‘The Gambia not affected by global financial Crisis’

The looming financial crisis that continue to wreck havoc on international economies has so far had no bearing  on The Gambia’s economy, according to a report obtained from a one day sensitization workshop for stakeholders on the current state of the World Financial Crisis.

The workshop which was  organised by  the Social Forum  was held at the conference room of TANGO in Kanifing,  revealed that the financial system in The Gambia has not been affected directly by the looming global financial crisis.

However, it adds that adverse impact from recessions in Europe and the USA are likely to slow down the real Gross Domestic Products (GDP) growth from 6% in 2008 to 5% in 2009.

This revelation was made by Lamin Dampha, Principal Economist at the department of state for Trade, Industry and Employment, during a presentation on the topic: ‘The Impact of global economic crisis on Trade and Investment.’

According to Mr Dampha, the IMF mission report for October 2008 indicates that inflation had been rising in recent months, reaching an annual rate of 6.3% in September 2008 but expected to remain in single-digit, as pressures from abroad ease with falling commodity prices.

He said the Gambia may not have benefited from the commodity boom because not only that it has got small export base but also the commodities affected were not the Gambia’s major commodities, adding that the impact on the BOPs is projected to be more pronounced in 2008 than in 2007.

Mitigation measures

According to the economist, prudent fiscal and monetary policies which have laid a solid foundation for macroeconomic stability were needed.

He pointed out that despite the increase in world food and fuel prices, growth has remained stronger, per capita GDP has increased significantly, and that inflation has been contained at low single digit level.

He observed further that removal of custom duty and sales tax on imported rice and adjustment of retail petroleum product prices to avoid budget subsidization, among others, will help to sustain the quantity of the commodities.

Recommendations

For Mr Dampha, to sustain growth and keep inflation in check, countries need to be prepared to respond to sudden changes in the global economic conditions, particularly in commodity prices.

In addition, he said, donor assistance is needed to cushion the impact of adjustment on vulnerable countries that have high poverty levels and limited access to foreign financing.