By Aji Fatou Faal
The Central Bank of the Gambia (CBG), on Wednesday presented their 2016 Annual Activity Report and Financial Statement to the Finance and Public Accounts Committee (FPAC) of the National Assembly for the year ended 1st January to 31st December 2016.
Presenting his institution’s report, Bakary Jammeh, Governor and Chairman of the Board stated that the CBG has the responsibility of achieving and maintaining price stability as well as ensuring that the financial system is safe and sound. He then noted that the CBG is also charged with responsibility to supervise banks, insurance companies, foreign exchange bureaus and microfinance institutions in addition to oversight responsibility of the country’s payment systems.
According to him, as a prelude to ensuing discussions, it is important to draw the attention of members of the FPAC to the objectives of the Central Bank as stipulated under Section 5 of the Central Bank of the Gambia Act 2005.
Governor Jammeh highlighted that the Board is responsible for formulating policies necessary for the achievement of the Bank’s mandate which is achieve and maintain price stability; promote and maintain the stability of the currency of the Gambia; direct and regulate the financial, insurance, banking and currency system in the interest of the economic development of the Gambia; encourage and promote sustainable economic development and the efficient utilisation of the resources of the Gambia through the effective and efficient operation of a financial system. “Without prejudice to the above, the bank shall support the general economic policy of the government and promote economic growth and effective and efficient operation of a financial system in the Gambia, subject to the direction of the Secretary of State”, he revealed.
He added that every activity of the Central Bank is premised around the above . globally, government monetary policy is geared towards price and exchange stability.
He said that the Central Bank is able to pay for its operations from the income generated from effective and efficient management of the reserves, plus interest from loans and advances to government and penalties and charges to regulated institutions.
It is important to differentiate the Central Bank from commercial banks which are setup primarily for profit making.
“Treatment of operating outcomes (profit/loss) of the Central Bank is therefore governed by sections 8 &9 of the Central Bank of the Gambia Act. This treatment is different from the requirements of International Financial Reporting Standards (IFRS)”.
According to his statement, on December 30, 2016, the Central Bank consolidates all existing claims on government in a single 30-year bond amounting to D10.78 billion at 5 percent interest rate. The claims included the holdings of treasuring bills, loans and advances and government overdrawn (overdraft) position noting that the measure was intended to create some fiscal space for government.
He opined that implementation of fourth component of the Gamswitch modernised payment system is still on going. All the 12 banks have been connected to the platform. This would mean a countrywide coverage of the Automated Teller Machines (ATM).
As part of efforts towards a secure and reliable system, the CBG has directed that all banks’ ATMs, Point of Sale (POS) terminals and plastic cards must be compliant with Europay, MasterCard Visa (EMV) standards. Gamswitch recently signed an agreement with the national electricity company for cash power vending using ATMs. Currently six out the twelve banks are offering the services to their customers.