The governor of the Central Bank of The Gambia, Buah Saidy, revealed in a press conference that the government’s overall budget deficit had expanded to D18.5 billion (12.9% of GDP) in 2023, up from D15.3 billion (12.5% of GDP) the previous year. This increase of D3 billion was driven by a rise in total revenue and grants, which reached D31.9 billion, a 39.4% increase from the previous year.

However, the government’s total expenditure and net lending also rose by 21.8% to D36.3 billion, accounting for 25.3% of GDP. The governor attributed this increase to higher development expenditures, mainly financed externally.

Regarding domestic debt, the CBG reported an 8.4% increase to D41.3 billion, representing 29% of GDP. This rise was fueled by increased issuance of treasury bills and medium-term government bonds to settle maturities and finance the budget. Short-term debt constituted 58.5% of the total domestic debt stock, while medium to long-term debt made up 41.5%, posing substantial refinancing risks.

Inflation, however, saw a decline for the second consecutive month. Headline inflation dropped from 17.3% to 16.2% in January 2024, with food inflation decreasing to 21% in December 2023 from 23.8%. This decline was attributed to global easing of food prices and a favorable cropping season.

Non-food inflation also decreased from 11.3% to 10.7%, driven by lower prices of textiles, energy, and transportation. Despite these improvements, the CBG has maintained a tighter monetary policy to sustain the decline in inflation, keeping the MPR at 17%, required reserve ratio at 13%, interest rate on standing deposit facility at 3%, and interest rate on standing lending facility at 18%.