The Gambian President, Yahya Jammeh, declared here Thursday that the West African nation continues to face a heavy debt burden, with interest on domestic debt consuming 21% percent of government revenues in 2012, up from 18.5% in 2011.
“Including external debt, interest consumed a little over 25% of government revenues in 2012, up from 22.5% in 2011,” President Jammeh told Gambians while addressing the new National Assembly in Banjul, the Gambian capital.
He said that, as at the end of 2012, the stock of domestic debt, much of which consisted of treasury bills with maturities of one year or less, stood at about 34% of the growth domestic products (GDP), up from 33% in 2011.
“Sustained improvement on the public financial management, measured by the World Bank’s Country Policy and Institutional Assessment (CPIA), allowed for an increase in Gambia’s thresholds for various external debt indicators,” President Jammeh told Gambian lawmakers.
Admitting that the country debt burden was huge for the first time in 18 years, President Jammeh said the tiny West African state experienced one of its worst droughts in years in 2011, causing a drop in crop production by about 70% and the GDP to contract by 4.3%.
“The drought and its impact on the lives of the people propelled the government, with the help of its development partners, to intervene by providing food, seeds and fertilizer to mitigate the effect on the poor and the vulnerable in our society, especially the farmers.” he added.
Jammeh said the government succeeded in mobilizing resources, for drought relief, to the tune of US$ 14.3 million, with approximately 140 million Dalasis or US$ 4.6 million from domestic resources.
According to him, this strong intervention resulted in a rebound in 2012 with real GDP growth of 2.3%, saying that this was supported by a continued growth in tourism of about 10% of the GDP.
Jammeh disclosed that manufacturing weakened in early 2012, especially groundnut processing, and construction remained weak throughout the year.
Despite pressure on the food prices and a weakening of the Gambian Dalasis, inflation remained under control at 4.9% year-on-year in December 2012, he said, adding that the initial disbursement from the Extended Credit Facility (ECF) helped to stabilize the exchange rate during the first half of 2012.
He told Gambians that the attainment of his government’s Vision 2020 objectives on time will continue to be the main focus of government intervention in the years to come, saying that the government will maintain and encourage fiscal prudence and place the country on a sustainable trajectory towards inclusive growth.
Jammeh called on Gambians to work together regardless of their political, religious or ethnic affiliation, saying that coming together will propel the country to make progress and collectively confront its challenges.