Gambia’s Int’l reserves stand at D3.2 billion

The Gambia’s good standing in introducing the ECO – the second common currency in the West African Region – is increasingly coming to light as the country’s economy continues to register remarkable and impressive results over the years, both for the good of the national economy and for that of the sub-region and beyond.

The country’s international reserves, which should be enough to meet at least 3 months of import cover, as one of the primary criteria for introducing the ECO, have risen to D3.2 billion (US$142.5m), and have hit an import cover of over four months.

"As at end-December 2007, gross international reserves stood at D3.2 billion (US$142.5 million), equivalent to 4.3 months of imports," said the governor of the Central Bank of The Gambia (CBG), Momodou Bamba Saho, at a recent press briefing held at the Central Bank.

The balance of payment surplus (reserves balance after payment will have been made for goods and services incurred by the country) stood at D101.8 billion ($4.52 million) in the third quarter of 2007 "compared to an estimated deficit of D227.8 million ($8.4 million) in the second quarter reflecting the marked increase" in the capital and financial account balance.

The country’s domestic debt, an economic fundamental that bears one of the primary criteria for introducing the ECO, has drastically been reduced to D5.6 billion, or 3.8 per cent from end-September 2007 to the end of the year or period under review.

As at end-November 2007, according to Governor Saho, "the stock of domestic debt declined to D5.6 billion, or 3.8 per cent," from end-September 2007.  "The maturity structure of Treasury bills, which accounts for 84.7 per cent of the debt stock, continued to move from the short to the long end," the  governor said.

These and other  macroeconomic variables and fundamentals of the economy have  lent credence to the 2008 budget speech by the secretary of state for Finance and Economic Affairs, Mousa Gibril Bala-Gaye, who said, "if the ECO is to be introduced in  January  2009, only The Gambia and Nigeria will qualify."

The fundamentals have also substantiated the latest Country Performance Assessments paraphrased by SoS Gaye while delivering the budget. "The September 2007 country performance assessments of The Gambia, the Republic of Guinea, Sierra Leone, Ghana and Nigeria against the macro-economic convergence criteria set for introducing a common currency (the ECO) in the West African Region had indicated that The Gambia has met all the four (4) primary criteria, and three (3) secondary criteria that were also met in 2006," SoS Gaye had said.

The convergence criteria are a set of macro-economic targets member countries of WAMZ are required to satisfy for the ECO to be introduced. The primary criteria include achieving and maintaining price stability by recording single digit end period inflation; ensuring sustainable government fiscal position by reducing the ratio of budget deficit (excluding grants); limiting Central Bank financing of government budget to 10 per cent or less of previous year’s tax revenue, and maintaining sufficient level of gross official foreign exchange reserves of at least 3 to 4 months of import cover.