Good morning Gambia and welcome to Dalasi Update (DUD). We will also like to wish our magnificent and loyal readership a joyous and bless-filled Christmas in advance.

I would like to pay respect to the following point before delving into the figures this week in the quest that heed is taken for a better trading Dalasi.

When will the price of fuel be reduced?
There is great and urgent need to reduce the price of fuel at the pump. The capacity is there as everywhere in the world prices of patrol and diesel has gone drastically down.

In the Gambia, the business community which is dominated by foreigners anyway will never hesitate to increase prices whenever prices go up without even waiting to clear yesterday’s stocks at yesterday’s prices but will jump and just increase prices thereby gaining an unfair profit and advantage in the process meaning selling at today’s increased prices of goods bought by yesterday’s reduced prices.

Where are you love and partners in development call when world market prices are down for over two months and still you selling to us at $147 per barrel prices when the price of a barrel today is under $50? We call on the respective authorities to step in and arrest the unfair play by our unfriendly business people in a friendly Gambia. Cheaper fuel means cheaper cost of goods and services in the Gambia.

This will also trickle down to every Gambian way of life and will lessen the burden and demand on the Dalasi for foreign currencies. This will ultimately help the Dalasi regain serious grounds against major world currencies.

We pay when you increase your prices without complaining and agreeing with you that you cannot sell less than you buy as dictated by world market prices then what is stopping you from reducing prices when world market prices go down? We need businessmen for our development quest but unfair prices and cheating the masses is also a crime punishable by law which seems to be the case at the moment. I hope people who matters and can effect change are listening?

The dalasi this week Non Movers
ANK PHB is the only non mover this week and that translates to the fact that it is the second week running to be in such a great position and please do keep it up. In the same league is Trust Bank and they have registered non moving figures as of last week in all but loosing some more grounds on the Dollar trading.

The Us Dollar
SCBG, AGIB, GTB and ICBG all registered gains against the US Dollar at trading with the Gambian Dalasi while ECOBANK, TBL and BSIC all trade at loss this week as of last week trading figures with Bank PHB and ACCESS being non movers as per last week trading figures as far as the battle between the Dollar and Dalasi is concerned.

Mixed Picture
All banks in the Gambia with the exception of Bank PHB and TBL all are registering and  posting a mixed picture with some gains, some losses and some non movers in their respective currency dealings this week while no figures are available from FIB this week.

This is the second week running for FIB to be a non performer in our tables of currency analysis meaning no figures are available from them through the Central Bank to the baking community in the Gambia. I hope the situation is remedied as we love FIB and wish to see them furnishing us with data for their esteem customers. In that vein, Market Beat has the privilege to bring to you the Indicative Rates currency tables as we buy and sell in a selection of our major banks in selected currencies as dictated by the Central Bank of the Gambia (CBG) as at the 19th.December 2008, thus:

The Gambia is not directly affected by the global financial crises
An International Monetary Fund (IMF) mission led by Mr. Tsidi Tsikata visited The Gambia during October 23 to November 6, 2008, to conduct the fourth review under the Poverty Reduction and Growth Facility (PRGF) arrangement. At the conclusion of the visit, the mission made the following observations, thus:

Leading to the present times, the financial system in The Gambia has not been affected directly by the global financial crisis. However, adverse impacts from recessions in Europe and the USA are likely to slow down real GDP growth from about 6 percent in 2008 to less than 5 percent in 2009. Inflation has been rising in recent months, reaching an annual rate of 6.3 percent in September 2008 but is expected to remain in single digits, as pressures from abroad ease with falling commodity prices.

In light of weaker-than-expected revenue performance and an uncertain outlook for 2009, the mission advised the government to restrain its expenditures. The mission estimates that government revenues will fall short of budget estimates by over Dalasi 400 million (about 2 percent of GDP) in 2008, due mainly to implicit subsidization of petroleum product prices and lower revenues from non-oil imports (including re-exports).

With the recent decline in world oil prices, the government should recoup some of the revenue loss associated with a less-than-full pass through of rising world prices to consumers earlier this year. The mission advised government to restrain discretionary expenditures in the fourth quarter of 2008 in order to limit domestic borrowing and avoid a marked increase in interest rates.

The mission noted that a reduction in re-export activity may represent a permanent erosion of an important part of the tax base, and cautioned against over-optimistic revenue projections and an overly expansionary budget for 2009. While supportive of civil service reform, the mission noted that another large increase in the wage bill (following a 40 percent increase in 2008) would constrain the room provided by debt relief to increase poverty reducing expenditures.

The mission endorsed the CBG's commitment to containing inflation using all instruments at its disposal. In order to enhance the effectiveness of monetary operations, the mission called for greater collaboration between the CBG and the Department of State for Finance and Economic Affairs in forecasting government revenues and expenditures.

Following the entry of two new banks this year, there are now 11 banks operating in The Gambia, with five more awaiting licenses. The mission expressed concern that the growing number of banks was stretching the CBG's supervision capacity to the limit and risked diverting resources from meeting other pressing needs. The mission welcomed a review of the scope of activities eligible for incentives under the Investment Promotion Act which is currently underway.

It advised that applications for investment incentives be carefully scrutinized, but that once approved the incentives should be provided in a predictable way. The government requested assistance from the IMF to review tax policy, especially in the areas of rationalizing central and local government taxation and broadening the tax base. With regard to the PRGF-supported program, the mission found that, except for the fiscal basic balance target which was missed, overall performance against the end of September 2008 targets were good.

The mission noted that the terms of external loans recently ratified by the National Assembly were in line with the minimum degree of concessionality agreed under the program. The mission urged the government to meet the target date of February 2009 for completing work on a national debt strategy, with a view to placing government borrowing decisions in an appropriate medium-term context.

The mission wishes to express its gratitude to the authorities for their hospitality and the constructive spirit in which the discussions were held. The Executive Board of the IMF is expected to discuss the report of the mission in January 2009.