By: Kebba AF Touray
Mr. Buah Saidy, the Governor of the Central Bank, has disclosed that total outstanding domestic debt, rose to D37.32 billion (by 2.77 billion) in the year till end of October 2021.
Governor Saidy said this on Thursday, 25 November, 2021 during the Monetary Policy Committee (MPC) meeting, held at the Central Bank of the Gambia (CBG).
He explained that the modest growth (by 2.77 billion) in the debt stock, was driven partly by widened fiscal deficit financed through bond issuance, as well as the government’s ongoing debt management strategy of profiling the debt stock to create fiscal space.
“Total revenue and grants collected in the nine months ending September 2021, amounted to D11.8 billion, compared to D15.5 billion, (12.6 percent GDP and 16.5 GDP respectively), recorded in the same period a year ago. The decline in government revenue receipts is mainly explained by a significant drop in grants receipts,” said Governor Saidy.
He also said that government expenditure and net lending decreased during the review period to D15.9 billion, from D16.8 billion a year ago on an account of decline in recurrent and capital expenditures by 6.1 percent and 4.5 percent respectively.
He said banking industries’ total assets grew yearly significantly by 18.9 percent to D67.54 billion as at end of September 2021, compared to D56.82 billion in the same period in 2020.
This, he explicated, was driven mainly by the increase in the balances due from other banks and a slight increase in loans and advances.
“All banks were well capitalized and met the minimum capital requirement of D200, 000,000. The industry remains highly liquid with an average liquidity ratio of 91.5 percent,” he said.
On private remittances, Governor Saidy informed the journalists that it continued to be the main source of FX (foreign exchange) inflows in the domestic FX market during the review period, adding that total volumes of remittance inflows from January to October 2021, outperformed the whole of 2020 remittance inflows by 11.4 percent to stand at US$657.22 million.
He said that overall budget deficit (including grants) for the period under review, revealed an overall deficit of D4.1 billion (4.3 percent of GDP) relatively to a deficit of D1.3 billion (1.4 percent of GDP) in the same period last year.
He also told the journalists that the deficit in current account balance narrowed to US$31.91 million(1.76 percent GDP) in nine months of 2021, from a deficit of US$87.88 million(4.97 percent GDP) in the corresponding period of 2020, due to improvement in the goods account balance and strong remittance inflows.
“In contrast, the services account balance deteriorated to a deficit of US$13.47 million in the nine months to end September 2021, from a deficit of US$4.98 million in the comparative period in 2020, owing to decrease in personal travels by 15.96 percent,” he stated.
He stressed that headline inflation rose to 7.3 percent at end of October 2021, from 7.0 percent at end September 2021 and 5.6 percent a year ago. The increase in the consumer price inflation reflects the trend in the global food prices and domestic structural issues.
Non-food inflation Governor Saidy stated, also increased to 5.7 percent in October 2021, from 4.3 percent in the same period last year.
He explained that the surge in non-food inflation was due to an increase in the prices of all the components of non-food baskets except furnishings and household equipment.
“The capital contributors were transport, miscellaneous goods and services, clothing, footwear, house, water, electricity, gas and other fuels,” he said.
Based on this he said the committee decided among other things to maintain the policy rate (MPR) at 10 percent, maintain the required reserve (RR) at 13 percent, maintain interest rate on the standing deposit facility at3.0 percent and the standing lending facility at 11.0 percent(MPR plus 1 percentage point).