Central Bank to monitor inflation

Saturday, June 30, 2007

The Central Bank of The Gambia has informed the International Monetary Fund (IMF) mission that it will closely monitor inflation in the coming months and take appropriate action to contain inflation at low single digit levels. 

This statement was issued in Banjul, by Mr. Tsidi Tsikata, the International Monetary Fund’s mission chief for The Gambia.

In a press release issued by the mission stated that “an IMF mission visited The Gambia from June 8 to 23, 2007, for discussions on the first review under The Gambia’s Poverty and Growth Facility (PRGF), and completion point under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative.

The release stated that the mission met with Secretary of State for Finance and Economic Affairs, Mousa Gibril Bala-Gaye, Governor of the Central Bank of The Gambia (CBG) Famara Jatta, Chairman of the National Planning Commission, Alieu Ngum, other senior officials of the government and the CBG, members of the National Assembly, and representative of the business community, civil society, and The Gambia’s development partners.

“The authorities success in sustaining macroeconomic stability over the last few years has contributed to a substantial inflow of foreign direct investment and vibrant economic activity”, the release outlined.
 However, strengthening of the dalasi against major currencies in recent months, reflecting a surge in foreign exchange inflows, is expected to help lower inflation to about 5 percent by December. The CBG informed the mission that it will monitor inflation closely in the coming months and take appropriate action to contain inflation at low single digit levels. “The mission agrees with this strategy”, the release noted.

Fiscal performance, the release stated, has been strong in the first half of the year, reflecting higher-than-expected revenues and lower-than-programme expenditures.

“The introduction of the Integrated Financial Management Information System at the beginning of 2007, has helped enforce budget discipline and strengthen overall public financial management. The mission encouraged the authorities to continue their prudent fiscal policies with a view for reducing domestic debt and facilitating the gradual reduction in domestic interest rates”, the release further indicated.

The IMF mission commended the authorities for making solid progress in implementing structural reforms critical for progress towards achieving the Millennium Development Goals. Reforms, it added, under the PRGF-supported programme span the areas of public finance management, central bank governance and operational independence, and financial depending.  In addition, they include steps to improve statistics in order to better inform economic policy-making and the general public.

With respect to the completion point under the enhanced HIPC Initiative, the release pointed out that good progress has been made towards meeting almost all the conditions established at the decision point.  However, a condition related to privatising public assets in the groundnut sub sector has not been met. Discussions will continue between the government and the staffs of the IMF and World Bank over the coming weeks on reforms in the groundnut sector.

The mission welcomed the authorities’ plans to strictly limit new debt accumulation, including after the granting of debt relief under the enhanced HIPC and Multilateral Debt Relief Initiatives. 

The mission commended the authorities for their hospitality, close collaboration, and the constructive spirit in which the discussions were held.

Author: Written by Ousman Darboe
Source: The Daily Observer Newspaper