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

1
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 (tamsirc@hotmail.com)
or Tarun Das (das.tarun@hotmail.com)

1
 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 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

2
 The Gambia - Monthly Economic Abstract- May 2009

GDP per capita (2006) US$ 329 192 out of 207

countries
Poverty Ratio (% of people Percent 59 7 out of 59 countries
below One-US$) (2000)

3
 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 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 (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 Latest Status in the Status in the Outlook for 2009
Reference latest reference Corresponding
Period period in 2009 period in 2008
CPI inflation rate (%) April 2009 Overall Overall 3.1 Expected to decline
6.7 Food 4.5 during the year
Food Non-food 1.2
8.2
Non-food
4.8
Brent crude oil price May 2009 Average US$60 Average US$123 May stabilize around $55
(US$/ brl) by the end of 2009
Growth rate (%) of Jan-Apr 2009 16.2 -2.2 Fiscal performance in
Revenue & grants 2009 will be better than
Growth rate (%) of Exp Jan-Apr 2009 19.6 0.7 last year.
& Net Lending
Rev. and grants as % of Jan-Apr 2009 7.7 7.4 As % of GDP at current
nominal GDP market prices, revenues,
Exp & Net Lending as % Jan-Apr 2009 7.5 7.0 expenditures and basic
of GDP balance are on-track.
Overall fiscal bal. as % Jan-Apr 2009 0.2 0.4
of GDP
Basic Balance as % of Jan-Apr 2009 1.2 0.9
nominal GDP
Primary Bas. Bal, as % Jan-Apr 2009 2.6 2.5
of GDP
Outstanding Domestic April 2009 5659 6013 Likely to decline in 2009.
Debt (Million D)
Domestic debt as % April 2009 28.4% 33.5%
of GDP
Yield of 91-day TBs April 2009 12.0 10.9 Yields may come down
(%) as CPI inflation has
Yield of 182-day TBs April 2009 13.0 11.9 started decelerating.
(%)
Yield of 364-day TBs April 2009 14.6 13.3
(%)
CBG Rediscount rate May 2009 16 15
(%)
GR of Money supply April 2009 18.8 3.7 Broad money growth
(M3) (%) rate is likely to
Growth rate of April 2009 11.1 -6.0 decelerate.
Reserve Money (%)
Banks’ foreign assets April 2009 8.9 10.9 Likely to remain stable
as % of total assets
Banks’ foreign liabil. April 2009 1.8 3.6
as % of total liabilities
Dalasi/ US$ April 2009 26.56 20.12 Dalasi is likely to
depreciate against major
Dalasi/ UK £ April 2009 38.94 39.52 currencies during the
Dalasi/ Euro April 2009 35.07 31.43 year 2009.
Dalasi/ CHF April 2009 22.80 19.16
Dalasi/ CFA (5000) April 2009 259.13 235.95

5
 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 April- Apriil-2009 Inflation Wi (CPIi1 – Contributio

Wi (%) 2008 Index (%) CPIi0) n2 (%)
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).

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 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

7
 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)

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

8
 The Gambia - Monthly Economic Abstract- May 2009

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

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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 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-3.1 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

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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
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
ap 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.grants3
Basic balance4 -86.0 60.7 -101.2 -1.3 -0.9 1.2 0.9
Basic Prim. Balance5 88.6 50.5 80.5 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).
4
(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

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

Table-4.1: 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-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 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)

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.

Table-5 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

13
 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 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.

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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.

Table-7 Sectoral Distribution of Bank Credits

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

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 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 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
Source: Central Bank of Gambia (CBG)

16