Tuesday, December 18, 2012

Gambia: Economic activity improving


Gambian Women at Serrekunda Market (Photo Credit: Access Gambia)
After a year enmesh in drought, very poor harvest, and hunger, think-tanks have announced economic activity is improving in the West African nation of The Gambia.

Majority of her people suffered a food crisis in 2011 following a total crop failure that was blamed on erratic rains.
Though talks of a “bumper harvest” could be lowered as it may not be as bumper as being claimed – life is slowly coming back to normal as the agriculture sector recovers.

An International Monetary Fund (IMF) mission to The Gambia said economic activity in The Gambia has picked up in recent months with the beginning of the agricultural harvest and tourism seasons.

Based on preliminary indicators, crop production is expected to increase by roughly 20-30 percent this year, while tourism continues to expand at a strong pace, mission chief Mr. David Dun said on December 10, 2012.

 “Although the increase in crop production is weaker than was previously estimated, owing to damage caused by prolonged heavy rains, the harvest marks a solid initial rebound from last year’s severe crop failure,” Mr. Dun observed during the visit from December 3-7.

Gambian woman and child.
Gambian women and children were the most vulnerable at the height of the food crisis. (Photo credit: Wikipedia)
The IMF mission estimates that economic growth in The Gambia could reach about 2-3 percent in 2012, rising to 8-9 percent in 2013 as the agricultural sector recovers further. However, it said these estimates will be revisited in the coming months with a broader analysis of economic developments.

Meanwhile, inflation is projected to remain relatively modest at around 5 percent (year-on-year).

He said: “The mission welcomes continued progress in gradually reducing government borrowing needs. The 2013 budget submitted to the National Assembly would reduce new domestic borrowing to about 1 percent of GDP next year, which is expected to ease pressure on interest rates and eventually generate fiscal savings.

“The imminent introduction of the new VAT in January 2013 is a key step toward modernizing The Gambia’s tax system and rebuilding the revenue base.

"In the banking sector, the upcoming increase in the minimum capital requirement will enhance stability. The mission commends the CBG for managing this important measure in a transparent manner.

“The mission looks forward to continued good progress by the Gambian authorities on implementing a sound macroeconomic policy framework, which will facilitate concluding discussions under the first review of The Gambia’s arrangement under the IMF’s Extended Credit Facility.”

Written by Modou S. Joof


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