Today Newspaper - Online Edition - The Gambia's Quality Newspaper: TOURISM REBOUND, REMITTANCES & AGRIC TIPPED TO REJIG GAMBIA'S ECONOMY TOURISM REBOUND, REMITTANCES & AGRIC TIPPED TO REJIG GAMBIA'S ECONOMY ================================================================================ Reports by Saloum Sheriff Janko and Modou Baldeh on 26 February, 2010 07:04:00 This was said by the governor of the Central Bank of The Gambia, Mr. Bamba Saho at a press conference held at the Central Bank building in Banjul. According to the governor of The Gambia's apex bank, the combination of these factors would expectedly occasion a reinvigorated economic activity. He said recent data point to a return to global economic bgrowth which is supported by improvements in financial conditions and stronger domestic demand in many emerging market economies. This would imply that many holiday seekers would be more ready to visit tourist destinations like The Gambia while Gambians in foreign countries would have more money to send back home. These, added to a booming agriculture sector, would expectedly lead to economic growth for The Gambia. The Central bank governor noted that money supply grew by 19.4 percent in 2009 compareed to 18.4 percent in 2008. According to him, both components of money supply experienced increases. He said the volume of transactions in the domestic foreign exchange market remained unchanged while the Dalasi appreciated against the British Pound by 0.08 percent, the US Dollar by 0.02 percent and the Euro by 2.12 percent in January 2010. Currently, the Dalasi is exchanged at D26.95; D42.19 and D38.52 to the US Dollar, the British Pound and the Euro respectively. Speaking further, Mr. Saho said the banking industry's overall condition in terms of capital adequacy, liquidity and asset quality was satisfactory. In other words, no Gambian bank has risks of folding up. “The industry's average risk-weighted capital adequacy ratio was 18.1 percent at end-December 2009, compared to 33.22 percent in September 2009. All the banks observed the minimum requirement,” he said. According to him, the banking industry's total assets increased to D14.8 billion in 2009, up 8.0 percent from September 2009 while loans and advances to all major economic sectors increased by 25.7 percent to D4.4 billion in December 2009 from D3.5 billion in December 2008. He also said credit to distributive trade, agriculture, building and construction and manufacturing increased by 22.7 percent, 86.9 percent, 1.7 percent and 104.9 percent respectively, while loans and advances to fishing, tourism and transportation increased by 6.7 percent, 7.3 percent and 8.2 percent respectively during the same period, indicating that finances is being circulated around all the major sectors on which the economy reclines. “According to the forward-looking business sentiment survey, respondents indicate that economic and business activity was higher in the fourth quarter of 2009 relative to the preceding quarter and that prospects for the first quarter of 2010 are favourable.” However, he said, a majority of the respondents expect the rate of inflation to be higher in the first quarter of 2010. He said food and non-food consumer price inflation increased in January 2010 though annual average inflation fell to 4.3 percent in January 2010 compared to 5.6 percent in September 2009. “On the back of increased economic activity, commodity prices continue to increase,” he said. He noted that owing to the stability of the Dalasi and increased agricultural production, “headline inflation is forecast to be in the range of 3.5 percent to 4.0 percent by the end of the first quarter of 2010.” The risks to this outlook are the steady rise in global energy and food prices. He concluded by saying that the foregoing has informed the Monetary Policy Committee of the Central Bank to maintain the Rediscount Rate, that is the rate of interest charged to member banks when they borrow from the reserve system, at 14.0 percent.