By: Kebba AF Touray
The Governor of the Central Bank of the Gambia (CBG) Buah Saidy, said inflation has reached a peak of 18.5 percent in September 2023 due to balance of payment challenges.
He told the members of the Finance and Public Accounts Committee of the Assembly that the exchange rate of the Dalasi also came under immense pressure in the past years amid the rise in the trend of the United States Dollar globally.
Governor Saidy said this while highlighting developments both on the domestic and international economy, during their appearance before members of FPAC yesterday Wednesday 29 May 2024.
The CBG board members appeared before FPAC to present their activity reports and audited financial statements for the fiscal years 2021 and 2022, for scrutiny, consideration, and adoption by the Committee.
The annual reports of the CBG provide a comprehensive review of the economic and financial developments in the Gambia in 2021 and 2023 respectively. It also highlights the various policy measures taken by the CBG to ensure that the country’s economy remains stable and resilient in the face of global economic challenges.
He cited the Dalasi’s depreciation against the US Dollar by 15.6 percent, and 5.7 percent in 2022 and 2023 respectively.
“The current account deficit widened to US Dollar 90.3 million in 2022, from US Dollar 86.9 Million in 2021, and this was driven by an increase in imports of goods and services, and fueled by stronger domestic demand and higher global commodity prices. The country spent US$694.0 million in 2022 on imports of goods which was significantly higher than the US$51.6 Million earned from exports. This resulted in a trade deficit of US$642.4 million, a considerable increase from the US$448.2 Million deficit recorded in 2021,” Governor Saidy said.
Consequently, he said the foreign currency shortage plunged the economy, despite noteworthy remittance inflows and capital transfers from donors.
“This warranted the CBG to intervene by selling close to US$200 Million from the external reserves over the past two years, to ensure continued availability of essential goods and services. The CBG’s interventions during those challenging times ensured the uninterrupted availability of essential goods and services and played a significant role in tempering prices within the market,” Governor Saidy said.
Governor Saidy informed FPAC that many countries experienced economic downturns and soaring inflation, and said developing nations face challenges of widespread currency depreciation, high public debt, and capital flow issues among others.
Dilating on developments in both the domestic and international economies, CBG Governor Buah Saidy informed FPAC that the reports will enable the committee to contextualize the evolution of the economic recovery of the country since the COVID-19 pandemic started four years ago.
“The global economy has been facing significant headwinds in recent times. The Covid-19 pandemic disrupted global supply chains causing shortages of key goods and services, resulting in rising prices and inflationary pressures in many countries,” Governor Saidy said.
He said geopolitical tensions notably the Russia-Ukraine war and events in the Middle East, along with trade disputes, added to the uncertainties in the global economic landscape.
“In the Gambia, we have also faced our fair share of these challenges. The economy just avoided recession in 2020, registering a muted 0.6 percent growth. Inflation accelerated from 7.6 percent in December 2021, to 13.7 percent in December 2022,” Governor Saidy told FPAC.
