Through a turbulent period, The Gambian economy struggled between 2019 and 2021, with effects felt across all sectors. The COVID-19 pandemic dampened growth levels from 6.2 percent in 2019 to a staggering -0.2 percent in 2020 however, the economic recovery efforts significantly impacted growth positively to a 4.3 percent in 2021. The poor economic performance in 2020 largely resulted from the COVID-19 pandemic over the period, which mostly affected the Services sector and slightly impacted the industry sector.
In 2021, Government’s recovery efforts, coupled with support from the international community helped the economy get on a quick path to recovery, generating growth of 1.9 percent in the Services sector, compared to -5.0 percent in 2020, and 10.4 percent in Industry compared to 8.2 percent in the previous year. The agriculture sector, however, registered a decline in growth rate from 10.6 percent in 2020 to 4.7 percent in 2021. The main growth driver in this sub-sector was fishing and aquaculture, with an impressive growth rate of 20.8 percent whilst all other subsectors registered negative growth during the period.
For the Monetary and External Sector, the preliminary balance of payments estimates show that the current account balance deteriorated to a deficit of US$94.08 million (4.6 percent of GDP) in 2021 from a deficit of US$86.55 million (4.56 percent of GDP) in the corresponding period of 2020, due to the decrease in income, service and current transfers.
The Monetary policy stance has been relatively accommodative in the fourth quarter of 2021 aimed at supporting the real economy and the economic policy of the government.
The Monetary policy Rate was maintained at 10 percent during the last Monetary Policy Committee (MPC) in 2021 to support the economy through private sector growth. The weighted average T-bills fell below 1.0 percent for the review period resulting in negative real interest rates as inflation remains elevated. The real interest rate was negative during the fourth quarter as the weighted average T-bill rate dropped to below one percent. Moreover, inflation rose slightly relative to the previous quarter. Growth in private sector credit is reverting to its pre-pandemic levels as confidence returns to the economy. Annual reserve money growth slowed relative to a year ago occasioned by a decline in the Net Foreign Asset (NFA) of the Central Bank.
In the Fiscal Sector, performance in 2021 was lower than expected, owing to a major gap in budget support, as well as certain urgent spending. Whilst domestic revenue collections met expectations owing primarily to a good non-tax revenue performance, weak economic recovery hampered tax revenue collection.
The total public and publicly guaranteed debt stock at end of 2021 stood at USD 1.69 billion (GMD 88.93 billion). Out of this, external debt constitutes USD981.45 million (58.19%) and domestic debt USD705.01 million (41.81%). The nominal debt as a percentage of GDP increased slightly from 84.1 percent at the end of 2020 to 84.74 percent by the end of 2021 as a result of the partial debt restructuring program and new disbursements of ongoing projects.
The total debt service payment in 2021 amounted to USD95 million (GMD 5.0 billion), of which GMD1.9 billion ($36M) was external debt service payments and GMD3.1 billion ($59M) in domestic debt service payments. Principal payments of USD25.3 million (GMD 1.3 billion) represent 70% of the total external debt service payments and the remaining USD10.8 million (GMD 570.6 million) on interest payments represent 30% respectively.
The interest and amortization of the non-marketable debt instruments i.e., the 30-year Government and the 7-year NAWEC bond accounted for GMD 1.2 billion. The total debt service payment has increased by 11% from GMD4.5 billion in 2020 to GMD 5.0 billion in 2021. External debt service as a percentage of the total debt service has increased by 9% from 2020 to 2021. This is a result of the expiration of the 2020 DSSI in 2020 debt restructuring on external debt.