The Governor of the Central Bank of The Gambia, Buah Saidy has said that it is not “accurate to blame the food price inflation on government tax” policies. Addressing a press conference at the Monetary Policy Committee meeting, Governor Buah Saidy said structural problems at the Ports and the Covid-19 pandemic strain on the economy are the main factors to blame for the high prices.
“The tax increase has nothing to do with the increase in prices and in The Gambia, the major commodities which continue to increase like rice have zero tax. So it is not the tax but a structural cause and this is being addressed by the government with plans to improve the efficiency of the Ports,” Saidy said.
Gambians have been under the joke of rocketing food prices due to increasing government tax on businesses and absence of a national price control framework.
He argued that the commodities emergency power regulations of 2020 invoked by the president during the start of last March’s lockdown have yielded temporary stability in prices of basic food commodities.
The governor informed that the CBG and the government are struggling to address the inflation of food prices. He said the Ports is working to ensure that there is no stress in the food availability in the market. “They are trying to increase the jetty to be able to accommodate at least 3 ships at a time“.
As for the role being played by the Central Bank, the Governor said “Under normal circumstance we at the CBG our main objective is to ensure that there is price stability and if we see inflation pressures going up, naturally the first weapon we reach is the interest rates. We would increase the interest rates to deal with the increasing prices, but could not and therefore still maintain it at 10% because we are dealing with two things: the pandemic and the inflation pressures, so there has to be room for monetary accommodation to provide liquidity to the financial sector to grow.”
The Central Bank’s quarterly business sentiment survey however reignites the vivid fears a gloomy economic outlook, reflecting largely the impact of the outbreak of the Covid-19 new variants.
The majority of respondents in the survey reported negative sentiments about the current and expected level of business activity. The survey also revealed heightened inflation expectations for the first quarter of 2021.