By Muhammad Bah The Governor of the Central Bank of the Gambia (CBG) Mr. Amadou Colley on Tuesday November 4th informed the Gambia National Assembly that the domestic debt stock of the country has picked up in the past years and raises concern over sustainability. Mr. Colley who was speaking at the Parliament in Banjul, said the issuance of short term Treasury bills has increased dramatically to finance government fiscal operations. According to the CBG Governor, in 2013 the outstanding domestic debt which is mainly short term debt was D13.5 billion dalasis (39% of GDP), an increase of 25.1% in 2012. Mr. Amadou Colley said the Treasury bills and Sukuk Al-Salaam accounted for 81.0 percent and 2.9 percent of the Gambia’s domestic debt which shows an increase by 34.5% and 13.6% during the period. He said the budget deficit including grants is 2.7 billion (8% of GDP) in 2013 higher than the deficit in 2012 (5.9% of GDP) in 2012. He informed the National Assembly Members that the deficit was financed from domestic sources in the amount of 2.2 billion (6.0% of GDP) adding that external financing amounts to D578.8 million and repayments (D172.7 million). According to the Bank Governor, the bank financing is 71.1 percent of total financing at D2.5 billion while repayment of D172.7 million or 7.0% was made to the non-bank sector. He added that the Central bank financing of government deficit was 91.4% of the total domestic financing in 2013. He pointed out that the consequences of financing the fiscal deficit through advances by the central bank, limits the ability of monetary policies to have the desired impact. He said it contributed to the macro-economic instability increasing depreciation and inflationary pressures and stifled the growth. On the village savings and credit Associations (VISACAs), this registered growth in membership and deposits in 2013. He said membership rise from 38,389 in 2012 to 42,104 by end of December 2013, an increase of 9.68 percent annually. He said the deposit liabilities increased to D18.5 million in 2013 from 15.2 million in 2012(21.71%). On the Treasury Bills and Sukuk Al-Islam, he said the interest rates on treasury bills and Sukuk Al- salam increased, that the 91 day Treasurer bill and Sukuk Al-salam rose from 9.62% percent and 9.70% in December 2012. He added that it increased to 15.85% and 15.84% in December 2013. He said the yields on the 182 day and 364 day Treasurer Bills increase to 17.0 percent and 18.51 % from 10.20% and 10.9% respectively. On his final note, the CBG Governor said the bank is working with the Ministry of Finance and Economic Affairs to bring consistency between fiscal consolidation and medium term debt sustainability to create greater space for government future infrastructure investment and social spending. ]]>
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