Inflation increases as Gambian Dalasi loses value

Inflation - the rate at which the prices of goods and services increase, is forecasted to have increased more than the target of 5 per cent in The Gambia. 

This is primarily because the national currency, the Dalasi, continues to weaken in value against all major international currencies, the Central Bank Governor has said.

The Central Bank Governor made this remark on Monday during the opening ceremony of the ‘regional course on fundamentals of macro-economic analysis’. 

The weeklong training course organized by the West African Institute for Financial and Economic Management (WAIFEM) underway in Banjul, is being attended by economists from central banks in the ECOWAS sub-region and other financial institutions. 

The Dalasi has depreciated against the British Pound by 12.62 per cent, the US dollar by 11.87 per cent and the Euro by 12 per cent. 

Governor Amadou Colley said in view of this unforeseen circumstance, the Central Bank of The Gambia (CBG) would therefore continue to implement prudent monetary policy critical to maintaining low, stable and predictable rate of inflation.

Among these prudent monetary policies the Bank is expected to undertake is price stability so as to promote economic growth by reducing uncertainty and preventing arbitrary redistribution of wealth.

The CBG Governor said in view of the uncertain economic environment, policy actions should be indicated by the prevailing economic circumstances of the country.

WAIFEM equips West African economists for uncertain future

Economists from central banks and other financial institutions in West Africa are being train to reinforce their understanding on the working of the economy. 

The weeklong training, organised by the West African Institute for Financial and Economic Management (WAIFEM), is to prepare the economists to appropriately intervene in any uncertain economic environment.

The regional course on the fundamentals of macroeconomic analysis started on Monday in Banjul.

Speaking on the occasion, the Director General of WAIFEM, Prof Akpan H. Ekpo, said recent global financial crisis has raised serious concern about the need to develop adequate manpower base among institutions charged with managing the economy.

“It could be seen from the crisis that countries with weak macroeconomic fundamentals were more vulnerable to the propagation of the financial crisis,” he stated.

Prof Ekpo explained that the regional course seeks to offer the participants with the requisite theoretical and practical background that will broaden and deepen their knowledge and analytical skills on macroeconomic management.

The course has been designed to cover a number of key macroeconomic topics such as basic macroeconomic framework for policy analysis, openness in goods and financial analysis, the balance of payment and exchange rates, the interest rate and the exchange rate, the foreign exchange market, introduction to financial programming, and interrelations among macroeconomic accounts.

‘Corruption remains a challenge in W/Africa’

Officials of economic and financial departments in the member states of the West African Institute for Financial and Economic Management have made strong recommendations to stamp out corruption and fiscal indiscipline in government circles.

The senior public officials from Nigeria, Ghana, Liberia, Sierra Leone and The Gambia say there is the need to enforce and strengthen legislations by various governments with the aim of tackling fiscal indiscipline and perennial corruption in the sub-region.

“Corruption remains a challenge in the effective utilization and management of public funds within the West African sub-region,” they say, adding that the adoption of best practices of good governance, transparency and accountability are precondition for the achievement of rapid economic growth, sustainable development and poverty reduction.

Investigative institutions and judicial arm of governments must be truly independent and capable of prosecuting culprits, they state in a communiqué they established after their two-week regional course on public financial management held at the Paradise Suites Hotel in Kololi from 19 to 30 March this year.

W/Africa Needs Good-Governance to Fight Against Poverty

Economic development and the fight against poverty can only effectively be enhanced under an environment of good governance and transparent management of public finances, Gambia’s Central Bank Governor has told West African financial and economic professionals.

“The centre piece of good governance in public resource management is transparency and accountability,” Governor Amadou Colley said on Monday at the commencement of a two-week regional course on public financial management: budgeting, planning and performance organised by the West African Institute for Financial and Economic Management (WAIFEM).

Cross section of participants

He told the course participants, drawn from Nigeria, Ghana, Liberia, Sierra Leone, and The Gambia, that the central element of transparency in the management of public resources is the question of the rules of engagement relating to the bid process for public contracts.

“These should be clearly defined and publicised for the information of all interested parties,” he said.

However, Hon. Colley noted with pride that a good number of countries in the sub-region have embarked on this path by enacting a Public Procurement Act to provide a clear framework.

West Africa looks to interest-free banking

As interest-free (Islamic) banking has emerged and evolved as a viable and competitive component of the overall financial system to drive growth and development, West Africa is now promoting its principles for people of the sub-region to have broad understanding of its operations so as to embrace it.

Islamic banking or interest-free banking is a banking model which is based on profit and loss sharing system.  In this dispensation, the customer and the bank share the risk of any investment on agreed terms, and divide any profits that accrue from there. 

In cognizant of the fact that there has been significant growth in Islamic financial services in recent years and experts forecast that this growth will continue at a rapid pace, the West African Institute for Financial and Economic Management (WAIFEM), on Monday started a weeklong training on rudiments of interest free (Islamic) banking at Paradise Suites Hotel in Kololi.

The training brought together participants from different countries in the sub-region including Gambia, Ghana, and Nigeria.  It was organized to provide participants with a broad understanding on rudiments of Islamic banking as well as provide clarity on ‘Shariah’ (principles of Islamic law) requirements and the avoidance of interest in modern day banking business.

ATMs pose ‘considerable’ challenges for banks, says CBG Governor

By Lamin Jahateh,  Banjul The Governor of the Central Bank of The Gambia has underscored the new challenges posed by the growing network of Automated Teller Machines (ATM), for commercial and central banks, saying it has affected the compositional shift from lower denomination notes to higher denomination notes. Pic: Mr. Colley, Governor, Central Bank of The Gambia “The proliferation of Automated Teller Machines has had a considerable impact and sharpened the focus for both commercial and centrals banks,” Governor Amadou Colley said recently while officially opening a weeklong training on banknote and currency management and forecasting in central banks, organised by the West African Institute for Financial and Economic Management (WAIFEM) in collaboration with De La Rue, at the Paradise Suites Hotel in Kololi. The CBG Governor said banks do not find it commercially viable to stock the ATMs with lower denomination notes “because they run out sooner and increase both the capital cost and operating costs”. The training on banknote and currency management was necessitated by the fact that the problems of currency management in WAIFEM member countries need urgent solutions and a new direction consistent with best practices, in order to engender greater efficiency and minimize the cost of printing and minting currency. National economies in the region remain predominantly cash-based, reflecting the preference of economic agents, the weakness of the legal system to enforce contracts, and the level of development of payments in WAIFEM member countries. Generally, the major challenge to protect currencies from counterfeiters has also increasingly become more dependent on partnerships between law enforcement agencies, financial institutions and central banks, as well as with the security printing industry and high-grade supplier’s community. All these factors put together make it essential for central banks of WAIFEM member countries to consider new mechanisms for protecting banknotes and maintaining efficient currency management. Governor Colley told the workshop participants, drawn from central banks in WAIFEM member countries, including The Gambia, Ghana, Liberia, Nigeria and Sierra Leone, that currency designs present a series of interlocking challenges. “New designs must win public acceptance, incorporate requisite security features and meet durability and machine processing standards, he said, adding “fitness standards for currency in circulation must be set and monitored whether currency sorting is carried out in-house or outsourced.” He explained that effective currency management depends on excellent information and insightful analysis. Governor Colley said:  “Efficient and effective currency management commences with a strategic analysis of the currency life-cycle.  However, strategic management of currency is impossible without accurate forecasts of the demand for banknotes. The long lead time involved in banknote production makes it vital from cost and reputational point of view that central banks forecast the demand for banknotes as accurately as possible.” The benefits of accurate forecasting are obvious. It encourages more efficient procurement and reduces stockholding costs. In other words, a disciplined, balanced approach to currency management reduces opportunity losses and thus enhances the smooth functioning of the banking system. Prof. Akpan H. Expo, director general of WAIFEM, noted that no central bank function is more visible than currency management. “A currency’s integrity and efficient supply are unequivocal everyday indicators of a well-functioning central bank. In the eyes of the people, this integral central bank function should be efficient, meet demand and also present minimal issues which may damage the reputation of the country,” he said. “Of particular concern is the issue of counterfeiting, which is as old as money itself, and continues to present a potential danger to national economies and financial losses to consumers. Worse of all, recent developments in photographic and computer technology, as well as printing devices, have made the production of counterfeit money relatively easy, thereby increasing the potential threat.” The central bank officials who took part in the training covered such topics as the new challenges in currency management, new directions in banknote design, security features against counterfeiting, forecasting the demand for banknotes, and country case studies on currency management.