The Gambia has met all criteria for the introduction of a common currency in the West African Monetary Institute (WAMI), as the country has achieved significant milestones both in macroeconomic and policy harmonization in line with the 2005, Banjul Declaration Action Plan.

According to a release from the Department of State for Finance and Economic Affairs, the West African Monetary Institute conducted a multilateral surveillance mission to The Gambia, from March 19-27, 2007, to look a the country’s performance against the macro-economic convergence criteria set for introducing a common currency in the countries of The Gambia, Sierra-Leone, Guinea Conakry, Ghana and Nigeria.

The report of the mission highlighted the impressive macro-economic developments in The Gambia during 2006, attributed mainly to the significant progress made by Gambian authorities in consolidating the gains registered in recent years. According to the report, “economic fundamentals have been strengthened year after year since 2003. The Gambia, the release said, has achieved significant milestones both in macro-economic management and policy harmonisation in line with the 2005, Banjul declaration action plan. The country satisfied all four primary convergence criteria for the first time since the commencement of the convergence process. “The fiscal deficit, excluding grants as a percentage of GDP, inflation rate, gross external reserves (in months of import cover) and Central Bank financing of the fiscal deficit” the release added.

The released pointed out that the overall fiscal performance in 2006, has improved significantly from 2005, despite the budgetary challenges posed by the elections and the AU summit. “The fiscal deficit (on commitment basis, excluding grants), narrowed from 7.4% of GDP in 2005 to 2.7% of GDP in 2006.

Including grants, the fiscal deficit improved from 5.6% in 2005 to 2.1% in 2006. The debt dependency ratio declined to 16.5% from 25.7% in 2005”, the release stated. This relatively lower recourse to debt for financing the deficit was as a result of increased revenue performance.

In addition to macro-economic convergence, development in the areas specified in the Banjul Action Plan showed that The Gambia, continued to make progress in payment system development, statistical harmonisation, as well as financial sector integration and sensitisation.