#TheGambia -Local media reporting Chief Justice Ali Chowhan has been dismissed

Justice Chowhan was sworn in as Chief Justice of The Gambia on 6 March 2014. 

On 6 May 2015, the Supreme Court of The Gambia acquitted and released erstwhile Commander of Naval Staff, Rear Admiral Sarjo Fofana on treason charges.

See links to reports by local media



#TheGambia – Central bank increases policy rate by 100bps to 23% in May 2015 MPC

By Rafiq Raji, Ph.D.

Real GDP growth for 2014 revised up to 1.6%; a contraction of 1.4% was previously estimated. Latest revision comes on the back of authorities’ estimation of a lower than expected contraction of 8.4% in the agriculture sector (previously -22.7%). The hard-hit services sector (65% of GDP) – due to effects of Ebola fears on tourism sector – apparently expanded by 6.9% in 2014 (8.1% in 2013), according to authorities.

Fiscal deterioration continues – Q1 2015 domestic debt rose 38.7% y/y, indicative of continuing fiscal deterioration. In spite of this, the government yield curve (maturities no more than a year) shifted downwards, with the interbank rate falling to 12.7% in March 2015 from 15.2% a year earlier. Net borrowing in Q1 2015 amounted to c. GMD 0.5bn (8.8% of GDP, based on pro-rata 2014 data). With data such as these, authorities plan for a 1.3% of GDP fiscal deficit in 2015 (12.6% of GDP fiscal deficit in 2014) is clearly at risk.

Inflation rises above target, prompting 100bps rate hike to 23 % – Inflation remains on an upward trajectory with the rate rising to 6.7% y/y (above the CBG target of 5.0%) in March 2015, largely due to food inflation. Much more noteworthy is how core inflation (excludes energy and food prices) accelerated faster, rising 7.1% in the same month. In light of the recent downward revision of the exchange rate by fiat[1], the balance of payments (BOP) data is not of much use. Noteworthy though, gross FX reserves stood at USD 95.8mn (3.4 months of imports) as at end-March 2015, a decline from its 2014 level of USD 112mn (4 months of imports). This was as the volume of FX transactions increased 13.7% y/y to USD 1.41bn for the same period. Dalasi depreciation (e.g. USD: GMD depreciated by 21.9% in the period) probably explains the converse trend.

[1] http://macroafricaintelligence.com/2015/05/06/gambia-authorities-launch-operation-no-compromise-set-dalasi-rate-downwards-by-fiat-institute-capital-controls/

See link to MPC statement http://www.cbg.gm/research/pdf/Press%20Release/Press%20Release_Draft_May_2015.pdf

#Gambia – Authorities launch “Operation No Compromise,” set dalasi rate downwards by fiat & institute capital controls

By Rafiq Raji, Ph.D.

USD:GMD now set at 35-40 from prevailing market rate of 53-55. Foreign exchange > USD 10k not to be allowed out of The Gambia without presidential approval. Long-running dalasi pressure driven by decline in FX receipts (in recent times due to Ebola effects on tourism sector with receipts cut by >50% in 2014-15 season) and consequent balance of payment (BOP) impact estimated at 3.5% of 2015 GDP, extremely high public debt (100% of 2014 GDP, forecast to be 105.6% of 2015 GDP by IMF), with hitherto booming re-exports sector fuelling FX demand. Fiscal dominance of monetary policy continues to constrain the effectiveness of the Central Bank of The Gambia; albeit authorities expect improvements to emanate from new fiscal measures announced in the 2015 budget. In March, authorities requested for a Rapid Credit Facility from the IMF to manage its BOP problems. Delayed rains, which have caused a 15% crop loss, also add to strains on the economy, weighing the 2015 GDP outlook significantly to the downside. With FX reserves at record lows (3 months imports, 5 months in 2013), such forceful measures now in place – which proved ineffective in the past – are unlikely to moderate continuing pressures on the dalasi.