Recent West African Monetary Zone Mission to the Gambia Ends

In a press release made available to this paper, the West African Monetary Institute (WAMI) is reported to have conducted a multilateral surveillance mission to The Gambia from 2nd –11th September 2007. The mission was a “mid-year assessment of the macroeconomic developments, and convergence performance under the West African Monetary Zone (WAMZ) program.” According to the press release, the convergence assessment is aimed at looking into the country’s performance against the macroeconomic convergence criteria set for introducing a common currency in the West African region.

The Report released by the Mission showed that the Gambian economy has maintained sustained growth since 2003, leading through the first half of 2007 thanks to broad macroeconomic stability. The Report further stated that strong macroeconomic fundamentals are the basis of evidence of sustained economic growth.

“The Gambia has satisfied and sustained her performance on the four primary criteria and three secondary criteria that were met in 2006. There are strong indications that the Gambia will sustain the performances in the primary criteria and will improve on the secondary criteria. The Gambia’s performance on the four primary criteria are as follows:

1. Inflation rate was 3.7%, which is well within the specified convergence criteria of WAMZ

2. The fiscal deficit (on commitment basis, excluding grants) was 2.7%, as at December 2006, to a surplus of 1.7% as at end June 2007.

3. Central Bank financing of Fiscal deficit was 0.0% against the criterion of < 10% of previous year’s tax revenue, which has been on a consistent basis since 2004.

4. Gross external reserves (in months of import cover) were 5.5 which is 2.5 months above the WAMZ requirement.

“Government’s fiscal performance,” the release went on, “improved significantly in 2006 despite the budgetary commitments for the AU summit. Total revenue (excluding grants) improved from the level of 18.6% of GDP in June 2006 to 23.9% of GDP in June 2007. The overall fiscal balance on commitment basis excluding grants indicated a surplus of 1.7% of GDP relative to a deficit of 4.5% recorded in June 2006. The Gambia has successfully met the primary convergence criteria for the past 3-4 years.”