Gambia’s domestic debt surpasses half of the GDP, says CBG governor

Governor Colley

 The Gambia’s domestic debt now stands at 20.7 billion, 4.2% more than half of the national gross domestic product (GDP), according to a press release issued today by the Central Bank of The Gambia.

Reading the release before journalists and other stakeholders at the bank’s headquarters in Banjul, the capital of the country, Governor Amadou Colley disclosed that “…in the year to end-September 2015, the domestic debt rose to 20.7 billion (54.2 percent of the GDP)or 23.8 percent from a year earlier”.

During the apex bank’s last meeting with journalists in early August this year, the governor has revealed that the domestic debt was at D19.1 billion (49.6 percent of GDP), or 30.4 percent from a year earlier.

Colley said today that the Outstanding treasury bills which accounted for 69 percent of the domestic debt, increased by 4.4 percent whilst the stock of outstanding Sukuk Al Salaam (SAS) also contracted by 11.2 percent.

“The yields on all short dated government securities increased. The yield on the 91-day, 182-day and 364-day treasury bills rose from 14.21 percent, 16.43 percent and 19.46 percent in September 2014 to 17.54 percent, 17.97 percent and 21.86 percent in September 2015 respectively,” he said.

In their recent country report which x-rayed the country’s economy based on different indicators, the International Monetary Fund has stated that “extended period of poor economic performance has left The Gambia facing serious economic difficulties” while also urging authorities to keep domestic borrowing rate at 1% of the GDP in 2015.

The IMF noted that the continuous domestic borrowing by government has almost drained the banks of the needed resources to extend credit to the private sector for development purposes.

Inflation

The Governor also said consumer price inflation, measured by the National Consumer Price Index (NCPI), has accelerated to 6.6 percent in September 2015, from 6.3 percent in September 2014.

He said the sole driver of consumer price inflation was food prices which increased to 8.05 percent from 7.34 percent in September 2014.

However, he revealed that the non-food inflation has, in contrast, decelerated slightly to 4.35 percent from 4.84 percent in September 2014.

“Core inflation, which excludes utilities and energy prices, declined to 6.32 percent from 6.92 percent in September 2014,” he added.

The governor also said the bank’s Monetary Policy Committee “expects that the end-December 2015 inflation target of 5.0 percent would be breached and inflationary expectations to remain elevated”.

Government fiscal operations

The governor further revealed that the overall budget deficit on cash basis, including grants, is “estimated at D1.9 billion (5.1 percent of GDP), slightly higher than the deficit of D1.6 billion (4.4 percent of GDP) in the first nine months of 2014.”

  “Provisional data on government fiscal operations for the first nine months of 2015 indicates that total revenue and grants amounted to D6.2 billion compared to D6.0 billion in the corresponding period a year ago. Domestic revenue, comprising tax and non tax revenue rose to 5.7 billion, or 18.9 percent from the corresponding period in 2014. Tax revenue increased to 5.1 billion, 25.6 percent. Non tax revenue, on the other hand, contracted to D622.0 million, or 16.8 percent,” he added.

“Total expenditure and net lending amounted to 8.2 billion (21.2 percent of GDP) compared to D7.5 billion (21.4 percent of GDP) in the first nine months of 2014. Recurrent expenditure increased to D6.4 billion, or 19.3 percent attributed mainly to the 59.3 percent increase in interest payments. In contrast, capital expenditure declined to D1.8 billion, lower than the D2.1 billion in the first nine months of 2014.”

 

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