Revised estimates from the Gambia Bureau of Statistics (GBoS) indicated that the Gambian economy grew by 5.0 percent in 2010, driven by strong growth in the agriculture sector, according to Amadou Colley, Governor of the Central Bank of the Gambia.
Speaking Saturday at the update of the Monetary Policy Committee of the Bank, Colley said growth in real GDP was projected at 5.5 percent in 2011.
He said the strong performance in agriculture and telecommunications was expected to offset the continued weakness in tourism and exports of groundnut, both of which were expected to be boosted by good harvest.
“In the year to end-March 2011, money supply grew by 14.9 percent, lower than the 21.7 percent a year earlier. Of the components of money supply, quasi money rose by 21.7 percent and narrow money by 7.8 percent Reserve money, the bank’s operating target, grew by 15.9 percent to 15.7 percent a year ago,” he outlined.
He pointed out that the banking industry remained fundamentally sound and the key financial sound indicators showed that the average capital adequacy ratio was 49.0 percent in March 2011 compared to 46.3 percent in December 2010, and over and above the minimum requirement of 8.0 perecnt, adding that all banks operating in the Gambia met the requirement.
According to Colley, the industry assets increased to D17.7 billion, or 14.0 percent from March 2010, and deposit liabilities also surged to D11.5 billion or 16.0 percent.
He added that owing to improved earning, the return on assets and return on equity rose to 1.74 percent compared to the 0.22 percent in March 2010.
“Commercial bank loans and advances increased to D5.4 billion, or 17.4 percent from March 2010, and credit to all sectors increased with loans to distributive trade, agriculture and building and construction increasing by 25.9 percent, 10.0 percent and 10.4 percent respectively,” he said.
He further said credit to transportation, tourism and other commercial loans rose by 6.3 percent, 5.0 percent and 23.2, saying that despite increased lending, impaired advances to loan advances declined to 14 percent in March 2011 compared to 16 percent in December 2010
Colley maintained that global commodity prices remained elevated, driven by the strong demand and supply shocks, saying that crude oil price had surged in response to the unrest in North Africa and the Middle East and increased demand from emerging market economics, principally those in the Asia.
“Food price inflation accelerated to 7.5 percent in March 2011, compared to 5.0 percent in March 2010, but lower that the 8.3 percent figures in September and December 2010,” he said, adding that non-food inflation, on the other hand, decelerated to 2.0 percent compared to 2.6 percent in March 2011.
He noted that core inflation, which excludes the price of energy, utilities and volatile food items, increased from 4.0 percent in March 2010 to 5.3 percent in March 2011.