 to 1.43% in 2009.
Table-2.12: Commercial Banks Assets at the end-April 2009 (Million Dalasi)
Assets April April April Composition (%) % ch. in % ch. In

2007 2008 2009 April April Apr-08 Apr-09
Million Million Million 2008 2009 over over
Dalasi Dalasi Dalasi Apr-07 Apr-08
1. Notes and coins 130.6 173.5 165.1 1.7 1.3 32.9 -4.8
2. Foreign exchange 187.6 201.8 216.8 1.9 1.7 7.6 7.4
3. Local Bank balance 846.7 879.5 954.0 8.4 7.6 3.9 8.5
ii. CBG 833.1 850.1 951.8 8.2 7.5 2.0 12.0
iii. Banks locally 13.7 29.4 2.2 0.3 0.0 115.2 -92.6
4. Balances abroad 2,074.5 785.6 798.0 7.5 6.3 -62.1 1.6
5. Bills purchased 7.7 21.9 185.5 0.2 1.5 183.7 746.0
6. Loans and advances 2,157.3 2,668.1 3,478.7 25.6 27.6 23.7 30.4
i. Public sector 103.1 135.7 469.5 1.3 3.7 31.5 246.1
ii. Private sector 2,054.2 2,532.5 3,009.2 24.3 23.8 23.3 18.8
7. Investments 2,228.0 3,150.8 3,250.9 30.2 25.8 41.4 3.2
i. Govt Treasury Bills 2,054.6 2,892.8 2,960.4 27.7 23.5 40.8 2.3
ii. Others 78.8 160.6 180.9 1.5 1.4 103.7 12.6
iii Foreign Investments 94.6 97.4 109.6 0.9 0.9 2.9 12.5
8. Fixed assets 402.1 609.7 889.7 5.8 7.1 51.6 45.9
9. Guarantees 1,104.5 1,071.9 1,641.2 10.3 13.0 -2.9 53.1
10. Other assets 603.0 867.6 1,040.1 8.3 8.2 43.9 19.9
11. Total assets (1 to 10) 9,742.0 10,430.5 12,620.1 100.0 100.0 7.1 21.0
12. Net Balance (11-9) 8,637.5 9,358.6 10,978.9 89.7 87.0 8.3 17.3
Source: Central Bank of Gambia.
38
2.13 Commercial Banks’ Liabilities
• As mentioned earlier, Gambian banks do not have large exposure to foreign liabilities.
At end-April 2009, external sector related liabilities constituted only 1.8% of total
liabilities (non-residents deposits 1.5%, balances with banks abroad 0.1% and external
debt 0.2%), down from 3.6% a year ago (non-residents deposits 1.2%, balances with
banks abroad 1.2% and external debt 1.2%).
• In April 2009 banks’ total deposits increased by 19% over April 2008, aided by a growth
of 19.6% in demand deposits, 11.6% in savings deposits and 29.1% in time deposits.
• In April 2009 banks capital and reserves increased by 21.3%, bank balances increased
by 39% while borrowings declined by 38.8% over April 2008.
• At end April 2009, direct contingent liabilities (i.e. guarantees) of banks increased by
53.1% over end- April 2008 and constituted 13% of total liabilities
Table-2.13: Commercial Banks Liabilities at the end-April 2009 (Million

Dalasi)
LIABILITIES April April April Composition (%)
2007 2008 2009 April April
% ch. in % change in
Million Million Million 2008 2009 April -08 April-09
Dalasi Dalasi Dalasi over Ap-07 over Ap-2008
1,053.8 1,238.0 1,501.5 11.9 11.9 17.5 21.3
1. Capital and reserves
2. Demand deposits 2,436.1 2,506.9 2,998.1 24.0 23.8 2.9 19.6
i Residents 2,146.9 2,217.6 2,588.0 21.3 20.5 3.3 16.7
ii Non residents 102.3 30.8 28.4 0.3 0.2 -69.9 -8.1
iii Government entities 186.8 258.5 381.7 2.5 3.0 38.3 47.7
3. Savings deposits 2,636.7 2,529.5 2,822.8 24.3 22.4 -4.1 11.6
i Residents 2,558.7 2,445.8 2,718.8 23.4 21.5 -4.4 11.2
ii Non residents 74.4 68.9 72.1 0.7 0.6 -7.4 4.7
4. Time deposits 1,113.0 1,735.7 2,241.2 16.6 17.8 55.9 29.1
i Residents 811.7 1,255.5 1,567.9 12.0 12.4 54.7 24.9
ii Non residents 14.8 17.2 89.2 0.2 0.7 16.1 417.6
Total deposits 6,185.8 6,772.2 8,062.0 64.9 63.9 9.5 19.0
5. Bank Balances 23.6 136.2 189.4 1.3 1.5 477.4 39.0
i HO & branches 23.6 8.6 179.0 0.1 1.4 -63.7 1989.6
ii Other banks abroad - 127.6 10.4 1.2 0.1 -91.9
6. Borrowings from 30.5 237.8 145.5 2.3 1.2 678.6 -38.8
i CBG - - - 0.0 0.0
ii Other banks locally - - - 0.0 0.0
iii HO & branches 30.5 114.2 125.1 1.1 1.0 274.0 9.5
iv Other banks abroad - 123.6 20.4 1.2 0.2 -83.5
v. Other sources - - - 0.0 0.0
7. Guarantees 1,104.5 1,071.9 1,641.2 10.3 13.0 -2.9 53.1
8. Other liabilities 1,343.8 974.3 1,080.5 9.3 8.6 -27.5 10.9
9. Total liabilities (1 to 8) 9,742.0 10,430.5 12,620.1 100.0 100.0 7.1 21.0
10. Net balance (9-7) 8,637.5 9,358.6 10,978.9 89.7 87.0 8.3 17.3
Source : Central Bank of The Gambia (CBG)
39
2.14 Interest Rates and Central Bank Policy Rates
Interest rate on government treasury bills declined from 31% in 2003 to 14.9% in 2006 and
further to 13.7 per cent in 2007. It ranged in between 13.1% to 14.7% during 2008. The bank
rate of the Central bank 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.
The Central bank rediscount rate declined from 34% in 2003 to 14% in 2004. In order to counter
emerging inflationary pressures, the CBG raised its rediscount rate from 14% to 15% in June
2007, 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. Given the acceleration in inflation and the weakening of the Dalasi, the MPC decided to
increase the Rediscount Rate by one percentage point to 16.0% in October 2008.
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 14.6% in January 2009. By contrast, commercial banks’ lending
rates remained sticky above 20% due to high operating costs and risks of bank credits.
Appropriate monetary policies are necessary to reduce the maximum short-term deposit
rates and the lending rates.
Table-2.14: Trends of Nominal Interest rates (per cent per annum, end period)
Items 2000 2001 2002 2003 2004 2005 2006 2007 2008
Bank lending rare- min 18 18 17 21 21 21 18 18 18
Bank lending rare- max 24 24 24 36.5 36.5 30 28 27 27
Deposit rate (SB) min 8 8 8 8 10 5 5 5 4
Deposit rate (SB) max 10 10 10 17 17 10 7 7 7
Time dep (3 months) min 9.5 9.5 6 7 8 5 5 5 5
Time dep (3 months) max 12.5 12.5 13 22 22 14 8.5 12.9 13.6
Time dep (6 months) min 10 10 6 8 8 7 6 6 6
Time dep (6 months) max 12.5 12.5 13 22 22 15 13 12.9 13.6
Time dep (12 month) min 11 11 7 10 12 7 6 7 7
Time dep (12 month) max 12.5 12.5 13 22 23 13 13 12.9 13.6
Govt treasury bills 12 15 20 31 30 16 12.8 13.7 13.6
CBG Bank Rate 10 13 18 29 28 14 9 10 10
CBG Rediscount Rate 15 18 23 34 33 19 14 15 16
Range = Maximum – Minimum
Bank lending rate 6 6 7 15.5 15.5 9 10 9 9
Deposit rate (SB) 2 2 2 9 7 5 2 2 3
Time deposits (3 months) 3 3 7 15 14 9 3.5 7.9 8.6
Time deposits (6 months) 2.5 2.5 7 14 14 8 7 6.9 7.6
Time deposits (12 month) 1.5 1.5 6 12 11 6 7 5.9 6.6
Some important factors influencing interest rates
Inflation (GDP-Deflator) 3.6 15.2 16.1 23.8 17.6 4.2 2.0 5.0 4.1
CPI-Inflation 0.9 4.5 8.6 17.0 14.3 5.0 2.1 5.4 4.9
Real GDP-Growth Rate 5.5 5.8 0.7 2.4 -0.7 2.0 6.6 6.3 7.2
Exchange rate change (%) 12.2 22.7 27.0 43.2 5.3 -4.8 -1.8 -11.4 -9.8
Source: Central Bank of Gambia (CBG)
40
2.15 Balance of Payments (BOP) and Foreign Exchange Reserves
Central Bank of Gambia has prepared the provisional BOP estimates for the year 2008 in
conformity with the IMF Balance of Payments (BOP) Statistics. Although these are not strictly
comparable with the final IMF estimates, which make some changes as per their concepts and
definitions and also on the basis of leads and lags in foreign exchange transactions, an analysis
of the provisional estimates leads to the following observations:
(a) The overall BOP outcome for 2008 is not as bad as they were anticipated earlier.
Year end foreign exchange reserves at US$125.2 million were still equivalent to 5.7
months of c.i.f. imports compared to US159.4 million equivalent to 6.2 months at the
end of 2007.
(b) BOP estimates indicate an overall deficit of D767.3 billion (-) $34.2 million),
amounting to (-) 3.4 percent of GDP in 2008 compared to an estimated surplus of
D741.7 million ($29.8 million), amounting to 3.6 percent of GDP in 2007, reflecting
the deterioration in both the current and the capital and financial accounts.
(c) The goods account deficit improved from a deficit of D3.52 billion, amounting to 17.2
percent of GDP in 2007 to a deficit of D2.92 billion, amounting to 12,.8 percent of
GDP in 2008, or a decline by 17.14%.
(d) Exports of goods are estimated at D3.18 billion (amounting to 14 percent of GDP) in
2008 compared to D3.29 billion (amounting to 16.1 percent of GDP) or a decline by
only 3.4%. However, due to appreciation of average exchange rate of dalasi per
US$, goods exports in terms of US$ increased from US$132.2 million in 2007 to
US$141.6 in 2008.
(e) The c.i.f. import bill declined by 10.1% from D7.43 billion, amounting to 36.4 percent
of GDP, in 2007 to D6.67 billion, amounting to 29.3 percent of GDP, in 2008.
(f) Current account deficit including official transfer declined from (-)D1.46 billion,
amounting to 7.2 percent of GDP, in 2007 to (-) D1.11 billion, amounting to 4.9
percent of GDP in 2008.
Foreign Exchange Reserves
• Reflecting the widening of the current account deficit, gross external reserves stood at
US$116.8 million at end-January 2009 compared to US$140.4 million in January 2008.
• Volume of transactions in the inter-bank foreign exchange market in the year to end-
January 2009 amounted to D35.1 billion (US$1.3 billion) compared to D37.8 billion
(US$1.7 billion) a year ago.
41
2.15 BOP Summary Table for 2007-2008
Items 2007 2008 2007 2008 2007 2008 2007 2008

Million Dalasi Million US$ AS % of GDP Annual %
change
1 Goods balance (1.1-1.2) -4138 -3499 -166.3 -156.0 -20.3 -15.4 8.5 -15.4
1.1 Exports of goods (a+b+c) 3289 3176 132.2 141.6 16.1 14.0 7.6 -3.4
a. Exports of goods in trade 266 330 10.7 14.7 1.3 1.5 -17.2 24.1
statistics
b. Re-exports 2781 2489 111.8 111.0 13.6 10.9 9.2 -10.5
c. Other goods 242 356 9.7 15.9 1.2 1.6 29.5 47.5
1.2 Imports of goods c.i.f 7427 6675 298.5 297.6 36.4 29.3 8.1 -10.1
2 Services, net (2.1 to 2.7) 1663 1338 66.8 59.6 8.1 5.9 188.4 -19.6
2.2 Travel 1869 1624 75.1 72.4 9.2 7.1 11.4 -13.1
2.3 Communications 103 214 4.1 9.6 0.5 0.9 -43.2 107.9
2.5 Construction 224 120 9.0 5.3 1.1 0.5 -46.4
2.6 Information technology -33 -71 -1.3 -3.2 -0.2 -0.3 49.0 115.2
2.7 Others business -500 -550 -20.1 -24.5 -2.4 -2.4 -60.3 10.0
3 Income, net (3.1 + 3.2) -1111 -757 -44.6 -33.8 -5.4 -3.3 4.5 -31.8
3.1 Investment income -1129 -931 -45.4 -41.5 -5.5 -4.1 6.7 -17.5
3.2 Compensation to labor 19 174 0.7 7.8 0.1 0.8 -553. 836.0
4
4 Transfers, net 2123 1809 85.3 80.7 10.4 8.0 -13.7 -14.8
(4.1+4.2+4.3)
4.1 Official transfer 130 137 5.2 6.1 0.6 0.6 -22.7 5.2
4.2 Remittances 965 1196 38.8 53.3 4.7 5.3 -45.4 23.9
4.3 Other transfer 1028 476 41.3 21.2 5.0 2.1 96.6 -53.6
5 Current account balance
5.1 Incl. official transfers -1463 -1110 -58.8 -49.5 -7.2 -4.9 -20.5 -24.2
(1+2+3+4)
5.2 Excl. off. Transfer (5.1 - -1594 -1247 -64.1 -55.6 -7.8 -5.5 -20.7 -21.8
4.1)
6 Capital Account 43 24 1.7 1.1 0.2 0.1 -62.4 -43.3
7 Financial Account 2162 318 86.9 14.2 10.6 1.4 6.2 -85.3
(7.1+7.2)
7.1 Foreign direct investment 1902 1556 76.4 69.4 9.3 6.8 -17.6 -18.2
7.2 Other investment 112 -1430 4.5 -63.7 0.5 -6.3 -56.2 -1379
7.3 Reserve change 148 192 6.0 8.5 0.7 0.8 -128. 29.3
2
8 Capital and Financial 2205 342 88.6 15.3 10.8 1.5 2.5 -84.5
A/C (6+7)
9 Overall BOP Balance 742 -767 29.8 -34.2 3.6 -3.4 139.8 -203.
(5.1+8) 5
Foreign Exchange 4441 3673 159.4 125.2 21.8 16.1 20.1 -17.3
Reserves
Equivalent to months of 6.2 5.7 6.2 5.7
imports c.i.f
Ave. Exch. Rate (D/$) 24.88 22.43
GDP at cmp (Million 20413 22754 820.5 1014.4
Dalasi)
42
2.16 Exchange Rate

• During the last one year, the Dalasi depreciated against major international currencies
traded in the inter-bank market except the British Pound, reflecting the impact of the
global financial crisis on remittances and tourism as well as increased demand for
foreign exchange to meet the high cost of imports.
• During 2009 also the Dalasi has depreciated against major currencies in every month
until May 2009 over the corresponding month in 2008.
• At the end of May 2009, Dalasi has appreciated marginally against British Pound by
0.1%, while it depreciated by 29.7%, 16.9% , 12.4% and 4.3% against US$, CHF, Euro
and CFA respectively over May 2008.
Table-2.17 Inter-bank exchange rates - end of period mid-market rates

(Dalasi per unit of foreign currency)
Year Month UK US$ CHF Euro CFA

(5000)
2008 Jan 44.27 22.34 19.91 32.89 252.85
Feb 42.58 21.88 19.57 32.28 243.98
Mar 40.87 19.46 19.15 30.83 239.16
Apr 39.52 20.12 19.16 31.43 235.95
May 40.25 20.64 19.46 32.1 245.84
June 40.77 20.65 189.27 32.07 245.51
July 41.65 20.94 19.9 32.21 251.05
Aug 40.73 21.37 20.08 32.23 249.47
Sept 41.65 23.12 19.86 33.02 249.30
Oct 40.49 24.89 20.15 32.89 258.09
Nov 40.56 26.26 20.07 33.28 258.31
Dec 40.14 26.54 22.94 35.67 259.15
2009 Jan 37.25 26.07 20.85 33.52 262.81
Feb 37.38 26.11 22.04 33.6 257.78
Mar 38.18 26.38 23.31 35.22 259.30
Apr 38.94 26.56 22.8 35.07 259.13
May 40.20 26.78 22.75 36.09 256.38
Rate of appreciation (-) / depreciation (+) of Dalasi
over the corresponding 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 -1.5 32.0 19.0 11.6 9.8
May -0.1 29.7 16.9 12.4 4.3
43
3. Assessment of Quantitative Targets agreed with IMF under
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 honorable Mousa Gibril Bala-
Gaye, Secretary of State (Finance and Economic Affairs) and honorable Momodou Bamba
Saho, Governor, Central Bank of Gambia 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. The Performance criteria for end March 2009 and the actual
performance is indicated in the following table 3.1.
It may be observed from the table that all quantitative targets have been satisfied at the
end of March 2009.
Performance Targets Stock end- Target at Status at

Dec 2006 end-Mar end-Mar
2009 2009
Net domestic assets of the central bank (ceiling) 38.7 797.7 127.3
adjusted for privatization proceeds (Million Dalasi)
Basic balance (floor) defined as domestic revenue --- 616.9 738.1

minus expenditure and net lending, excluding externally
financed capital expenditure. Adjusted downward by the
dalasi equivalent of the amount of external budget
support in excess of the projected levels up to a
cummulative maximum in of US$10 million in 2009
New external payments arrears of the central 0.0 0.0 0.0

government (ceiling)
Net usable international reserves (floor) adjusted for 94.9 92 95.6

privatization proceeds. Adjusted upward
(downward) by the extent to which actual
receipts exceed (fall short of) projected level of
privatization receipts (Million US$)
New non-concessional debt contracted or guaranteed 0.0 0.0 0.0

by the government with original maturity of more than
one year (ceiling)
Outstanding stock of external public debt with original 0.0 0.0 0.0
maturity of one year or less (ceiling)
44
Bearing in mind the linkages of the key macroeconomic sectors of monetary, fiscal and external
sectors, the net usable reserves target was set at $92 million for the first quarter of 2009.
Similarly, the net domestic asset target was set at D797.7 for the same period. The Central
Bank through pro-active, consistent and prudent use of various policy instruments, was able to
meet all the agreed quantitative targets for end-March 2009.
With regard to the performance of the monitored variables vis-à-vis their end-March 2009 target,
the NUR totaled D2.5 billion (US$95.6 million) at end-march 2009 and was above the end-
march target (floor) by D108.8 million (US$3.6 million). Similarly, the NDA of the Central Bank
amounting to D127.3 million was below target ceiling by D220.7 million.
The target for basic fiscal balance (floor) was fixed at D616.7 million for the end of March 2009.
Government achieves a basic balance of D738.1 million.
Government did not default on the payment of debt services on any external debt. As agreed
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
having original maturity exceeding one year.
45

Gambia Monthly Eco Bulletin May 2009

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The Gambia Monthly Economic Bulletin- May 2009

THE GAMBIA MONTHLY

Institutional Support Project for Economic and Financial Governance (ISPEFG)

Political and Administrative Structure

below One-US$) (2000)

ISPEFG Project/ Research Team and Document History 4

1. Global Economic Outlook and Global Public Policy 11-15

2. Current State of the Gambian Economy 16-37

3. Assessment of Quantitative Targets agreed with IMF under MEFP 38-39

ISPEFG Project and Monthly Report Research Team

Project Supervisors Honorable Mr. Mod A. K. Secka,

Project Coordinator Mr. Momodou Cham

Director (EMPU) Mr. Tamsir Cham

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

Impact of Global Financial Crisis and Economic Slowdown

Food and Oil Prices

Impact on the Gambian Economy

Government Financial Performance

Money Supply and Bank Credits

Commercial Banks Assets’ and Liabilities

Interest Rates and Central Bank Policy Rates

Balance of Payments and Exchange Rate

At a Glance- May 2009

Ports cargo Calendar year 9.5 11.8

At a Glance- May 2009 Continued

At a Glance- May 2009 Continued

7. Maturity Composition of Treasury Bills (in Percentage)

8. Yields of Treasury Bills (in Percentage)

91-days April 2009 12.0 10.9 Yields may come down

9. Annual Growth Rate of Money Supply (Percentage)

Broad Money April 2009 18.8 3.7 Broad money growth

CBG Bank rate April 2009 10 10 Banks’ lending rates may

Foreign assets April 2009 8.9 10.9 Likely to remain stable

12. Sectoral distribution of bank credits (in percentage)

Agriculture March 2009 6.7 7.9 Bank credits to

At a Glance- May 2009 Continued

13. Balance of Payments (Million US Dollar)

Goods A/C Bal. 2008 (-) 156.0 (-) 166.3

14. Inter-bank Exchange Rate- End Period Mid-Market Rates

UK £ May 2009 40.20 40.25 Dalasi is likely to

UK £ May 2009 -0.1 -24.6 Dalasi is likely to

16. Foreign Exchange Reserves (US$ Million)

FER End-Jan 116.8 140.4 Likely to remain under

1. Global Economic Outlook and Global Public Policies

Figure-1: Trends of Global Growth Rates and World Trade

Table 1.2 Growth Prospects of African Economies

1.2 World Commodity Prices and Inflation

1.3 Trends of International Crude Oil Prices

Trends of Monthly Brent Crude Oil Prices (US$/ barrel)

Months and Years 1999-2009

Table-2 Trends of World Commodity Prices

Quarterly averages Monthly averages

Source: World Bank Pink Sheet May 2009

2. Current State of the Gambian Economy

Figure 2.1 Trends of Sectoral Growth Rates 1998-2009

GDP Agriculture Industry Services

2.2 Growth Rates of Selected Indicators for Trade and Transport

Items 2005 2006 2007 2008

(1) Ports cargo unloaded 4.4 2.7 11.8 9.5

2.3 Consumer Price Index and Inflation

Table-2.3 CPI Inflation Rates in April 2009 (in percentage)

Items Weights April- Apriil-2009 Inflation Wi (CPIi1 – Contributio

Sub-group wise inflation in April 2009 (%)