Gambia Monthly Economic Bulletin December 2009

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The Gambia Monthly Economic Bulletin- December 2009

THE GAMBIA MONTHLYECONOMIC BULLETIN 1

December 2009

Institutional Support Project for Economic and Financial Governance (ISPEFG)Ministry of Finance and Economic Affairs (MOFEA)

The Republic of GambiaThe Quadrangle, Banjul, the Gambia

1 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 theHonorable 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, MacroeconomicAdviser (ISPEFG); with key inputs from the Ministry of Finance and Economic Affairs (MOFEA), theCentral Bank of Gambia (CBG), the Gambian Bureau of Statistics (GBOS), and the Gambian RevenueAuthority (GRA).

It is needless to point out that the views expressed in this Bulletin solely indicate the views of theResearch Team, which do not necessarily imply the views of the MOFEA, the Budgetary Agencies or theorganizations they are associated with.

Any questions and feedback can be addressed to: Either Tamsir Cham ( [email protected] ) or Tarun Das ( [email protected] )

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mailto:[email protected]







Political and Administrative Structure

The Gambia is divided into seven regions comprising two Municipalities namely, Banjul CityCouncil (BCC) and the Kanifing Municipal Council (KMC) and five provincial administrativeregions 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 areLocal 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: 1 st January to 31 st DecemberItems (Year) Units Value Rank in the World

from topin descending order

Area (2009) Sq. km. 11,300 171 out of 248countries

Population (2008) Million 1.735 148 out of 241countries

GDP PPP (2004) Million US$ 3284 167 out of 224countries

GDP Nominal (2006) Million US$ 511 199 out of 229countries

GDP PPP per capita (2004) US$ 1945 177 out of 223countries

GDP per capita (2006) US$ 329 192 out of 207countries

Poverty Ratio (% of peoplebelow One-US$ per day) (2000)

Percent 59 7 out of 65 countries

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Source: http://www.nationmaster.com

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http://www.nationmaster.com/

http://www.nationmaster.com/




Contents

Items Page

Basic Facts About the Gambia 2

Contents 3

ISPEFG Project/ Research Team and Document History 4

Highlights 5-6

At a Glance 7

1. Global Economic Outlook1.1Global recovery is uneven, weak, slow and painful1.2 Global Commodity Prices and Inflation

8-148

13

2. Current State of the Gambian Economy2.1 Overall and Sectoral GDP Growth Rates2.2 Consumer Price Index (CPI) and Inflation2.3 Projection of CPI inflation for the year 2009

15-36151719

2.4 Government Fiscal Performance2.5 Projections of Fiscal Outturn for 20092.6 Domestic Debt and Outstanding Treasury Bills2.7 Treasury Bills Yields2.8 Money Supply2.9 Performance of Commercial Banks2.10 Commercial Banks’ Assets2.11 Commercial Banks’ Liabilities2.12 Interest Rates and Central Bank’s Policy Rates2.13 BOP, Foreign Exchange Reserves and Exchange Rates2.14 Exchange Rates

2022242526272829303136

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ISPEFG Project and Monthly Bulletin Research Team

Project Supervisor Honorable Mr. Serign Cham,Permanent Secretary

Project Coordinator Mr. Momodou Cham

Director (EMPU)Principal EconomistSenior EconomistEconomistTechnical Assistant (Debt Management)Technical Assistant (Fiscal/ Financial)Technical Assistant (Macroeconomic)

Dr. Tamsir ChamMr. Momodou TaalMs. Amie KhanMs. Ceesay ChilelMr. Adam AikutaMr. Dan Mambule MwanjeDr. Tarun Das

Document History:

This report is an update of the following reports prepared by the Research Team:

1. The Gambia Quarterly Economic Bulletin, pp.1-30, 31 March 2009.2. The Gambia Monthly Economic Abstract, pp.1-16, 31 March 2009.

3. The Gambia Monthly Economic Bulletin, pp.1-40, 30 April 2009.4. The Gambia Monthly Economic Abstract, pp.1-16, 30 April 2009.5. The Gambia Monthly Economic Bulletin, pp.1-39, 31 May 2009.6. The Gambia Monthly Economic Abstract, pp.1-15, 31 May 2009.7. The Gambia Monthly Economic Bulletin, Part-1, pp.01-22, June 2009.8. 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.

HIGHLIGHTS

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Impact of Global Financial Crisis and Economic Slowdown

• As per the IMF projections made in the WEO October 2009, global output is expected tocontract by about 1% in 2009 followed by a positive growth of 3% in 2010 . IMF concludes that althoughthe global economy has started to pull out of the unprecedented recession witnessed since the WorldWar-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 worldcommodity prices including food and petroleum since August 2008. However, since March 2009commodity prices have started rising again in response to some increase in global demand, butcommodity 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 USand EU and OPEC’s decision to have no supply cuts, global crude oil prices were projected to remainsoft and rule around $51 per barrel in 2009. However, since April 2009 petroleum prices started risingand 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 Gambianeconomy was not an exception and witnessed a decline in exports, remittances, foreigninvestment, tourist arrivals, manufacturing production and wholesale and retail trade in 2008.

• However, thanks to bumper crops contributed by favorable monsoon at home and very goodperformance by electricity, telecom and financial sectors, the real GDP growth at constant marketprices improved from 6% in 2007 to 6.3% in 2008, supported by a spectacular growth of 26.6% inagriculture 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 theglobal financial crisis, its spread to the real sectors of the global economy had adverse impact onthe 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 tourist’s 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% inagriculture 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 rateaccelerated 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%.

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Government Fiscal Performance

• Government’s fiscal performance was mixed in Jan-Nov 2009 than Jan-Nov 2008. During Jan-Nov 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 netlending 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 balancedeteriorated to (-) D369 million and D310 million respectively in Jan-Nov 2009 from (-) D213million 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 maturityof treasury bills, the higher is the yield. However, despite stability in deposit rates and significantdecline 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, yieldon 182-day bills increased from 12.1% to 12.3% over the period, while yield on 364 day billsdeclined 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 Nov2009, aided by 21.4% growth in currency, 1.6% growth in demand deposits, 22.3% growth insavings deposits and 41.6% growth in time deposits. On the demand side, growth was due to21.3% 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 entitiesand 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 alower overall deficit at D348.44 million compared to D376.5 million in Jan-June 2008. The currentaccount recorded a surplus of D163.48 million in Jan-June 2009 compared to a deficit of D276.1million 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), asat 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.

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At a Glance- November 2009EconomicIndicators

LatestReference

Period

Status in thelatest reference

period

Status in theCorresponding

period in theprevious year

Outlook for 2009

Real GDP (MP)Growth rate (%) Calendar year 2009 Overall 5.0Agriculture 5.5Industry 3.5Services 5.7

Overall 6.3Agriculture 26.6Industry (-) 1.2Services 4.2

Overall 5.0Agriculture 5.5Industry 3.5Services 5.7

CPI inflation (%) Nov 2009 Overall 2.6Food 2.6Non-food 2.7

Overall 6.6Food 8.6Non-food 4.0

Expected to remainstable in December 2009.

Brent crude oilprice (US$/ brl)

Nov 2009 AverageUS$77.04

Average US$75 May stabilize aroundUS$75 by the end-2009

Growth rate (%) of Revenue & grants

Jan-Nov 2009 34.9 (-) 1.1 Revenue realisation in 2009is expected to be better than in 2008 due to better performance by bothdomestic revenue and

grants in 2009. However,there will be expenditureoverruns leading towidening of gross fiscaldeficit.

Growth rate (%) of Exp & Net Lending

Jan-Nov 2009 35.9 16.8

Overall fiscal bal.as % of GDP

Jan-Nov 2009 (-) 2.5 (-) 1.9

Basic Balance as% of GDP

Jan-Nov 2009 (-)1.5 (-) 0.9

Primary Bas. Bal,as % of GDP

Jan-Nov 2009 1.2 1.9

Domestic debtas % of GDP

Nov 2009 24.1 26.3 Likely to decline in 2009.

Yield on 91-daysTBs (%)

Nov2009 10.8 10.1 Yields may come downas CPI inflation hasstarted decelerating.Yield on 182-

days TBs (%)Nov 2009 12.3 13.4

Yield on 364-days TBs (%)

Nov 2009 14.0 13.7

GR of Moneysupply (M2) (%) Nov 2009 19.3 19.8 Money growth rate islikely to remain high.Banks’ assets(Billion Dalasi)

End-Nov 2009 13.9 12.8 Likely to increase

CBG policy rate(%)

Dec 2009 14 16 MPC reduced policy rateto 14% in Dec 2009

Overall BOPBalance (Mln D)

Jan-June 2009 (-) 348.44 (-) 376.5 BOP is likely to improvein the second half.

Current A/CBalance (Mln D)

Jan-June 2009 163.48 (-) 276.1

Capital-Fin. A/CBalance (Mln D)

Jan-June 2009 (-) 511.92 (-) 100.4

Rate of change- l

Nom. EffectiveExch. Rate (%)

End-Sep 2009 (-) 7.9 1.6

Dalasi is expected todepreciate against major currencies in 2009.

Dalasi/ UK£ End-Nov 2009 43.88 40.56Dalasi/ US$ End-Nov 2009 26.93 26.26Dalasi/ CHF End-Nov 2009 26.65 20.07Dalasi/ CFA5000 End-Nov 2009 295.53 258.31Dalasi/ Euro End-Nov 2009 40.15 33.28

1. Global Economic Outlook

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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 wasadversely affected by three worst crises in fuel, food and financial sectors (called F-3 Crisis) in asingle 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 fiscalstimulus 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.) toboost both investment and consumption, output and employment. In their latest World EconomicOutlook (WEO) 2 of October 2009, the International Monetary Fund (IMF) concludes that althoughthe global economy has started to pull out of the unprecedented recession, recovery is expected tobe 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 bustswill 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 2010–14, global growth is expected to be just above 4 percent, appreciably less than the 5percent growth rates in the years just ahead of the crisis. Achieving this turnaround will depend onstepping up efforts by the governments of both developed and developing countries to heal thefinancial sector, while continuing to support demand with monetary and fiscal easing.

In recent years African economies in general experienced an economic boom contributed by twofavorable factors: namely (a) rising exports driven by high commodity prices, and (b) increasinginflows of remittances and foreign investment. The ongoing financial crisis and economic slowdownin the developed countries have led to reversal of these positive factors and imposed seriousadverse 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 2009while 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 1¾ percent in 2009, before accelerating to 4 percent in 2010. This growth performance, whiledisappointing 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 inthe region have been able to use fiscal balances as shock absorbers, sustaining domestic demandand helping contain employment losses.

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

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

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Source: World Economic Outlook- Sustaining the recovery, October 2009,International Monetary Fund, Washington D.C.

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Box 1.1

IMF Outlook for Sub-Saharan AfricaPublished 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 economicgrowth 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 particularlybadly affected, and most low-income countries somewhat less so. In all SSAcountries, however, the crisis will likely slow, if not reverse, progress on povertyreduction. Unemployment and under-employment, already endemic, have likelyrisen across the region. But playing-off the global economic recovery, we expectgrowth 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 yearshave provided some policy space to counter the effects of the slowdown.Accordingly, most countries have been able to maintain or even raise publicspending, allowing fiscal deficits to widen temporarily. Where possible, monetarypolicy has also played a supportive role.

“There are significant downside risks, however. Therefore, wherever possible, IMFstaff recommends that fiscal and monetary policies remain supportive until theeconomic recovery is well-established. As the recovery gains strength, the

emphasis of fiscal policy will need to shift from stabilization to medium-termconsiderations, including debt sustainability. In countries with binding financingconstraints, the room for fiscal policy is more limited and the primary focus willneed to remain on reducing macroeconomic imbalances. Financial sectors havebeen for the most part resilient, but prudential supervision will need to remainvigilant 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 rapidresponse to countries’ needs, and new IMF commitments to sub-Saharan Africahave reached over US$3 billion so far this year, compared to some US$1.1 billionfor the whole of 2008 and only US$0.1 billion in 2007. Looking ahead, it will becritical that other development partners support this effort and those of otherinternational financial institutions.”

The full text of the October 2009 Regional Economic Outlook: Sub-SaharanAfrica can be found on the IMF's website, www.imf.org .




Figure 1.1 Sub-Saharan Africa: Projected GDP Growth, 2008–11

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

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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 in2005, is to support low-income countries in their efforts to achieve their development goalswithout 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 atfive 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 isderived by reviewing the evolution of debt burden indicators compared to their indicative

policy-dependent debt-burden thresholds using a baseline scenario, alternative scenarios, andstress tests. The thresholds depend on the quality of a country’s policies and institutions asmeasured by the three-year average of the World Bank’s Country Policy and InstitutionalAssessment (CPIA) index.




1.2 World Commodity PricesInflation 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 emergingeconomies. Inflation in advanced economies is projected to be close to zero in 2009 and toaccelerate 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 someprotection against sustained large price declines. In emerging economies, inflation is forecast tohover around 5 percent in 2009–2010, down from more than 9 percent in 2008. Only China, afew of the ASEAN-5 and most emerging European economies are projected to see inflation fallappreciably 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 incommodity 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 PetroleumExporting Countries (OPEC) members’ strict observance of lower production quotas. Brentcrude oil prices averaged $74.67 per barrel in December 2009. Forward markets project oilprices in the range of $75-78 for 2010, not much above current levels, with high excesscapacity expected to buffer growing demand.

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Table-1.2 Trends of World Commodity PricesQuarterly averages Monthly averages

Oct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec Oct Nov DecCommodity Unit 2008 2009 2009 2009 2009 2009 2009 2009

EnergyCrude oil, Brent $/bbl 55.89 44.98 59.13 68.37 74.97 73.19 77.04 74.67Crude oil, Dubai $/bbl 53.67 44.56 58.93 68.07 75.46 73.28 77.63 75.49

Natural gas, Europe $/mmbtu 15.75 11.94 8.18 6.91 7.81 7.60 7.81 8.01Natural gas, US $/mmbtu 6.40 4.57 3.70 3.17 4.36 4.02 3.70 5.35Beverages & FoodCocoa ¢/kg 224.1 259.4 257.9 296.4 342.0 336.0 338.5 351.4Coffee, robusta ¢/kg 192.6 175.8 165.3 160.1 156.4 162.1 153.2 154.1Tea, Kolkata auctions ¢/kg 220.2 177.4 271.3 273.0 286.2 294.4 291.2 273.0Tea, Mombasa auction ¢/kg 190.8 214.9 228.0 281.7 283.2 261.3 290.6 297.7Coconut oil $/mt 772 677 779 711 734 706 729 767Copra $/mt 520 447 513 469 491 470 493 509Groundnut oil $/mt 1,773 1,283 1,166 1,133 1,150 1,148 1,116 1,187Palm oil $/mt 512 577 743 679 732 680 725 791Palmkernel oil $/mt 609 577 763 700 737 728 726 758Soybean oil $/mt 830 755 863 856 920 897 931 933Soybeans $/mt 377 394 461 454 439 427 440 451Barley $/mt 129.5 116.3 129.5 122.0 145.5 130.7 155.3 150.6Maize $/mt 168.4 166.9 176.0 151.3 167.8 167.3 171.6 164.6Rice, Thailand, 5% $/mt 564.4 586.3 552.4 539.0 542.3 493.0 542.8 591.0Rice, Thailand, 25% $/mt 449.9 469.4 458.7 441.4 462.8 412.8 460.3 515.3Wheat, US, HRW $/mt 228.1 231.6 250.5 208.8 205.4 198.8 211.0 206.3Wheat, US SRW $/mt 182.7 187.4 195.6 165.2 195.6 175.6 204.7 206.5Fishmeal $/mt 1,023 1,013 1,097 1,276 1,535 1,427 1,526 1,651Meat, beef ¢/kg 268.0 245.2 262.8 273.2 273.5 264.8 275.6 280.0Meat, chicken ¢/kg 174.7 173.5 174.1 173.9 165.1 166.1 164.6 164.7Meat, sheep ¢/kg 410.0 378.5 428.7 453.3 450.1 445.8 457.0 447.5Oranges $/mt 842 799 870 861 1,107 1,153 1,154 1,014Shrimp, Mexico ¢/kg 1,014 976 970 970 864 937 863 794Sugar EU ¢/kg 51.97 51.44 53.76 55.43 49.11 48.78 49.63 48.92Raw MaterialsLogs, Cameroon $/cum 473.8 426.8 394.8 414.9 449.5 444.5 451.1 452.7Plywood ¢/sheet 645.5 572.8 565.8 561.5 558.4 559.3 558.6 557.2Sawnwood, Cameroon $/cum 770.8 689.2 721.2 779.0 806.3 790.0 821.0 807.7Cotton Memphis ¢/kg 129.4 122.4 137.5 148.8 168.1 163.7 171.5 169.2Rubber RSS1, US ¢/kg 202.8 165.8 187.0 221.0 284.7 264.8 279.3 310.0

FertilizersDAP $/mt 663.3 362.2 303.6 309.6 316.9 300.1 290.3 360.4Phosphate rock $/mt 371.3 193.3 113.3 90.0 90.0 90.0 90.0 90.0Potassium chloride $/mt 766.7 865.2 726.7 506.8 423.0 435.0 435.0 399.0Urea $/mt 292.2 267.3 241.1 241.6 248.3 239.0 244.8 261.1Metals and MineralsAluminum $/mt 1,821 1,360 1,485 1,812 2,003 1,879 1,949 2,180Copper $/mt 3,905 3,428 4,663 5,859 6,648 6,288 6,676 6,982Gold $/toz 795 909 922 960 1,102 1,043 1,127 1,135Iron ore ¢/dmtu 140.6 101.0 101.0 101.0 101.0 101.0 101.0 101.0Lead ¢/kg 124.5 115.7 149.9 192.8 229.3 224.1 230.9 232.9Nickel $/mt 10,843 10,471 12,920 17,700 17,528 18,525 16,991 17,066Silver ¢/toz 1,020 1,265 1,376 1,477 1,760 1,726 1,788 1,764Steel cr coilsheet $/mt 1,100 1,033 700 700 700 700 700 700Steel hr coilsheet $/mt 1,000 933 600 600 600 600 600 600Steel rebar $/mt 630 473 450 500 522 580 495 490Steel wire rod $/mt 1,200 1,200 1,007 857 816 850 825 773

Tin ¢/kg 1,310 1,103 1,351 1,459 1,517 1,501 1,494 1,555Zinc ¢/kg 118.5 117.2 147.3 176.1 221.4 207.2 219.3 237.6

Source: World Bank Pink Sheet November 2009

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2. Current State of the Gambian Economy2.1 Overall and Sectoral GDP Growth Rates

• The sharp decline in global economic activity had adverse impact on the Gambianeconomy 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 highinternational prices of food grains, and very good performance by electricity, telecomand financial sectors, the real GDP growth at constant 2004 market prices improvedfrom 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 constantmarket prices is expected to be 5% supported by a growth of 5.5% in agriculturalproduction, 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% to61.5% during the same period. Increase of agricultural share was contributed byincrease 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.

Agriculture26%

Mining2% Manufacturing

6%Utilities

2% Construction4%

Trade26%

Hotels4%

Transport12%

Business11%

Others7%

GDP Composition (%) in 200

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




-30.0

-20.0

-10.0

0.0

10.0

20.0

30.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

GDPMP Agriculture Industry Services

Table-2.1: Sectoral Growth Rates and Shares in GDP in the Gambia in 2005-2009 (in %)Sectoral GDP Growth Rates

(in percentage)Sectoral Shares in GDP

(in percentage)Items 2006

Actual2007

Actual2008

Actual2009Estd.

2009IMF-Proj

2006Actual

2007Actual

2008Actual

2009Estd.

GDP at 2004 basic price 3.1 6.0 6.3 5.0 3.6 100.0 100.0 100.0 100Agriculture and allied -14.3 -1.9 26.6 5.5 4.0 23.1 21.6 25.3 25.3

-- Crops -26.3 -15.2 55.2 5.5 4.0 11.8 9.5 13.6 13.7-- Livestock 2.4 11.9 4.3 4.5 4.0 8.8 9.4 9.0 9.0-- Forestry 3.0 -4.0 1.0 0.7 3.0 0.7 0.6 0.6 0.5-- Fishing 7.8 18.0 3.5 11.3 3.0 1.9 2.1 2.0 2.1

Industry 4.5 2.5 -1.2 3.5 2.6 15.1 14.7 13.4 13.2-- Mining and quarrying 1.2 -14.1 8.8 8.8 2.0 2.4 1.9 1.9 2.0

-- Manufacturing 4.1 3.9 -8.3 0.4 4.0 7.0 7.0 5.9 5.6-- Electricity, gas, water 8.7 59.1 1.7 10.0 5.0 1.1 1.6 1.5 1.6-- Construction 6.0 -4.3 5.0 3.0 5.0 4.6 4.2 4.1 4.0

Services 10.0 8.3 4.2 5.7 2.4 61.8 63.7 61.3 61.5-- Wholesale/retail trade 16.1 9.7 -2.3 1.0 2.7 28.2 29.5 26.6 25.5-- Hotels/ restaurants 15.7 14.3 2.9 3.0 -10.0 3.6 3.9 3.7 3.6-- Transport / telecom 2.7 7.0 -8.0 8.0 3.5 12.8 13.0 11.0 11.3-- Financial 5.7 -0.9 28.2 3.0 1.0 7.5 7.0 8.3 8.2-- Real est., business

-3.9 1.4 0.0 2.5 1.0 3.4 3.3 3.0 3.0-- Public administration 11.1 12.9 42.1 2.0 5.0 2.6 2.8 3.7 3.6-- Other service 11.0 17.8 27.0 37.1 3.0 3.7 4.1 4.9 6.3

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

17




2.2 Consumer Price Index and Inflation

• As measured by the Consumer Price Index (CPI), annual point-to-point CPI inflationdecelerated significantly from 6.6% in November 2008 to 2.6% in November 2009. Onthe 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-pointinflation rate of 2.6% in November 2009, down from 8.6% a year ago, and contributed56.5% 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)Items Weights

Wi (%)Nov-2008

IndexNov-2009

IndexInflation

(%)Wi (CPI i1 –

CPI i0)Contributio

n 3 (%)Overall 100.0 119.54 122.70 2.6 320.6 100.0Food 55.2 124.66 127.94 2.6 181.1 56.5Tobacco 0.7 104.77 106.52 1.7 1.2 0.4Clothing 11.3 110.73 112.39 1.5 18.7 5.8Utilities 3.4 120.10 122.64 2.1 8.6 2.7Furnishing 5.2 113.59 116.14 2.2 13.4 4.2Health 1.0 101.13 101.82 0.7 0.7 0.2Transport 4.4 119.61 122.18 2.1 11.3 3.5Telecom 3.0 101.92 102.5 0.6 1.7 0.5

Recreation 8.0 104.14 105.15 1.0 8.1 2.5Education 1.5 101.94 102.99 1.0 1.6 0.5Hotels 0.4 115.79 119.93 3.6 1.5 0.5Misc. 5.9 121.47 133.73 10.1 72.7 22.7Non-food 44.8 113.23 116.27 2.7 136.2 43.5

Source of basic data: Gambian Bureau of Statistics (GBOS).

3 Contribution of an item to overall inflation is estimated by the following formula:

Contribution of Item (i) = W i (CPI i1 – CPI i0) / ∑ W i (CPI i1 – CPI i0) expressed as a percentage.where CPI i1 = Consumer Price Index for Item (i) in the current period

CPI i0 = Consumer Price Index for Item (i) in the previous periodWi = Weights for Item (i) andW = Total weights = Σ Wi

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

18






2.3 Projection of CPI inflation for December 2009

We have made three alternative projections of inflation rates for the remainder month of theyear (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 monthin 2009 will be the average CPI variation for the month over the previous month in lasttwo 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 in2009 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 stableand low around 2.6% during December 2009, and the annual average inflation is expected to bearound 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)2007Index

2008Index

2009-Alt1

2009-Alt2

2007Inf. rate

2008Inf. rate

2009-Alt1

2009-Alt2

2009Alt3

Jan 106.86 112.31 120.13

120.13

2.0 5.1 7.0 7.0 7.0

Feb 107.01 112.34 120.25

120.25

2.1 5.0 7.0 7.0 7.0

Mar 109.36 112.73 120.30

120.30

4.2 3.1 6.7 6.7 6.7

Apr 111.64 113.21 120.36 120.36 6.3 1.4 6.3 6.3 6.3May 112.0

5113.8

3120.51 120.51 6.6 1.6 5.9 5.9 5.9

Jun 111.98

114.48

120.61 120.61 6.4 2.2 5.4 5.4 5.4

July 111.95 116.21 120.84 120.84 6.3 3.8 4.0 4.0 4.0Aug 112.09 117.65 121.15 121.15 6.4 5.0 3.0 3.0 3.0Sep 111.86 118.96 121.75 121.75 6.0 6.3 2.3 2.3 2.3

Oct 111.95 119.29 121.99 121.99 6.0 6.6 2.3 2.3 2.3Nov 112.13 119.54 122.70 122.70 6.0 6.6 2.6 2.6 2.6Dec 112.26 119.93 122.96 123.09 6.0 6.8 2.5 2.6 2.6

Q1 107.7 112.5 120.2 120.2 2.8 4.4 6.9 6.9 6.9Q2 111.9 113.8 120.5 120.5 6.4 1.7 5.8 5.8 5.8Q3 112.0 117.6 121.2 121.2 6.2 5.0 3.1 3.1 3.1Q4 112.1 119.6 122.6 122.6 6.0 6.7 2.5 2.5 2.5

Average 110.9 115.9 121.1 121.1 5.4 4.5 4.6 4.6 4.6

20




21




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 andexpenditure of the government in the first 11 months (i.e. Jan-Nov) of 2007, 2008 and 2009respectively. 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 thecorresponding period of the previous year.

• It is observed from the table that the government’s revenue realization was better in Jan-Nov 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 Jan-Nov 2007. On contrast, Jan-Nov 2009 witnessed an increase in total domestic revenue by13.2% 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 capitalexpenditure and net lending over Jan-Nov 2008.

• Overall, there is a fiscal deficit of D629 million in Jan-Nov 2009, higher than fiscal deficitof D438 million in Jan-Nov 2007, and basic balance and basic primary balance deterioratedto (-) D369 million and D310 million respectively in Jan-Nov 2009 from (-) D213 million andD430 million respectively in Jan-Nov 2008.

Table-2.4.1 Govt Financial Performance in Jan-Nov 2009 compared with Jan-Nov 2008

Items2008

ActualMln Dal.

2009Budget

EstimateMln. Dal.

2007Jan-NovActual

Mln Dal.

2008Jan-NovActual

Mln Dal.

2009Jan-NovActual

Mln Dal.

% changein Jan-

Nov 2008over Jan-Oct 2007

% changeIn Jan-

Nov 2009over Jan-Oct 2008

(1) (2) (3) (4) (5) (6) (7) (8)Revenue and grants 3645 4582 3426.5 3390.3 4572.3 -1.1 34.9

Domestic Revenue 3479 3771 3256.9 3167.6 3584.2 -2.7 13.2Tax Revenue 3161 3391 2863.4 2846.2 3240.8 -0.6 13.9Nontax Revenue 318 380 393.5 321.4 343.5 -18.3 6.9Grants 166 811 169.6 222.7 988.1 31.3 343.7

Exp & Net Lending 4135 5363 3277.3 3828.7 5201.6 16.8 35.9Current Expenditure 3011 3838 2330.3 2807.3 3317.3 20.5 18.2

Personnel Emoluments 906 1035 594.1 905.8 1083.0 52.5 19.6Other Charges 1398 1958 981.4 1258.3 1555.6 28.2 23.6Interest 708 845 754.8 643.2 678.6 -14.8 5.5

External 154 147 220.8 128.8 132.0 -41.7 2.5Domestic 555 698 534.0 514.4 546.6 -3.7 6.3

Cap Exp & Net Lending 1123 1525 946.9 1021.4 1884.3 7.9 84.5Capital Expenditure 1017 1468 871.3 917.3 1811.6 5.3 97.5Net Lending 107 57 75.7 104.1 72.7 37.6 -30.2

Overall Bal Inc. grants -490 -781 149.2 -438.4 -629.3 -393.9 43.5Basic balance -156 -268 726.2 -213.2 -368.9 -129.4 73.1Basic Primary Bal 553 577 1481.0 430.1 309.8 -71.0 -28.0

Nominal GDP (GBOS) 22590 25023 20413 22590 25023 10.7 10.8Notes: (1) Overall balance= (Revenue and grants) minus (expenditure and net lending).(2) Basic balance= Domestic revenue minus (expenditure and net lending) plus externallyfinanced capital expenditure; (3) Basic primary balance= Basic balance plus interestpayments

22




• Column (2) of Table-2.4.2 indicates the item-wise actual fiscal performance in 2008 aspercentage of GDP and the column (3) indicates the item-wise budget estimates in 2009 aspercentage of GDP. It is observed from these columns that 2009 budget estimates assumebetter performance of grants and expenditure as percentages of GDP. Overall fiscal deficitfor 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 percentagesof the corresponding nominal GDP (as estimated by GBOS) for the full year. It is observedfrom the table that, in terms of the percentages of GDP, the total revenues and expenditureshave 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-Nov2009 (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

2008Actual

as % of GDP

2009Budget

as % of GDP

2007Jan- Nov

as % of GDP

2008Jan- Nov

as % of GDP

2009Jan- Nov

as % of GDP

2008Jan- Nov

as % of Outturn

2009Jan- Nov

as % of Budg et(1) (2) (3) (4) (5) (6) (7) (8)

Revenue and grants 16.1 18.3 16.8 15.0 18.3 93.0 99.8

Domestic Revenue 15.4 15.1 16.0 14.0 14.3 91.1 95.0

Tax Revenue 14.0 13.5 14.0 12.6 13.0 90.0 95.6

Nontax Revenue 1.4 1.5 1.9 1.4 1.4 101.2 90.3

Grants 0.7 3.2 0.8 1.0 3.9 134.5 121.8

Exp & Net Lending 18.3 21.4 16.1 16.9 20.8 92.6 97.0

Current Expenditure 13.3 15.3 11.4 12.4 13.3 93.2 86.4

Personnel Emoluments 4.0 4.1 2.9 4.0 4.3 100.0 104.6

Other Charges 6.2 7.8 4.8 5.6 6.2 90.0 79.5

Interest 3.1 3.4 3.7 2.8 2.7 90.8 80.3External 0.7 0.6 1.1 0.6 0.5 83.9 89.7

Domestic 2.5 2.8 2.6 2.3 2.2 92.7 78.3

Cap Exp & Net Lending 5.0 6.1 4.6 4.5 7.5 90.9 123.6

Capital Expenditure 4.5 5.9 4.3 4.1 7.2 90.2 123.4

Net Lending 0.5 0.2 0.4 0.5 0.3 97.5 128.3Overall BalInc.grants 4

-2.2 -3.1 0.7 -1.9 -2.5 89.4 80.6

Basic balance 5 -0.7 -1.1 3.6 -0.9 -1.5 137.1 137.8

Basic Prim. Balance 6 2.4 2.3 7.3 1.9 1.2 77.8 53.6

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

4 (1) Overall balance= (Revenue and grants) minus (expenditure and net lending).5 (2) Basic balance= Domestic revenue minus (expenditure and net lending) plus externallyfinanced capital expenditure;6 (3) Basic primary balance= Basic balance plus interest payments

23




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 inJan-Nov 2009. The ratios of actual realization for any item in Jan-Nov to the final outturn for theitem during the complete year for the last five years viz. 2004, 2005, 2006, 2007 and 2009 arepresented in columns (3) to (7) respectively. Item-wise average ratios for these five years arepresented in column (8) of the Table-2.5.3 . Taking these ratios as norms to take care of monthlyseasonality over the year, expected revenue and expenditure outcomes for the full year 2009are 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 inColumn (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 (amountingto 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 2009Items 2009-

Jan-Nov

Actual

Ratio of Jan-Nov performance inAnnual Outturn (in Percentage)

Ave.ratio2004-2009

2009Proj.Out-turn 7

2009Budget

Esti-mate

2004-Ja-Nv

2005-Ja-Nv

2006-Ja-Nv

2007-Ja-Nv

2008-Ja-Nv

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)1.Rev & grants (2+5) 4572.3 91.1 89.1 91.8 93.6 90.5 4988.1 4582.22.Dom. Revenue (3+4) 3584.2 90.6 88.7 91.6 93.9 90.5 3915.4 3771.13.Tax Rev (3.1+3.2) 3240.8 91.4 90.4 92.6 93.8 90.5 3537.1 3390.63.1 Direct Tax (a to e) 920.7 92.6 89.9 96.3 96.4 92.0 977.8

(a) Personal 391.3 93.1 94.2 93.8 93.7 93.2 93.6 418.1(b) Corporate 449.3 92.1 86.8 97.4 98.2 98.2 94.6 475.1(c) Capital Gains 24.2 93.1 93.4 95.3 94.5 56.0 86.4 28.0(d) Payroll 37.5 97.7 98.3 98.4 99.7 98.0 98.4 38.1(e) Other 18.4 98.3 99.8 100.0 99.4 99.4 18.5

7 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




2.5.3 Government Fiscal Performance in Jan-Nov 2009 and Expected Outturn for 2009Items 2009

Jan-Nov

Actual

Ratio of Jan-Nov performance inAnnual Outturn (in Percentage)

Ave.ratio2004-2009

2009Proj.Out-turn 8

2009Budget

Esti-mate

2004-Ja-Nv

2005-Ja-Nv

2006-Ja-Nv

2007-Ja-Nv

2008-Ja-Nv

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)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 85.4 378.3 380.5(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 1072.7 811.16. Exp & Net Lend (7+8) 5201.6 92.0 95.7 91.1 90.2 88.4 5859.6 5362.97. Cur. .Exp (7.1 to 7.3) 1884.3 95.5 97.3 93.9 90.3 89.2 2165.8 1524.97.1 Pers. Emoluments 1811.6 95.0 96.4 93.6 89.6 89.3 2075.3 1468.2

7.2 Other Charges 1248.5 97.2 96.2 94.4 95.7 88.7 1372.37.3 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 56.78.1 Capital Exp. (a+b) -629.3 -871.5 -780.7

(a) Ext. Financed (i+ii) -368.9 500.8 -267.7(i) Loans 309.8 1233.2 577.6

(ii) Grants 1884.3 95.5 97.3 93.9 90.3 89.2 2165.8 1524.9(b) GLF Capital 1811.6 95.0 96.4 93.6 89.6 89.3 2075.3 1468.2

8.2 Net lending 1248.5 97.2 96.2 94.4 95.7 88.7 1372.39. Overall fis. bal (1-6) 610.2 99.9 96.8 94.2 98.5 89.5 91.0 670.710. Basic balance 638.3 90.9 93.1 95.3 87.2 86.9 91.0 701.611. 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 -3.113. Basic balance -1.5 2.0 -1.114. Basic PrimaryBalance

1.2 4.9 2.3

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

25




2.6 Domestic Debt and Treasury Bills Outstanding

• At the end of November 2009, outstanding domestic debt stood at D6 billion (amountingto 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 2008to 84.5% at the end of November 2009, share of Sukuk Al-Salam increased from 1.1% to2.4%, 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 % change inNov 2009

over Nov 2008

Composition(in percentage)

30 Nov2008

30 Nov2009

30 Nov2008

30 Nov2009

Treasury bills 4,764 5,100 7.0 80.1 84.5Sukuk Al-Salam 63 142 124.4 1.1 2.4Government Bonds 250 250 0.0 4.2 4.1NIB Treasury Notes 873 547 -37.4 14.7 9.1Total 5,951 6,038 1.5 100 100Nominal GDP(GBOS)

22590 25023

As % of nominalGDP

26.3 24.1

Domestic Debt Sustainability

As per the analysis made by the CBG, the current level of Gambia’s domestic debt is notsustainable. Out of three sustainability indicators given in Table-2.6.B, one indicator viz. debtservice to revenue ratio is not satisfied.

Table-2.6-B Primary Benchmarks for Domestic Debt Sustainability Ratios (%)Item Threshold 2006 2007 2008 2009

Projected1. Debt service torevenue ratio

28-63 142 124 118 91

2. Debt to GDP ratio 20-25 33 30 27 243. Debt to revenueratio

92-167 180 158 166 147

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. Thethresholds used here are those used by the Debt Relief International (DRI) for many HIPC countries.Source: Central Bank of Gambia

26




2.7 Treasury Bills Yields

• Yields on treasury bills fluctuated widely in recent months. As expected, the higher thematurity of treasury bills, the higher is the yield. However, despite stability in depositrates and significant decline of annual point-to-point CPI inflation rate from 7% in Jan2009 to 2.6% in Nov 2009, average yields on the 91-day bills increased from 10.5% inJan 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 2009to 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 Committeereduced 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)2007 2008 2009

91-D 162-D 364-D 91-D 162-D 364-D 91-D 182-D 364-DJan 10.5 12.7 13.6 10.6 11.4 13.6 10.5 12.1 14.4Feb 12.0 13.4 13.8 10.9 11.9 13.7 11.1 12.8 14.4Mar 12.6 13.4 13.7 11.0 12.1 13.6 11.4 12.7 14.4Apr 13.0 13.4 13.8 10.9 11.9 13.3 12.0 13.0 14.6May 12.8 13.3 13.8 10.2 11.3 13.0 12.5 13.8 15.3Jun 12.6 13.1 13.9 10.0 11.2 13.3 13.0 13.8 15.6Jul 12.5 13.2 13.9 9.6 10.6 12.6 11.5 12.0 14.4Aug 12.6 12.9 13.6 8.8 10.2 12.1 10.2 11.2 13.3Sep 11.6 12.2 12.9 8.9 11.0 13.1 10.4 11.7 14.3Oct 10.6 11.7 12.5 10.3 11.4 13.6 10.8 12.1 14.2Nov 10.5 11.5 12.5 10.1 13.4 13.7 10.8 12.3 14.0Dec 10.4 11.6 13.6 9.9 12.5 14.0

Trends of Yields of Treasury Bills during 2007-2009

27




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 17.6percent, 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 wassupported by 21.4% growth in currency, 1.6% growth in demand deposits, 22.3% growthin 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 Nov2009, supported by 15.8% growth in government borrowing, 26.6% growth in credits topublic entities and 12.8% growth in credits to the private sector, over a year ago.

Table-2.8 Money Supply and Demand in November 2009Components Nov

2007MillionDalasi

Nov2008

MillionDalasi

Nov2009

MillionDalasi

Nov2008

%share

Nov2009

%share

Nv-08% ch.over

Nv-07

Nv-09% ch.over

Nv-081.Money Supply (M3) (2+3) 7755 9287 11077 100 100 19.8 19.32.Narrow Money (2.1+2.2) 3766 4760 5167 51 47 26.4 8.62.1 Currency 1461 1679 2038 18 18 14.9 21.42.2 Demand deposits 2305 3080 3128 33 28 33.6 1.63.Quasi money (3.1+3.2) 3989 4528 5910 49 53 13.5 30.53.1 Savings deposits 2562 2602 3183 28 29 1.6 22.33.2 Time deposits 1427 1926 2727 21 25 34.9 41.6Demands for money (1+2) 7755 9287 11077 100 100 19.8 19.31.Net foreign assets (1.1+1.2) 3013 3227 3916 35 35 7.1 21.31.1 Monetary Authorities 2362 2729 3206 29 29 15.6 17.51.2 Commercial banks 651 498 710 5 6 -23.5 42.72.Net Dom. Assets (2.1+2.2) 4742 6060 7161 65 65 27.8 18.22.1 Domestic credit 4721 6493 7259 70 66 37.5 11.8

(a) Credits to government 1689 2501 2895 27 26 48.1 15.8(b) Credits to public entities 352 496 627 5 6 40.7 26.6(c) Credits to private sector 2496 3313 3736 36 34 32.7 12.8(d) Credits to forex bureau 183 183 0 2 0 0.0 -100.0

2.2 Other items, net 22 -432 -97 -5 -1 -2095 -77.5Reserve Money 2560 2660 3130 3.9 17.6

Source: Central Bank of Gambia

28




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 accountedfor 64.4% of the total assets at the end of September 2009, although their share hasdeclined from 67% a year ago.

• The banking industry remains sound. Total industry assets increased by 17% on year-on-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 industry’s risk-weighted capital adequacy ratio stood at 34.84% in March 2009, and33.22% 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 to7% in Sept 2009 compared to 9.95 percent a year ago, and were adequately provisionedin compliance with the statutory norms and requirements.

• However, commercial banks’ Return on Assets (ROA) declined from 2.10% in March2008 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 loansgiven by the commercial banks, followed by building accounting for 12 percent, transport8 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 recordeddecline over last year’s 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 bestperformer as it had the least defaults.

Table-2.9 Banks’ total loans and non-performing loans (NPL) by sectors in Sept 2009Sectors Total Loans

Sep 2008Million Dalasi

Total loansSep 2009

Million Dalasi

Sep2008

% share

Sep2009

% share

Sep 2009% changeover Sep

2008

NPLMl. D.

NPLas %

of loansto thesector

1. Agriculture 148 136 5 3 -8.4 5.9 4.3

2. Fishing 17 25 1 1 43.0 10.4 42.03. Manufacturing 117 195 4 5 67.4 3.1 1.64. Building 342 512 11 12 49.6 62.8 12.35. Transport 281 355 9 8 26.3 21.4 6.06. Distribution 831 931 26 22 12.0 103.1 11.17. Tourism 195 293 6 7 50.5 22.2 7.68. Financial sector 125 126 4 3 0.8 12.9 10.29. Others 1140 1624 36 39 42.5 71.8 4.410. Total 3196 4197 100 100 31.3 313.5 7.5


29




2.10 Commercial Banks’ Assets

• Total assets of the commercial banks increased by 14.7% on year-on-year basis fromD12.1 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. Atend-Nov 2009, foreign assets constituted only 9.9% of total assets (foreign exchange1.8%, 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 contingentliabilities 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 ratioremained 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 hadthe dominant share.

• At end-Nov 2009, loans and advances to the public sector increased by 38.1%, whilethose to the private sector increased by only 19% over end-Nov 2008.

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

Nov-2008 Nov-20091. Notes and coins 136.9 152.1 265.9 1.3 1.9 11.12. Foreign exchange 101.6 236.2 256.3 1.9 1.8 132.6

3. Local Bank balance 1,008.5 891.0 1,037.0 7.3 7.5 -11.6ii. CBG 999.3 888.6 867.9 7.3 6.2 -11.1

iii. Banks locally 9.1 2.5 169.1 0.0 1.2 -73.1 64. Balances abroad 914.9 583.3 966.3 4.8 6.9 -36.35. Bills purchased 7.8 107.2 70.5 0.9 0.5 1268.46. Loans and advances 2,452.1 3,377.3 4,094.9 27.8 29.4 37.7

i. Public sector 215.4 392.9 542.5 3.2 3.9 82.4ii. Private sector 2,236.8 2,984.4 3,552.3 24.6 25.5 33.4

7. Investments 2,991.8 3,420.5 3,739.8 28.2 26.9 14.3i. Govt Treasury Bills 2,671.2 3,151.9 3,511.3 26.0 25.2 18.0

ii. Others 215.3 175.8 67.5 1.4 0.5 -18.3iii Foreign Invest. 105.3 92.8 161.0 0.8 1.2 -11.9

8. Fixed assets 523.8 922.1 1,119.7 7.6 8.0 76.19. Guarantees 1,086.2 1,455.2 1,467.0 12.0 10.5 34.010. Other assets 824.9 991.3 901.0 8.2 6.5 20.211. Total assets (1 to 10) 10,048.4 12,136.2 13,918.2 100.0 100.0 20.812. Net Balance (11-9) 8,962.2 10,681.0 12,451.3 88.0 89.5 19.2

% ch.over

Assets (MillionDalasi)

Nov-2007 Nov-2008 Nov-2009 Composition (%) % ch. Nv08over Nv07

Source: Central Bank of Gambia.

30




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 debt0.5%), up from 2.7% a year ago (non-residents deposits 0.9%, balances with banksabroad 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 balancesincreased 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 by0.8% over end- end-Nov and constituted 10.5% of total liabilities.

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

Nov-2008 Nov-20091. Capital and reserves 1,196.3 1,558.4 1,593.2 12.8 11.4 30.32. Demand deposits 2,305.1 3,080.4 3,128.3 25.4 22.5 33.6i Residents 2,051.5 2,743.8 2,328.9 22.6 16.7 33.7ii Non residents 47.0 22.6 471.2 0.2 3.4 -51.9 1iii Government entities 206.7 314.0 328.2 2.6 2.4 51.93. Savings deposits 2,561.7 2,602.3 3,183.2 21.4 22.9 1.6i Residents 2,467.2 2,510.6 3,084.9 20.7 22.2 1.8ii Non residents 74.5 72.2 85.5 0.6 0.6 -3.1

iii Government entities 20.0 19.5 12.8 0.2 0.1 -2.54. Time deposits 1,427.3 1,925.6 2,726.9 15.9 19.6 34.9i Residents 1,057.0 1,398.9 1,999.2 11.5 14.4 32.4ii Non residents 16.0 17.0 44.0 0.1 0.3 6.3iii Government entities 354.3 509.6 683.6 4.2 4.9 43.9Total deposits 6,294.0 7,608.2 9,038.5 62.7 64.9 20.95. Bank Balances 243.6 90.7 211.1 0.7 1.5 -62.8i HO & branches 26.8 23.1 157.4 0.2 1.1 -13.7ii Other banks abroad 216.8 67.6 53.7 0.6 0.4 -68.8iii. Banks locally - - - 0.0 0.0 -6. Borrowings from 227.5 326.3 462.8 2.7 3.3 43.4i Cent. bank of Gambia - - - 0.0 0.0

ii Other banks locally - 2.3 - 0.0 0.0iii HO & branches 172.5 173.2 393.7 1.4 2.8 0.4iv Other banks abroad 55.0 150.8 69.1 1.2 0.5v. Other sources - - - 0.0 0.07. Guarantees 1,086.2 1,455.2 1,467.0 12.0 10.5 34.08. Other liabilities 1,000.8 1,097.4 1,145.7 9.0 8.2 9.79. Total liabilities (1 to 8) 10,048.4 12,136.2 13,918.1 100.0 100.0 20.8

Nov-2007 Nov-2008 Nov-2009 % ch. Nv08over Nv07

% ch.over

Composition (%)Liabilities (MillionDalasi)


31




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 andfurther to 13.7 per cent in 2007. It ranged in between 13.1% to 14.7% during 2008. The bankrate 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 CBGreduced 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 pointfrom 14% to 15% in June 2007, and further to 16.0% in October 2008. The rediscount rate hasremained unchanged at 16% since then until November 2009.

In view of the declining trend of inflation rates, the Monetary Policy Committee reduced thepolicy 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-termdeposit rates and commercial banks’ lending rates remain very high, and there exist wideinterest rate spreads. Successful disinflation allowed the weighted yield on treasury bills to fallfrom 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 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Bank lending rare- min 18 18 17 21 21 21 18 18 18 18Bank lending rare- max 24 24 24 36.5 36.5 30 28 27 27 27Deposit rate (SB) min 8 8 8 8 10 5 5 5 4 4Deposit rate (SB) max 10 10 10 17 17 10 7 7 7 7Time dep (3 months) min 9.5 9.5 6 7 8 5 5 5 5 5

Time dep (3 months) max 12.5 12.5 13 22 22 14 8.5 12.9 13.6 15.5Time dep (6 months) min 10 10 6 8 8 7 6 6 6 6Time dep (6 months) max 12.5 12.5 13 22 22 15 13 12.9 13.6 15.5Time dep (12 month) min 11 11 7 10 12 7 6 7 7 6Time dep (12 month) max 12.5 12.5 13 22 23 13 13 12.9 13.6 15.5Govt. treasury bills 12 15 20 31 30 16 12.8 13.7 13.6 14.2CBG Bank Rate 10 13 18 29 28 14 9 10 10 10CBG Rediscount Rate 15 18 23 34 33 19 14 15 16 16

Range = Maximum-MinimumBank lending rate 6 6 7 15.5 15.5 9 10 9 9 9Deposit rate (SB) 2 2 2 9 7 5 2 2 3 3Time deposits (3 months) 3 3 7 15 14 9 3.5 7.9 8.6 9.5Time deposits (6 months) 2.5 2.5 7 14 14 8 7 6.9 7.6 9.5Time deposits (12 month) 1.5 1.5 6 12 11 6 7 5.9 6.6 9.5

Factors Influencing Interest RatesInflation (GDP-Deflator) 3.6 14.9 15.0 22.9 13.6 3.9 0.0 2.0 8.0 4.7CPI-Inflation 0.9 4.5 8.6 17.0 14.3 5.0 2.1 5.4 4.9 4.5Real GDP-Growth Rate 5.5 5.7 0.7 2.4 2.1 -0.1 3.1 6.3 6.3 5.0Exch. Rate change (%) 12.2 22.7 27.0 43.2 5.3 -4.8 -1.8 -11.4 -9.8 15.9

Source: Central Bank of Gambia (CBG)

32




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 endforeign 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 andthe capital and financial accounts. The Net Usable Reserve of the CBG stood at US$95.6million 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 percentof GDP in 2007 to a deficit of D2.92 billion, amounting to 12.8 percent of GDP in 2008, or adecline 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. Thecurrent account deficit, including official transfers, amounted to D234.3 million compared to asurplus 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 theoverall 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 adeficit of D276.1 million in Jan-June 2008. The capital and financial account balance worsenedto deficit of D511.92 million in Jan-June 2009 from a deficit D100.4 million in Jan-June 2008reflecting 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 D1.1billion in Jan-June 2009 attributed to the surge in exports which more than offset the increase inimports. Exports, including re-exports rose to D2.2 billion in Jan-June 2009 compared to D1.4billion 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 inthe year to end-September 2009 from US$1.6 billion a year earlier. The domestic currencydepreciated by 7.9 percent on the overall nominal exchange rate index of currencies comparedto 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 7.1percent, 17.5 percent, 9.4 percent and 8.2 percent respectively.

Gross official reserves, including Special Drawing Rights (SDR) allocation from the InternationalMonetary Fund (IMF), as at end-September stood at US$141.3 million, equivalent to 6.0 monthsof import cover.

33




Table-2.13A: Quarterly BOP Summary Table 2008-2009Q2In Million Dalasi

(Million Dalasi) 2008-Q1

2008-Q2

2008-Q3

2008-Q4

2008 2009-Q1

2009-Q2

1 Goods balance (1.1-1.2)

-761.3 -612.0 -627.8 -918.1 -2919.

1

-683.9 -

399.01.1 Exports of goods

(a+b+c)804.9 788.2 699.4 883.3 3175.

8934.5 1331.

6a. Exports of goods in

trade stat69.0 125.1 80.3 56.0 330.4 239.1 597.8

b. Re-exports 639.6 571.8 542.0 735.7 2489.1 660.9 706.8c. Other goods 96.3 91.3 77.1 91.6 356.2 34.5 27.0

1.2 Imports of goods fob 1566.1 1400.2 1327.2

1801.3

6094.9

1618.4

1730.6

2 Services, net (2.1 to2.7)

542.4 57.0 -69.5 183.6 757.5 370.3 19.7

2.1 Transport -137.4 -96.3 -71.5 -128.9 -434.1 -123.6 -

124.32.2 Travel 800.9 196.3 143.9 483.0 1624.1 615.7 190.12.3 Communications 49.2 79.4 44.8 41.0 214.4 52.4 82.92.4 Insurance -36.1 -38.8 -30.2 -41.0 -146.0 -38.0 -42.82.5 Construction 3.2 55.9 2.5 14.3 120.0 12.9 14.82.6 Information technology 0.0 -2.0 -21.5 -47.4 -70.9 -23.6 23.62.7 Others business -137.5 -137.5 -137.5 -137.5 -550.0 -125.5 -

124.53 Income -233.1 -176.0 -176.8 -171.5 -757.4 -74.8 -57.5

3.1 Investment income -275.8 -219.6 -223.8 -212.2 -931.4 -115.2 -98.93.2 Compensation to labor 42.7 43.6 47.0 40.7 174.0 40.3 41.4

4 Transfers, net(4.1+4.2+4.3)

456.9 450.0 499.5 403.0 1809.3

154.1 834.64.1 Official transfer 42.7 40.5 29.0 25.0 137.2 108.3 151.94.2 Remittances 219.2 249.1 370.7 356.7 1195.8 290.2 434.24.3 Other transfer 195.0 160.4 99.7 21.3 476.4 -244.4 248.5

5 Current accountbalance

4.9 -281.0 -374.5 -503.0 -1109.6

-234.3 397.8

6 Capital Account 0.0 19.1 3.2 2.0 24.4 0.0 0.07 Financial Account

(7.1+7.2)-12.4 -107.2 26.5 411.0 317.9 -234.5 -

277.47.1 Foreign direct investment 411.4 411.4 366.5 366.5 1555.7 262.7 262.77.2 Other investment -865.0 -351.5 60.5 -273.6 -

1429.6

-311.1 -484.2

7.3 Reserve change 441.2 -167.1 -400.5 318.2 191.8 -186.2 -55.98 Capital and Financial A/C

(6+7)-12.4 -88.1 29.7 413.0 342.3 -234.5 -

277.49 Overall BOP Balance

(5+8)-7.4 -369.1 -344.8 -89.9 -767.3 -468.9 120.4

Foreign Exchange Reserve 4428.2 4059.1 3714.3

3624.4

3624.4

3155.5

3275.9

34




Equi to months of imports 7.4 7.6 7.3 5.2 6.2 5.1 4.9Ave.Exch.rate(D/$) 21.23 20.47 21.81 25.90 22.35 26.19 26.8GDP at cmp (Million Dalasi) 18240 18240 18240 18240 18240 19529 1952

9

35




Table-2.13B: Quarterly BOP Summary Table 2008-2009Q2In Million US dollar

(Million US$) 2008-Q1

2008-Q2

2008-Q3

2008-Q4

2008 2009-Q1

2009-Q2


-35.9 -29.9 -28.8 -35.4 -130.6 -26.1-14.9

1.1 Exports of goods(a+b+c)

37.9 38.5 32.1 34.1 142.1 35.7 49.7

a. Exports of goods intrade stat

3.2 6.1 3.7 2.2 14.8 9.1 22.3


1.2 Imports of goods fob 73.8 68.4 60.9 69.5 272.7 61.8 64.62 Services, net (2.1 to

2.7)25.5 2.8 -3.2 7.1 33.9 14.1 0.7

2.1 Transport -6.5 -4.7 -3.3 -5.0 -19.4 -4.7 -4.62.2 Travel 37.7 9.6 6.6 18.6 72.7 23.5 7.12.3 Communications 2.3 3.9 2.1 1.6 9.6 2.0 3.12.4 Insurance -1.7 -1.9 -1.4 -1.6 -6.5 -1.5 -1.62.5 Construction 0.2 2.7 0.1 0.6 5.4 0.5 0.62.6 Information technology 0.0 -0.1 -1.0 -1.8 -3.2 -0.9 0.92.7 Others business -6.5 -6.7 -6.3 -5.3 -24.6 -4.8 -4.6

3 Income -11.0 -8.6 -8.1 -6.6 -33.9 -2.9 -2.13.1 Investment income -13.0 -10.7 -10.3 -8.2 -41.7 -4.4 -3.73.2 Compensation to labor 2.0 2.1 2.2 1.6 7.8 1.5 1.5


21.5 22.0 22.9 15.6 80.9 5.9 31.1

4.1 Official transfer 2.0 2.0 1.3 1.0 6.1 4.1 5.74.2 Remittances 10.3 12.2 17.0 13.8 53.5 11.1 16.24.3 Other transfer 9.2 7.8 4.6 0.8 21.3 -9.3 9.3


0.2 -13.7 -17.2 -19.4 -49.6 -8.9 14.8


(7.1+7.2)-0.6 -5.2 1.2 15.9 14.2 -9.0 -10.4

7.1 Foreign direct investment 19.4 20.1 16.8 14.1 69.6 10.0 9.87.2 Other investment -40.7 -17.2 2.8 -10.6 -64.0 -11.9 -18.17.3 Reserve change 20.8 -8.2 -18.4 12.3 8.6 -7.1 -2.1

8 Capital and Financial A/C(6+7)

-0.6 -4.3 1.4 15.9 15.3 -9.0 -10.4

9 Overall BOP Balance(5+8) -0.3 -18.0 -15.8 -3.5 -34.3 -17.9 4.5Foreign ExchangeReserve

208.6 198.3 170.3 139.9 162.1 120.5 122.2

Equi to months of imports

7.4 7.6 7.3 5.2 6.2 5.1 4.9

Ave.Exch.rate(D/$) 21.2 20.5 21.8 25.9 22.4 26.2 26.8GDP at cmp (Million US$) 859.2 891.1 836.3 704.2 816.0 745.7 728.7

36




Table-2.13-C: Quarterly BOP Summary Table 2008-2009Q2AS percentage of GDP at current market prices

BOP as % of GDP 2008-Q1

2008-Q2

2008-Q3

2008-Q4

2008 2009-Q1 2009-Q2


-4.2 -3.4 -3.4 -5.0 -16.0 -3.5-2.0

1.1 Exports of goods(a+b+c)

4.4 4.3 3.8 4.8 17.4 4.8 6.8

a. Exports of goods intrade stat

0.4 0.7 0.4 0.3 1.8 1.2 3.1


1.2 Imports of goods fob 8.6 7.7 7.3 9.9 33.4 8.3 8.92 Services, net (2.1 to

2.7)3.0 0.3 -0.4 1.0 4.2 1.9 0.1

2.1 Transport -0.8 -0.5 -0.4 -0.7 -2.4 -0.6 -0.62.2 Travel 4.4 1.1 0.8 2.6 8.9 3.2 1.02.3 Communications 0.3 0.4 0.2 0.2 1.2 0.3 0.42.4 Insurance -0.2 -0.2 -0.2 -0.2 -0.8 -0.2 -0.22.5 Construction 0.0 0.3 0.0 0.1 0.7 0.1 0.12.6 Information technology 0.0 0.0 -0.1 -0.3 -0.4 -0.1 0.12.7 Others business -0.8 -0.8 -0.8 -0.8 -3.0 -0.6 -0.6

3 Income -1.3 -1.0 -1.0 -0.9 -4.2 -0.4 -0.33.1 Investment income -1.5 -1.2 -1.2 -1.2 -5.1 -0.6 -0.53.2 Compensation to labor 0.2 0.2 0.3 0.2 1.0 0.2 0.2


2.5 2.5 2.7 2.2 9.9 0.8 4.3

4.1 Official transfer 0.2 0.2 0.2 0.1 0.8 0.6 0.84.2 Remittances 1.2 1.4 2.0 2.0 6.6 1.5 2.24.3 Other transfer 1.1 0.9 0.5 0.1 2.6 -1.3 1.3


0.0 -1.5 -2.1 -2.8 -6.1 -1.2 2.0


(7.1+7.2)-0.1 -0.6 0.1 2.3 1.7 -1.2 -1.4

7.1 Foreign direct investment 2.3 2.3 2.0 2.0 8.5 1.3 1.37.2 Other investment -4.7 -1.9 0.3 -1.5 -7.8 -1.6 -2.57.3 Reserve change 2.4 -0.9 -2.2 1.7 1.1 -1.0 -0.3


-0.1 -0.5 0.2 2.3 1.9 -1.2 -1.4

9 Overall BOP Balance(5+8) 0.0 -2.0 -1.9 -0.5 -4.2 -2.4 0.6Foreign ExchangeReserve

24.3 22.3 20.4 19.9 19.9 16.2 16.8

37




Table-2.13-D: Quarterly BOP Summary Table 2008-200Q1Percentage change over same quarter of previous year (%)

Items 2009-Q1 2009-Q1 2009-Q2 2009-Q2

(Dalasi) (US$) (Dalasi) (US$)1 Goods balance (1.1-1.2) -10.2 -27.2 -34.8 -50.21.1 Exports of goods (a+b+c) 16.1 -5.9 68.9 29.0

a. Exports of goods in trade stat 246.6 181.0 377.8 265.0b. Re-exports 3.3 -16.2 23.6 -5.6c. Other goods -64.2 -71.0 -70.4 -77.4

1.2 Imports of goods fob 3.3 -16.2 23.6 -5.62 Services, net (2.1 to 2.7) -31.7 -44.7 -65.4 -73.6

2.1 Transport -10.1 -27.1 29.2 -1.32.2 Travel -23.1 -37.7 -3.1 -26.02.3 Communications 6.5 -13.6 4.4 -20.22.4 Insurance 5.5 -14.5 10.4 -15.72.5 Construction 297.2 222.0 -73.5 -79.72.6 Information technology - - -1260.1 -986.12.7 Others business -8.7 -26.0 -9.5 -30.8

3 Income -67.9 -74.0 -67.3 -75.13.1 Investment income -58.2 -66.1 -55.0 -65.63.2 Compensation to labor -5.5 -23.4 -5.1 -27.5

4 Transfers, net (4.1+4.2+4.3) -66.3 -72.7 85.5 41.74.1 Official transfer 153.7 105.7 275.1 186.54.2 Remittances 32.4 7.3 74.3 33.1

4.3 Other transfer -225.3 -201.6 54.9 18.35 Current account balance -4833.9 -3937.4 -241.5 -208.16 Capital Account - - -7 Financial Account (7.1+7.2) 1797.6 1438.2 158.8 97.7

7.1 Foreign direct investment -36.1 -48.2 -36.1 -51.27.2 Other investment -64.0 -70.8 37.7 5.27.3 Reserve change -142.2 -134.2 -66.5 -74.4


1797.6 1438.2 214.9 140.5

9 Overall BOP Balance (5+8) 6227.5 5029.2 -132.6 -124.9Foreign Exchange Reserve -28.7 -42.2 -19.3 -38.4

Equi to months of imports -31.0 -31.0 -34.7 -34.7Ave.Exch.rate(D/$) 23.4 23.4 30.9 30.9GDP at cmp 7.1 -13.2 7.1 -18.2

2.14 Exchange Rate

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• During Jan-April 2009, every month the Dalasi depreciated against major internationalcurrencies (viz. US$, CHF, EURO and CFA) traded in the inter-bank market except theUK£, reflecting the adverse impact of the global financial crisis on remittances andtourism and increased demand for foreign exchange to meet the high cost of imports.Since May 2009 Dalasi has also started depreciating against UK£. At end-Nov 2009,Dalasi has depreciated by 9.2% against British Pound, by 1.5% against US$, 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 perunit of foreign currency)

Year Month UK£ US$ CHF Euro CFA (5000)2008 Jan 53.84 27.97 22.36 36.20 276.30

Feb 53.67 27.90 21.95 36.17 271.70Mar 53.47 27.70 22.49 36.16 273.52Apr 53.68 27.55 22.42 36.39 274.62May 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 33.52 255.72Sept 41.62 20.81 17.72 29.27 215.56Oct 39.02 19.15 15.98 27.38 215.46Nov 42.42 20.95 18.01 29.99 238.30Dec 44.28 22.24 19.81 31.60 256.78

2009 Jan 44.27 22.34 19.91 32.89 252.85 Feb 42.58 21.88 19.57 32.28 243.98

Mar 40.87 19.46 19.15 30.83 239.16Apr 39.52 20.12 19.16 31.43 235.95May 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 32.21 251.05Aug 40.73 21.37 20.08 32.23 249.47Sept 41.65 23.12 19.86 33.02 249.30Oct 40.49 24.89 20.15 32.89 258.09Nov 40.56 26.26 20.07 33.28 258.31

Annual Rate of appreciation (-) / depreciation (+) of Dalasi (in % over same month in 2008)2009 Jan -15.9 16.7 4.7 1.9 3.9

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 11.1May 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 10.6Aug 7.5 24.6 21.3 16.9 12.8

Sept 3.2 16.6 28.2 16.9 13.7Oct 7.4 8.1 29.4 20.4 15.1Nov 8.2 2.5 32.8 20.6 14.4

Source: Central Bank of Gambia (CBG)

Documents

Gambia Monthly Economic Bulletin December 2009