Gambia: National Economic Council Discusses solutions to Forex Currency Hike
State House, Banjul, 26th April 2023:H.E. President Adama Barrow on Wednesday presided over the Economic Council meeting at the State House in Banjul. The discussion focused on the forex currency market exchange rate fluctuation and forex availability in the economy.
The Council was briefed on the background of the developments in the foreign currency market and measures taken by the monetary authority to restore normalcy in the market. The bank made consultative meetings with Banks, Money Transfer Operators, and Foreign Exchange Bureaus on current operational issues that have been noticed in the forex market.
The Central Bank of The Gambia briefed the meeting on the current market trends in the global economy, the sub-region, and the domestic economy. Global market developments impact local market conditions. It was revealed that some countries in the region have inflations as high as 40% compared with The Gambia, which though registered 14.8% by the end of March 2023, advised that The Gambia should not be complacent with its lower inflation rate. The bank informed the meeting that in the last seven years, apart from South Africa, the Gambian Dalasi has been the most stable currency in the region.
Additionally, the council was informed that the Forex movement is mainly demand-driven, and its sources, such as remittance, are still high and are affected by informal transfer channels. The figures for tourism receipts have done well despite not reaching the pre-pandemic level. Demand for CFA associated with festive periods (Eids) coupled with imbalance trade flow largely account for the hike in CFA. There are ongoing efforts by CBG to close swap deals to facilitate the growing buoyant trade with the CFA zone.
The Gambia Revenue Authority also reported that despite challenges, there was growth in both domestic and international trade.The challenges outlined included bottlenecks at the port of Banjul, causing delays and people resorting to land shipment.
The meeting concluded that the Central Bank to finalise regulations to regulate the forex market through the stringent application of the reference rate and the operational margin. Stricter supervision of Money transfer Operators, the parallel market, and strengthen the financial regulations in managing the demand and coordination with market participants and stakeholders. It was agreed that the dual tariffs toll regime be reintroduced at the Senegambia Bridge.
Council also discussed possibilities to explore Diaspora investment opportunities by Gambians living abroad to spur remittances and investment in The Gambia.
H.E. President Barrow emphasised that all possibilities must be considered to solve the growing concern about rising cost prices (inflation)and the availability of forex in the country to address the observed market abnormalities. In the long- term, take concrete measures toward import substitution by production, productivity, and value additions.