CBG Governor Harps on Global Economy, Gambia

It is evident that the global financial crisis has deepened and spilled over into the global economy. The major advanced economies are now in recession and some emerging economies have been severely affected.

The International Monetary Fund revised its forecast for global growth to 0.5 percent, a record said to be its lowest since the Second World War. Latest data also indicated that the IMF projects growth in advanced economies to contract by 2.0 percent in 2009 whilst in Sub-Saharan Africa, output is expected to expand by 3.5 percent, down from 5.4 percent in 2008.

However, The Gambia, though a small country in size and population will no doubt face the impacts of the global financial crisis. "The sharp decline in global economic activity is likely to exert a drag on growth in The Gambia as economic growth is expected to be modest in 2009",  Mr Bamba Saho, Governor of the Central Bank of The Gambia said last Friday.

At a press conference organised by the Monetary Policy Committee of the Central Bank, Governor Bamba Saho noted that data on government fiscal operations indicated that revenue and grants amounted to D3.6 billion in 2008 compared to D3.7 billion in 2007. The decline in revenue and grants, he added, was on account of the decrease in indirect tax and non-tax revenue, and the less than excepted grant receipts.

He stated that as a result of the sharp downturn in global demand, commodity prices have fallen, especially for energy, and inflationary pressures have subsided in the major advanced economies.

According to the Central Bank Governor, in the year to end-January 2009, 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.

"The Dalasi weakened against the US dollar and Euro by 16.7 percent and 1.9 percent respectively. The Dalasi however, appreciated against the British Pound by 15.9 percent. From December 2008 to end-January 2009, the Dalasi strengthened against the British Pound, US Dollar, Swiss Franc, Swedish Kroner, and Euro by 7.2 percent, 1.8 percent, 9.1 percent, 14.4 percent and 6.0 percent respectively," Governor Saho further stated.

Balance of payments estimates, he went on, indicate an overall deficit of D1.30 billion ($54.6 million) in 2008 compared to an estimated surplus of D796.80 million ($32.0 million) in 2007, reflecting the deterioration in both the current and the capital and financial accounts.