Gambiaj.com – (BANJUL, The Gambia) – The Governor of the Central Bank of The Gambia, Buah Saidy, has addressed concerns over the transparency and benefits of a currency swap agreement between The Gambia and the African Export-Import Bank (Afrexim Bank). His remarks came in response to questions raised by Lamine Mane, a former African Development Bank employee and member of the opposition United Democratic Party (UDP), during an interview on West Coast Radio’s Coffee Time With Peter Gomez.

Mane had questioned whether the deal was in the best interest of The Gambia and whether it had been executed with sufficient transparency. In response, Governor Saidy defended the agreement, providing details on its structure and intended benefits for the Gambian economy.

According to Saidy, the currency swap agreement was established between the Central Bank of The Gambia and Afrexim Bank to leverage the newly established capital market. He emphasized that the capital market was designed not only for domestic financial growth but also to integrate with regional and global markets, making it a viable mechanism for raising capital.

He explained that the government had been seeking innovative ways to finance infrastructure projects, particularly road construction, without over-relying on foreign loans and donor assistance. As part of this effort, a special ring-fenced account was created to manage fuel revenues, allowing for strategic reinvestment in road infrastructure.

Saidy stated that Afrexim Bank saw an opportunity in The Gambia’s financial strategy and proposed a five-year currency swap deal worth $75 million. Under the arrangement, the Central Bank received dollars from Afrexim Bank, which in turn purchased bonds issued by the National Roads Authority (NRA) in dalasi. The swap allowed the government to finance infrastructure projects while ensuring that the dollars received were invested at a 5% return.

“The dollars that I am holding—$75 million—if I don’t invest it, I’ll be a foolish governor because money’s value depreciates over time due to inflation,” Saidy said. “So I opened an account with Afrexim Bank and agreed with them to invest that money for five years at a 5% return. It’s a win-win for everybody.”

He further clarified that the agreement adhered strictly to legal procedures, with the Ministry of Finance directing the Accountant General to facilitate the transaction. Saidy assured that all steps were taken transparently and in compliance with economic management regulations, including limits on treasury overdrafts.

Addressing the broader implications, Saidy highlighted that The Gambia’s approach to capital market development had garnered international attention. He revealed that at a recent UNECA meeting in Addis Ababa, The Gambia’s financing model was discussed as a case study, with the Ugandan President challenging UNECA to invite The Gambia to share insights on how the strategy was supporting infrastructure growth and inflation control.

In conclusion, Governor Saidy maintained that the currency swap deal was a strategic financial move benefiting The Gambia by unlocking capital for road development while strengthening the nation’s capital market. He called on Gambians to trust the process, assuring them that financial prudence and transparency remained top priorities.

Despite the governor’s detailed explanation, the opposition and economic analysts may continue to scrutinize the deal, particularly regarding long-term debt implications and oversight mechanisms to ensure its full benefits reach the public.