The West African Monetary Institute (WAMI) has recently conducted a multilateral surveillance mission to The Gambia. The report released by the mission indicates that the Gambian economy has maintained sustained growth since 2003, leading through the first half of 2007, aided by broad macroeconomic stability.

According to a press release from the Department of State for Finance and Economic Affairs, the West African Monetary Institute (WAMI) conducted a multilateral surveillance mission in The Gambia from 2-11, September 2007, to conduct a mid-year assessment of the macroeconomic developments, and convergence performance under the West African Monetary Zone (WAMZ) programme.

The convergence assessment, the released added, is to look into the country’s performance against the macroeconomic convergence criteria set for introducing a common currency in the West African region.

The report released by the mission showed that the Gambian economy has maintained sustained growth since 2003, leading through the first half of 2007, aided by broad macroeconomic stability. According to the report, strong macroeconomic fundamentals are the basis of evidence of sustained economic growth.

“The Gambia has satisfied and sustained her performance on the four primary criteria and three secondary criteria that were met in 2006. There are strong indications that The Gambia will sustain the performances in the primary criteria and will improve on the secondary criteria,” the release added.

The Gambia’s performance on the four primary criteria’s, according to the report are as follows, “inflation rate was 3.7%, which is well within the specified convergence criteria of WAMZ. The fiscal deficit (on commitment basis, excluding grants) was 2.7%, as at December 2006, to a surplus of 1.7% as at end June 2007. 

Central Bank financing of fiscal deficit was 0.0% against the criterion of 10% of previous year’s tax revenue, which has been on a consistent basis since 2004. Gross external reserves (in months of import cover) were 5.5, which is 2.5 months above the WAMZ requirement”.

The release indicated that the Government’s fiscal performance improved significantly in 2006 despite the budgetary commitments for the AU Summit and the total revenue (excluding grants) improved from the level of 18.6% of GDP in June 2006 to 23.9% of GDP in June 2007.

The release concluded that the overall fiscal balance on commitment basis excluding grants indicated a surplus of 1.7% of GDP relative to a deficit of 4.5% recorded in June 2006, noting that The Gambia has successfully met the primary convergence criteria for the past 3-4 years.