The Finance & Public Accounts Committee from Monday June 20th – 21st 2022 summoned the Ministry of Finance and Economic Affairs, the Governor of the Central Bank, the office of the Auditor General and the Gambia Public Procurement Authority to discuss the annual report and audited financial statements of the Central Bank of the Gambia for the year 2020.

During the session, The Committee mirrored the financial statement of accounts with the audit report in reconciling issues that surfaced in the reports looking at the current market realities, Investments, The Committee employed a gradational approach issues on the report beginning with the Gam Switch, a central bank investment service provider that integrates all payment systems and other inter banking financial transactions to ensure ease in the banking system. The Governor lamented the reluctance of certain banks to subscribe to this service as a way of persuading the public that is a central bank directive that is unachievable and the Governor intends to convene a meeting of all Managing Directors of banks to discuss these issues.

The Committee asked the role played by the Central Bank in the operation of Gam Switch as a majority shareholder. It is the role of the Central Bank to ensure there is an integrated payment system as per the Central Bank Act which stems from the 1997 Constitution. The Central Banks is moving towards heavily investing and establishing a National Switch which aims to go beyond interbank payments but also accommodate international payments, digital and electronic payments, efficient tax payments to reduce mismanagement and the uninterrupted use of Automated Teller Machines (ATM). This which will further serve as a major source of foreign exchange, increased employment, economic growth through an increased this will help modernize, strengthen and expand its activity. Modelling from developing countries, the Central Bank is investing in Central Bank Digital Currency to avert the use and influx of crypto currency in the economy and limit the risk of cash transactions in the economy. Partner s to the Gam Switch aside the Central Bank is Trust Bank and Bankers Association as watch dogs to the system.

The Committee questioned the legality of the involvement of the Central Bank in such massive investment and the possibility of a rising conflict of interest considering the capacity private sector investors to run Switches on their own. Citing other sovereign countries, Central Bank is of the view that there are certain services and assets that is the responsibility of the government to manage and provide. The distinction or running some of these services is most government operate on a loss but still continue to deliver services given the social benefits attached to thus there are regional frame works and internationally accepted practices and standard, countries like Nigeria have successfully run National Switches in conducting swift international inter regional like transactions like the inter African trade through a payment and settlement system Pan African Payment & Settlement System and this is distinct from the Switches run by Banks Consequently, looking at legality of the involvement of the CBG in commercial activities, section 161 (4) (d) of the 1997 Constitution, states that the Central Bank shall exercise such other functions as conferred on the central bank, the National Assembly in 2016, passed the Payments System Act part 2 section 3 of makes provisions relating to the functions of the CBG. Section 3 of the Payments System Act states the power to establish and designate payment systems the central Bank may;

  • 1. establish, operate, promote and supervise payments, fund transfers, clearing and settlement assistance subject to rules as it may from time to time.
  • Also Sections 6 (e) of the CBG Act 2018 provides for specifically the functions of the Central Bank; (e) The Central Bank shall promote, regulate and supervise payment and settlement systems.

    From all indications, the Payment Systems Act and the Central Bank Act permits the CBG to establish, promote, regulate and supervise payment systems in the Gambia as also found in the Central Bank Acts of Ghana and Nigeria respectively.

    Issues related to the vault security and the unavailability of a Director of Audit at the Central Bank which was a key recommendation captured on the Management Letter emanating from the external auditors and the Gambia Procurement Authority was of concern to the committee.

    The committee raised issues of sanctions levied on the operation and maintenance of foreign currency accounts. Central Bank in their response made clarifications that the order to control the influx of the Dollar currency was only limited to Business enterprises for the sole purpose of preventing inflation in the market.

    There have been discrepancies in the physical count if stock and the ledger balance which maybe as a result of difference in the general ledger in the Management Letter emanating from the Audit institutions.

    A key finding by the external audit institution also flags the existence of a manual fixed asset register and payroll which was previously recommended to be changed and also a vacant position of the Director of Audit of the Internal Audit Department within the central bank for over 12 months. There wasn’t equally a work plan received from the Internal Audit Department. However, the administrative orders of the CBG state that in the absence of a substantive Director, the next officer tales charge of the function of the portfolio.