By: Sandally Sawo
The finance and economic affairs minister Seedy Keita said preliminary Balance of Payments estimates show that the Current Account deficit widened to US$209.0 million (10.1percent of GDP) in the nine months ending September 2023, from US$74.7 million (3.8 percent of GDP) in the corresponding period of 2022, due to higher imports bills, despite significant growth in total exports.
“The Goods Account registered a deficit of US$702.1 million (34.0 percent of GDP) in the review period, higher than US$444.9 million (22.4 percent of GDP) recorded in the corresponding period in 2022. The widening of the deficit in the Goods Account is because of the increase in the value of imports (FOB) from US$489.0 million in the nine months of 2022 to US$702.1 million in the nine months of 2023. The main merchandise imports include electricity, vegetables, rice and cereals, fuel, and oil, and the main import partners in the review period were Senegal, India, and China,” Minister Keita said as he recently delivered the budget speech.
He reported that exports of goods grew significantly to US$215.8 million in the nine months of 2023, from US$44.1 million in the same period in 2022, adding that the main export items were edible fruits, fish, cashew, and groundnut, destined mainly for India, China, UK, and Turkey.
He explained that the Services Account balance is estimated to have registered a surplus of US$136.4 million in the nine months ending September 2023, up from US$19.0 million in the comparable period a year ago.
“This was driven by an increase in tourist arrivals, which is gradually picking up. From January to September 2023, total arrival numbers recorded 137,187, higher than 116,283 registered in the same period in 2022,” the finance minister said.
He explained that the Secondary Income Account (current transfers) declined marginally by 0.9 percent to a net inflow of US$372.7 million in the nine months 2023, from a net inflow of US$376.1 million in the corresponding period of 2022.
“This growth can be associated with the seasonality of remittance inflows, which normally peak during the months of Ramadan, Lent and Tobaski,” he further explained.
The minister said the Capital Account balance improved to a surplus of US$75.6 million in the nine months of 2023 from a surplus of US$23.4 million in the same period in 2022, disclosing that the net lending/net borrowing (capital account + current account) results to a deficit of US$133.5 million in the nine months of 2023, indicating that The Gambia continues to be a net borrower from the rest of the world.
He said that developments in the Financial Account during the review period indicate a moderate net incurrence of liabilities as non-resident investments are slightly offset by domestic investment.
“Total net inflow of US$159.4 million was recorded in the nine months ending September 2023, compared to US$216.8 million in the same period a year earlier, highlighting a moderate inflow from foreign direct investments and other investments, he stated.
Minister Keita said a confluence of the effects of the two external shocks (Ukraine war and COVID-19 pandemic) have disrupted external reserve build up efforts