CBG governor explains reasons for price hikes

CBG governor explains reasons for price hikes

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By Tabora Bojang

The governor of the Central Bank of the Gambia has attributed the current commodity price surge in the country to the “costs push effects of the structural bottlenecks at the Banjul Ports” because waiting times of ships in high seas are included in the costs of delivering goods to The Gambia.

The increasing government tax on businesses and the absence of a national price framework are highly considered to be push factors for the skyrocketing of staple food prices which are mostly imported into the country.

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Addressing a press conference at the bank’s Monetary Policy Committee meeting on Thursday, Governor Buah Saidy said the increase in consumer price inflation reflects the trend in the global food prices and domestic structural problems which a monetary policy cannot influence.

“The ports of Banjul have a structural rigidity. The jetty is not large enough to allow the ships from high seas to enter our river and dock at the ports and immediately leave. As a result, these ships that bring most of our foods – oils, fat, clothing, building material, take days queuing in high seas before they can dock, offload and allow other ships to come in. The way this contributes to increase in food prices is that the waiting times of ships in high seas are included in the costs of delivering goods to The Gambia and in turn the local importer or the businessman here would absorb that cost and also pass that to the consumer and that is how it affects the prices,” he said. 

Saidy who revealed heightened inflation expectations next month, said these are issues which the Monetary Policy cannot virtually address because the country imports most of its food commodities.

He reported that the consumer price inflation in food and non-alcoholic beverages accelerated to 8.97 percent in October 2021 from 6.83 percent last year.

Similarly, non-food inflation also increased to 5.7 percent in October from 4.3 percent in the same period last year.

According to the governor, the surge in non-food inflation was to increase in the prices of all the components of non-food basket excluding furnishings and household equipment.

Saidy said the government has received a grant and soft loan from the IMF and European Investment Bank to dig more channels in the sea and expand the Banjul ports to be able to accommodate a minimum three ships at the same time. 

“This will provide a wider way for ships to dock, offload and at zero waiting time and that would significantly contribute to the decline in food prices.”