The Gambia Monthly Economic Bulletin- December 2009

THE GAMBIA MONTHLY ECONOMIC BULLETIN1

December 2009

Institutional Support Project for Economic and Financial Governance (ISPEFG) Ministry of Finance and Economic Affairs (MOFEA) The Republic of Gambia The Quadrangle, Banjul, the Gambia

The Gambia Monthly Economic Bulletin provides an update on the recent economic developments and policies in the Republic of the Gambia. The Bulletin is prepared, under the overall guidance of the Honorable Permanent Secretary Mr. Serign Cham, by a research team comprising Tamsir Cham, Director; Momodou Taal, Principal Economist; Amie Khan, Senior Economist and Ceesay Chiel, Economist in the Economic Management and Planning Unit (EMPU) and Tarun Das, Macroeconomic Adviser (ISPEFG); with key inputs from the Ministry of Finance and Economic Affairs (MOFEA), the Central Bank of Gambia (CBG), the Gambian Bureau of Statistics (GBOS), and the Gambian Revenue Authority (GRA). It is needless to point out that the views expressed in this Bulletin solely indicate the views of the Research Team, which do not necessarily imply the views of the MOFEA, the Budgetary Agencies or the organizations they are associated with. 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 Bulletin- December 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 GDP per capita (2006) US$ 329 192 out of 207 countries Poverty Ratio (% of people Percent 59 7 out of 65 countries below One-US$ per day) (2000) 2

The Gambia Monthly Economic Bulletin- December 2009 Source: http://www.nationmaster.com

The Gambia Monthly Economic Bulletin- December 2009

Contents

Items
Basic Facts About the Gambia Contents ISPEFG Project/ Research Team and Document History Highlights At a Glance 1. Global Economic Outlook 1.1 Global recovery is uneven, weak, slow and painful 1.2 Global Commodity Prices and Inflation 2. Current State of the Gambian Economy 2.1 Overall and Sectoral GDP Growth Rates 2.2 Consumer Price Index (CPI) and Inflation 2.3 Projection of CPI inflation for the year 2009 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 Government Fiscal Performance Projections of Fiscal Outturn for 2009 Domestic Debt and Outstanding Treasury Bills Treasury Bills Yields Money Supply Performance of Commercial Banks Commercial Banks Assets Commercial Banks Liabilities Interest Rates and Central Banks Policy Rates BOP, Foreign Exchange Reserves and Exchange Rates Exchange Rates

Page 2 3 4 5-6 7 8-14 8 13 15-36 15 17 19 20 22 24 25 26 27 28 29 30 31 36

The Gambia Monthly Economic Bulletin- December 2009

ISPEFG Project and Monthly Bulletin Research Team

Project Supervisor Project Coordinator Director (EMPU) Principal Economist Senior Economist Economist Technical Assistant (Debt Management) Technical Assistant (Fiscal/ Financial) Technical Assistant (Macroeconomic)

Honorable Mr. Serign Cham, Permanent Secretary Mr. Momodou Cham Dr. Tamsir Cham Mr. Momodou Taal Ms. Amie Khan Ms. Ceesay Chilel Mr. Adam Aikuta Mr. Dan Mambule Mwanje Dr. Tarun Das

Document History: This report is an update of the following reports prepared by the Research Team: The Gambia Quarterly Economic Bulletin, pp.1-30, 31 March 2009. The Gambia Monthly Economic Abstract, pp.1-16, 31 March 2009. The Gambia Monthly Economic Bulletin, pp.1-40, 30 April 2009. The Gambia Monthly Economic Abstract, pp.1-16, 30 April 2009. The Gambia Monthly Economic Bulletin, pp.1-39, 31 May 2009. The Gambia Monthly Economic Abstract, pp.1-15, 31 May 2009. The Gambia Monthly Economic Bulletin, Part-1, pp.01-22, June 2009. The Gambia Monthly Economic Bulletin, Part-2, pp.23-46, June 2009. 9. The Gambia Monthly Economic Abstract, pp.1-16, June 2009. 10. The Gambia Monthly Economic Bulletin, Part-1, pp.01-22, July 2009. 11. The Gambia Monthly Economic Bulletin, Part-2, pp.23-46, July 2009. 12. The Gambia Monthly Economic Abstract, pp.1-16, July 2009. 13. The Gambia Monthly Economic Abstract, pp.1-16, August 2009. 14. The Gambia Monthly Economic Abstract, pp.1-16, September 2009. 15. The Gambia Monthly Economic Bulletin, pp.1-25, October 2009. 16. The Gambia Monthly Economic Bulletin, pp.1-37, November 2009. 17. The Gambia Monthly Economic Bulletin, pp.1-37, December 2009.
1. 2. 3. 4. 5. 6. 7. 8.

HIGHLIGHTS

The Gambia Monthly Economic Bulletin- December 2009

Impact of Global Financial Crisis and Economic Slowdown

As per the IMF projections made in the WEO October 2009, global output is expected to contract by about 1% in 2009 followed by a positive growth of 3% in 2010. IMF concludes that although the global economy has started to pull out of the unprecedented recession witnessed since the World War-II, recovery is uneven, slow, and jobless. In African developing economies, growth is projected to slow down significantly from 5.2 percent in 2008 to 2 percent in 2009. Global Food and Oil Prices

Due to sluggish demand and economic slowdown, there were significant decline of world commodity prices including food and petroleum since August 2008. However, since March 2009 commodity prices have started rising again in response to some increase in global demand, but commodity prices still rule much below the peaks reached in 2008.

At the beginning of 2009, given weakness in the Chinese demand and negative growth in the US and EU and OPECs 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$77.04 per barrel in November 2009. Recent forward markets project oil prices around $75 for 2010, which is not much above current price. Impact on the Gambian Economy

A global crisis of this magnitude is bound to have adverse impact on any country. The Gambian economy was not an exception and witnessed a decline in exports, remittances, foreign investment, tourist arrivals, manufacturing production and wholesale and retail trade in 2008. However, thanks to bumper crops contributed by favorable monsoon at home and very good performance by electricity, telecom and financial sectors, the real GDP growth at constant market prices improved from 6% in 2007 to 6.3% in 2008, supported by a spectacular growth of 26.6% in agriculture GDP and a growth of 4.2% in services GDP despite decline by 1.2% in industrial GDP. Even though the Gambian economy was relatively insulated from the first round effects of the global financial crisis, its spread to the real sectors of the global economy had adverse impact on the Gambian manufacturing production, selected services and trade sectors. In particular, exports, retail trade, tourism and foreign direct investment (FDI) declined since the second half of 2008 due to weak global demand. Due to fall in tourists income and foreign investment and deceleration of agricultural growth, real GDP growth rate in 2009 is expected to decelerate to 5%, aided by a growth of 5.5% in agriculture production, 3.5% in industry and 5.7% in services production.

CPI Inflation

As measured by the Consumer Price Index (CPI), annual point-to-point CPI inflation decelerated significantly from 6.6% (Food 8.6% and Non-Food 4%) in November 2008 to 2.6% (Food 2.6% and Non-Food 2.7%) in November 2009. On the contrary, the 12-month average inflation rate accelerated from 4.4% in November 2008 to 5.0% in November 2009. Among other groups in November 2009, housing and utilities recorded an annual inflation of 2.1%, restaurants and hotels 3.6% and miscellaneous goods and services 10.1%.

The Gambia Monthly Economic Bulletin- December 2009

Government Fiscal Performance

Governments fiscal performance was mixed in Jan-Nov 2009 than Jan-Nov 2008. During JanNov 2009, total domestic revenue increased by 13.2% over Jan-Nov 2008 aided by 13.9% increase in taxes and 6.9% increase in non-tax revenues; while total expenditures and net lending increased by 35.9% aided by 18.2% increase in current expenditure and 84.5% increase of capital expenditure and net lending. Overall, there was a fiscal deficit of D629 million (2.5% of GDP) in Jan-Nov 2009, up from D438 million (1.9% of GDP) in Jan-Nov 2007, and basic balance and basic primary balance deteriorated to (-) D369 million and D310 million respectively in Jan-Nov 2009 from (-) D213 million and D430 million respectively in Jan-Nov 2008.

Domestic Debt and Treasury Bills Yields At the end of Nov 2009, outstanding domestic debt stood at D6 billion (24.1% of GDP), marginally up from the outstanding domestic debt at D5.95 billion (26.3% of GDP) a year ago.

The share of Treasury bills increased from 80.1% at end-Nov 2008 to 84.5% at end-Nov 2009, that of Sukuk Al-Salam increased from 1.1% to 2.4%, that of Govt. bonds declined marginally from 4.2% to 4.1%, and that of NIB treasury bills declined from 14.7% to 9.1% over the period. Yields on treasury bills fluctuated widely in recent months. As expected, the higher the maturity of treasury bills, the higher is the yield. However, despite stability in deposit rates and significant decline of annual point-to-point CPI inflation rate from 7% in Jan 2009 to 2.6% in Nov 2009, average yields on the 91-day bills increased from 10.5% in Jan 2009 to 10.8% in Nov 2009, yield on 182-day bills increased from 12.1% to 12.3% over the period, while yield on 364 day bills declined marginally from 14.4% in Jan 2009 to 14% in Nov 2009. In view of the declining trend of the inflation rates, the MPC reduced policy rate by 2 percentage points to 14% in Dec 2009.

Money Supply and Bank Credits

Annual growth rate of money supply (M2) decelerated from 19.8% in Nov 2008 to 19.3% in Nov 2009, aided by 21.4% growth in currency, 1.6% growth in demand deposits, 22.3% growth in savings deposits and 41.6% growth in time deposits. On the demand side, growth was due to 21.3% growth in net foreign assets and 18.2% growth in net domestic assets. Domestic credit increased by 11.8% from D6.5 billion in Nov 2008 to D7.3 billion in Nov 2009, supported by 15.8% growth in government borrowing, 26.6% growth in credits to public entities and 12.8% growth in credits to the private sector, over a year ago.

Balance of Payments, Foreign Exchange Reserves and Exchange Rate

Preliminary BOP estimates by the CBG for the first half of 2009 (i.e. Jan-June 2009) indicated a lower overall deficit at D348.44 million compared to D376.5 million in Jan-June 2008. The current account recorded a surplus of D163.48 million in Jan-June 2009 compared to a deficit of D276.1 million in Jan-June 2008. The capital and financial account balance worsened to deficit of D511.92 million in Jan-June 2009 from a deficit D100.4 million in Jan-June 2008. Gross official reserves, including SDR allocation from the International Monetary Fund (IMF), as at end-September stood at US$141.3 million, equivalent to 6.0 months of import cover. At end-Nov 2009, Dalasi has depreciated by 8.2% against British Pound, by 2.5% against US$, by 32.8% against CHF, by 20.6% against Euro and by 14.4% against CFA over end-Nov 2008.

The Gambia Monthly Economic Bulletin- December 2009

At a Glance- November 2009

Economic Indicators Real GDP (MP) Growth rate (%) CPI inflation (%) Brent crude oil price (US$/ brl)
Growth rate (%) of Revenue & grants Growth rate (%) of Exp & Net Lending Overall fiscal bal. as % of GDP Basic Balance as % of GDP Primary Bas. Bal, as % of GDP

Latest Reference Period Calendar year 2009 Nov 2009 Nov 2009
Jan-Nov 2009 Jan-Nov 2009 Jan-Nov 2009 Jan-Nov 2009 Jan-Nov 2009

Status in the latest reference period Overall 5.0 Agriculture 5.5 Industry 3.5 Services 5.7 Overall 2.6 Food 2.6 Non-food 2.7 Average US$77.04
34.9 35.9 (-) 2.5 (-)1.5

Status in the Corresponding period in the previous year Overall 6.3 Agriculture 26.6 Industry (-) 1.2 Services 4.2 Overall 6.6 Food 8.6 Non-food 4.0 Average US$75
(-) 1.1 16.8 (-) 1.9 (-) 0.9

Outlook for 2009

Overall 5.0 Agriculture 5.5 Industry 3.5 Services 5.7 Expected to remain stable in December 2009. May stabilize around US$75 by the end-2009
Revenue realisation in 2009 is expected to be better than in 2008 due to better performance by both domestic revenue and grants in 2009. However, there will be expenditure overruns leading to widening of gross fiscal deficit.

1.2
24.1 10.8 12.3 14.0 19.3 13.9 14 (-) 348.44

1.9
26.3 10.1 13.4 13.7 19.8 12.8 16 (-) 376.5 (-) 276.1 (-) 100.4 1.6 40.56 26.26 20.07 258.31 33.28

Domestic debt as % of GDP Yield on 91-days TBs (%) Yield on 182days TBs (%) Yield on 364days TBs (%) GR of Money supply (M2) (%) Banks assets (Billion Dalasi) CBG policy rate (%) Overall BOP Balance (Mln D) Current A/C Balance (Mln D) Capital-Fin. A/C Balance (Mln D) Rate of change- l Nom. Effective Exch. Rate (%) Dalasi/ UK Dalasi/ US$ Dalasi/ CHF Dalasi/ CFA5000 Dalasi/ Euro

Nov 2009 Nov2009 Nov 2009 Nov 2009 Nov 2009 End-Nov 2009 Dec 2009 Jan-June 2009 Jan-June 2009 Jan-June 2009 End-Sep 2009 End-Nov 2009 End-Nov 2009 End-Nov 2009 End-Nov 2009 End-Nov 2009

Likely to decline in 2009. Yields may come down as CPI inflation has started decelerating.

Money growth rate is likely to remain high. Likely to increase MPC reduced policy rate to 14% in Dec 2009 BOP is likely to improve in the second half.

163.48
(-) 511.92 (-) 7.9 43.88 26.93 26.65 295.53 40.15

Dalasi is expected to depreciate against major currencies in 2009.

1. Global Economic Outlook 8

The Gambia Monthly Economic Bulletin- December 2009 1.1 Global recession is ending but recovery is weak, slow and painful It is well known that the global economy is presently passing through a critical conjecture. It was adversely affected by three worst crises in fuel, food and financial sectors (called F-3 Crisis) in a single year in 2008 - the first massive F-3 crisis in the last 70 years since the great depression in 1930s. Both the advanced and developing countries have adopted various monetary and fiscal stimulus packages (such as cuts in central bank policy interest rates, continued provision of bank liquidity, credit easing, provision of public guarantees, bail outs and bank recapitalization etc.) to boost both investment and consumption, output and employment. In their latest World Economic Outlook (WEO)2 of October 2009, the International Monetary Fund (IMF) concludes that although the global economy has started to pull out of the unprecedented recession, recovery is expected to be weak and slow, and jobless for some time, as financial systems remain impaired, support from public policies will gradually have to be withdrawn, and households that suffered asset price busts will continue to rebuild savings. As per the IMF projections made in the WEO October 2009, global growth is expected to reach about 3 percent in 2010, following a contraction in activity of about 1 percent in 2009 (Table-1.1). During 201014, global growth is expected to be just above 4 percent, appreciably less than the 5 percent growth rates in the years just ahead of the crisis. Achieving this turnaround will depend on stepping up efforts by the governments of both developed and developing countries to heal the financial sector, while continuing to support demand with monetary and fiscal easing. In recent years African economies in general experienced an economic boom contributed by two favorable factors: namely (a) rising exports driven by high commodity prices, and (b) increasing inflows of remittances and foreign investment. The ongoing financial crisis and economic slowdown in the developed countries have led to reversal of these positive factors and imposed serious adverse impact on the African economies. Prospects of Sub-Saharan Africa Growth projections in Sub-Saharan Africa have been revised downward to 1.3 percent in 2009 while growth projection for 2010 remains unchanged at 4.1 percent (see Box 1.1 and Figure 1.1). Real GDP growth in Africa as a whole is projected to decline from an average of 6 percent in 2004 08 to 1 percent in 2009, before accelerating to 4 percent in 2010. This growth performance, while disappointing in light of the experience of the mid-2000s, is still encouraging given the severity of the external shocks. An important factor behind this outcome has been that many governments in the region have been able to use fiscal balances as shock absorbers, sustaining domestic demand and helping contain employment losses.

Table-1.1 IMF WEO (Oct 2009) Projections (Annual Growth Rate in Percentage)

World Economic Outlook- Sustaining the Recovery, October 2009, IMF Washington D.C.

The Gambia Monthly Economic Bulletin- December 2009

Source: World Economic Outlook- Sustaining International Monetary Fund, Washington D.C.

the

recovery,

October

2009,

10

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

The Gambia Monthly Economic Bulletin- December 2009

Figure 1.1 Sub-Saharan Africa: Projected GDP Growth, 200811

Source: IMF, African Department database. Note: The country borders or names in this map do not necessarily reflect the IMFs official position.

12

The Gambia Monthly Economic Bulletin- December 2009

Box 1.2 IMF-World Bank Debt Sustainability Analysis for African Economies The objective of the IMF-World Bank debt sustainability framework, which was introduced in 2005, is to support low-income countries in their efforts to achieve their development goals without creating future debt problems (see The Debt Sustainability Framework for Low-Income Countries, Occasional Paper 266, IMF (2008). A debt sustainability analysis using the DSF looks at five debt burden indicators to evaluate the risk of external debt distress: the ratios of (i) present value (PV) of debt-to-GDP; (ii) PV of debt-to-exports; (iii) PV of debt-to-revenues; (iv) debt service-to-revenues; and (v) debt service-to-exports. The risk of debt distress is derived by reviewing the evolution of debt burden indicators compared to their indicative policy-dependent debt-burden thresholds using a baseline scenario, alternative scenarios, and stress tests. The thresholds depend on the quality of a countrys policies and institutions as measured by the three-year average of the World Banks Country Policy and Institutional Assessment (CPIA) index.

13

The Gambia Monthly Economic Bulletin- December 2009

1.2 World Commodity Prices Inflation pressures to remain low. The global recession has caused a large drop in inflation and rising concern about mild deflation. However, the decline in inflation pressures has been limited among some emerging economies. Inflation in advanced economies is projected to be close to zero in 2009 and to accelerate very modestly to about 1 percent in 2010, largely reflecting rising commodity prices. Prices for many manufactured goods will probably continue to decline for some time. Fortunately, inflation expectations have generally remained well anchored, providing some protection against sustained large price declines. In emerging economies, inflation is forecast to hover around 5 percent in 20092010, down from more than 9 percent in 2008. Only China, a few of the ASEAN-5 and most emerging European economies are projected to see inflation fall appreciably below 5 percent. Low potential growth and inflation will slow the process of deleveraging, adding to contractionary forces.

Commodity Prices Commodity prices have rebounded ahead of the recovery (Table 1.2). The recent rally in commodity prices was strong and broad-based, reflecting improved market sentiment, U.S. dollar depreciation, and commodity-specific supply-demand conditions. Oil prices have responded strongly to improved demand prospects but also to Organization of Petroleum Exporting Countries (OPEC) members strict observance of lower production quotas. Brent crude oil prices averaged $74.67 per barrel in December 2009. Forward markets project oil prices in the range of $75-78 for 2010, not much above current levels, with high excess capacity expected to buffer growing demand.

14

The Gambia Monthly Economic Bulletin- December 2009 Table-1.2 Trends of World Commodity Prices
Commodity Unit $/bbl $/bbl $/mmbtu $/mmbtu /kg /kg /kg /kg $/mt $/mt $/mt $/mt $/mt $/mt $/mt $/mt $/mt $/mt $/mt $/mt $/mt $/mt /kg /kg /kg $/mt /kg /kg $/cum /sheet $/cum /kg /kg $/mt $/mt $/mt $/mt $/mt $/mt $/toz /dmtu /kg $/mt /toz $/mt $/mt $/mt $/mt /kg /kg Oct-Dec 2008 55.89 53.67 15.75 6.40 224.1 192.6 220.2 190.8 772 520 1,773 512 609 830 377 129.5 168.4 564.4 449.9 228.1 182.7 1,023 268.0 174.7 410.0 842 1,014 51.97 473.8 645.5 770.8 129.4 202.8 663.3 371.3 766.7 292.2 1,821 3,905 795 140.6 124.5 10,843 1,020 1,100 1,000 630 1,200 1,310 118.5 Quarterly averages Jan-Mar Apr-Jun 2009 2009 44.98 44.56 11.94 4.57 259.4 175.8 177.4 214.9 677 447 1,283 577 577 755 394 116.3 166.9 586.3 469.4 231.6 187.4 1,013 245.2 173.5 378.5 799 976 51.44 426.8 572.8 689.2 122.4 165.8 362.2 193.3 865.2 267.3 1,360 3,428 909 101.0 115.7 10,471 1,265 1,033 933 473 1,200 1,103 117.2 59.13 58.93 8.18 3.70 257.9 165.3 271.3 228.0 779 513 1,166 743 763 863 461 129.5 176.0 552.4 458.7 250.5 195.6 1,097 262.8 174.1 428.7 870 970 53.76 394.8 565.8 721.2 137.5 187.0 303.6 113.3 726.7 241.1 1,485 4,663 922 101.0 149.9 12,920 1,376 700 600 450 1,007 1,351 147.3 Jul-Sep 2009 68.37 68.07 6.91 3.17 296.4 160.1 273.0 281.7 711 469 1,133 679 700 856 454 122.0 151.3 539.0 441.4 208.8 165.2 1,276 273.2 173.9 453.3 861 970 55.43 414.9 561.5 779.0 148.8 221.0 309.6 90.0 506.8 241.6 1,812 5,859 960 101.0 192.8 17,700 1,477 700 600 500 857 1,459 176.1 Oct-Dec 2009 74.97 75.46 7.81 4.36 342.0 156.4 286.2 283.2 734 491 1,150 732 737 920 439 145.5 167.8 542.3 462.8 205.4 195.6 1,535 273.5 165.1 450.1 1,107 864 49.11 449.5 558.4 806.3 168.1 284.7 316.9 90.0 423.0 248.3 2,003 6,648 1,102 101.0 229.3 17,528 1,760 700 600 522 816 1,517 221.4 Monthly averages Oct Nov 2009 2009 73.19 73.28 7.60 4.02 336.0 162.1 294.4 261.3 706 470 1,148 680 728 897 427 130.7 167.3 493.0 412.8 198.8 175.6 1,427 264.8 166.1 445.8 1,153 937 48.78 444.5 559.3 790.0 163.7 264.8 300.1 90.0 435.0 239.0 1,879 6,288 1,043 101.0 224.1 18,525 1,726 700 600 580 850 1,501 207.2 77.04 77.63 7.81 3.70 338.5 153.2 291.2 290.6 729 493 1,116 725 726 931 440 155.3 171.6 542.8 460.3 211.0 204.7 1,526 275.6 164.6 457.0 1,154 863 49.63 451.1 558.6 821.0 171.5 279.3 290.3 90.0 435.0 244.8 1,949 6,676 1,127 101.0 230.9 16,991 1,788 700 600 495 825 1,494 219.3 Dec 2009 74.67 75.49 8.01 5.35 351.4 154.1 273.0 297.7 767 509 1,187 791 758 933 451 150.6 164.6 591.0 515.3 206.3 206.5 1,651 280.0 164.7 447.5 1,014 794 48.92 452.7 557.2 807.7 169.2 310.0 360.4 90.0 399.0 261.1 2,180 6,982 1,135 101.0 232.9 17,066 1,764 700 600 490 773 1,555 237.6

Energy
Crude oil, Brent Crude oil, Dubai Natural gas, Europe Natural gas, US

Beverages & Food

Cocoa Coffee, robusta Tea, Kolkata auctions Tea, Mombasa auction Coconut oil Copra Groundnut oil Palm oil Palmkernel oil Soybean oil Soybeans Barley Maize Rice, Thailand, 5% Rice, Thailand, 25% Wheat, US, HRW Wheat, US SRW Fishmeal Meat, beef Meat, chicken Meat, sheep Oranges Shrimp, Mexico Sugar EU

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 Iron ore Lead Nickel Silver Steel cr coilsheet Steel hr coilsheet Steel rebar Steel wire rod Tin Zinc

Source: World Bank Pink Sheet November 2009

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The Gambia Monthly Economic Bulletin- December 2009 2. Current State of the Gambian Economy 2.1 Overall and Sectoral GDP Growth Rates The sharp decline in global economic activity had adverse impact on the Gambian economy in 2008 leading to decline of exports and remittances and decline of manufacturing production and wholesale and retail trade. However, thanks to bumper crops contributed by favorable monsoon at home and high international prices of food grains, and very good performance by electricity, telecom and financial sectors, the real GDP growth at constant 2004 market prices improved from 6% in 2007 to 6.3% in 2008 (Table-2.1 and Figure-2.1). As per the Preliminary Estimates of the GBOS, real GDP growth in 2009 at constant market prices is expected to be 5% supported by a growth of 5.5% in agricultural production, 3.5% by industrial production and 5.7% in services production. Share of agriculture increased from 21.6% in 2007 to 25.3% in 2009, while share of industry declined from 14.7% to 13.2% and that of services declined from 63.7% to 61.5% during the same period. Increase of agricultural share was contributed by increase in share of crops, while decline of services share was mainly due to decline of share of wholesale and retail trade, and transport and communications.

GDP Composition(%) in 2009

Others Business 7% 11% Agriculture 26% Mining 2% Manufacturing Trade 26% 6% Utilities 2% Construction 4%

Transport 12% Hotels 4%

Figure-2.1: Trends of sectoral growth rates during 2000-2009 (in percentage) 16

The Gambia Monthly Economic Bulletin- December 2009

30.0 20.0 10.0 0.0 -10.0 -20.0 -30.0 GDPMP Agriculture Industry Services 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Table-2.1: Sectoral Growth Rates and Shares in GDP in the Gambia in 2005-2009 (in %)
Items GDP at 2004 basic price Agriculture and allied -- Crops -- Livestock -- Forestry -- Fishing Industry -- Mining and quarrying -- Manufacturing -- Electricity, gas, water -- Construction Services -- Wholesale/retail trade -- Hotels/ restaurants -- Transport / telecom -- Financial -- Real est., business -- Public administration -- Other service

2006 Actual 3.1 -14.3 -26.3 2.4 3.0 7.8 4.5 1.2 4.1 8.7 6.0 10.0 16.1 15.7 2.7 5.7 -3.9 11.1 11.0

Sectoral GDP Growth Rates (in percentage) 2007 2008 2009 2009 Actual Actual Estd. IMF-Proj 6.0 6.3 5.0 3.6 -1.9 -15.2 11.9 -4.0 18.0 2.5 -14.1 3.9 59.1 -4.3 8.3 9.7 14.3 7.0 -0.9 1.4 12.9 17.8 26.6 55.2 4.3 1.0 3.5 -1.2 8.8 -8.3 1.7 5.0 4.2 -2.3 2.9 -8.0 28.2 0.0 42.1 27.0 5.5 5.5 4.5 0.7 11.3 3.5 8.8 0.4 10.0 3.0 5.7 1.0 3.0 8.0 3.0 2.5 2.0 37.1 4.0 4.0 4.0 3.0 3.0 2.6 2.0 4.0 5.0 5.0 2.4 2.7 -10.0 3.5 1.0 1.0 5.0 3.0

Sectoral Shares in GDP (in percentage) 2006 2007 2008 2009 Actual Actual Actual Estd. 100.0 100.0 100.0 100 23.1 11.8 8.8 0.7 1.9 15.1 2.4 7.0 1.1 4.6 61.8 28.2 3.6 12.8 7.5 3.4 2.6 3.7 21.6 9.5 9.4 0.6 2.1 14.7 1.9 7.0 1.6 4.2 63.7 29.5 3.9 13.0 7.0 3.3 2.8 4.1 25.3 13.6 9.0 0.6 2.0 13.4 1.9 5.9 1.5 4.1 61.3 26.6 3.7 11.0 8.3 3.0 3.7 4.9 25.3 13.7 9.0 0.5 2.1 13.2 2.0 5.6 1.6 4.0 61.5 25.5 3.6 11.3 8.2 3.0 3.6 6.3

Source: Gambian Bureau of Statistics (GBOS) for the years 2006-2009 and IMF projections for 2009 by the IMF Mission to the Gambia in May 2009.

17

The Gambia Monthly Economic Bulletin- December 2009 2.2 Consumer Price Index and Inflation As measured by the Consumer Price Index (CPI), annual point-to-point CPI inflation decelerated significantly from 6.6% in November 2008 to 2.6% in November 2009. On the contrary, the 12-month average inflation rate accelerated from 4.4% in November 2008 to 5% in November 2009. Food and drinks (with weights of 55.2% in overall CPI) recorded an annual point-to-point inflation rate of 2.6% in November 2009, down from 8.6% a year ago, and contributed 56.5% to overall inflation in November 2009. Non-food items (weights of 44.8% in overall CPI) recorded annual inflation rate of 2.7% in Nov 2009, down from 4% a year ago and contributed 43.5% to overall inflation. Among other groups in Nov 2009, housing and utilities recorded an annual inflation of 2.1%, restaurants and hotels 3.6% and miscellaneous goods and services 10.1%.

Table-2.2 CPI Inflation Rates in November 2009 (in percentage) Weights Nov-2008 Nov-2009 Inflation Contributio Wi (CPIi1 Wi (%) Index Index (%) CPIi0) n3 (%) Overall 100.0 119.54 122.70 2.6 320.6 100.0 Food 55.2 124.66 127.94 2.6 181.1 56.5 Tobacco 0.7 104.77 106.52 1.7 1.2 0.4 Clothing 11.3 110.73 112.39 1.5 18.7 5.8 Utilities 3.4 120.10 122.64 2.1 8.6 2.7 Furnishing 5.2 113.59 116.14 2.2 13.4 4.2 Health 1.0 101.13 101.82 0.7 0.7 0.2 Transport 4.4 119.61 122.18 2.1 11.3 3.5 Telecom 3.0 101.92 102.5 0.6 1.7 0.5 Recreation 8.0 104.14 105.15 1.0 8.1 2.5 Education 1.5 101.94 102.99 1.0 1.6 0.5 Hotels 0.4 115.79 119.93 3.6 1.5 0.5 Misc. 5.9 121.47 133.73 10.1 72.7 22.7 Non-food 44.8 113.23 116.27 2.7 136.2 43.5 Source of basic data: Gambian Bureau of Statistics (GBOS).
Items

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 = Wi For example, contribution of food is estimated as 100 X 181.1 / 320.6 = 56.5%.

18

The Gambia Monthly Economic Bulletin- December 2009

19

The Gambia Monthly Economic Bulletin- December 2009 2.3 Projection of CPI inflation for December 2009 We have made three alternative projections of inflation rates for the remainder month of the year (i.e. December 2009), on the basis of the following assumptions: (1) Alternative-1: It is assumed that the CPI variation for a month over the previous month in 2009 will be the average CPI variation for the month over the previous month in last two years (2008 and 2007). Thus, Dec 2009 CPI is estimated by the following formula: Projected Dec 2009 CPI = Nov 2009 CPI + [Dec 2008 CPI + Dec 2007 CPI Nov 2008 CPI Nov 2007 CPI]/ 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 that for the respective month over the previous month in 2008. For example, CPI for Dec 2009 is estimated by the following formula: Projected CPI for Dec 2009 = Actual CPI for Nov 2009 + (Dec 2008 CPI Nov 2008 CPI). (3) Alternative-3: Average of inflation rates under Alternatives 1 and 2. Results are presented in Table 2.3 which indicates that inflation is expected to remain stable and low around 2.6% during December 2009, and the annual average inflation is expected to be around 4.6% in 2009, almost the same as in the last year. Table-2.3: Projections of CPI inflation during October-December 2009 (in percentage)
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Q1 Q2 Q3 Q4
Average

2007 Index 106.86 107.01 109.36 111.64

2008 Index 112.31 112.34 112.73 113.21

2009Alt1

2009Alt2

120.1 3 120.2 5 120.3 0

120.36 120.51 120.61 120.84 121.15 121.75 121.99 122.70 122.96

120.1 3 120.2 5 120.3 0

120.36 120.51 120.61 120.84 121.15 121.75 121.99 122.70 123.09

2007 Inf. rate 2.0 2.1 4.2 6.3 6.6 6.4 6.3 6.4 6.0 6.0 6.0 6.0

2008 Inf. rate 5.1 5.0 3.1 1.4 1.6 2.2 3.8 5.0 6.3 6.6 6.6 6.8

2009Alt1 7.0 7.0 6.7 6.3 5.9 5.4 4.0 3.0 2.3 2.3 2.6 2.5 6.9 5.8 3.1 2.5

2009Alt2 7.0 7.0 6.7 6.3 5.9 5.4 4.0 3.0 2.3 2.3 2.6 2.6 6.9 5.8 3.1 2.5

2009 Alt3

7.0 7.0 6.7 6.3 5.9 5.4 4.0 3.0 2.3 2.3 2.6 2.6 6.9 5.8 3.1 2.5 4.6

112.0 5 111.9 8
111.95 112.09 111.86 111.95 112.13 112.26 107.7

113.8 3 114.4 8
116.21 117.65 118.96 119.29 119.54 119.93 112.5

111.9
112.0 112.1

113.8
117.6 119.6

110.9

115.9

120.2 120.5 121.2 122.6 121.1

120.2 120.5 121.2 122.6 121.1 20

2.8 6.4 6.2 6.0 5.4

4.4 1.7 5.0 6.7 4.5

4.6

4.6

The Gambia Monthly Economic Bulletin- December 2009

21

The Gambia Monthly Economic Bulletin- December 2009 2.4 Government Fiscal Performance in Jan-Nov 2009 Columns (4), (5) and (6) of Table-2.4.1 present major item-wise revenue realization and expenditure of the government in the first 11 months (i.e. Jan-Nov) of 2007, 2008 and 2009 respectively. Columns (7) and (8) indicate annual percentage changes of major items of revenues and expenditure in Jan-Nov 2008 and Jan-Nov 2009 respectively over those in the corresponding period of the previous year. It is observed from the table that the governments revenue realization was better in JanNov 2009 than Jan-Nov 2008. In Jan-Nov 2008 total domestic revenues declined by 2.7%, as tax revenues and non-tax revenues declined by 0.6% and 18.3% respectively over JanNov 2007. On contrast, Jan-Nov 2009 witnessed an increase in total domestic revenue by 13.2% aided by 13.9% increase in taxes and 6.9% increase in non-tax revenues. During Jan-Nov 2009, total expenditures and net lending has increased by 35.9% over Jan-Nov 2008 due to 18.2% increase in current expenditure and 84.5% increase of capital expenditure and net lending over Jan-Nov 2008. Overall, there is a fiscal deficit of D629 million in Jan-Nov 2009, higher than fiscal deficit of D438 million in Jan-Nov 2007, and basic balance and basic primary balance deteriorated to (-) D369 million and D310 million respectively in Jan-Nov 2009 from (-) D213 million and D430 million respectively in Jan-Nov 2008. Table-2.4.1 Govt Financial Performance in Jan-Nov 2009 compared with Jan-Nov 2008
Items 2008 Actual Mln Dal. (2) 3645 3479 3161 318 166 4135 3011 906 1398 708 154 555 1123 1017 107 -490 -156 553 2009 Budget Estimate Mln. Dal. (3) 4582 3771 3391 380 811 5363 3838 1035 1958 845 147 698 1525 1468 57 -781 -268 577 25023 2007 Jan-Nov Actual Mln Dal. (4) 3426.5 3256.9 2863.4 393.5 169.6 3277.3 2330.3 594.1 981.4 754.8 220.8 534.0 946.9 871.3 75.7 149.2 726.2 1481.0 20413 2008 Jan-Nov Actual Mln Dal. (5) 3390.3 3167.6 2846.2 321.4 222.7 3828.7 2807.3 905.8 1258.3 643.2 128.8 514.4 1021.4 917.3 104.1 -438.4 -213.2 430.1 2009 Jan-Nov Actual Mln Dal. (6) 4572.3 3584.2 3240.8 343.5 988.1 5201.6 3317.3 1083.0 1555.6 678.6 132.0 546.6 1884.3 1811.6 72.7 -629.3 -368.9 309.8 25023 % change in JanNov 2008 over JanOct 2007 (7) -1.1 -2.7 -0.6 -18.3 31.3 16.8 20.5 52.5 28.2 -14.8 -41.7 -3.7 7.9 5.3 37.6 -393.9 -129.4 -71.0 10.7 % change In JanNov 2009 over JanOct 2008 (8) 34.9 13.2 13.9 6.9 343.7 35.9 18.2 19.6 23.6 5.5 2.5 6.3 84.5 97.5 -30.2 43.5 73.1 -28.0 10.8

(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 (GBOS)

22590

22590

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

22

The Gambia Monthly Economic Bulletin- December 2009 Column (2) of Table-2.4.2 indicates the item-wise actual fiscal performance in 2008 as percentage of GDP and the column (3) indicates the item-wise budget estimates in 2009 as percentage of GDP. It is observed from these columns that 2009 budget estimates assume better performance of grants and expenditure as percentages of GDP. Overall fiscal deficit for 2009 is budgeted at 3.1% of GDP compared to 2.2% of GDP recorded in 2008. Columns (4), (5) and (6) of Table-2.4.2 present the major item-wise performance of revenues and expenditure in Jan-Nov of 2007, 2008 and 2009 respectively, as percentages of the corresponding nominal GDP (as estimated by GBOS) for the full year. It is observed from the table that, in terms of the percentages of GDP, the total revenues and expenditures have performed better in Jan-Nov 2009 than those in Jan-Nov 2008. The revenue and expenditure ratios to GDP are also observed to be on track in Jan-Nov 2009 (column-6) as compared with the 2009 budget estimates (column-3). Table-2.4.2 Govt Financial Performance in Jan-Nov 2009 compared with Jan- Nov 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 2008 Actual as % of GDP (2) 16.1 15.4 14.0 1.4 0.7 18.3 13.3 4.0 6.2 3.1 0.7 2.5 5.0 4.5 0.5 -2.2 -0.7 2009 Budget as % of GDP (3) 18.3 15.1 13.5 1.5 3.2 21.4 15.3 4.1 7.8 3.4 0.6 2.8 6.1 5.9 0.2 -3.1 -1.1 2007 Jan-Nov as % of GDP (4) 2008 Jan-Nov as % of GDP (5) 15.0 14.0 12.6 1.4 1.0 16.9 12.4 4.0 5.6 2.8 0.6 2.3 4.5 4.1 0.5 -1.9 -0.9 2009 Jan-Nov as % of GDP (6) 18.3 14.3 13.0 1.4 3.9 20.8 13.3 4.3 6.2 2.7 0.5 2.2 7.5 7.2 0.3 -2.5 -1.5 2008 Jan-Nov as % of Outturn (7) 93.0 91.1 90.0 101.2 134.5 92.6 93.2 100.0 90.0 90.8 83.9 92.7 90.9 90.2 97.5 89.4 137.1 2009 Jan-Nov as % of Budget (8) 99.8 95.0 95.6 90.3 121.8 97.0 86.4 104.6 79.5 80.3 89.7 78.3 123.6 123.4 128.3 80.6 137.8

Overall Bal Inc.grants4 Basic balance5 Basic Prim. Balance6

16.8 16.0 14.0 1.9 0.8 16.1 11.4 2.9 4.8 3.7 1.1 2.6 4.6 4.3 0.4 0.7 3.6 7.3

2.4

2.3

1.9

1.2

77.8

53.6

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

4
5

(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; 6 (3) Basic primary balance= Basic balance plus interest payments 23

The Gambia Monthly Economic Bulletin- December 2009

2.5 Projection of Fiscal Outturn for the Year 2009

Column (2) of the Table-2.5.3 below presents detailed item-wise revenues and expenditure in Jan-Nov 2009. The ratios of actual realization for any item in Jan-Nov to the final outturn for the item during the complete year for the last five years viz. 2004, 2005, 2006, 2007 and 2009 are presented in columns (3) to (7) respectively. Item-wise average ratios for these five years are presented in column (8) of the Table-2.5.3. Taking these ratios as norms to take care of monthly seasonality over the year, expected revenue and expenditure outcomes for the full year 2009 are estimated by the following formula and are presented in column (9) of the Table-2.5.3. Expected outturn for an item in 2009 = 100 X (actual realization in Jan-Nov 2009) / average realization ratio (in percentage) in Jan-Nov in the last five years (2004-2008) Comparison of the expected outcome given in Column (9) with the budget estimates given in Column (10) 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 realized by actual collections in 2009. (b) Grants as budgeted are also expected to be realized in 2009. (c) There is likely to be marginal shortfall in non-tax revenues. (d) Both current and capital expenditure will be within budgeted targets. (e) Overall, it is expected to have a fiscal deficit of D872 million (amounting to 3.5% of nominal GDP) compared to budget estimate of fiscal deficit at D780.7 million (amounting to 3.1 percent of GDP). However, basic primary balance is likely to be 4.9% of GDP, higher than the budget estimate at 2.3% of GDP.
2.5.3 Government Fiscal Performance in Jan-Nov 2009 and Expected Outturn for 2009 Items 2009JanNov Actual (2) 4572.3 3584.2 3240.8 920.7 391.3 449.3 24.2 37.5 18.4 Ratio of Jan-Nov performance in Annual Outturn (in Percentage) 20042005200620072008Ja-Nv Ja-Nv Ja-Nv Ja-Nv Ja-Nv (3) (4) (5) (6) (7) 91.1 89.1 91.8 93.6 90.5 90.6 88.7 91.6 93.9 90.5 91.4 90.4 92.6 93.8 90.5 92.6 89.9 96.3 96.4 92.0 93.1 94.2 93.8 93.7 93.2 92.1 86.8 97.4 98.2 98.2 93.1 93.4 95.3 94.5 56.0 97.7 98.3 98.4 99.7 98.0 98.3 99.8 100.0 99.4 Ave. ratio 20042009 (8) 2009 Proj. Outturn7 (9) 4988.1 3915.4 3537.1 977.8 418.1 475.1 28.0 38.1 18.5
2009 Budget Estimate

(1) 1.Rev & grants (2+5) 2.Dom. Revenue (3+4) 3.Tax Rev (3.1+3.2) 3.1 Direct Tax (a to e) (a) Personal (b) Corporate (c) Capital Gains (d) Payroll (e) Other

(10) 4582.2 3771.1 3390.6

93.6 94.6 86.4 98.4 99.4

Expected outturn for an item in 2009 = 100 X (actual realization in Jan-Nov 2009) / average realization ratio (in percentage) in Jan-Nov during the last five years (2004-2008)

24

The Gambia Monthly Economic Bulletin- December 2009

2.5.3 Government Fiscal Performance in Jan-Nov 2009 and Expected Outturn for 2009 2009 Ratio of Jan-Nov performance in Ave. 2009 JanAnnual Outturn (in Percentage) ratio Proj. Nov 2004Out20042005200620072008Actual 2009 turn8 Ja-Nv Ja-Nv Ja-Nv Ja-Nv Ja-Nv (1) (2) (3) (4) (5) (6) (7) (8) (9) 3.2 Indirect Tax 2320.1 90.9 90.6 91.0 92.8 89.6 2559.3 3.2.1 Dom Tax on G&S 520.8 89.0 91.4 89.5 92.3 91.1 575.8 (a) Stamp Duties 15.1 95.1 93.4 97.7 97.2 91.5 95.0 15.9 (b) Excise Duties 132.8 90.0 83.3 89.6 89.8 90.9 88.7 149.7 (c) Dom Sales Tax 372.8 88.5 92.7 89.0 93.1 91.2 90.9 410.2 3.2.2 Tax on Ext Trade 1799.3 91.3 90.3 91.5 92.9 88.9 1983.5 (a) Duty (i+ii) 1058.0 92.0 90.5 91.2 92.9 86.5 1171.5 (i) Oil 588.8 94.0 89.5 91.8 94.6 78.5 89.7 656.5 (ii) Non-oil 469.2 91.4 90.9 90.8 92.0 90.5 91.1 514.9 (b) Sale tax on imp (i+ii) 741.3 90.5 90.1 91.8 92.9 91.5 812.0 (i) Oil 131.8 90.2 92.7 91.7 90.3 93.6 91.7 143.7 (ii) Non-oil 609.5 90.5 89.5 91.8 93.5 90.7 91.2 668.3 4. Nontax Rev (a to d) 343.5 83.7 77.7 80.3 94.6 90.8 85.4 378.3 (a) Govt Charges 128.3 88.8 94.5 86.8 97.3 96.5 92.8 138.3 (b) NTR from CRD 4.6 95.8 97.7 98.1 94.1 96.4 4.7 (c) NTR from CED 95.8 91.0 92.5 90.6 91.4 104.8 (d) Others 114.8 75.0 80.0 85.0 100.0 100.0 88.0 130.5 5. Grants 988.1 93.4 93.6 95.3 87.2 91.1 92.1 1072.7 6. Exp & Net Lend (7+8) 5201.6 5859.6 92.0 95.7 91.1 90.2 88.4 7. Cur. .Exp (7.1 to 7.3) 1884.3 95.5 97.3 93.9 90.3 89.2 2165.8 7.1 Pers. Emoluments 1811.6 95.0 96.4 93.6 89.6 89.3 2075.3 7.2 Other Charges 1248.5 97.2 96.2 94.4 95.7 88.7 1372.3 7.3 Interest (a+b) 610.2 99.9 96.8 94.2 98.5 89.5 91.0 670.7 (a) External 638.3 90.9 93.1 95.3 87.2 86.9 91.0 701.6 (b) Domestic 563.1 68.1 98.2 79.5 64.8 89.9 80.1 702.9 8. Cap Exp & Net Lend. 72.7 60.3 53.0 100.0 100.0 88.4 80.3 90.5 8.1 Capital Exp. (a+b) -629.3 -871.5 (a) Ext. Financed (i+ii) -368.9 500.8 (i) Loans 309.8 1233.2 (ii) Grants 1884.3 95.5 97.3 93.9 90.3 89.2 2165.8 (b) GLF Capital 1811.6 95.0 96.4 93.6 89.6 89.3 2075.3 8.2 Net lending 1248.5 97.2 96.2 94.4 95.7 88.7 1372.3 9. Overall fis. bal (1-6) 610.2 99.9 96.8 94.2 98.5 89.5 91.0 670.7 10. Basic balance 638.3 90.9 93.1 95.3 87.2 86.9 91.0 701.6 11. Basic Primary Bal. 563.1 68.1 98.2 79.5 64.8 89.9 80.1 702.9 Memorandum Items: As percentage of IMF Program Nominal GDP (equal to D19904 million) 12. Fiscal bal (1-6) -2.5 -3.5 13. Basic balance -1.5 2.0 14. Basic Primary 1.2 4.9 Items
Balance

2009 Budget Estimate

(10)

380.5

811.1 5362.9 1524.9 1468.2

56.7 -780.7 -267.7 577.6 1524.9 1468.2

-3.1 -1.1 2.3

Expected outturn for an item in 2009 = 100 X (actual realization in Jan-Nov 2009) / average realization ratio in JanNov (in percentage) during the last five years (2004-2008)

25

The Gambia Monthly Economic Bulletin- December 2009 2.6 Domestic Debt and Treasury Bills Outstanding At the end of November 2009, outstanding domestic debt stood at D6 billion (amounting to 24.1% of GDP), marginally higher than the outstanding domestic debt at D5.95 billion (amounting to 26.3% of GDP) a year ago. The share of Treasury bills increased from 80.1% at the end of November 2008 to 84.5% at the end of November 2009, share of Sukuk Al-Salam increased from 1.1% to 2.4%, while that of Government bonds declined marginally from 4.2% to 4.1% and that of NIB treasury bills declined from 14.7% to 9.1% over the period. Table-2.6-A Outstanding Domestic Public Debt as on 30 November 2009
Type of debt Million Dalasi 30 Nov 2008 Treasury bills Sukuk Al-Salam Government Bonds NIB Treasury Notes Total Nominal GDP (GBOS) As % of nominal GDP 30 Nov 2009

% change in Nov 2009 over Nov 2008 7.0 124.4 0.0 -37.4 1.5

4,764 63
250

5,100 142
250

Composition (in percentage) 30 Nov 30 Nov 2008 2009 80.1 84.5 1.1 4.2 14.7 100 2.4 4.1 9.1 100

873
5,951 22590 26.3

547
6,038 25023 24.1

Domestic Debt Sustainability As per the analysis made by the CBG, the current level of Gambias domestic debt is not sustainable. Out of three sustainability indicators given in Table-2.6.B, one indicator viz. debt service to revenue ratio is not satisfied. Table-2.6-B Primary Benchmarks for Domestic Debt Sustainability Ratios (%) Item Threshold 2006 2007 2008 2009 Projected 1. Debt service to 28-63 142 124 118 91 revenue ratio 2. Debt to GDP ratio 20-25 33 30 27 24 3. Debt to revenue 92-167 180 158 166 147 ratio
Note: (1) Debt service is the sum of interest payments plus the amortization (i.e. repayment of principal) including the rollover of treasury Bills. (2) There are no internationally agreed levels of thresholds. The thresholds used here are those used by the Debt Relief International (DRI) for many HIPC countries. Source: Central Bank of Gambia

26

The Gambia Monthly Economic Bulletin- December 2009 2.7 Treasury Bills Yields Yields on treasury bills fluctuated widely in recent months. As expected, the higher the maturity of treasury bills, the higher is the yield. However, despite stability in deposit rates and significant decline of annual point-to-point CPI inflation rate from 7% in Jan 2009 to 2.6% in Nov 2009, average yields on the 91-day bills increased from 10.5% in Jan 2009 to 10.8% in Nov 2009, yield on 182-day bills increased from 12.1% to 12.3% over the period, while yield on 364 day bills declined marginally from 14.4% in Jan 2009 to 14% in Nov 2009. This implies that the margins of yields over inflation rates/ deposit rates increased over time. In view of the declining trend of inflation rates, the Monetary Policy Committee reduced the policy rate by 2 percentage points to 14% with effect from Dec 2009.
Table-2.7 Average yields on treasury bills (in percentage per annum) 2008 2009 2007 91-D 162-D 364-D 91-D 162-D 364-D 91-D 182-D 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 12.0 13.0 13.0 13.4 13.8 10.9 11.9 13.3 12.5 13.8 12.8 13.3 13.8 10.2 11.3 13.0 13.0 13.8 12.6 13.1 13.9 10.0 11.2 13.3 11.5 12.0 12.5 13.2 13.9 9.6 10.6 12.6 10.2 11.2 12.6 12.9 13.6 8.8 10.2 12.1 10.4 11.7 11.6 12.2 12.9 8.9 11.0 13.1 10.8 12.1 10.6 11.7 12.5 10.3 11.4 13.6 10.8 12.3 10.5 11.5 12.5 10.1 13.4 13.7 10.4 11.6 13.6 9.9 12.5 14.0

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

364-D 14.4 14.4 14.4

14.6 15.3 15.6 14.4 13.3 14.3 14.2 14.0

Trends of Yields of Treasury Bills during 2007-2009

27

The Gambia Monthly Economic Bulletin- December 2009 2.8. Money Supply Broad money supply (M2) recorded an annual growth of 19.3% in November 2009, compared to 19.8 percent a year ago. While quasi money increased by a faster pace of 30.5 percent, narrow money increased by 8.6 percent. Reserve money grew by 17.6 percent, higher than an increase of 3.9 percent recorded a year ago. On the supply side, 19.3% growth in broad money supply in November 2009 was supported by 21.4% growth in currency, 1.6% growth in demand deposits, 22.3% growth in savings deposits and 41.6% growth in time deposits. On the demand side, growth was due to 21.3% growth in net foreign assets and 18.2% growth in net domestic assets in November 2009 over a year ago. Domestic credit increased by 11.8% from D6.5 billion in Nov 2008 to D7.3 billion in Nov 2009, supported by 15.8% growth in government borrowing, 26.6% growth in credits to public entities and 12.8% growth in credits to the private sector, over a year ago. Table-2.8 Money Supply and Demand in November 2009
Components Nov 2007 Million Dalasi 7755 3766 1461 2305 3989 2562 1427 7755 3013 2362 651 4742 4721 1689 352 2496 183 22 2560 Nov 2008 Million Dalasi 9287 4760 1679 3080 4528 2602 1926 9287 3227 2729 498 6060 6493 2501 496 3313 183 -432 2660 Nov 2009 Million Dalasi 11077 5167 2038 3128 5910 3183 2727 11077 3916 3206 710 7161 7259 2895 627 3736 0 -97 3130 Nov 2008 % share 100 51 18 33 49 28 21 100 35 29 5 65 70 27 5 36 2 -5 Nov 2009 % share 100 47 18 28 53 29 25 100 35 29 6 65 66 26 6 34 0 -1 Nv-08 % ch. over Nv-07 19.8 26.4 14.9 33.6 13.5 1.6 34.9 19.8 7.1 15.6 -23.5 27.8 37.5 48.1 40.7 32.7 0.0 -2095 3.9 Nv-09 % ch. over Nv-08 19.3 8.6 21.4 1.6 30.5 22.3 41.6 19.3 21.3 17.5 42.7 18.2 11.8 15.8 26.6 12.8 -100.0 -77.5 17.6

1.Money Supply (M3) (2+3) 2.Narrow Money (2.1+2.2) 2.1 Currency 2.2 Demand deposits 3.Quasi money (3.1+3.2) 3.1 Savings deposits 3.2 Time deposits Demands for money (1+2) 1.Net foreign assets (1.1+1.2) 1.1 Monetary Authorities 1.2 Commercial banks 2.Net Dom. 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 Reserve Money

Source: Central Bank of Gambia

28

The Gambia Monthly Economic Bulletin- December 2009

2.9 Performance by Commercial Banks

The Gambian banking industry consists of 13 banks with highly skewed distribution of assets. The industry continues to be dominated by three large banks which accounted for 64.4% of the total assets at the end of September 2009, although their share has declined from 67% a year ago. The banking industry remains sound. Total industry assets increased by 17% on yearon-year basis from D11.3 billion at end-Sep 2008 to D13.2 billion at end-Sep 2009. The Banking sector continues to function efficiently with sufficient capital and liquidity. The industrys risk-weighted capital adequacy ratio stood at 34.84% in March 2009, and 33.22% in Sept 2009 significantly 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% in Sept 2009 compared to 9.95 percent a year ago, 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 0.9% in Sep 2008. ROA declined further to 0.49% at the end of Sep 2009. In September 2009, distribution and trade sector accounted for 22 percent of total loans given by the commercial banks, followed by building accounting for 12 percent, transport 8 percent, tourism 7 percent, manufacturing 5 percent, and agriculture 3 percent. However, the notable sectoral increases of bank loans in September 2009 were for manufacturing, construction, tourism and fishing, while loans to agriculture recorded decline over last years lending. As regards non-performing loans as a percentage of bank loans given to the sector, in September 2009 the fishing sector accounted for the highest non-performing loans (42% of total sector loans), followed by building (12.3%), distribution and trade (11.1%), financial sector (10.2%) and agriculture 4.3%. The manufacturing sector was the best performer as it had the least defaults.
Table-2.9 Banks total loans and non-performing loans (NPL) by sectors in Sept 2009
Sectors Total Loans Sep 2008 Million Dalasi Total loans Sep 2009 Million Dalasi Sep 2008 % share Sep 2009 % share Sep 2009 % change over Sep 2008 -8.4 43.0 67.4 49.6 26.3 12.0 50.5 0.8 42.5 31.3 NPL Ml. D. NPL as % of loans to the sector 4.3 42.0 1.6 12.3 6.0 11.1 7.6 10.2 4.4 7.5

1. Agriculture 2. Fishing 3. Manufacturing 4. Building 5. Transport 6. Distribution 7. Tourism 8. Financial sector 9. Others 10. Total

148 17 117 342 281 831 195 125 1140 3196

136 25 195 512 355 931 293 126 1624 4197

5 1 4 11 9 26 6 4 36 100

3 1 5 12 8 22 7 3 39 100

5.9 10.4 3.1 62.8 21.4 103.1 22.2 12.9 71.8 313.5

Source: Central Bank of Gambia

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The Gambia Monthly Economic Bulletin- December 2009

2.10 Commercial Banks Assets

Total assets of the commercial banks increased by 14.7% on year-on-year basis from D12.1 billion at end-Nov 2008 to D13.9 billion at end-Nov 2009. Gambian banks do not have large exposure to foreign assets or foreign liabilities. At end-Nov 2009, foreign assets constituted only 9.9% of total assets (foreign exchange 1.8%, balances abroad 6.9% and foreign investment 1.2%), up from 7.5% a year ago (foreign exchange 1.9%, balances abroad 4.8% and foreign investment 0.8%). Gambian banks also do not have large contingent liabilities. At end-Nov 2009 contingent liabilities constituted only 10.5% of total liabilities, compared to 12% a year ago. At end-Nov 2009, loans and advances constituted 29.4% of total assets and the ratio remained fairly stable during 2009. At end-Nov 2009, investments in government Treasury Bills by the banks increased by 11.4% and constituted 25.2% of their total assets. As expected, three large banks had the dominant share. At end-Nov 2009, loans and advances to the public sector increased by 38.1%, while those to the private sector increased by only 19% over end-Nov 2008.

Table-2.10: Commercial Banks Assets at the end-November 2009 (Million Dalasi)

Assets (Million Dalasi) Nov-2007 Nov-2008 152.1 236.2 891.0 888.6 2.5 583.3 107.2 3,377.3 392.9 2,984.4 3,420.5 3,151.9 175.8 92.8 922.1 1,455.2 991.3 12,136.2 10,681.0 912.3 Nov-2009 265.9 256.3 1,037.0 867.9 169.1 966.3 70.5 4,094.9 542.5 3,552.3 3,739.8 3,511.3 67.5 161.0 1,119.7 1,467.0 901.0 13,918.2 12,451.3 1,383.6 % ch. Nv08 % ch. Nv09 Composition (% ) Nov-2008 Nov-2009 over Nv07 over Nv08 1.3 1.9 11.1 74.8 1.9 1.8 132.6 8.5 7.3 7.5 -11.6 16.4 7.3 6.2 -11.1 -2.3 0.0 1.2 -73.1 6785.4 4.8 6.9 -36.3 65.7 0.9 0.5 1268.4 -34.3 27.8 29.4 37.7 21.2 3.2 3.9 82.4 38.1 24.6 25.5 33.4 19.0 28.2 26.9 14.3 9.3 26.0 25.2 18.0 11.4 1.4 0.5 -18.3 -61.6 0.8 1.2 -11.9 73.5 7.6 8.0 76.1 21.4 12.0 10.5 34.0 0.8 8.2 6.5 20.2 -9.1 100.0 100.0 20.8 14.7 88.0 89.5 19.2 16.6 7.5 9.9 -18.7 51.7

1. Notes and coins 136.9 2. Foreign exchange 101.6 3. Local Bank balance 1,008.5 ii. CBG 999.3 iii. Banks locally 9.1 4. Balances abroad 914.9 5. Bills purchased 7.8 6. Loans and advances 2,452.1 i. Public sector 215.4 ii. Private sector 2,236.8 7. Investments 2,991.8 i. Govt Treasury Bills 2,671.2 ii. Others 215.3 iii Foreign Invest. 105.3 8. Fixed assets 523.8 9. Guarantees 1,086.2 10. Other assets 824.9 11. Total assets (1 to 10) 10,048.4 12. Net Balance (11-9) 8,962.2 Source: Central Bank of Gambia. Memo: Foreign Assets 1,121.8

30

The Gambia Monthly Economic Bulletin- December 2009

2.11 Commercial Banks Liabilities

As mentioned earlier, Gambian banks do not have large exposure to foreign liabilities. At end-Nov 2009, external sector related liabilities constituted only 5.2% of total liabilities (non-residents deposits 4.4%, balances with banks abroad 0.4% and external debt 0.5%), up from 2.7% a year ago (non-residents deposits 0.9%, balances with banks abroad 0.6% and external debt 1.2%). At end-Nov 2009 bank deposits increased by 18.8% over a year, aided by a growth of 1.6% in demand deposits, 22.3% in savings deposits and 41.6% in time deposits. At end-Nov 2009 banks capital and reserves increased by 2.2% and bank balances increased by 132.6%, while borrowings increased by 41.8% over end-Nov 2008. At end-Nov 2009, direct contingent liabilities (i.e. guarantees) of banks increased by 0.8% over end- end-Nov and constituted 10.5% of total liabilities.

Table-2.11: Commercial Banks Liabilities at the end-November 2009 (Million Dalasi)

Liabilities (Million Dalasi) 1. Capital and reserves 2. Demand deposits i Residents ii Non residents iii Government entities 3. Savings deposits i Residents ii Non residents iii Government entities 4. Time deposits i Residents ii Non residents iii Government entities Total deposits 5. Bank Balances i HO & branches ii Other banks abroad iii. Banks locally 6. Borrowings from i Cent. bank of Gambia ii Other banks locally iii HO & branches iv Other banks abroad v. Other sources 7. Guarantees 8. Other liabilities 9. Total liabilities (1 to 8) 10. Net balance (9-7) Nov-2007 1,196.3 2,305.1 2,051.5 47.0 206.7 2,561.7 2,467.2 74.5 20.0 1,427.3 1,057.0 16.0 354.3 6,294.0 243.6 26.8 216.8 227.5 172.5 55.0 1,086.2 1,000.8 10,048.4 8,962.2 Nov-2008 1,558.4 3,080.4 2,743.8 22.6 314.0 2,602.3 2,510.6 72.2 19.5 1,925.6 1,398.9 17.0 509.6 7,608.2 90.7 23.1 67.6 326.3 2.3 173.2 150.8 1,455.2 1,097.4 12,136.2 10,681.0 Nov-2009 1,593.2 3,128.3 2,328.9 471.2 328.2 3,183.2 3,084.9 85.5 12.8 2,726.9 1,999.2 44.0 683.6 9,038.5 211.1 157.4 53.7 462.8 393.7 69.1 1,467.0 1,145.7 13,918.1 12,451.2 % ch. Nv08 % ch. Nv09 Composition (% ) Nov-2008 Nov-2009 over Nv07 over Nv08 12.8 11.4 30.3 2.2 25.4 22.5 33.6 1.6 22.6 16.7 33.7 -15.1 0.2 3.4 -51.9 1985.4 2.6 2.4 51.9 4.5 21.4 22.9 1.6 22.3 20.7 22.2 1.8 22.9 0.6 0.6 -3.1 18.4 0.2 0.1 -2.5 -34.3 15.9 19.6 34.9 41.6 11.5 14.4 32.4 42.9 0.1 0.3 6.3 158.8 4.2 4.9 43.9 34.1 62.7 64.9 20.9 18.8 0.7 1.5 -62.8 132.6 0.2 1.1 -13.7 580.7 0.6 0.4 -68.8 -20.6 0.0 0.0 2.7 3.3 43.4 41.8 0.0 0.0 0.0 0.0 1.4 2.8 0.4 127.3 1.2 0.5 -54.2 0.0 0.0 12.0 10.5 34.0 0.8 9.0 8.2 9.7 4.4 100.0 100.0 20.8 14.7 88.0 89.5 19.2 16.6

Source: Central Bank of Gambia Mem Foreign liabl. o: 409.3

330.3

723.4

2.7

5.2

-19.3

119.1

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The Gambia Monthly Economic Bulletin- December 2009

2.12 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 CBG declined from 29% in 2003 to 9% in 2007, but was raised to 10% at the end of 2007 to check effective demand and inflationary pressures on the economy. In response to tight monetary conditions and against a backdrop of falling inflation, the CBG reduced the statutory minimum reserve requirement of banks from 16% to 14% in March 2008. The CBG rediscount rate declined from 34% in 2003 to 14% in 2004. In order to counter emerging inflationary pressures, the CBG raised its rediscount rate by one percentage point from 14% to 15% in June 2007, and further to 16.0% in October 2008. The rediscount rate has remained unchanged at 16% since then until November 2009. In view of the declining trend of inflation rates, the Monetary Policy Committee reduced the policy rate by 2 percentage points to 14% with effect from December 2009. 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 12.1% in November 2009. By contrast, commercial banks lending rates remained sticky above 20% due to high operating costs and risks of bank credits.

Table-2.12: Trends of Nominal Interest rates (per cent per annum, end period)
Items Bank lending rare- min Bank lending rare- max Deposit rate (SB) min Deposit rate (SB) max Time dep (3 months) min Time dep (3 months) max Time dep (6 months) min Time dep (6 months) max Time dep (12 month) min Time dep (12 month) max Govt. treasury bills CBG Bank Rate CBG Rediscount Rate Bank lending rate Deposit rate (SB) Time deposits (3 months) Time deposits (6 months) Time deposits (12 month) Inflation (GDP-Deflator) CPI-Inflation Real GDP-Growth Rate Exch. Rate change (%)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

18 24 8 10 9.5 12.5 10 12.5 11 12.5 12 10 15 6 2 3 2.5 1.5 3.6 0.9 5.5 12.2

18 17 21 21 21 24 24 36.5 36.5 30 8 8 8 10 5 10 10 17 17 10 9.5 6 7 8 5 12.5 13 22 22 14 10 6 8 8 7 12.5 13 22 22 15 11 7 10 12 7 12.5 13 22 23 13 15 20 31 30 16 13 18 29 28 14 18 23 34 33 19 Range = Maximum-Minimum 6 7 15.5 15.5 9 2 2 9 7 5 3 7 15 14 9 2.5 7 14 14 8 1.5 6 12 11 6 Factors Influencing Interest Rates 14.9 15.0 22.9 13.6 3.9 4.5 8.6 17.0 14.3 5.0 5.7 0.7 2.4 2.1 -0.1 22.7 27.0 43.2 5.3 -4.8

18 28 5 7 5 8.5 6 13 6 13 12.8 9 14 10 2 3.5 7 7 0.0 2.1 3.1 -1.8

18 27 5 7 5 12.9 6 12.9 7 12.9 13.7 10 15 9 2 7.9 6.9 5.9 2.0 5.4 6.3 -11.4

18 27 4 7 5 13.6 6 13.6 7 13.6 13.6 10 16 9 3 8.6 7.6 6.6 8.0 4.9 6.3 -9.8

18 27 4 7 5 15.5 6 15.5 6 15.5 14.2 10 16 9 3 9.5 9.5 9.5 4.7 4.5 5.0 15.9

Source: Central Bank of Gambia (CBG)

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The Gambia Monthly Economic Bulletin- December 2009

2.13 BOP, Foreign Exchange Reserves and Exchange Rates

(a) BOP Situation in 2008
(a) Overall BOP outcome in 2008 was not as bad as they were anticipated earlier. Year end foreign exchange reserves at US$125.2 million were still equal to 5.7 months of c.i.f. imports compared to US159.4 million equal to 6.2 months at end-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 a 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. 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. (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%.

(b) BOP Situation in 2009-Q1

Provisional BOP estimates for the first quarter of 2009 indicate an overall deficit of D468.9 million (US $17.9 million) compared to D7.42 million (US $0.34 million) in the first quarter of 2008. The current account deficit, including official transfers, amounted to D234.3 million compared to a surplus of D4.94 million a year ago. The capital and financial account widened from a deficit of D12.36 million in the first quarter of 2008 to D234.53 million in the first quarter of 2009.

(c) BOP Situation in 2009-Q2 BOP estimates by the CBG for the first half of 2009 (i.e. Jan-June 2009) indicated that the overall BOP deficit narrowed to D348.44 million in 2009 from D376.5 million in Jan-June 2008. The current account recorded a surplus of D163.48 million in Jan-June 2009 compared to a deficit of D276.1 million in Jan-June 2008. The capital and financial account balance worsened to deficit of D511.92 million in Jan-June 2009 from a deficit D100.4 million in Jan-June 2008 reflecting the decline in reinvested earnings and equity capital. The goods account balance improved from a deficit of D1.4 billion in Jan-June 2008 to D1.1 billion in Jan-June 2009 attributed to the surge in exports which more than offset the increase in imports. Exports, including re-exports rose to D2.2 billion in Jan-June 2009 compared to D1.4 billion Jan-June 2008. (d) Foreign Exchange Reserves and Exchange Rates Volume of transactions in the domestic foreign exchange market contracted to US$1.3 billion in the year to end-September 2009 from US$1.6 billion a year earlier. The domestic currency depreciated by 7.9 percent on the overall nominal exchange rate index of currencies compared to an appreciation of 1.6 percent in the preceding year. From December 2008 to end-September 2009, the Dalasi depreciated against the British Pound, US Dollar, CFA Franc and euro by 7.1 percent, 17.5 percent, 9.4 percent and 8.2 percent respectively. Gross official reserves, including Special Drawing Rights (SDR) allocation from the International Monetary Fund (IMF), as at end-September stood at US$141.3 million, equivalent to 6.0 months of import cover.

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The Gambia Monthly Economic Bulletin- December 2009

1 1.1 a. b. c. 1.2 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 3 3.1 3.2 4 4.1 4.2 4.3 5 6 7 7.1 7.2 7.3 8 9

Table-2.13A: Quarterly BOP Summary Table 2008-2009Q2 In Million Dalasi (Million Dalasi) 20082008200820082008 Q1 Q2 Q3 Q4 Goods balance (1.1-627.8 -918.1 -761.3 -612.0 1.2) 2919. 1 Exports of goods 699.4 883.3 3175. 804.9 788.2 (a+b+c) 8 Exports of goods in trade stat Re-exports Other goods Imports of goods fob Services, net (2.1 to 2.7) Transport Travel Communications Insurance Construction Information technology Others business Income Investment income Compensation to labor Transfers, net (4.1+4.2+4.3) Official transfer Remittances Other transfer Current account balance Capital Account Financial Account (7.1+7.2) Foreign direct investment Other investment Reserve change Capital and Financial A/C (6+7) 69.0 639.6 96.3 1566.1 542.4 -137.4 800.9 49.2 -36.1 3.2 0.0 -137.5 -233.1 -275.8 42.7 456.9 42.7 219.2 195.0 4.9 0.0 -12.4 411.4 -865.0 441.2 -12.4 -7.4 4428.2 125.1 571.8 91.3 1400.2 57.0 -96.3 196.3 79.4 -38.8 55.9 -2.0 -137.5 -176.0 -219.6 43.6 450.0 40.5 249.1 160.4 -281.0 19.1 -107.2 411.4 -351.5 -167.1 -88.1 -369.1 4059.1 80.3 542.0 77.1 1327. 2 -69.5 -71.5 143.9 44.8 -30.2 2.5 -21.5 -137.5 -176.8 -223.8 47.0 499.5 29.0 370.7 99.7 -374.5 3.2 26.5 366.5 60.5 -400.5 29.7 -344.8 3714. 3 56.0 735.7 91.6 1801. 3 183.6 -128.9 483.0 41.0 -41.0 14.3 -47.4 -137.5 -171.5 -212.2 40.7 403.0 25.0 356.7 21.3 -503.0 2.0 411.0 366.5 -273.6 318.2 413.0 -89.9 3624. 4 330.4 2489.1 356.2 6094. 9 757.5 -434.1 1624.1 214.4 -146.0 120.0 -70.9 -550.0 -757.4 -931.4 174.0 1809. 3 137.2 1195.8 476.4 1109.6 24.4 317.9 1555.7 1429.6 191.8 342.3 -767.3 3624. 4

2009Q1 -683.9 934.5 239.1 660.9 34.5 1618. 4 370.3 -123.6 615.7 52.4 -38.0 12.9 -23.6 -125.5 -74.8 -115.2 40.3 154.1 108.3 290.2 -244.4 -234.3 0.0 -234.5 262.7 -311.1 -186.2 -234.5 -468.9 3155. 5

2009Q2

399.0 1331. 6 597.8 706.8 27.0 1730. 6 19.7 124.3 190.1 82.9 -42.8 14.8 23.6 124.5 -57.5 -98.9 41.4 834.6 151.9 434.2 248.5 397.8 0.0 277.4 262.7 484.2 -55.9 277.4 120.4 3275. 9

Overall BOP Balance (5+8) Foreign Exchange Reserve

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The Gambia Monthly Economic Bulletin- December 2009

Equi to months of imports Ave.Exch.rate(D/$) GDP at cmp (Million Dalasi) 7.4 21.23 18240 7.6 20.47 18240 7.3 21.81 18240 5.2 25.90 18240 6.2 22.35 18240 5.1 26.19 19529

4.9 26.8 1952 9

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The Gambia Monthly Economic Bulletin- December 2009

1 1.1 a. b. c. 1.2 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 3 3.1 3.2 4 4.1 4.2 4.3 5 6 7 7.1 7.2 7.3 8 9

Table-2.13B: Quarterly BOP Summary Table 2008-2009Q2 In Million US dollar (Million US$) 20082008200820082008 Q1 Q2 Q3 Q4 Goods balance (1.1-35.9 -29.9 -28.8 -35.4 -130.6 1.2) Exports of goods 37.9 38.5 32.1 34.1 142.1 (a+b+c) Exports of goods in 3.2 6.1 3.7 2.2 14.8 trade stat Re-exports 30.1 27.9 24.9 28.4 111.4 Other goods Imports of goods fob Services, net (2.1 to 2.7) Transport Travel Communications Insurance Construction Information technology Others business Income Investment income Compensation to labor Transfers, net (4.1+4.2+4.3) Official transfer Remittances Other transfer Current account balance Capital Account Financial Account (7.1+7.2) Foreign direct investment Other investment Reserve change Capital and Financial A/C (6+7) Overall BOP Balance (5+8) Foreign Exchange Reserve Equi to months of imports Ave.Exch.rate(D/$) GDP at cmp (Million US$) 4.5 73.8 25.5 -6.5 37.7 2.3 -1.7 0.2 0.0 -6.5 -11.0 -13.0 2.0 21.5 2.0 10.3 9.2 0.2 0.0 -0.6 19.4 -40.7 20.8 -0.6 -0.3 208.6 7.4 21.2 859.2 4.5 68.4 2.8 -4.7 9.6 3.9 -1.9 2.7 -0.1 -6.7 -8.6 -10.7 2.1 22.0 2.0 12.2 7.8 -13.7 0.9 -5.2 20.1 -17.2 -8.2 -4.3 -18.0 198.3 7.6 20.5 891.1 3.5 60.9 -3.2 -3.3 6.6 2.1 -1.4 0.1 -1.0 -6.3 -8.1 -10.3 2.2 22.9 1.3 17.0 4.6 -17.2 0.1 1.2 16.8 2.8 -18.4 1.4 -15.8 170.3 7.3 21.8 836.3 3.5 69.5 7.1 -5.0 18.6 1.6 -1.6 0.6 -1.8 -5.3 -6.6 -8.2 1.6 15.6 1.0 13.8 0.8 -19.4 0.1 15.9 14.1 -10.6 12.3 15.9 -3.5 139.9 5.2 25.9 704.2 15.9 272.7 33.9 -19.4 72.7 9.6 -6.5 5.4 -3.2 -24.6 -33.9 -41.7 7.8 80.9 6.1 53.5 21.3 -49.6 1.1 14.2 69.6 -64.0 8.6 15.3 -34.3 162.1 6.2 22.4 816.0

2009Q1 -26.1 35.7 9.1 25.2 1.3 61.8 14.1 -4.7 23.5 2.0 -1.5 0.5 -0.9 -4.8 -2.9 -4.4 1.5 5.9 4.1 11.1 -9.3 -8.9 0.0 -9.0 10.0 -11.9 -7.1 -9.0 -17.9 120.5 5.1 26.2 745.7

2009Q2

-14.9 49.7 22.3 26.4 1.0 64.6 0.7 -4.6 7.1 3.1 -1.6 0.6 0.9 -4.6 -2.1 -3.7 1.5 31.1 5.7 16.2 9.3 14.8 0.0 -10.4 9.8 -18.1 -2.1 -10.4 4.5 122.2 4.9 26.8 728.7

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The Gambia Monthly Economic Bulletin- December 2009

1 1.1 a. b. c. 1.2 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 3 3.1 3.2 4 4.1 4.2 4.3 5 6 7 7.1 7.2 7.3 8 9

Table-2.13-C: Quarterly BOP Summary Table 2008-2009Q2 AS percentage of GDP at current market prices BOP as % of GDP 20082008200820082008 Q1 Q2 Q3 Q4 Goods balance (1.1-4.2 -3.4 -3.4 -5.0 -16.0 1.2) Exports of goods 4.4 4.3 3.8 4.8 17.4 (a+b+c) Exports of goods in 0.4 0.7 0.4 0.3 1.8 trade stat Re-exports 3.5 3.1 3.0 4.0 13.6 Other goods Imports of goods fob Services, net (2.1 to 2.7) Transport Travel Communications Insurance Construction Information technology Others business Income Investment income Compensation to labor Transfers, net (4.1+4.2+4.3) Official transfer Remittances Other transfer Current account balance Capital Account Financial Account (7.1+7.2) Foreign direct investment Other investment Reserve change Capital and Financial A/C (6+7) Overall BOP Balance (5+8) Foreign Exchange Reserve 0.5 8.6 3.0 -0.8 4.4 0.3 -0.2 0.0 0.0 -0.8 -1.3 -1.5 0.2 2.5 0.2 1.2 1.1 0.0 0.0 -0.1 2.3 -4.7 2.4 -0.1 0.0 24.3 0.5 7.7 0.3 -0.5 1.1 0.4 -0.2 0.3 0.0 -0.8 -1.0 -1.2 0.2 2.5 0.2 1.4 0.9 -1.5 0.1 -0.6 2.3 -1.9 -0.9 -0.5 -2.0 22.3 0.4 7.3 -0.4 -0.4 0.8 0.2 -0.2 0.0 -0.1 -0.8 -1.0 -1.2 0.3 2.7 0.2 2.0 0.5 -2.1 0.0 0.1 2.0 0.3 -2.2 0.2 -1.9 20.4 0.5 9.9 1.0 -0.7 2.6 0.2 -0.2 0.1 -0.3 -0.8 -0.9 -1.2 0.2 2.2 0.1 2.0 0.1 -2.8 0.0 2.3 2.0 -1.5 1.7 2.3 -0.5 19.9 2.0 33.4 4.2 -2.4 8.9 1.2 -0.8 0.7 -0.4 -3.0 -4.2 -5.1 1.0 9.9 0.8 6.6 2.6 -6.1 0.1 1.7 8.5 -7.8 1.1 1.9 -4.2 19.9

2009-Q1 -3.5 4.8 1.2 3.4 0.2 8.3 1.9 -0.6 3.2 0.3 -0.2 0.1 -0.1 -0.6 -0.4 -0.6 0.2 0.8 0.6 1.5 -1.3 -1.2 0.0 -1.2 1.3 -1.6 -1.0 -1.2 -2.4 16.2

2009Q2

-2.0 6.8 3.1 3.6 0.1 8.9 0.1 -0.6 1.0 0.4 -0.2 0.1 0.1 -0.6 -0.3 -0.5 0.2 4.3 0.8 2.2 1.3 2.0 0.0 -1.4 1.3 -2.5 -0.3 -1.4 0.6 16.8

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The Gambia Monthly Economic Bulletin- December 2009

Table-2.13-D: Quarterly BOP Summary Table 2008-200Q1 Percentage change over same quarter of previous year (%)

Items 1 1.1 a. b. c. 1.2 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 3 3.1 3.2 4 4.1 4.2 4.3 5 6 7 7.1 7.2 7.3 8 9 Goods balance (1.1-1.2) Exports of goods (a+b+c) Exports of goods in trade stat Re-exports Other goods Imports of goods fob Services, net (2.1 to 2.7) Transport Travel Communications Insurance Construction Information technology Others business Income Investment income Compensation to labor Transfers, net (4.1+4.2+4.3) Official transfer Remittances Other transfer Current account balance Capital Account Financial Account (7.1+7.2) Foreign direct investment Other investment Reserve change Capital and Financial A/C (6+7) Overall BOP Balance (5+8) Foreign Exchange Reserve Equi to months of imports Ave.Exch.rate(D/$) GDP at cmp

2009-Q1 (Dalasi) -10.2 16.1 246.6 3.3 -64.2 3.3 -31.7 -10.1 -23.1 6.5 5.5 297.2 -8.7 -67.9 -58.2 -5.5 -66.3 153.7 32.4 -225.3 -4833.9 1797.6 -36.1 -64.0 -142.2 1797.6 6227.5 -28.7 -31.0 23.4 7.1

2009-Q1 (US$) -27.2 -5.9 181.0 -16.2 -71.0 -16.2 -44.7 -27.1 -37.7 -13.6 -14.5 222.0 -26.0 -74.0 -66.1 -23.4 -72.7 105.7 7.3 -201.6 -3937.4 1438.2 -48.2 -70.8 -134.2 1438.2 5029.2 -42.2 -31.0 23.4 -13.2

2009-Q2 (Dalasi) -34.8 68.9 377.8 23.6 -70.4 23.6 -65.4 29.2 -3.1 4.4 10.4 -73.5 -1260.1 -9.5 -67.3 -55.0 -5.1 85.5 275.1 74.3 54.9 -241.5 158.8 -36.1 37.7 -66.5 214.9 -132.6 -19.3 -34.7 30.9 7.1

2009-Q2 (US$) -50.2 29.0 265.0 -5.6 -77.4 -5.6 -73.6 -1.3 -26.0 -20.2 -15.7 -79.7 -986.1 -30.8 -75.1 -65.6 -27.5 41.7 186.5 33.1 18.3 -208.1 97.7 -51.2 5.2 -74.4 140.5 -124.9 -38.4 -34.7 30.9 -18.2

2.14 Exchange Rate

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The Gambia Monthly Economic Bulletin- December 2009 During Jan-April 2009, every month the Dalasi depreciated against major international currencies (viz. US$, CHF, EURO and CFA) traded in the inter-bank market except the UK, reflecting the adverse impact of the global financial crisis on remittances and tourism and increased demand for foreign exchange to meet the high cost of imports. Since May 2009 Dalasi has also started depreciating against UK. At end-Nov 2009, Dalasi has depreciated by 9.2% against British Pound, by 1.5% against US$, by 20.8% against CHF, by 20.9% against Euro and by 14.4% against CFA over end-Nov 2008.

Table-2.14 Inter-bank end-period mid-market exchange rates (Dalasi per unit of foreign currency)
Month UK US$ CHF Euro CFA (5000) Jan 53.84 27.97 22.36 36.20 276.30 Feb 53.67 27.90 21.95 36.17 271.70 Mar 53.47 27.70 22.49 36.16 273.52 Apr 53.68 27.55 22.42 36.39 274.62 May 53.41 27.34 22.11 36.42 278.92 June 52.47 26.81 21.99 36.03 273.42 July 52.47 25.90 22.19 35.56 269.64 Aug 49.27 24.16 20.41 33.52 255.72 Sept 41.62 20.81 17.72 29.27 215.56 Oct 39.02 19.15 15.98 27.38 215.46 Nov 42.42 20.95 18.01 29.99 238.30 Dec 44.28 22.24 19.81 31.60 256.78 44.27 22.34 19.91 32.89 252.85 2009 Jan 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 19.27 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 Annual Rate of appreciation (-) / depreciation (+) of Dalasi (in % over same month in 2008) -15.9 16.7 4.7 1.9 3.9 2009 Jan Feb -12.2 19.3 12.6 4.1 5.7 Mar -6.6 35.6 21.7 14.2 8.4 Apr -1.2 33.2 20.1 12.4 11.1 May 2.9 29.5 15.1 15.3 8.2 June 5.8 30.1 14.0 15.5 11.1 July 4.0 27.9 22.7 18.2 10.6 Aug 7.5 24.6 21.3 16.9 12.8 Sept 3.2 16.6 28.2 16.9 13.7 Oct 7.4 8.1 29.4 20.4 15.1 Nov 8.2 2.5 32.8 20.6 14.4 Source: Central Bank of Gambia (CBG) Year 2008

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