By Bakary Ceesay
Bakary K. Jammeh, Governor of Gambia Central Bank yesterday indicated that preliminary estimates of government fiscal operations indicated that overall deficit, including grants worsened from D24.3 million in the first quarter of 2019 to a deficit of D341.6 million in the first quarter of 2020.
“Revenue and grants in the first three months of 2020 decreased to D4.7 billion from D5.0 billion registered in the corresponding period in 2019. Domestic revenue, which comprises tax and non-tax revenue increased to D4.5 billion during the period under review from D3.0 billion in the same period last year.”
Jammeh was speaking during the Monetary Policy Committee (MPC) press conference held in Banjul, Governor Jammeh added that the deficit excluding grants have improved to D0.5 billion during the first quarter of 2020 compared to D1.97 billion in the same period in 2019.
He further explained that total government expenditure and net lending increased slightly to D5.02 billion, compared to D5.01 billion in 2019. He added the recurrent expenditure increased by 23.5 % to D4.1 billion (4.1% of GDP) during the period under review.
“Capital expenditure decreased to D948.7 million in the first quarter of 2020 from D1.7 billion in the same period last year.”
Dwelling on the domestic debt, Governor Jammeh stated that The Gambia’s domestic debt remains high, saying the stock of the domestic debt increased to D33.6 billion or 33.2% of Gross Domestic Product (GDP) as at end April 2020, from D32.5 billion or 35.7% of GDP in the corresponding period in 2019.
After reviewing the country’s economy, Jammeh explained that the committee decided to reduce the monetary policy rate by 2% point to 10% to support the economy. It also reduced the statutory required reserve ratio by 2% points to 13%, which will release about D700 million liquidity to banks; and maintain the interest rate on the standing deposit facility at 3% and the interest rate on the standing lending facility at 1% points above the monetary policy rate.
With regard to the decision taken by the MPC, Governor Jammeh encourages banks to translate these to increase lending to the private sector, while adding that the committee will continue to closely monitor the situation and stands ready to act accordingly.