The Gambia’s domestic debt rose from D41.3 billion in December 2023 to D42.1 billion in June 2024, according to Governor Buah Saidy of the Central Bank of The Gambia.
Providing an update on the nation’s economic position, the Central Bank of The Gambia convened a news conference on Tuesday to discuss the conclusions of the 91st meeting of the Monetary Policy Committee (MPC).
The main decision-making body for monetary policy at the Central Bank, the Monetary Policy Committee (MPC) met quarterly and discussed both local and international economic situations.
The Gambia’s attempts to fight inflation and its continuously expanding economy were the focal points of Governor Saidy’s speech. In addition, he disclosed the most recent data, which showed that the national debt had climbed from D41.3 billion at the end of 2023 to D42.1 billion in June 2024.
Inflation fighting efforts show promise as the Gambian economy maintains robust performance in Q2 2024. The Gambia Bureau of Statistics (GBOS) has published data showing that the Gambian GDP grew by 4.8 percent in 2023, more than the revised increase of 5.5 percent in 2022. The private and public construction activities were boosted, which led to an uptick in the services and industry sectors, which in turn supported the growth. Saidy, the governor, reported.
In June 2024, the stock of domestic debt was D42.1 billion, or 27 percent of the GDP, he said; in December 2023, it was D41.3 billion, or 29.4 percent of the GDP. Nearly half of all government securities (47.5% to be exact) have maturities of one year or less. The government borrowed more money from the domestic market in June 2024, which caused the yields on these short-term assets to rise. The weighted average treasury bill rate jumped from 6.1% in March 2024 to 10.4% in June 2024.
From D41.3 billion (29.4 percent of GDP) in December 2023 to D42.1 billion (27 percent of GDP) in June 2024, the stock of domestic debt increased. 47.5% of the total stock of domestic debt was short-term government securities having maturities of one year or less. June 2024 saw a spike in yields on short-term government securities, which was mainly due to the government borrowing money from the domestic market. According to Governor Saidy’s interview with journalists, the weighted average treasury bill rate rose from 6.1% in March 2024 to 10.4% in June 2024.
In addition, Governor Saidy presented the Central Bank’s prediction for The Gambia’s economic growth in 2024, which is 5.7%. This is a 0.2 percentage point increase from the May 2024 forecast. Strong public and private investment, consumer spending, and a revival in tourism are anticipated to bolster this expansion.
But he did warn that grave dangers such as global economic disintegration, persistent geopolitical tensions, commodity price volatility, and climate-related problems at home still loom.
Nevertheless, there are still several unknowns that might derail this growth forecast, such as global economic fragmentation, persistent geopolitical tensions, commodity price volatility, and climate-related concerns at home. A small uptick in optimism was seen in the most recent Business Sentiment Survey conducted by the Central Bank for the second quarter of 2024.
The majority of people who took the survey think the economy will grow in the coming three months. Despite this upbeat outlook, firms are nevertheless worried about inflation; in fact, many of them anticipate a near-term increase in inflationary pressures. In the future, he predicted, “these expectations should be stabilized” due to the persistent fall in inflation.
According to Governor Saidy, the national budget deficit for 2024 is expected to reach D5.1 billion, which is equal to 3.9% of the GDP.
He went on to discuss problems in the external sector and revealed that after a surplus of $1.4 million in Q1 2024, the current account balance worsened to a loss of $16.0 million in Q2. A slight decline in imports caused the goods account balance to display a modest deficit of US$244 million (11.2 percent of GDP), down from US$257.9 million (8.8 percent of GDP) in the first quarter.
An overall deficit of D9.3 billion (6.5 percent of GDP), excluding grants, is projected for the first half of 2024 according to preliminary projections of government fiscal operations. This is an increase over the same period of 2023, when the deficit was D8.9 billion (6.2 percent of GDP). Similarly, Governor Saidy announced that the sum of all budget deficits, including grants, was D5.1 billion in the first half of 2024, which was greater than the D4.8 billion (3.3 percent of GDP) recorded in the same time of 2023.
Based on the data presented by Governor Saidy, the Gambian Dalasi depreciated by 0.5 percent versus the US dollar, 1.2 percent versus the euro, 1.2 percent versus the British pound sterling, and 3.9 percent versus the CFA franc between March and June 2024. Despite this, the currency remained relatively stable, according to Saidy.
Although it has lost a little ground versus the most heavily traded currencies on the local foreign exchange market, the Dalasi has remained fairly steady. According to Governor Saidy, the value of the Dalasi fell against the US dollar, the euro, the British pound sterling, and the CFA franc between March 2004 and June 2024.
Domestic market transaction volumes increased to US$563.0 million in the second quarter of 2024 from US$600.9 million in the first quarter, according to Governor Saidy, who also noted that the foreign exchange market is still running smoothly. The downturn in remittance inflows and the slowdown in tourism are the main causes of the activity volume fall.
At the same time, he assured the public that the Central Bank’s international reserves would remain at a healthy level of US$452.7 million in July 2024, enough to cover projected imports for more than 4.6 months.