|Select Economic and Financial Indicators||2014||2015||2016||2017e||2018f|
|Real GDP (% change)||0.9||4.3||2.2||3.0||3.5|
|GDP (USD bn)||0.8||0.9||1.0||1.0||1.1|
|Fiscal Balance (% GDP)||-5.8||-8.1||-9.7||-2.5||-2.0|
|Broad Money (% change, end period)||11.2||-0.9||15.3||11.4||9.6|
|Exports (USD bn)||0.2||0.2||0.2||0.2||0.2|
|Imports (USD bn)||0.4||0.4||0.4||0.5||0.5|
|Current Account Balance (% GDP)||-10.8||-15.0||-8.9||-9.4||-12.0|
|FX Reserves (USD bn, end period)||0.10||0.08||0.05||0.08||0.10|
|Exchange Rate (average)||39.95||41.04||41.95||46.21||49.23|
Real GDP: Following the resolution of the political impasse in early last year, we are sanguine 2018 growth prospects. We expect growth to be boosted by a vastly increased government budget for 2018 (a 66% rise in expenditures to GMD20.6bn; 233% rise in capital expenditures to GMD6bn), alongside a recovery in tourist arrivals, remittances and donor re-engagement. In a similar vein, we are optimistic over wholesale and retail trade (accounting for 30% of GDP) as improved Gambia-Senegal relations, which were strained under the Yahya Jammeh presidency, should ease disruptions along the Gambia-Senegal border and facilitate trade. In addition, as the new government re-establishes relationships with the international community, we expect investment inflows to rise, fueling an uptick in real GDP growth above the 3% estimated for last year, alongside implementation of economic reform programmes (pre-conditions for renewed donor engagement).
Inflation: Improving agricultural activity should help stabilise food prices, while improved GMD stability should limit the pass-through effects of currency weakening on domestic prices. However, higher oil prices will keep inflation high over 2018.
Fiscal balance: Following reports of looting by the previous government and comments by new President Adama Barrow about an empty treasury, The Gambia’s public finance situation appears very fragile. Although, in June 2017, the new government agreed a Rapid Credit Facility (RCF) loan and a Staff Monitoring Programme (SMP), with the IMF, to aid policy making. Accordingly, we believe donor engagement should drive fiscal consolidation and cutback the deficit further below the elevated levels seen in 2016 (9.7% of GDP). Already, the new government’s 2018 budget projects a 219% surge in grant inflows (to GMD10.2bn).
Current account: As a net oil importer, rising oil prices should stoke an increase in oil imports. In addition, we believe capital imports will track higher as the new government seeks to execute public infrastructure projects and reduce stresses in the economy. Consequently, we forecast a widening of the already large current account deficits (at around 12% of GDP) in 2018 from near 10% of GDP in 2017, maintaining downside pressure on the GMD.
Key downside risks stem from a potential failure of the new Gambian government to re-establish relationships with key international partners which should lead to higher donor funding to finance budgetary operations and current account transactions. In addition in recent years, The Gambia’s subpar growth rates have stemmed from policy slippages under the previous regime, failure to improve economic policy discipline could ward off donor flows to The Gambia.
Exchange Rate Structure
|Target||No target, but CBG intervenes to limit volatility|
|Type of intervention||Via spot market|
|FX Products||Spot||Forwards||Non-deliverable Forwards||Options||Swaps|
|Daily trading volume (USD mn)||n/a||n/a|
|Average trade size (USD mn)||n/a|
|FX Market Structure||The CBG may purchase FX from the domestic interbank market to meet its target for FX reserves (equivalent to around five months of imports).|
|Non-resident FX Regulations||Spot||Forwards||Non-deliverable Forwards||Options||Swaps|
|Trade and FDI flow||No restrictions||n/a|
|Resident FX Regulations||Spot||Forwards||Non-deliverable Forwards||Options||Swaps|
|Trade and FDI flow||No restrictions||n/a|
|Primary Market||Treasury bills||Sukuk al-salaam Treasury bills||Treasury notes||Treasury bonds||Central Bank/OMO bills|
|End use||Government financing||Government financing|
|Maturity structure||91- to 364-days||91- to 364-days|
|Daily trading volume||No trading||No trading||n/a|
|Average trade size||No trading||No trading|
Ecobank local affiliate contact details:
Ecobank The Gambia, 42 Kairaba Avenue, Serrekunda
Tel: +220 439 90 31 / 33
|The Gambia Debt||2014||2015||2016||2017e||2018f|
|Government debt (% GDP)||104.9||105.3||120.2||112.7||108.1|
|External debt (official creditors, % GDP)||53.9||55.9||52.3||49.8||50.4|
|External public debt stock (USD bn)||0.4||0.5||0.5||0.5||0.6|
|Share of total sub-Sahara debt (%)||0.2||0.2||0.2||0.2||0.2|
Hydrocarbon & mineral production
Gambia is believed to have reserves of heavy minerals, including ilmenite, zircon and rutile (titanium ore), but to date there has been no progress with developing them. Gambia has no known oil and gas reserves, although the country’s offshore is believed to be prospective given its proximity to successful developments in neighbouring Senegal. Gambia has four licensed blocks shared equally between Erin Energy and African Petroleum. Most exploratory activity has focused on geological mapping, with just one well being drilled offshore (Jammah-1 in 1979) which found gas but not in commercial quantities. Gambia consumed 177,000 tonnes of refined products in 2016, worth US$66mn. Over 90% of the country’s petroleum products are imported from Côte d’Ivoire.
Soft commodity production
As a tiny resource-poor country, Gambia lacks a large agricultural sector. The country’s key commodity is wood (for fuel), with estimated output of 60,000 tonnes in 2016. Gambia also produces groundnuts (estimated at 80,000 tonnes in 2016) and cashew nuts (27,000 tonnes).
Gambia’s imports totalled US$385mn in 2016. Given the country’s limited natural resources, Gambia is dependent on imports of petroleum products and food, worth US$67mn and US$138mn, respectively. The country is also reliant on imports of electronics, machinery, vehicles and iron & steel (together worth US$68mn in 2016), reflecting the low level of industrialisation.
Gambia’s exports totalled US$94mn in 2016. Food is Gambia’s most valuable export, including cereal, flour & dairy products (US$18mn in 2016), sugar (US$8mn) and palm oil (6mn). The country’s most valuable manufactured exports are textiles (US$9mn in 2016) and woven fabrics (US$7mn), most of which went to Mali and Guinea. Groundnuts are the country’s most valuable soft commodity export, worth US$10mn in 2016, most of which went to Vietnam for processing.