Gambia Monthly Economic Abstract May 2009

The Gambia - Monthly Economic Abstract- May 2009

THE GAMBIA MONTHLY ECONOMIC ABSTRACT1 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

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The Gambia Monthly Economic Abstract is an abridged version of the Gambia Monthly/ Quarterly Economic Bulletin published every month. It provides a brief account of the current state of the Gambian economy. The Abstract has been prepared jointly by Dr. Tamsir Cham, Director; Economic Management and Planning Unit (EMPU) and Dr. Tarun Das, Macroeconomic Adviser (ISPEFG), Ministry of Finance and Economic Affairs (MOFEA) under the overall direction of the Permanent Secretary, MOFEA. Any questions and feedback can be addressed to: Either Tamsir Cham ([email protected]) or Tarun Das ([email protected])

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The Gambia - Monthly Economic Abstract- May 2009

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

Area (2009)

Sq. km.

11,300

Population (2008)

Million

1.735

GDP PPP (2004)

Million US$

3284

GDP Nominal (2006)

Million US$

511

US$

1945

GDP PPP per capita (2004)

2

Rank in the World from top in descending order 171 out of 248 countries 148 out of 241 countries 167 out of 224 countries 199 out of 229 countries 177 out of 223 countries

The Gambia - Monthly Economic Abstract- May 2009 GDP per capita (2006) Poverty Ratio (% of people below One-US$) (2000)

US$

329

Percent

59

3

192 out of 207 countries 7 out of 59 countries

The Gambia - Monthly Economic Abstract- May 2009

HIGHLIGHTS Inflation and Oil Prices

•

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.

•

Given global economic slowdown, international 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.

Government Financial Performance

•

Government Financial Performance was 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.

•

Overall, there is a fiscal surplus of D35 million in Jan-April 2009, lower than the fiscal surplus of D75 million in Jan-April 2008, due to significant increase of capital expenditure by 88% in JanApril 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 (28.4% of GDP), down by 5.9% from D6 billion (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.

•

Despite significant decline of CPI inflation in the recent months, average yield on the 91-day TBs increased from 10.5% in Jan 2009 to 12% in April 2009, yield of 182-day TBs 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 significantly 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.

•

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.

Exchange Rate

•

In 2008, the Dalasi depreciated against major international currencies except the British Pound. Since Jan 2009, Dalasi has appreciated against major international currencies.

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The Gambia - Monthly Economic Abstract- May 2009

At a Glance- May 2009 Economic Indicators CPI inflation rate (%)

Brent crude oil price (US$/ brl)

Latest Reference Period April 2009

May 2009

Status in the latest reference period in 2009 Overall 6.7 Food 8.2 Non-food 4.8 Average US$60

Status in the Corresponding period in 2008 Overall 3.1 Food 4.5 Non-food 1.2

Outlook for 2009

Average US$123

May stabilize around $55 by the end of 2009 Fiscal performance in 2009 will be better than last year.

Expected to decline during the year

Growth rate (%) of Revenue & grants Growth rate (%) of Exp & Net Lending Rev. and grants as % of nominal GDP Exp & Net Lending as % of GDP Overall fiscal bal. as % of GDP Basic Balance as % of nominal GDP Primary Bas. Bal, as % of GDP

Jan-Apr 2009

16.2

-2.2

Jan-Apr 2009

19.6

0.7

Jan-Apr 2009

7.7

7.4

Jan-Apr 2009

7.5

7.0

Jan-Apr 2009

0.2

0.4

Jan-Apr 2009

1.2

0.9

Jan-Apr 2009

2.6

2.5

Outstanding Domestic Debt (Million D) Domestic debt as % of GDP Yield of 91-day TBs (%) Yield of 182-day TBs (%) Yield of 364-day TBs (%) CBG Rediscount rate (%) GR of Money supply (M3) (%) Growth rate of Reserve Money (%) Banks’ foreign assets as % of total assets Banks’ foreign liabil. as % of total liabilities Dalasi/ US$

April 2009

5659

6013

April 2009

28.4%

33.5%

April 2009

12.0

10.9

April 2009

13.0

11.9

April 2009

14.6

13.3

May 2009

16

15

April 2009

18.8

3.7

April 2009

11.1

-6.0

Broad money growth rate is likely to decelerate.

April 2009

8.9

10.9

Likely to remain stable

April 2009

1.8

3.6

April 2009

26.56

20.12

38.94 35.07 22.80 259.13

39.52 31.43 19.16 235.95

Dalasi/ UK £ Dalasi/ Euro Dalasi/ CHF Dalasi/ CFA (5000)

April April April April

2009 2009 2009 2009

5

As % of GDP at current market prices, revenues, expenditures and basic balance are on-track.

Likely to decline in 2009.

Yields may come down as CPI inflation has started decelerating.

Dalasi is likely to depreciate against major currencies during the year 2009.

The Gambia - Monthly Economic Abstract- May 2009 1. 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-1 CPI Inflation Rates in April 2009 (in percentage)

Items

Weights Wi (%)

April2008 Index 113.21 116.61 104.19 106.19 115.38 111.50 101.00 115.14 101.54 103.94

Apriil-2009 Index

Inflation (%)

6.3 125.6 7.7 105.78 1.5 111.08 4.6 121.64 5.4 114.97 3.1 101.77 0.8 119.95 4.2 101.98 0.4 104.67 0.7 Education 1.5 101.87 102.25 0.4 Hotels 0.4 108.86 116.24 6.8 Misc. 5.9 112.46 125.37 11.5 non-food 44.8 109.08 114.03 4.5 Source of basic data: Gambian Bureau of Statistics (GBOS). Overall Food Tobacco Clothing Utilities Furnishing Health Transport Telecom Recreation

100.0 55.2 0.7 11.3 3.4 5.2 1.0 4.4 3.0 8.0

120.36

2

Wi (CPIi1 – CPIi0)

Contributio n2 (%)

700.9 496.3 1.1 55.1 21.3 18.2 0.8 21.2 1.3 5.8 0.6 2.7 76.5 221.7

100.0 70.8 0.2 7.9 3.0 2.6 0.1 3.0 0.2 0.8 0.1 0.4 10.9 29.2

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 525.0 / 746.7 = 70.3%.

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The Gambia - Monthly Economic Abstract- May 2009

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 3%

Others 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 07Ja

Mar May J ul

Sp

Nv

08- Mar May J ul Ja

7

Sp

Nv

09Ja

Mar

The Gambia - Monthly Economic Abstract- May 2009 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). 2.1 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)

120 100 80 60 40 20

an -9 9 J ul -9 9 J an -0 0 J ul -0 Ja 0 n0 1 J ul -0 1 J an -0 2 J ul -0 2 J an -0 3 J ul -0 3 J a n0 4 J u l-0 4 J an -0 5 J ul -0 5 J a n0 6 J ul -0 6 J a n0 7 J u l-0 7 J an -0 8 J ul -0 8 J a n0 9

0

J

US$ per Barrel

140

Months and Years 1999-2009 Series1

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The Gambia - Monthly Economic Abstract- May 2009 Table-2 Trends of World Commodity Prices

Commodity Energy Coal, Australia Crude oil, Brent Crude oil, Dubai Natural gas Index Natural gas, Europe Agriculture Coffee, Arabica Tea, Mombasa auctions Coconut oil Groundnut oil Soybean oil Barley Maize Rice, Thailand, 25% Wheat, US, HRW Wheat US SRW Fishmeal Meat, beef Meat, chicken Meat, sheep Shrimp, Mexico Sugar, world Raw Materials Logs, Cameroon Plywood Sawnwood, Cameroon Cotton Memphis Rubber RSS1, US Fertilizers DAP Phosphate rock Potassium chloride Urea Metals and Minerals Aluminum Copper Gold Steel cr coilsheet Steel hr coilsheet Steel, rebar Steel wire rod Tin Zinc

Unit $/mt $/bbl $/bbl 2000=1 00 $/mmbt u

Jan-Mar 2008

Quarterly averages Apr-Jun Jul-Sep Oct-Dec 2008 2008 2008

Jan-Mar 2009

Monthly averages Feb Mar Apr 2009 2009 2009

114.00 96.67 91.30 235.3

138.65 122.39 116.67 286.0

162.80 115.60 113.47 284.1

92.97 55.89 53.67 266.2

71.93 44.98 44.56 198.3

75.38 43.24 43.14 187.4

61.00 46.84 45.58 177.7

63.56 50.85 50.18 144.7

10.86

12.40

14.62

15.75

11.94

11.04

10.90

8.51

328.5 221.8 1,379 2,007 1,384 216.8 220.4 182.2 411.8 384.1 1,126 282.1 158.8 453.6 1,103 28.42

315.1 221.6 1,499 2,328 1,466 239.1 259.0 n.a. 346.5 277.8 1,185 332.7 167.9 493.2 1,109 27.01

321.2 252.8 1,246 2,417 1,353 216.6 244.7 669.5 317.7 241.5 1,198 372.4 177.1 477.3 1,048 31.14

267.8 190.8 772 1,773 830 129.5 168.4 449.9 228.1 182.7 1,023 268.0 174.7 410.0 1,014 26.28

283.9 214.9 677 1,283 755 116.3 166.9 469.4 231.6 187.4 1,013 245.2 173.5 378.5 976 28.85

285.5 211.8 673 1,293 748 112.5 163.4 472.8 224.7 183.4 1,001 236.2 173.8 380.3 970 29.26

283.3 213.8 625 1,214 727 114.8 164.6 471.5 230.9 183.7 1,030 247.7 171.9 374.6 970 29.54

297.4 222.5 747 1,188 800 110.9 168.5 446.0 233.6 182.6 1,038 255.5 171.1 396.1 970 30.09

530.8 640.4 1,035.5 174.2 292.6

554.4 647.3 1,052.3 171.6 311.7

548.5 648.6 974.5 170.0 329.1

473.8 645.5 770.8 130.1 202.8

426.8 572.8 689.2 129.8 165.8

421.9 573.0 690.2 131.4 165.8

388.2 570.8 679.9 123.3 161.8

382.5 567.7 684.3 135.6 183.6

$/mt $/mt $/mt $/mt

860.2 234.4 367.7 357.6

1,191.6 367.5 511.1 575.7

1,153.7 409.2 635.0 745.4

663.3 371.3 766.7 292.2

362.2 193.3 865.2 267.3

367.9 157.5 872.5 273.3

367.6 157.5 870.0 265.4

335.4 125.5 745.0 245.2

$/mt $/mt $/toz $/mt $/mt $/mt $/mt ¢/kg ¢/kg

2,743 7,796 927 763 700 639 754 1,778 243.0

2,940 8,443 896 900 833 838 950 2,265 211.3

2,787 7,680 870 1,100 1,000 934 1,135 2,051 177.0

1,821 3,905 795 1,100 1,000 630 1,200 1,310 118.5

1,360 3,428 909 1,033 933 473 1,200 1,103 117.2

1,330 3,315 943 1,100 1,000 485 1,200 1,104 111.2

1,336 3,750 924 900 800 470 1,200 1,068 121.7

1,421 4,407 890 700 600 425 1,100 1,174 137.9

¢/kg ¢/kg $/mt $/mt $/mt $/mt $/mt $/mt $/mt $/mt $/mt ¢/kg ¢/kg ¢/kg ¢/kg ¢/kg $/cum ¢/sheets $/cum ¢/kg ¢/kg

Source: World Bank Pink Sheet May 2009

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The Gambia - Monthly Economic Abstract- May 2009 3. Government Financial Performance in Jan-April 2009 •

Columns (5) and (6) of Table-3.1 present major item-wise revenue realization and expenditure of the government in the first four months of 2009 (i.e. Jan-April 2009) and JanApril 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, JanApril 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 JanApr 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 JanApr 2009, despite significant increase of capital expenditure in Jan-Apr 2009. Table-3.1 Govt Financial Performance in Jan-Apr 2009 compared with Jan-Apr 2008

Items (1) Revenue and grants Domestic Revenue Tax Revenue Nontax Revenue Grants Exp & Net Lending Current Expenditure Personnel Emoluments Other Charges Interest External Domestic Cap Exp & Net Lending Capital Expenditure Net Lending Overall Bal Inc. grants Basic balance Basic Primary Bal Nominal GDP (IMP Prg)

2008 Actual Mln Dal. (2) 3644.6 3479 3161.3 317.7 165.6 4134.8 3011.4 905.5 1397.5 708.4 153.5 554.9 1123.4 1016.6 106.8 -495.1 -155.5 557.8 17959

2008 BE Mln Dal.

2009 BE Mln. Dal.

(3) 4,475.5 3,770.9 3,362.6 408.3 704.7 5,205.1 2,812.3 917.5 1,143.4 622.3 72.3 550.0 2,332.8 2,223.2 109.6 -729.5 259.3 881.6 17859

(4) 4582.2 3771.1 3390.5 380.5 811.1 5362.9 3838.0 1035.2 1957.5 845.3 147.3 698.0 1524.9 1468.2 56.7 -780.7 -267.7 577.6 19904

2009 Jan-Apr Actual (5) 1537.1 1449.8 1327.7 122.1 87.3 1493.2 1029.9 356.0 392.8 281.1 52.6 228.5 463.3 451.1 12.1 43.9 230.3 511.4 17959

2008 Jan-Apr Actual (6) 1323.0 1255.9 1139.3 116.6 67.2 1248.5 980.4 302.6 390.0 287.8 65.3 222.5 268.1 240.1 28.0 74.5 157.3 445.2 17859

% change over Prev. period 2009 2008 Jan-Apr Jan-Apr (7) (8) 16.2 -2.2 15.4 -4.9 16.5 0.1 4.7 -35.9 30.0 107.8 19.6 0.7 5.1 21.4 17.6 39.1 0.7 31.3 -2.3 -1.8 -19.5 -24.9 2.7 8.0 72.8 -38.0 87.9 -32.8 -56.7 -62.8 -41.0 -33.8 46.4 -61.5 14.9 -36.5 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

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The Gambia - Monthly Economic Abstract- May 2009 •

Columns (2) and (3) of Table-3.2 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-3.2 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-3.2 Govt Financial Performance in Jan-Apr 2009 compared with Jan-Apr 2008 Items

(1) Revenue and grants Domestic Revenue Tax Revenue Nontax Revenue Grants Exp & Net Lending Current Expenditure Personnel Emoluments Other Charges Interest External Domestic ap Exp & Net Lending Capital Expenditure Net Lending

Overall Bal Inc.grants3 Basic balance4 Basic Prim. Balance5

2009 Jan-Apr as % of Budget (2) 33.5 38.4 39.2 32.1 10.8 27.8 26.8 34.4 20.1 33.3 35.7 32.7 30.4 30.7 21.4 -5.6

2008 Jan-Apr as % of Budget (3) 29.6 33.3 33.9 28.6 9.5 24.9 36.5 33.0 34.1 46.3 90.4 40.5 11.5 10.8 25.6 -13.8

2008 Jan-Apr as % of actual (4)

36.3 36.1 36.0 36.7 40.5 30.2 32.6 33.4 27.9 40.6 42.6 40.1 23.9 23.6 26.3 -15.2

2009 BE Full Year as % of GDP (5) 23.0 18.9 17.0 1.9 4.1 26.9 19.3 5.2 9.8 4.2 0.7 3.5 7.7 7.4 0.3 -3.9

2008 AC Full Year as % of GDP (6) 20.3 19.4 17.6 1.8 0.9 23.0 16.8 5.0 7.8 3.9 0.9 3.1 6.3 5.7 0.6 -2.7

2009 Jan-Apr as % of GDP (7) 7.7 7.3 6.7 0.6 0.4 7.5 5.2 1.8 2.0 1.4 0.3 1.1 2.3 2.3 0.1 0.2

2008 Jan-Apr as % of GDP (8) 7.4 7.0 6.4 0.7 0.4 7.0 5.5 1.7 2.2 1.6 0.4 1.2 1.5 1.3 0.2 0.4

-86.0

60.7

-0.9

1.2

0.9

50.5

-101.2 80.5

-1.3

88.6

2.9

3.1

2.6

2.5

Source: Economic Planning and Management Unit (EMPU), DODFEA.

3

(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; 5 (3) Basic primary balance= Basic balance plus interest payments 4

11

The Gambia - Monthly Economic Abstract- May 2009

4. Domestic Debt and Treasury Bills Outstanding •

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

Type of debt

Table-4.1: Outstanding Domestic Public Debt as on 30 April 2009 Million Dalasi Composition (in % change in percentage) April 09 30-Apr-08 30-Apr-09 30-Apr-09 over April 2008 30-Apr-08

Treasury bills

4826

4776

Sukuk Al-Salam

64

86

Government Bonds

250

250

NIB Treasury Notes

873

547

Total

6013

5659

-1.0 34.6 0.0 -37.4 -5.9

80.3

84.4

1.1

1.5

4.2

4.4

14.5

9.7

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-4.2 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 ratio

92-167

180

158

166

147

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)

12

The Gambia - Monthly Economic Abstract- May 2009 5. 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.

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Table-5 Interest Rates (yields on treasury bills in percentage per annum) 2008 2009 2007 3-M 6-M 12-M 3-M 6-M 12-M 3-M 6-M 10.5 12.7 13.6 10.6 11.4 13.6 10.5 12.1 12.0 13.4 13.8 10.9 11.9 13.7 11.1 12.8 12.6 13.4 13.7 11.0 12.1 13.6 11.4 12.7 13.0 13.4 13.8 10.9 11.9 13.3 12.0 13.0 12.8 13.3 13.8 10.2 11.3 13.0 12.6 13.1 13.9 10.0 11.2 13.3 12.5 13.2 13.9 9.6 10.6 12.6 12.6 12.9 13.6 8.8 10.2 12.1 11.6 12.2 12.9 8.9 11.0 13.1 10.6 11.7 12.5 10.3 11.4 13.6 10.5 11.5 12.5 10.1 13.4 13.7 10.4 11.6 13.6 9.9 12.5 14.0

Trends of Yields of Treasury Bills during 2007-2009

13

12-M 14.4 14.4 14.4 14.6

The Gambia - Monthly Economic Abstract- May 2009 6. 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-6 Money Supply in April 2009

Components

1.Broad Money Supply (M3) (2+3) 2.Narrow Money (2.1+2.2) 2.1 Currency 2.2 Demand deposits (a+b) (a) Private sector (b) Official 3.Quasi money (3.1+3.2) 3.1 Savings deposits (a+b) (a) Private sector (b) Official 3.2 Time deposits (a+b) (a) Private sector (b) Official Demands for money (1+2) 1.Net foreign assets (1.1+1.2) 1.1 Monetary Authorities 1.2 Commercial banks 2.Net Domestic Assets (2.1+2.2) 2.1 Domestic credit (a) Credits to government (b) Credits to public entities (c) Credits to private sector (d) Credits to forex bureau 2.2 Other items, net

Apr 2007 Mill.D.

Apr 2008 Mill.D.

Apr 2009 Mill.D.

Apr 2008 % Share

Apr 2009 % Share

Apr 2008 % change over Ap07

Apr 2009 % change over Ap08

8008.72

8306.73

9869.66

100.0

100.0

3.7

18.8

4258.97 1822.92 2436.05 2249.21 186.84 3749.75 2636.74 2633.12 3.62 1113.01 826.53 286.48 8008.72 4860.16 2557.55 2302.61 3148.56

4041.47 1534.52 2506.95 2248.46 258.49 4265.26 2529.54 2514.65 14.89 1735.72 1272.75 462.97 8306.73 3327.63 2616.82 710.81 4979.1

4805.75 1807.69 2998.06 2616.33 381.74 5063.91 2822.76 2790.85 31.91 2241.15 1657.06 584.094 9869.66 3379.89 2590.39 789.5 6489.77

48.7 18.5 30.2 27.1 3.1 51.3 30.5 30.3 0.2 20.9 15.3 5.6 100.0 40.1 31.5 8.6 59.9

48.7 18.3 30.4 26.5 3.9 51.3 28.6 28.3 0.3 22.7 16.8 5.9 100.0 34.2 26.2 8.0 65.8

-5.1 -15.8 2.9 0.0 38.3 13.7 -4.1 -4.5 311.3 55.9 54.0 61.6 3.7 -31.5 2.3 -69.1 58.1

18.9 17.8 19.6 16.4 47.7 18.7 11.6 11.0 114.3 29.1 30.2 26.2 18.8 1.6 -1.0 11.1 30.3

4032.49 1435.24 240.04 2173.92 183.29 -883.93

5053.83 1843.84 272.56 2754.14 183.29 -74.73

6665.28 2692.67 554.18 3418.43 0 -175.51

60.8 22.2 3.3 33.2 2.2 -0.9

67.5 27.3 5.6 34.6 0.0 -1.8

25.3 28.5 13.5 26.7 0.0 -91.5

31.9 46.0 103.3 24.1 -100.0 134.9

Source: Economic Research and Statistics Department of CBG.

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The Gambia - Monthly Economic Abstract- May 2009 7. 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

Agriculture Fishing Manufacturing Building Transportation Trade Tourism Financial Inst. Other comm. Others Total credits

Table-7 Sectoral Distribution of Bank Credits Outstanding credits Annual GR Composition of bank credits (Million Dalasi) in Mar 2009 (in percentage) (%) March-2008 March 2009 Mar-2008 Mar-2009 178.507 296.65 66.2 6.7 7.9 16.268 19.156 17.8 0.6 0.5 99.959 176.846 76.9 3.7 4.7 286.313 398.95 39.3 10.7 10.7 253.027 322.375 27.4 9.5 8.6 679.72 866.5 27.5 25.5 23.2 214.237 249.526 16.5 8.0 6.7 84.225 135.869 61.3 3.2 3.6 529.002 657.543 24.3 19.8 17.6 327.238 617.467 88.7 12.3 16.5 2668.496 3740.882 40.2 100.0 100.0

15

The Gambia - Monthly Economic Abstract- May 2009 8. 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 dad depreciated against major currencies in every month until April 2009 over the corresponding month in 2008.

•

At the end of April 2009, Dalasi has appreciated against British Pound by 1.5% while it depreciated by 32%, 19% , 11.6% and 9.8% against US$, CHF, Euro and CFA respectively over April 2008. Table-8 Inter-bank exchange rates - end of period mid-market rates (Dalasi per uit of foreign currency)

Year

Month

UK

US$

CHF

Euro

2008 Jan 44.27 22.34 19.91 32.89 Feb 42.58 21.88 19.57 32.28 Mar 40.87 19.46 19.15 30.83 Apr 39.52 20.12 19.16 31.43 May 40.25 20.64 19.46 32.1 June 40.77 20.65 189.27 32.07 July 41.65 20.94 19.9 32.21 Aug 40.73 21.37 20.08 32.23 Sept 41.65 23.12 19.86 33.02 Oct 40.49 24.89 20.15 32.89 Nov 40.56 26.26 20.07 33.28 Dec 40.14 26.54 22.94 35.67 2009 Jan 37.25 26.07 20.85 33.52 Feb 37.38 26.11 22.04 33.6 Mar 38.18 26.38 23.31 35.22 Apr 38.94 26.56 22.8 35.07 May 40.20 26.78 22.75 36.09 Rate of appreciation (-) / depreciation (+) of Dalasi over the corresponding month in 2008 (%) 2009 Jan -15.9 16.7 4.7 1.9 Feb -12.2 19.3 12.6 4.1 Mar -6.6 35.6 21.7 14.2 Apr -1.5 32.0 19.0 11.6 May -0.1 29.7 16.9 12.4 Source: Central Bank of Gambia (CBG)

16

CFA (5000) 252.85 243.98 239.16 235.95 245.84 245.51 251.05 249.47 249.30 258.09 258.31 259.15 262.81 257.78 259.30 259.13 256.38

3.9 5.7 8.4 9.8 4.3