## 1gmbea2024001

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### Context and reform priorities
- Peaceful and transparent presidential, parliamentary, and local elections; democratic consolidation underway.
- 2020-23 ECF arrangement supported reforms and mitigated COVID-19 and Russia–Ukraine shocks.
- Window of opportunity next two to three years to deepen reforms; remaining challenges include incomplete security sector reform, stalled constitutional review, an unadopted anti-corruption bill (Annex II), and signs of weakening governance and transparency indicators.
- Authorities’ 2023–27 Green Recovery-Focused National Development Plan (RF-NDP) is the strategic anchor for reforms.

### Recent macroeconomic developments and near-term outlook
- Economic activity recovering robustly; agriculture, services, and construction supportive.
- Tourism and remittances:
  - Tourist arrivals at end-2023Q3: increased by 18 percent (y-o-y) relative to same period in 2022 but below pre-pandemic levels.
  - Remittance inflows: increased by 6.2 percent at end-2023Q3 relative to same period in 2022.
- Inflation and monetary conditions:
  - Headline inflation: 18 percent (y-o-y) in October 2023.
  - Monetary policy rate: increased from 10 percent in March 2022 to 17 percent in September 2023; policy rate unchanged at 17 percent in December 2023.
  - Credit to the economy grew 17.4 percent (y-o-y) in September 2023 (compared with 36.6 percent in September 2022).
- Foreign exchange and reserves:
  - CBG net seller of forex since March 2023; gross reserves: US$426 million (4.1 months) in October 2023.
  - CBG reference exchange rate depreciated by 9.9 percent vs. US$ between end-December 2022 and end-October 2023; wedge with parallel rate ~10 percent.
  - Staff projects forex reserves to broadly remain at an adequate level (around 4 months) in the medium term.
- Fiscal execution and public debt:
  - End-September 2023 domestic revenue broadly on target; budget support delayed.
  - Overall fiscal deficit stood at 3 percent of GDP, 0.6 percentage points of GDP above projections; financed by privatization proceeds of MegaBank and 0.6 percentage point of GDP of excess NDB.
  - Public debt projected to decline from about 70 percent of GDP in 2023 to about 60 percent of GDP in 2026.

### RF-NDP financing scenarios (Box 1)
- RF-NDP 2023–2027 adopted April 2023 around seven pillars.
- Financing:
  - Active scenario total cost: US$3.5 billion.
  - Baseline scenario total cost: US$2.8 billion.
  - Available funding: US$0.7 billion.
  - Financing gap: US$2.8 billion (active) and US$2.1 billion (baseline).
- Government developed a financing strategy and plans a donor conference.

### Program design: Article IV and proposed ECF-supported program
- Core pillars and policy priorities:
  - Address inflation and foreign exchange pressures:
    - CBG to tighten monetary policy further as needed; reaffirm market-determined exchange rate and smooth forex market functioning.
  - Reduce debt vulnerabilities and overhaul SOE sector:
    - Sustain fiscal consolidation; bolster domestic revenue mobilization and expenditure efficiency; transform SOEs into revenue-generating assets including partial privatization.
  - Strengthen governance and unlock growth:
    - Implement governance diagnostic recommendations; adopt anti-corruption bill; improve business environment.
  - Address long-term climate and gender challenges:
    - Prioritize climate resilience and close gender gaps to raise incomes and reduce inequality.
- Program modalities and access:
  - Proposed duration: 36 months, semi-annual reviews.
  - Proposed access: SDR 74.64 million (120 percent of quota, about 3.5 percent of GDP).
  - First disbursement request supported: SDR 8.29 million, with SDR 4 million to be on-lent as budget support.
  - Estimated net Fund financial flows: about US$70 million (3 percent of GDP) during program.
  - Reserve objective: hold about four months of imports of forex reserves by end of projection period.

### Fiscal stance, end-2023 projections, and 2024 budget anchors
- End-2023 overall deficit projected at (2.3) percent of GDP (earlier projection: (2.7) percent of GDP).
- Text Table 2 - Jan-Dec 2023 projections (Percent of GDP):
  - Revenue: 19.8; Six Review: 18.9
    - Domestic revenue: 12.0; Six Review: 12.1
    - Grants: 7.8; Six Review: 6.7
      - o/w. Budget support: 2.7; Six Review: 2.1
  - Expenditures: 22.0; Six Review: 21.6
    - Expenses: 12.5; Six Review: 12.5
    - Net acquisition of nonfinancial assets: 9.6; Six Review: 9.1
      - o/w. Gambia local fund: 2.2; Six Review: 2.2
  - Net lending (+)/borrowing (–): (2.3); Six Review: (2.7)
  - Financing: 2.3; Six Review: 2.7
    - Domestic: 1.3; Six Review: 1.7
    - Foreign: 1.2; Six Review: 1.3
- 2024 budget anchors and MTFF objectives:
  - Overall fiscal deficit about 2.7 percent of GDP.
  - Domestic primary balance of 0.6 percent of GDP.
  - Net domestic borrowing of 1.5 percent of GDP.
  - MTFF aims to reduce overall fiscal deficit by about 1.4 percentage points of GDP during 2023–2026 and reduce public debt by about 15 percentage points of GDP over 2023–2026.

### Revenue and expenditure measures (selected)
- Revenue measures (selected and with SB timelines):
  - Move toward full passthrough of fuel prices with targeted social support.
  - Single window customs administration platform and command center (SB end-February 2024).
  - Streamline tax incentives under SICs (SB end-June 2024).
  - Strengthen telecom audits (SB end-September 2024).
  - Expand rental property taxation and enforce CIT/withholding on donor-funded projects.
  - Adopt domestic revenue mobilization strategy (SB end-September 2024).
- Expenditure and PFM measures:
  - Rationalize subsidies to NFSPMC, NAWEC and subvented agencies; study consolidation of redundant subvented agencies with MDAs (SB end-December 2024).
  - Implement cash-basis budgeting; use one-off revenue primarily for road construction and OIC summit; tighten overseas travel; preserve priority and poverty-reducing spending.
  - Expand GSRB selection criteria to domestically financed investments and PPPs; finalize and enact regulations for procurement and SOE Acts; accelerate PFM Act and PPP bill approval.
  - Program-based budgeting roadmap to be approved by Cabinet in early 2024; pilot ministries to submit 2025 budgets in compliance (SB end-December 2024).

### SOE sector overhaul and fiscal risk management
- Vision: transform SOEs into revenue-generating assets to reduce fiscal risks and improve governance.
- Immediate actions and SBs:
  - Expand performance contracts to four additional SOEs after SOE commission review (SB end-February 2024).
  - Eliminate backlog of SOE audits; publish fiscal risk statement; finalize SOEs Act regulations.
  - Proceed with full or partial privatization of GAMCEL (SB end-March 2025).
- Medium-term objectives (2023–2026):
  - Reduce overall fiscal deficit by about 1.4 percentage points of GDP and improve basic primary balance by about 2 percentage points of GDP.
  - Reduce total public debt by about 15.6 percentage points of GDP (Text Table 5 shows Total public debt 71.8 → 56.2, change -15.6 percent of GDP).

### Monetary, FX policy, and reserve management
- Monetary policy stance:
  - CBG tightened policy rate to 17 percent by September 2023; readiness to resume tightening to deliver a positive real policy rate.
  - Plans to issue CBG bills to mop up excess liquidity (early 2024) and use other tools as needed (deposit window, reserve requirement adjustments).
- Exchange rate policy and FX market reforms:
  - Implement published forex policy and intervention policy as prior action to improve market determination and transparency.
  - New CBG FX policy (with IMF TA) to compute official exchange rate based on actual same-day forex transactions, expand transaction coverage, publish official rate daily, and apply uniformly.
  - Objective: enhance flexibility, improve market efficiency, incentivize FX supply, move transactions back to banking system, and safeguard reserves.
- Reserve adequacy:
  - Staff assesses central bank should hold reserves of at least 4.5 months of prospective imports; ARA-CC indicates 3 months at 3 percent cost-of-holding.

### Financial sector resilience and inclusion
- Banking system indicators (end-June 2023):
  - Risk-weighted capital adequacy ratio: 24.6 percent.
  - Liquidity ratio: 70 percent.
  - Banks’ NPL ratios: 3.5 percent.
- Quarterly stress tests indicate resilience, capitalization, and liquidity.
- Privatization of MegaBank completed.
- CBG (with IMF TA) revising regulatory guidelines and Banking Act; revising Deposit Insurance Act and preparing revised AML/CFT law aligned with FATF (SB end-March 2024).
- Measures to expand financial inclusion: new payment system, capital market launch, mobile money and fintech expansion, Women’s Enterprise and youth funds.

### External sector, current account, and financing needs
- Current account and transfers (levels and percent of GDP preserved exactly in source tables):
  - Current account (incl. prospective official transfers) projections (percent of GDP): 2022 -4.2; 2023 -4.4; 2024 -5.8; 2025 -3.8; 2026 -2.8; 2027 -2.4; 2028 -2.1 (Text Table 3).
  - Remittances (US$ levels, selected): 2021 527.0; 2022 401.6; 2023 462.0; 2024 430.0; 2025 532.4; 2026 570.2.
- Reserves and external position (memorandum items):
  - Gross international reserves (US$ millions): 2021 530.4; 2022 454.7; Oct-2023 426.0; projected 440.4 (2025); 491.7 (2028).
  - Months of next year's imports (gross reserves): 2022 5.3; 2023 4.2; 2024 4.3; 2025 4.1; 2026 3.9; 2027 3.8; 2028 3.7.
- External financing needs (select items 2024–26, US$):
  - Total financing requirement (2024, 2025, 2026): -187.9; -275.3; -233.8; -226.2 (as presented in source table).
  - Main financing sources include capital transfers (120.9; 141.6; 143.0; 143.7) and FDI (102.4; 106.5; 110.5; 114.6).
  - Budget support (grants) projected: 64.8; 50.0; 50.1; 50.2 (memo).

### Debt sustainability, DSA findings and borrowing plan
- DSA conclusions:
  - Public debt sustainable but at high risk of external and overall debt distress.
  - PV of overall public debt projected to decline below benchmark of 55 percent of GDP around 2024–2025 with fiscal consolidation and concessional borrowing.
  - Some debt-service and export-related indicators breach thresholds in early years due to weak near-term exports and expiration of debt deferrals.
- Capacity to repay Fund:
  - Outstanding credit to IMF projected to peak at SDR 210 million in 2026 (6.6 percent of GDP).
  - Debt service to the Fund projected to rise from around 2.0–2.1 percent in 2024, peaking in 2030 at around 5.2–5.5 percent.
- External Borrowing Plan (Text Table 6, US$ millions, 2024–2026):
  - Total debt contracted: 119; 90; 90; 90; 270 (multi-year aggregation).
  - Concessional debt: 119; 90; 90; 90; 270.
  - Nonconcessional debt: 0; 0; 0; 0; 0.
  - Use of debt financing: Infrastructure 119; 90; 90; 90; 270 (Port expansion 50 in first year).

### Program monitoring, targets, and conditionality
- Performance monitoring:
  - Semi-annual reviews; QPCs to preserve external stability (NIR floor), anchor fiscal consolidation (ceilings on NDB and domestic primary fiscal balance), and ensure external debt sustainability (ceilings on arrears and new borrowing).
- Key quantitative performance criteria (selected figures from Table 1, cumulative 2024 targets):
  - Net domestic borrowing (ceiling, GMD): Mar. 2,300; Jun. 1,300; Sep. 2,600; Dec. 2,800.
  - Domestic primary balance (cumulative floor, GMD): Mar. -1,150; Jun. -160; Sep. -100; Dec. 1,100.
  - Stock of net usable international reserves (floor, US$ million): Mar. 280; Jun. 277; Sep. 265; Dec. 267.
  - New concessional external debt contracted (ceiling, US$ million): Mar. 119; Jun. 90; Sep. 90; Dec. 90.
- Structural benchmarks and prior actions:
  - Prior Actions include publication of foreign exchange policy and submission to the National Assembly of a 2024 budget consistent with program parameters.
  - Indicative/structural benchmarks include single-window customs platform (end-February 2024), expansion of SOE performance contracts (end-February 2024), and publication of governance diagnostic report (end-April 2024).

### Risks, safeguards, and mitigation
- Main downside risks:
  - Prolongation of war in Ukraine; intensification of conflict in Gaza and Israel; global slowdown; weak institutional capacity; high Fund exposure relative to peers.
- Mitigating factors:
  - Fund-supported program expected to catalyze donor financing; capacity development; good track record of Fund repayment; potential compact with Millennium Challenge Corporation.
- Safeguards:
  - Update safeguards assessment of CBG to be completed prior to first review; CBG implemented most 2020 safeguards recommendations; MoU on on-lending/repayment to be updated.

### Climate vulnerabilities and gender considerations
- Climate vulnerability:
  - Highly vulnerable to flooding, storms, droughts, and coastal erosion.
  - Long-Term Climate-Neutral Development Strategy 2050 and two NDCs produced; policies deemed compatible with 1.5°C objectives.
  - Internationally supported climate finance cited: €7 million (French Development Agency), CA$20 million (Canada), World Bank US$20 million catastrophic drawdown option.
  - Recommended measures: reform fossil fuel subsidies; sustainable management of fisheries and forests; prioritize renewables; strengthen early-warning systems and climate-smart agriculture; integrate climate into PFM (Climate-PIMA requested).
- Gender analysis:
  - Closing gender gaps in labor force participation would boost GDP by about 11 percent and government revenues by about 10 percent.
  - Recommended actions: expand gender budgeting pilot; increase maternal health and childcare investment; expand Women’s Enterprise Fund; close gaps in higher education, political participation, and land access.

### Data provision, capacity development, and reporting requirements
- Data commitments:
  - Weekly provision of key monetary sector, international reserves, and government net domestic financing indicators.
  - Monthly provision of Statement of Government Operations (SGO) and inflation data.
  - Quarterly GDP produced with IMF support.
  - CBG to publish daily official exchange rates and provide detailed reserve and FX intervention data per TMU reporting timelines.
- Capacity development priorities (IMF TA 2023–25):
  - Focus on domestic revenue mobilization, PFM, SOE governance, debt management, monetary policy, financial sector supervision, and macro statistics.
  - Three resident advisors at GRA, MoFEA, and CBG to continue TA support.

### Staff appraisal and recommendations
- Staff recommends concluding 2023 Article IV consultations and supports authorities’ request for a thirty-six-month ECF arrangement with SDR 74.64 million access and first disbursement of SDR 8.29 million (SDR 4 million to be on-lent).
- Key policy recommendations (selected and exact phrasing preserved where numeric values appear):
  - Fully pass through international fuel prices to domestic prices to avoid revenue losses and regressive subsidies; mitigate impacts by expanding targeted social safety nets using a nationwide social registry.
  - Swiftly adopt the anti-corruption bill; enhance and enforce asset declaration framework.
  - Strengthen selection and prioritization of infrastructure projects and adhere to priorities whether financed domestically or externally.
  - Address long-term climate-related risks and gender gaps; climate mitigation and adaptation measures will also support women in rural subsistence farming.
- Recommendation on surveillance frequency:
  - Staff recommends The Gambia be placed on the 24-month consultation cycle, in accordance with the Decision on Article IV Consultations Cycles.

*Source: EXECUTIVE SUMMARY and selected chapters/excerpts, 1gmbea2024001*

### EXECUTIVE SUMMARY

### 1gmbea2024001 - EXECUTIVE SUMMARY

### Context: democratic and economic transformation
- The Gambia recently organized peaceful and transparent presidential, parliamentary, and local elections and is consolidating its democratic transformation.
- The 2020-23 ECF arrangement accompanied reforms and helped alleviate the repercussions of the COVID-19 pandemic and Russia’s war in Ukraine.
- The end of the electoral cycle offers a window of opportunity for the next two to three years to further strengthen economic reforms and promote inclusive growth.
- Key remaining challenges include incomplete security sector reform, a stalled constitutional review, an unadopted anti-corruption bill, and signs of weakening in governance and transparency indicators (Annex II).

### Recent macroeconomic developments and outlook
- Economic activity is recovering robustly, supported by the agriculture, services, and construction sectors.
- Tourism and remittances:
  - Tourist arrivals at end-2023Q3 increased by 18 percent (y-o-y) from the same period in 2022 but remained below pre-pandemic periods.
  - Remittance inflows increased by 6.2 percent at end-2023Q3 relative to the same period in 2022.
- Inflation and monetary conditions:
  - Headline inflation was 18 percent (y-o-y) in October 2023, driven by global food and fuel prices, an electricity tariff adjustment, and depreciation of the Dalasi vis-à-vis the US dollar.
  - Credit to the economy grew 17.4 percent (y-o-y) in September 2023 (compared with 36.6 percent in September 2022).
- Foreign exchange and reserves:
  - Foreign exchange pressures and shortages are reemerging.
  - Forex reserves, in months of imports, are projected to slightly decline in the medium term but to broadly remain at an adequate level (around 4 months).
- Fiscal execution and public debt:
  - At end-September 2023 domestic revenue collection was broadly on target; budget support was delayed.
  - Overall spending execution was broadly in line with projections despite unbudgeted infrastructure projects (about 0.5 percent of GDP) and excess spending on wages and interest.
  - The overall fiscal deficit stood at 3 percent of GDP, exceeding projections by 0.6 percentage points of GDP; it was financed by privatization proceeds of MegaBank and 0.6 percentage point of GDP of excess NDB.
  - Public debt is expected to decline from about 70 percent of GDP in 2023 to about 60 percent of GDP in 2026.
- Medium-term growth prospects are supported by strong remittance inflows, sustained recovery in the tourism sector, and new infrastructure projects.

### Article IV and ECF-supported program: pillars and policy priorities
- Program design draws on outstanding challenges, lessons from the 2020-23 ECF program, and the authorities’ 2023-27 Green Recovery-Focused National Development Plan (RF-NDP).
- Core pillars:
  - Address inflation and foreign exchange pressures
    - The central bank will tighten further the monetary policy stance based on inflation developments.
    - Reaffirm a market-determined exchange rate and ensure smooth functioning of the forex market.
  - Reduce debt vulnerabilities and overhaul the SOE sector
    - Fiscal consolidation efforts will be sustained given that both public and external debt are at high risk of distress.
    - Bolster domestic revenue mobilization and enhance expenditure efficiency through prioritization and strict PFM principles.
    - Turn SOEs into revenue-generating assets, including through partial privatization.
  - Strengthen governance and unlock growth potential
    - Implement key recommendations from a recent governance diagnostic to guide reforms.
    - Adopt the anti-corruption bill swiftly.
    - Strengthen the business environment to foster strong and inclusive growth.
  - Address long-term climate and gender challenges
    - The Gambia is highly vulnerable to climate shocks; authorities have produced key climate policy documents.
    - Closing gender gaps will bolster income and reduce inequality.

### RF-NDP financing and scenarios (Box 1)
- The Green Recovery-Focused National Development Plan (RF-NDP) 2023-2027 was adopted in April 2023 and is structured around seven pillars including resilience, governance, macroeconomic stability and growth, human capital, agriculture/environment/climate, empowerment and inclusion, and energy/infrastructure/connectivity.
- Financing scenarios:
  - Active scenario total cost: US$3.5 billion.
  - Baseline scenario total cost: US$2.8 billion.
  - Available funding: US$0.7 billion.
  - Financing gap: US$2.8 billion (active scenario) and US$2.1 billion (baseline scenario).
- The government developed a financing strategy and plans to organize a donor conference.

### Access, program modalities, and financial projections
- Staff proposes a 36-month ECF arrangement, with semi-annual reviews.
- Proposed access: SDR74.64 million (120 percent of quota or about 3.5 percent of GDP) to meet balance of payment needs.
- The combination of policy adjustment and this access level is expected to allow holding forex reserves around its adequate level of four months of imports.
- Public debt projection: decline from about 70 percent of GDP in 2023 to about 60 percent of GDP in 2026.

### Risks to the program and capacity development
- The program faces large downside risks, including:
  - A potential prolongation of the war in Ukraine.
  - The intensification of the conflict in Gaza and Israel.
  - The country’s weak institutional capacity.
  - High Fund exposure relative to peer countries.
- Mitigation and upside factors:
  - A new Fund-supported program is expected to catalyze other donor financing.
  - Capacity development will help strengthen institutional capacity.
  - The Gambia has a good track record of Fund repayment.
  - An upside risk: The Gambia will benefit from a compact with the Millennium Challenge Corporation.

### Staff views and mission
- Staff recommends concluding the 2023 Article IV consultations and supports the authorities’ request for an ECF arrangement given strong policy commitments.
- The mission took place in Banjul during October 19–November 1, 2023.

*Source: EXECUTIVE SUMMARY, 1gmbea2024001*

### 7.      Nonetheless, the end-2023 fiscal targets are within reach, possibly with some margins

### 7. Nonetheless, the end-2023 fiscal targets are within reach, possibly with some margins

### Fiscal outturn and end-2023 projections
- End-2023 overall deficit projected at (2.3) percent of GDP (earlier projection: (2.7) percent of GDP).
- Lower net domestic borrowing of GMD2.3 billion (earlier projection: GMD3 billion).
- Budget supports disbursed in 2023Q4 will not be fully used in 2023 due to limited processing period and will increase government deposits at the central bank.
- Authorities are following a strict cash plan until end-year and will convene the cash management committee more frequently to prevent arrears accumulation.

- Text Table 2. The Gambia: Fiscal Projections for End 2023 (Percent of GDP)
  - Revenue: Jan-Sep Actual 13.0; Oct-Proj. 6.8; Jan-Dec 2023 Proj. 19.8; Six Review 18.9
    - Domestic revenue: 9.2; 2.8; 12.0; 12.1
    - Grants: 3.8; 4.0; 7.8; 6.7
      - o/w. Budget support: 0.1; 2.6; 2.7; 2.1
  - Expenditures: 16.0; 6.1; 22.0; 21.6
    - Expenses: 9.1; 3.3; 12.5; 12.5
    - Net acquisition of nonfinancial assets: 6.8; 2.7; 9.6; 9.1
      - o/w. Gambia local fund: 1.4; 0.8; 2.2; 2.2
  - Net lending (+)/borrowing (–): (3.0); 0.7; (2.3); (2.7)
  - Financing: 3.2; (0.9); 2.3; 2.7
    - Net acquisition of financial assets: -; (0.3); (0.3); (0.3)
    - Net incurrence of liabilities: 3.2; (0.7); 2.5; 3.0
      - Domestic: 2.4; (1.0); 1.3; 1.7
        - o/w. Net borrowing: 2.6; (1.0); 1.6; 1.9
      - Foreign: 0.8; 0.4; 1.2; 1.3
  - Statistical discrepancy: (0.2); 0.2; (0.0); (0.0)

### Revenue, subsidies, and budget support
- International fuel price increases led to re-occurrence of fuel subsidies since September 2023.
- Authorities are incrementally adjusting domestic pump prices to minimize subsidies while protecting social stability:
  - Diesel pump price increased for December 2023, albeit still below full passthrough.
  - Kerosene pump price at full passthrough.
  - Petrol pump price above full passthrough.
- October preliminary data: moderate spending and strong revenue collection; higher customs taxes more than offset underperformance of CIT, PIT and domestic VAT.
- World Bank will double its budget support in 2023Q4, adding to planned supports from the EU and AfDB in 2023Q4.
- About US$50 million (1.8 percent of GDP) budget support expected from the World Bank, the European Union, the African Development Bank and France (noted under 2024 measures as well).

### Monetary policy and inflation
- CBG tightened monetary policy as inflation accelerated:
  - Monetary policy rate increased from 10 percent in March 2022 to 17 percent in September 2023.
  - Policy rate unchanged at 17 percent in December 2023 given slight deceleration in October 2023 and projected further deceleration.
- Plan to issue central bank bills to mop up excess liquidity after bank excess reserves increased in Q3 2023.
- Staff analysis: long-term inflation drivers are global food prices, the exchange rate, and the domestic output gap; inflation highly persistent with large second-round effects.
- Asymmetric exchange rate passthrough: depreciation significantly impacts inflation; appreciation does not.

### Foreign exchange market and reserves
- Forex supply fell below demand after high tourism season; CBG net seller again since March 2023.
- Gross reserves around 4.3 months of prospective imports but declining.
- CBG’s reference exchange rate depreciated by 9.9 percent against the US$ between end-December 2022 and end-October 2023; wedge with parallel rate around 10 percent.
- Historical CBG forex interventions:
  - CBG sold around US$139 million in 2022.
  - As of end-September 2023, CBG net sold around US$35 million in 2023.
  - Gross international reserves: US$530.4 million (7.7 months) at end-2021; US$455 million (5.3 months) at end-2022; US$426 million (4.1 months) in October 2023.
- New CBG foreign exchange policy (with IMF technical assistance) to:
  - Compute official exchange rate based on actual same-day forex transactions.
  - Expand coverage of transactions included.
  - Publish official exchange rate daily and apply it uniformly to all market participants.
  - Use official exchange rate as reference for all transactions, including private and government.
- Objective: enhance flexibility of official exchange rate, improve forex market efficiency, incentivize forex supply, move transactions back to banking system, and safeguard reserves.

### Financial sector resilience and reforms
- Banking system indicators at end-June 2023:
  - Risk-weighted capital adequacy ratio: 24.6 percent.
  - Liquidity ratio: 70 percent.
  - Banks’ NPL ratios: 3.5 percent.
- Quarterly stress tests indicate sector is resilient, well-capitalized, and liquid.
- Privatization of Mega Bank completed.
- CBG with IMF technical assistance revising regulatory guidelines and the banking act to align with regional standards.
- Financial inclusion measures encouraged: new payment system, capital market launch, expansion of mobile money and fintech, women enterprise and youth development funds.
- CBG to revise deposit insurance Act and prepare a revised AML/CFT law aligned with FATF standards (SB for end-March 2024).

### Outlook and risks
- Baseline projections (Text Table 3):
  - Real GDP growth (percent): 2022 Prel. 4.9; 2023 Baseline 5.6; 2024 6.2; 2025 5.8; 2026 5.0; 2027 5.0; 2028 5.0
  - Consumer price inflation (average, percent change): 2022 11.5; 2023 17.2; 2024 15.9; 2025 10.5; 2026 6.5; 2027 5.0; 2028 5.0
  - Tax revenue: 9.1; 9.4; 9.9; 10.2; 10.7; 10.9; 11.2
  - Overall fiscal balance: -4.9; -2.3; -2.7; -1.3; -1.0; -1.0; -0.7
  - Domestic primary balance: -1.9; -0.5; 0.6; 1.7; 1.7; 2.1; 2.1
  - Current account balance: -4.2; -4.4; -5.8; -3.8; -2.8; -2.4; -2.1
  - PV of public debt: 68.9; 59.9; 54.3; 50.7; 46.1; 43.0; 39.7
  - Gross official reserves (months of prospective imports): 5.3; 4.2; 4.3; 4.1; 3.9; 3.8; 3.7
- Downside scenario highlights:
  - Risks from intensification of regional conflicts, prolongation of war in Ukraine, conflict in Gaza and Israel, and global slowdown could reduce tourism, intensify inflationary and forex pressures, and reduce remittances.
  - Downside projections (selected):
    - Real GDP growth (percent): 2023 4.4; 2024 5.5; 2025 5.3; 2026 5.0; 2027 5.0; 2028 5.0
    - Consumer price inflation (average): 2023 18.0; 2024 16.6; 2025 10.7; 2026 6.6; 2027 5.0; 2028 5.0
    - Overall fiscal balance: 2023 -3.1; 2024 -3.7; 2025 -2.3; 2026 -2.1; 2027 -2.2; 2028 -1.9
    - PV of public debt: 2023 61.1; 2024 56.4; 2025 53.8; 2026 50.1; 2027 47.8; 2028 45.4
    - Gross official reserves (months): 2023 4.0; 2024 4.2; 2025 3.9; 2026 3.7; 2027 3.6; 2028 3.6
- Upside: potential benefits from a compact with the Millennium Challenge Corporation, with a threshold program under implementation and a compact program in the medium term.

### Program objectives and policy measures
- Program aims:
  - (i) tackle inflationary and foreign exchange pressures;
  - (ii) reduce debt vulnerabilities in the context of expiring debt deferrals and an overhaul of the SOE sector;
  - (iii) strengthen governance and support economic recovery and inclusive growth.
- A. Addressing inflationary and foreign exchange pressures
  - Near term monetary measures:
    - Maintain readiness to resume tightening to deliver a positive real policy interest rate.
    - Mop up excess liquidity through issuance of CBG bills in early 2024.
    - Use other tools as needed: deposit window, increase in banks’ reserve requirement ratio.
    - Monetary tightening to be supported by adequate fiscal consolidation.
  - Exchange rate policy:
    - Ensure exchange rate fully reflects market forces under free-floating regime.
    - Implement published forex policy and intervention policy as prior action to improve market determination and transparency.
  - Authorities’ commitments:
    - Tighten monetary policy; implement new forex policy; strengthen AML/CFT framework ahead of GIABA follow-up assessment; welcome IMF safeguard mission early next year.
- B. Reducing debt vulnerabilities, building fiscal resilience, and overhauling the SOE sector
  - 2024 budget anchors:
    - Overall fiscal deficit of about 2.7 percent of GDP.
    - Domestic primary balance of 0.6 percent of GDP.
    - Net domestic borrowing of 1.5 percent of GDP.
    - Fiscal anchors slightly looser to use additional resources received and saved in 2023Q4.
    - Public debt projected to decline by about 6.6 percentage points of GDP in 2024.
  - Revenue measures (selected):
    - Move toward full passthrough of fuel prices with targeted social support.
    - Set up platform and command center for single window customs administration (SB for end-February 2023), followed by operationalization of tracking system and weight bridge at Port of Banjul.
    - Streamline tax incentives under SICs: restrict coverage to priority sectors; eliminate extension based on expansion and re-investment; cancel underperforming SICs; exclude fuel from tax-exempt goods; require SIC holders to be compliant with local tax obligations (SB for end-June 2024).
    - Strengthen revenue collection and enforcement for telecom sector through enhanced audits (SB for end-September 2024).
    - Expand rental property taxation by updating rental property register.
    - Enforce collection of CIT and withholding taxes on companies executing donor-funded projects.
    - Non-tax revenue to benefit from another dividend payment from the CBG, a tranche from Africa50's asset recycling program, and a court-mandated license penalties.
  - Expenditure measures (selected):
    - Recent electricity and water tariff adjustments, end of electoral cycle, and near completion of OIC infrastructure projects to relieve fiscal pressures.
    - Rationalize subsidies to National Food Security and Processing Corporation, NAWEC, and subvented agencies.
    - Conduct study on consolidating redundant subvented agencies with MDAs (SB for end-December 2024).
    - Implement budget on cash basis; use one-off revenue primarily for road constructions and OIC summit; tighten overseas travel; ensure infrastructure projects implemented based on secured resources; preserve priority and poverty-reducing spending.
    - Deviations from projected fiscal path to require identifying spending to be executed only if one-off revenue or budget support materialize.

*Source: The Gambian authorities and IMF staff estimates (excerpt from 1gmbea2024001).*

### 21.      A radical change in the SOE sector will help strengthen fiscal sustainability through a

### 21.      A radical change in the SOE sector will help strengthen fiscal sustainability through a

### SOE sector transformation and near-term actions
- Vision: transform the SOE sector from a budget burden relying on government subsidies to a valuable asset generating resources for the government, reducing fiscal risks and enhancing corporate governance.
- Immediate actions the authorities will take:
  - Expand the signing of performance contracts to four additional SOEs after the review of the drafts by the SOE commission (SB for end-February 2024).
  - Build capacity to assess the performance contracts already signed.
  - Proceed with the full or partial privatization of GAMCEL to upgrade without fiscal costs its infrastructure in line with the requirements of latest technologies and boost its competitiveness (SB for end-March 2025).
  - Expand and facilitate access of end-users to the national fiberoptic backbone to facilitate households access to internet.
  - Pursue the publication of the fiscal risk statement.
  - Eliminate the backlog of SOEs audits.
  - Finalize the regulations of the SOEs Act to enable its full implementation.

### Medium-term fiscal framework objectives (2023–2026)
- Overall aims (MEFP ¶13):
  - Firmly put public debt on a downward trend given limited room for further deterioration in debt burden indicators.
  - Address the expiration of debt service deferrals in 2025, which will lead to an increase in annual debt service by more than 0.5 percentage point of GDP.
  - Intensify domestic resource mobilization, transform SOEs into profit generating entities, and explore innovative options to finance infrastructure projects without worsening debt vulnerabilities.
- Anchors of the medium-term fiscal framework:
  - Reducing the overall fiscal deficit by about 1.4 percentage points of GDP during 2023-2026, corresponding to an improvement in the basic primary balance by about 2 percentage points of GDP.
    - Additional measures will be identified to tilt consolidation toward more revenue-based efforts.
    - Projected reduction of spending broadly reflects the completion of some major projects and faster nominal GDP growth than spending growth; preserves priority social and infrastructure spending.
  - Reducing public debt by about 15 percentage points of GDP during 2023-2026, based on a combination of fiscal consolidation and economic expansion.
    - Debt service-to-revenue ratio projected to gradually decline from about 15 to 7 between 2025 and 2033.
  - Protecting the framework with two significant upside risks: the Africa50 asset recycling program could generate larger-than-budgeted upfront financing, and the MCC compact (not yet included) will serve as a positive contingency.

### Key medium-term fiscal figures (Text Table 5)
- 2023–2026 Changes (Percent of GDP)
  - Revenue 19.8 19.1 -0.7
    - Domestic revenue 12.0 13.0 1.0
    - Grants 7.8 6.0 -1.7
      - o/w. Budget support 2.7 1.6 -1.1
  - Expenditures 22.0 20.0 -2.0
    - Expenses 12.5 11.7 -0.8
    - Net acquisition of nonfinancial assets 9.6 8.4 -1.2
      - o/w. Gambia local fund 2.2 2.1 -0.1
  - Net lending (+)/borrowing (–) -2.3 -1.0 1.3
  - Domestic Primary Balance -0.5 1.7 2.2
  - Memo item Total public debt 71.8 56.2 -15.6
- Sources: The Gambian authorities and IMF staff estimates

### Revenue mobilization and PFM measures (MEFP ¶14)
- Revenue measures:
  - Adopt a domestic revenue mobilization strategy (SB for end-September 2024).
  - Measures to boost revenue collection, expand the tax base, and improve simplicity, efficiency, and equity of the tax system.
  - Continue streamlining tax incentives, strengthen telecom revenue collection, and expand rental property taxation.
  - Strengthen compliance risk management focused on tourism, telecom, and construction; reduce profit shifting; enhance tax arrears management.
  - Strengthen customs border and inland controls; improve post-clearance audits; enhance internal integrity mechanisms.
  - Swift implementation of the Integrated Tax Administration System (ITAS) to set up a single window for tax services and expand e-filing and e-payment; expected to boost revenue (example: increase in customs revenue since ASYCUDA World).
  - Continue to strengthen non-tax revenue collection.
- Public Financial Management measures:
  - Expand scope of Gambia Strategic Review Board (GSRB) selection criteria to domestically financed investment projects and PPPs.
  - Finalize and enact regulations of public procurement and SOEs Acts.
  - Accelerate approval of the PFM Act and the PPP bill to contain fiscal risks.
  - Improve revenue forecasting by the Directorate of Revenue and Tax Policy.
  - Enhance budget ceiling estimates to align annual budgets with the MTFF and the RF-NDP.
  - Prepare roadmap for program-based budgeting to be approved by the Cabinet in early 2024; pilot ministries to submit 2025 budgets in compliance (SB for end-December 2024).
  - Advance gender budgeting; improve Cash Management Committee and Reform Monitoring committee effectiveness.

### Debt management and external borrowing
- DSA results: overall and external debt distress risk ratings remain high; public debt continues to be deemed sustainable but breaches of some indicative thresholds due to weak near-term exports and medium-term increase in debt service.
- With fiscal consolidation, prudent domestic bond issuances, and reliance on concessional borrowing and budget support grants, the PV of overall debt-to-GDP ratio is expected to drop below its benchmark of 55 percent of GDP around 2025.
- Required authorities’ commitments:
  - Rely on grants and highly concessional loans for development needs.
  - Comply with agreed external borrowing plan and fiscal consolidation path.
  - Contain fiscal risks from SOEs and PPPs.
  - Strengthen debt management through regular data reconciliation and production and publication of regular debt bulletins and borrowing plans.
  - Build buffers to address the expiring debt deferrals.
- External Borrowing Plan (Text Table 6) — 2024–2026 (US$ millions)
  - Total debt contracted 119 90 90 90 270
  - Concessional debt 119 90 90 90 270
    - Multilateral debt 94 60 60 60 180
      - Of which: Port expansion 50 0 0 0
    - Bilateral debt 25 30 30 30 90
  - Nonconcessional debt 0 0 0 0 0
  - Use of debt financing
    - Infrastructure 119 90 90 90 270
      - Of which: Port Expansion 50 0 0 0
    - Other (including budget support) 0 0 0 0 0

### Authorities’ views on debt and financing
- Authorities agree with staff’s recommendations to put public debt on downward trajectory.
- Given development needs, they see little space to further cut spending; intend to intensify domestic revenue mobilization to increase the tax-to-GDP ratio to the regional target and reduce non-tax revenue leakages.
- Plan to transform SOEs into income-generating assets and seek grants and concessional financing.
- Exploring innovative infrastructure financing options that do not worsen debt vulnerabilities, such as the Asset Recycling Program (ARP) and SOE-generated resources.

### Strengthening governance and unlocking growth potential
- Near-term governance actions (MEFP ¶17):
  - Implement recommendations of the 2023 governance diagnostic mission; publish the report and finalize an implementation plan (SB for end-April 2024).
  - Coordinate with the National Assembly for swift adoption of the anti-corruption bill and set up a high-level anti-corruption commission.
  - Revamp asset declaration framework; transmit Ombudsman reports for 2021 and 2022 to the National Assembly and publish on the website (SB for end-March 2024).
  - Finalize revised draft law on AML/CFT.
  - Build capacity and accelerate digitalization of administrative processes; publish all laws and regulations for public access.
- Governance Diagnostic (Box 2) — key recommendations:
  - Accelerate adoption of the Anti-Corruption bill; enhance asset declaration regime.
  - Develop a pipeline of appraised investment projects to ensure value for money.
  - Strengthen SOE performance contracts and transparency of SOE financial statements.
  - Address vulnerability of SSHFC mortgage scheme to undue interference.
  - Undertake massive digitalization of processes and make laws/regulations available online.
  - Review subsidies framework for farmers.
  - Bring AML/CFT framework in line with Financial Action Task Force standards and improve cooperation between AML/CFT and anti-corruption stakeholders.
  - Strengthen central bank governance and supervisory role.
  - Strengthen financial management of subsidized agencies.
  - Create a high-level steering committee of governance reforms.

### Business environment, private sector, and inclusive growth
- Near-term measures to support recovery and inclusive growth (MEFP ¶18):
  - Set up a digital platform for business creation (SB for end-December 2024).
  - Implement employment policy to foster job creation.
  - Enhance effectiveness of the National Business Council.
  - Establish a free trade zone around the Senegambia corridor area to access regional markets and leverage bilateral cooperation with Senegal, ECOWAS, and AfCFTA.
  - Accelerate expansion of Banjul port and development of river transportation.
  - Reform land tenure and land management systems for businesses.
  - Facilitate year-round agricultural production.
  - Expand digital infrastructure and financial access to individuals and businesses.
- Medium-term inclusivity measures (MEFP ¶19):
  - Ensure benefits of growth are widely shared to strengthen social cohesion and secure public support for reforms.
  - Expand the social registry to Banjul and Kombo areas by completing data collection and processing (SB for end-December 2024) to roll out targeted social programs.
  - Enhance access to finance, including for women and youth.
  - Leverage construction and rehabilitation of schools (including the Farato Campus, TVET Schools) and health facilities.
  - Implement the health insurance scheme to improve quality of education and health services and build human capital.
- Authorities’ views:
  - Agree to promote private sector-led inclusive growth, expand digital infrastructure (increase access to existing national backbone and bring a second fiber optic cable), complete social registry, and roll out gender budgeting pilot.

*Source: IMF staff and Gambian authorities as presented in the provided content unit.*

### 31.      Strong policies to build resilience from the vagaries of climate change will be needed

### 31.      Strong policies to build resilience from the vagaries of climate change will be needed

### Climate vulnerabilities and policy priorities
- The Gambia is highly vulnerable to flooding, storm, droughts, and coastal erosion.
- Key national climate documents and commitments:
  - The Gambia’s Long-Term Climate-Neutral Development Strategy 2050 aims at realizing The Gambia commitment to meet commitments under the Paris Agreement.
  - The Gambia has produced two Nationally Determined Contribution Reports and its policies and actions on climate are deemed compatible with the goals of the 1.5°C Paris climate agreement.
  - The internationally supported target is almost sufficient according to the Climate Action Tracker latest update.
- Internationally supported mitigation/adaptation finance examples cited:
  - €7 million project funded by the French Development Agency to support five marine protected areas and the associated communities.
  - CA$20 million donation from the government of Canada to deal with climate-related issues.
  - The World Bank approved a US$20 million three-year catastrophic drawdown option to help mitigate shocks.
- Recommended mitigation and adaptation measures:
  - Reform fossil fuel subsidies.
  - Sustainable management of fishery resources, forests and soil protection, and restoration of damaged ecosystems.
  - Prioritize renewable energy generation and support energy security.
  - Introduce adaptation measures: strengthen early-warning systems, increase crop diversification and rotation, switch to drought-tolerant crop and animal species.
  - Strengthen public finance and investment management to attract more climate finance and benefit climate investment.
- Institutional support:
  - The authorities have requested a Climate-PIMA assessment to help integrate climate considerations in PFM processes.
  - The World Bank is planning a Country Climate Development Report during its FY2024 (ending in June 2024). Discussions on a possible C-PIMA are underway.

### Gender gaps, economic impacts, and recommended actions
- Staff analysis findings:
  - Closing gender gaps in labor force participation would significantly boost GDP (by about 11 percent), government revenues (by about 10 percent), women’s earnings, and reduce income inequality.
- Recommended policy actions to unlock women’s economic potential:
  - Implement and expand the gender budgeting pilot program.
  - Increase investment in maternal health and childcare services.
  - Close gender gaps in higher education, political participation, and access to factors of production such as land.
  - Expand the Women’s Enterprise Fund to provide women formal financial access and reduce dependence on informal financial services.
  - Take action to address climate risks, which affect women especially in rural areas.

### Authorities’ views on climate and gender
- Authorities concurred with staff analysis and recommendations, emphasizing:
  - High vulnerability to climate change and commitment to climate action.
  - Need for additional international climate financing due to high costs of climate-related damages and the small size of The Gambia’s economy.
  - Importance of economic prosperity and job creation to enhance climate resilience (e.g., affordability of alternative energy to firewood).
  - Need to enhance predictive capabilities and insurance mechanisms in response to erratic weather patterns.
  - Support for IMF-UNDP-UNFPA collaboration on macroeconomic implications of gender gaps and commitment to ongoing initiatives (gender budgeting pilot and women enterprise fund).
  - Recognition of challenges for women in higher education, political empowerment, and rural areas; recommendation to support agricultural development and improve access to land and finance.

### Data provision and capacity development
- Data availability and commitments:
  - Data provision is broadly adequate for surveillance and program monitoring.
  - Authorities will continue weekly provision of key monetary sector, international reserves, and government net domestic financing indicators, and monthly provision of the Statement of Government Operations (SGO) and inflation data.
  - With IMF support, quarterly GDP is produced and disseminated.
  - The Gambia is an eGDDS country; authorities will endeavor to enhance compilation, reconciliation, coverage, and dissemination of SGOs, debt data, financial sector data (including non-bank), and external sector statistics.
  - Authorities agreed to compile/report additional indicators of financial inclusion under the financial access survey (FAS).
- Capacity development support:
  - Recent IMF capacity development missions covered governance diagnostic, tax policy, fuel pricing, central banking (including forex policy), PFM (including program-based budgeting), and macroeconomic statistics.
  - Authorities requested acceleration of support for GDP rebasing.
  - Authorities committed to leveraging resident advisors at GRA and CBG.

### Program modalities, access, and financing
- Proposed ECF arrangement:
  - Duration: 36 months.
  - Access: SDR 74.64 million (120 percent of quota, about US$100 million, or about 3.5 percent of GDP).
  - Distribution: access distributed equally across the three years of the program.
  - Estimated net Fund financial flows: about US$70 million (3 percent of GDP) during the program period.
  - Reserve objective: allow CBG to hold about four months of imports of forex reserves by the end of the projection period.
  - On-lending: Disbursements would be partly on-lent to the government as budget support; for the first disbursement, SDR 4 million will be on-lent. Government and central bank will update MOU on on-lending and repayment.
- First disbursement request:
  - Staff supports authorities’ request for a first disbursement of SDR 8.29 million under the arrangement, with SDR 4 million to be used as budget support.
- Program monitoring and targets:
  - Program performance assessed through semi-annual reviews.
  - QPCs aim at preserving external stability (NIR floor), anchoring fiscal consolidation (ceilings on net domestic borrowing and domestic primary fiscal balance), and ensuring external debt sustainability (ceilings on external arrears, short-term external debt, new concessional external debt, and new non-concessional external debt).
  - Proposed indicative targets (ITs) include: (1) a floor on tax revenue collection; (2) a zero ceiling on central bank financing of the budget at non-market terms; (3) stock of the net domestic assets of the central bank; and (3) a floor on poverty-reducing spending.
  - Prior Actions (PAs) include: (1) the publication of foreign exchange policy; and (2) submission to the national assembly of a 2024 budget consistent with program parameters.
  - The first program reviews will be based on QPCs and other targets at end-December 2023.
- Financing assurances and burden sharing:
  - Fund financing would be capped at about 40 percent of overall financing during the program period.
  - The program is fully financed with firm commitments in place over the 12 months immediately following approval and prospects for adequate financing beyond the upcoming 12 months.
  - The Gambia has arrears on external debt owed to Libya and Venezuela; authorities are engaged in discussions with Libya and have sought re-engagement with Venezuela. Staff assesses conditions are met for Fund financing despite arrears to Venezuela.
- Capacity to repay and Fund exposure:
  - With proposed access, outstanding credit to the IMF will peak at SDR 210 million in 2026 (6.6 percent of GDP).
  - Annual debt service to the Fund would increase during 2024-33 from 2.1 to 2.6 percent of exports and from 2 to 3.2 percent of revenue. Both indicators will peak at 5.2-5.5 percent in 2030.
  - Most Fund exposure metrics are significantly higher than the PRGT comparator group, mitigated by good repayment track record, authorities’ reform commitments, and CBG’s strengthening of financial safeguards.
  - Program request is subject to requirements of enhanced safeguards.

### Program risks, safeguards, and mitigation
- Main risks and uncertainties:
  - Potential prolongation of the war in Ukraine.
  - Expansion of the conflict in Gaza and Israel.
  - Country’s weak institutional capacity.
  - High Fund exposure relative to peer countries.
- Mitigating factors:
  - Authorities’ commitment to reforms and reiterated support from development partners, including the Millennium Challenge Corporation.
  - Capacity development to strengthen institutional capacity.
  - The Gambia’s good track record of Fund repayment.
- Safeguards:
  - An update safeguards assessment of the CBG will be completed prior to the first review of the new ECF.
  - CBG implemented most 2020 safeguards recommendations (including revising the Audit Committee’s charter and improving financial position) and is committed to further progress in foreign reserves management and internal audit functions.
  - The MoU between the CBG and government on responsibilities for servicing IMF financial obligations will be updated to reflect ECF on-lent disbursements.

### Staff appraisal and overarching recommendations
- Recent performance and outlook:
  - The Gambia is consolidating its democratic transformation and economic reforms; recent elections were peaceful, credible, transparent, and inclusive.
  - A three-year ECF-supported program was successfully completed in mid-2023.
  - Economic recovery is supported by construction, agriculture, tourism arrivals, and remittances.
  - Inflation slightly decelerated but remains elevated due to global food and fuel prices, electricity tariff adjustment, and some dalasi depreciation.
  - Foreign exchange pressures are reemerging and weigh on CBG reserves.
  - End-2023 fiscal targets are within reach due to resource mobilization and higher development partner support.
  - Downside macro risks remain significant (regional conflicts, war in Ukraine, conflict in Gaza and Israel, potential global slowdown).
- Near- and medium-term program objectives:
  - Tackle inflationary and foreign exchange pressures using monetary policy tools and a market-determined exchange rate.
  - Reduce debt vulnerabilities via a 2024 budget and medium-term fiscal frameworks, a medium-term revenue strategy, bolstered resource mobilization, and SOE sector overhaul.
  - Strengthen governance and support economic recovery and inclusive growth by enhancing PFM, improving the business environment, and implementing governance diagnostic recommendations.
- Specific policy recommendations from staff:
  - Fully pass through international fuel prices to domestic prices to avoid revenue losses and regressive subsidies; mitigate impacts on vulnerable populations by expanding and targeting social safety net programs through a nation-wide social registry.
  - Swiftly adopt the anti-corruption bill; enhance and enforce the asset declaration framework.
  - Strengthen selection and prioritization of infrastructure projects, and adhere to those priorities whether financed domestically or externally.
  - Address long-term challenges on climate-related risks and gender gaps, noting that climate mitigation and adaptation measures will also support women in rural subsistence farming.
- Board action recommendation:
  - Staff recommends the Executive Board’s conclusion of the 2023 Article IV Consultations and supports the authorities’ request for a thirty-six-month arrangement under the ECF, with SDR 74.64 million access (120.0 percent of quota). Staff also support the authorities’ request for a first disbursement of SDR 8.29 million under the arrangement, with SDR 4 million to be used as budget support.

*Source: 1gmbea2024001 - 31.      Strong policies to build resilience from the vagaries of climate change will be needed*

### 48.      Staff recommends that the Gambia be placed on the 24-month consultation cycle, in

### 48.      Staff recommends that the Gambia be placed on the 24-month consultation cycle, in

### Recent economic developments
- Economic recovery continued, supported by tourism and other sectors.
- Private credit picked up from pandemic lows.
- Inflation accelerated, driven primarily by high global food, fuel, and electricity prices.
- The central bank began to tighten monetary policy; T-bill rates began to rise.
- Forex reserves (in months of next year’s imports) have been on a declining trend since 2022.
- The impact of the war in Ukraine worsened fiscal indicators, but public debt stabilized.

### Fiscal sector developments (2014–22)
- Grants increased in 2022, including additional budget support towards year-end, while domestic revenue declined.
- Current spending was reduced despite spending pressures, including an increase in wage bill.
- Some fiscal indicators weakened due to shocks, but overall fiscal deficit was broadly maintained.
- Total public debt-to-GDP ratio stabilized in 2022 despite a large drop in domestic financing.

### Monetary developments (2016–23)
- The CBG tightened monetary policy to tame accelerating inflation triggered by global energy and food prices.
- The CBG sold forex causing reserve money and bank excess reserves to decline.
- Broad money growth decelerated in 2022, driven by a significant decline in the NFA of the central bank.
- A pickup in inflation coincided somewhat with an acceleration of credit to the private sector.
- Monetary indicators and selected series as presented:
  - Monetary policy instruments cited: Yields on 364-day T-Bills, Policy Rate, Average interbank rates, Interest rates on CBG special deposit facility.

### Medium-term outlook (2020–28)
- Economic growth is expected to accelerate as the recovery takes hold.
- Inflation is expected to peak in 2023 and is projected to gradually converge toward the CBG medium-term target.
- Projected fiscal consolidation in the medium term driven by expenditure restraint and improved tax effort.
- Borrowing needs are expected to gradually decline.
- Public debt-to-GDP ratio is projected to decline steadily.
- External current account deficit is expected to narrow from 2023 onwards, once tourism fully recovers.

### Key statistics and projections (selected extracts preserved exactly as in source)
- From Figure/Table captions and notes: Sources: The Gambian authorities; and IMF staff calculations/projections/estimates.
- Table 1 (selected rows, preserved exactly):
  - GDP at constant prices 5
  .34.95.66.25.85.05.05.0
  - GDP deflator7.410.814.111.48.35.33.84.1
  - Consumer prices (average)7.411.517.215.910.56.55.05.0
  - Consumer prices (end of period)7.613.718.912.98.15.05.05.0
  - Exports, f.o.b (US$ values)-55.858.792.320.913.612.111.911.9
  - Imports, f.o.b (US$ values)7.614.324.615.63.26.96.76.9
  - Terms of trade (deterioration = -)-7.1-2.6-3.7-7.6-3.7-1.0-0.80.5
  - Broad money19.57.12.59.49.67.67.68.0
  - Net foreign assets8.8-4.5-8.20.4-0.50.32.31.3
  - Net domestic assets10.711.610.78.910.17.45.36.7
  - Credit to the private sector (net)3.13.82.82.13.14.43.95.6
  - Domestic revenue (taxes and other revenues)14.211.812.012.712.613.013.413.6
  - Tax Revenue10.39.19.49.910.210.710.911.2
  - Grants2.55.57.87.06.46.05.14.9
  - Total expenditures21.522.322.022.420.220.019.519.2
  - Net lending (+)/borrowing (–) -4.8-4.9-2.5-2.7-1.3-1.0-1.0-0.7
  - Fiscal financing4.84.92.52.71.31.01.00.7
  - Primary balance-1.8-2.8-0.40.21.31.50.90.8
  - Public debt83.182.871.865.260.856.253.049.9
  - External public debt (millions of US$)965.91029.31,032.0   1,084.2   1,112.4   1,134.8   1,134.5   1,136.6
  - External current account balance Excluding official transfers-4.7-6.1-7.2-7.6-5.5-4.4-3.3-3.0
  - Including official transfers-4.2-4.2-4.4-5.8-3.8-2.8-2.4-2.1
  - Gross official reserves (millions of US$)530.4454.7412.3437.5440.4448.1468.4491.7
  - (months of next year's imports of goods and services)7.75.34.24.34.13.93.83.7
  - Nominal GDP (billions of dalasi)105.5122.6147.6174.8200.2221.5241.5264.0
  - GDP per capita (US$)820.6841.9904.51009.21076.21,109.4   1,140.8   1,175.1
  - Disbursements (millions of SDRs)35.026.45.024.924.924.90.00.0
  - Repayments -3.7-2.0-4.1-3.9-5.2-9.5-14.0-16.7

- Table 2a and 2b (selected fiscal flows, preserved exactly):
  - Revenue17,64821,31621,29226,44329,18434,93238,52542,26344,77748,804
  - Domestic revenue15,00114,27914,50117,25217,72022,75125,72028,87032,37335,971
  - Taxes10,83311,15811,16413,55613,89217,24220,50323,59026,38829,609
  - Grants2,6487,0376,7909,19211,46412,18112,80613,39412,40412,833
  - Expenditures22,67627,11327,35430,12032,88739,68241,03444,39547,20150,776
  - Net lending (+)/borrowing (–)-5,028-5,797-6,062-4,056-3,703-4,750-2,509-2,132-2,424-1,972
  - Financing6,5,0925,7975,9934,0563,7034,7502,5092,1322,4241,972
  - Primary balance -1,848-2,742-3,446-1,146-5493652,6973,2142,2242,236
  - Total debt87,67396,598101,528104,375105,980113,872121,779124,356127,988131,730

- Table 3 (2023–24 cumulative central government operations, preserved exactly):
  - Revenue29,1847,64715,55725,28834,932
  - Domestic revenue17,7205,11210,88817,38622,751
  - Grants11,4642,5354,6697,90212,181
  - Expenditures32,8879,50519,40429,61439,682
  - Net lending (+)/borrowing (–)-3,703-1,857-3,847-4,326-4,750
  - Financing3,7031,8573,8474,3264,750

- Table 4a (monetary accounts, selected levels preserved exactly):
  - Net foreign assets28,95322,28926,14623,35920,65920,96420,59420,80822,82724,109
  - (in millions of U.S. dollars)559430504382330325302297316324
  - Net domestic assets33,54142,75340,77145,89147,90654,02461,56867,60872,28178,608
  - Domestic credit39,97949,94949,59153,08756,72560,84365,88771,92776,60082,927
  - Broad money62,49465,04166,91769,25068,56574,98882,16188,41695,108   102,717
  - Reserve money21,12419,00320,92819,74020,01222,60323,33923,80525,85128,771

- Table 4b (percent changes, selected preserved exactly):
  - Broad money19.54.07.16.52.5
  9.49.67.67.68.0
  - Net foreign assets8.8-10.7-4.51.6-8.2
  0.4-0.50.32.31.3
  - Credit to the private sector20.740.025.08.616.0
  10.415.221.016.521.8

### Policy recommendation highlighted in the content unit
- Staff recommends that the Gambia be placed on the 24-month consultation cycle, in accordance with the Decision on Article IV Consultations Cycles.

*Source: The Gambian authorities; and IMF staff estimates, calculations, and projections as presented in the provided content.*

### 1. Current account

### 1. Current account

### A. Levels and projections (U.S. dollars)
- Goods and services (balance): -585.2, -745.7, -562.7, -754.2, -686.4, -760.5, -745.0, -768.0, -787.3, -821.6
- Goods (net): -574.6, -713.1, -642.7, -779.4, -765.9, -880.5, -896.8, -951.6, -1007.7, -1069.3
  - Exports, f.o.b.: 32.4, 48.0, 51.3, 120.6, 98.7, 119.3, 135.5, 152.0, 170.0, 190.3
  - Imports, f.o.b.: -607.0, -761.1, -694.0, -900.0, -864.6, -999.8, -1032.3, -1103.6, -1177.7, -1259.6
- Services (net): -10.5, -32.6, 80.0, 25.3, 79.5, 120.0, 151.8, 183.6, 220.4, 247.6
  - Services exports: 109.1, 118.9, 215.4, 187.8, 239.8, 294.5, 334.6, 377.4, 425.8, 465.6
    - Of which: Travel income: 58.0, 71.5, 154.0, 130.0, 175.5, 212.7, 240.0, 268.2, 299.7, 320.0
  - Services imports: -119.7, -151.5, -135.5, -162.5, -160.4, -174.5, -182.8, -193.8, -205.4, -218.0
- Income (net): -51.0, -32.4, -31.4, -31.2, -31.2, -32.4, -33.5, -34.8, -36.1, -37.6
  - Income credits: 4.0, 2.5, 13.2, 2.4, 13.1, 13.6, 14.1, 14.6, 15.2, 15.8
  - Income debits: -54.9, -34.9, -44.6, -33.7, -44.4, -46.0, -47.6, -49.4, -51.3, -53.3
- Current transfers: 549.3, 458.3, 503.0, 492.0, 611.4, 634.8, 663.8, 712.1, 741.0, 781.9
  - Official transfers: 9.7, 43.8, 40.0, 47.8, 64.8, 50.0, 50.1, 50.2, 30.0, 30.0
  - Remittances: 527.0, 401.6, 462.0, 430.0, 532.4, 570.2, 598.7, 646.6, 695.3, 735.8
  - Other transfers: 12.6, 12.9, 1.0, 14.2, 14.2, 14.6, 14.9, 15.3, 15.7, 16.1
- Current account (excl. official transfers): -96.6, -363.6, -131.1, -341.2, -171.1, -208.1, -164.8, -140.9, -112.4, -107.3
- Current account (incl. prospective official transfers): -86.9, -319.8, -91.1, -293.4, -106.3, -158.1, -114.7, -90.7, -82.4, -77.3

### B. Ratios and projections (percent of GDP)
- Goods and services: -28.6, -34.4, -26.0, -32.3, -28.7, -27.7, -24.7, -24.0, -23.2, -22.8
- Goods (net): -28.1, -32.9, -29.7, -33.4, -32.0, -32.0, -29.7, -29.7, -29.7, -29.7
  - Exports, f.o.b.: 1.6, 2.2, 2.4, 5.2, 4.1, 4.3, 4.5, 4.7, 5.0, 5.3
  - Imports, f.o.b.: -29.7, -35.1, -32.1, -38.6, -36.2, -36.4, -34.2, -34.4, -34.7, -35.0
- Services (net): -0.5, -1.5, 3.7, 1.1, 3.3, 4.4, 5.0, 5.7, 6.5, 6.9
  - Services exports: 5.3, 5.5, 10.0, 8.1, 10.0, 10.7, 11.1, 11.8, 12.5, 12.9
    - Travel income: 2.8, 3.3, 7.1, 5.6, 7.3, 7.7, 7.9, 8.4, 8.8, 8.9
  - Services imports: -5.9, -7.0, -6.3, -7.0, -6.7, -6.3, -6.1, -6.0, -6.1, -6.0
- Income (net): -2.5, -1.5, -1.5, -1.3, -1.3, -1.2, -1.1, -1.1, -1.1, -1.0
  - Income credits: 0.2, 0.1, 0.6, 0.1, 0.5, 0.5, 0.5, 0.5, 0.4, 0.4
  - Income debits: -2.7, -1.6, -2.1, -1.4, -1.9, -1.7, -1.6, -1.5, -1.5, -1.5
  - Of which: Interest on government debt: 0.4, 0.5, 0.5, 0.6, 0.4, 0.5, 0.3, 0.3, 0.3, 0.3
- Current transfers: 26.9, 21.1, 23.3, 21.1, 25.6, 23.1, 22.0, 22.2, 21.8, 21.7
  - Official transfers: 0.5, 2.0, 1.9, 0.1, 2.7, 1.8, 1.7, 1.6, 0.9, 0.8
  - Remittances: 25.8, 18.5, 21.4, 18.4, 22.3, 20.7, 19.8, 20.2, 20.5, 20.4
  - Other transfers: 0.6, 0.6, 0.0, 0.6, 0.6, 0.5, 0.5, 0.5, 0.5, 0.4
- Current account (excl. official transfers): -4.7, -16.8, -6.1, -14.6, -7.2, -7.6, -5.5, -4.4, -3.3, -3.0
- Current account (incl. prospective official transfers): -4.2, -14.7, -4.2, -12.6, -4.4, -5.8, -3.8, -2.8, -2.4, -2.1

### C. Capital and financial account (levels and percent of GDP)
- Capital account (U.S.$ millions / percent of GDP): 53.6, 82.9, 82.7, 106.9, 120.9, 141.6, 143.0, 143.7, 144.4, 145.1
  - As percent of GDP: 2.6, 3.8, 3.8, 4.6, 5.1, 5.2, 4.7, 4.5, 4.3, 4.0
- Financial account (U.S.$ millions / percent of GDP): 190.4, 97.4, -101.0, 177.0, -58.2, 13.6, -51.7, -65.7, -22.7, -21.7
  - Foreign direct investment: 99.3, 99.7, 99.7, 108.1, 102.4, 106.5, 110.5, 114.6, 119.0, 124.7 (percent of GDP: 4.9, 4.6, 4.6, 4.6, 4.3, 3.9, 3.7, 3.6, 3.5, 3.5)
  - Portfolio investment: 3.9, 4.1, 4.1, 4.4, 4.5, 5.2, 5.7, 6.1, 6.5, 6.8 (percent of GDP: 0.2, 0.2, 0.2, 0.2, 0.2, 0.2, 0.2, 0.2, 0.2, 0.2)
  - Other investment: 87.2, -6.4, -204.8, 64.4, -165.2, -98.2, -167.9, -186.4, -148.1, -153.2 (percent of GDP: 4.3, -0.3, -9.5, 2.8, -6.9, -3.6, -5.6, -5.8, -4.4, -4.3)
- Capital and financial account (combined): 244.0, 180.2, -18.2, 283.9, 62.7, 155.1, 91.3, 78.0, 121.7, 123.5

### D. Errors, overall balance, and financing (U.S. dollars)
- Errors and omissions: -35.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0
- Overall balance (does not include prospective budget support and project grants): 112.4, -183.4, -149.3, -57.3, -108.4, -52.9, -73.5, -62.9, 9.3, 16.1
- Financing (net): -112.4, 183.4, 149.3, 57.3, 108.5, 52.9, 73.5, 62.9, -9.3, -16.1
  - Net international reserves (increase -): -133.8, 138.6, 108.0, 39.5, 43.7, 2.9, 23.4, 12.7, -39.3, -46.1
  - Change in gross international reserves: -178.3, 105.8, 75.7, 8.3, 42.4, -25.1, -2.9, -7.8, -20.3, -23.3
  - Use of IMF resources (net): 44.5, 32.8, 32.6, 1.3, 1.3, 28.1, 26.3, 20.5, -19.0, -22.8
  - Exceptional financing: 5.6, 1.0, 1.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0
    - Of which: CCRT debt relief: 5.6, 1.0, 1.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0
  - Prospective donor financing: 15.8, 43.8, 40.0, 47.8, 64.8, 50.0, 50.1, 50.2, 30.0, 30.0
    - Budget support grants: 9.7, 43.8, 0.0, 47.8, 64.8, 50.0, 50.1, 50.2, 30.0, 30.0
    - Project support grants: 6.1, ............, ............, ............, ............ (data truncated in source)

### E. Reserves and external position (memorandum items)
- Gross international reserves (US$ millions): 530.4, 424.6, 454.7, 416.4, 412.3, 437.5, 440.4, 448.1, 468.4, 491.7
- Months of next year's imports of goods and services (gross reserves): 7.7, 4.8, 5.0, 3.4, 4.4, 4.2, 4.3, 4.1, 3.9, 3.8
- Gross international reserves (w/o SDR allocation) (US$ millions): 445.4, 339.6, 369.7, 331.4, 327.3, 352.5, 355.4, 363.1, 383.4, 406.7
- Months of next year's imports (w/o SDR allocation): 6.4, 3.8, 4.3, 3.5, 3.3, 3.5, 3.3, 3.2, 3.1, 3.1
- Net international reserves (US$ millions): 427.7, 299.6, 325.9, 290.0, 280.0, 281.5, 253.7, 241.0, 280.3, 329.2
- Months of next year's imports (net): 6.2, 3.4, 3.8, 3.1, 2.9, 2.8, 2.3, 2.1, 2.3, 2.5
- Net international reserves (w/o SDR allocation) (US$ millions): 342.7, 214.6, 240.9, 205.0, 195.0, 196.5, 168.7, 156.0, 195.3, 244.2
- Months of next year's imports (net, w/o SDR allocation): 5.0, 2.4, 2.8, 2.2, 2.0, 1.9, 1.6, 1.4, 1.6, 1.9
- Exports of goods and services (US$ millions): 141.5, 166.9, 266.8, 308.3, 338.5, 413.8, 470.1, 529.4, 595.9, 655.9
- Imports of goods and services (US$ millions): -726.7, -912.6, -829.5, -1062.5, -1025.0, -1174.3, -1215.1, -1297.4, -1383.2, -1477.5
- GMD per U.S. dollar, period average: 51.6, ..., 56.7, ...... (source shows incomplete series)
- External Debt service: 59.5, 65.9, 76.6, 40.2, 71.3, 54.8, 76.0, 87.9, 1.9, 106.5
- NIR/External Debt Service (ratio): 7.2, 4.6, 4.2, 7.2, 3.9, 5.1, 3.3, 2.7, 3.0, 3.1

### F. External financing needs (select items, 2024–26; U.S. dollars)
- 1. Total financing requirement (2024, 2025, 2026): -187.9, -275.3, -233.8, -226.2 (source table lists 2024–2026 with these values)
  - Current account deficit (excl. official transfers): -171.1, -208.1, -164.8, -140.9
  - Public debt amortization: -53.7, -36.8, -59.1, -64.7
  - Repayment to the IMF: -5.4, -5.2, -7.0, -12.8
  - Change in official reserves: 42.4, -25.1, -2.9, -7.8
- 2. Total financing sources (2024, 2025, 2026): 116.3, 191.9, 150.4, 142.7
  - Capital transfers: 120.9, 141.6, 143.0, 143.7
  - Foreign direct investment (net): 102.4, 106.5, 110.5, 114.6
  - Portfolio investment (net): 4.5, 5.2, 5.7, 6.1
  - Public sector debt financing: 54.9, 60.6, 60.6, 56.8
  - Other net capital inflows: -166.4, -122.0, -169.4, -178.5
- 3. Total financing needs (after sources and projected support): 71.5, 83.3, 83.4, 83.5
  - Budget support (grants): 64.8, 50.0, 50.1, 50.2
  - IMF disbursements: 6.7, 33.3, 33.3, 33.3

(Note: some table cells in the source are truncated or represented by dots; values reproduced exactly as presented.)

*Sources: The Gambian authorities; and IMF staff estimates and projections.*

### Annex I. Status of Key Recommendations from 2021 Article IV

### Annex I. Status of Key Recommendations from 2021 Article IV Consultation

### Fiscal Policy: implementation status and outstanding items
- Implemented recommendations:
  - Gambia Strategic Review Board (GSRB) equipped with tools to assess viability of new investment projects with IMF and World Bank support; the board has assessed a few foreign financed projects and some PPP arrangements.
  - New public procurement bill approved in 2022; regulations being finalized; GPPA began regular publication of all procured contracts.
  - Tax administration: cleansing of the taxpayer registry and building of the taxpayer ledger for the large taxpayer completed; internal affairs unit created; taxpayer charter published; digitalization advanced by connecting all regional offices to the internet, enhancing GAMTAXNET, launching ASYCUDA World and securing funding for ITAS.
- Outstanding / partial implementation:
  - Strategic review board mandate expansion: assessment of domestically financed projects is yet to begin.
  - Anti-corruption bill has not been adopted yet.
  - Full use of the investment prioritization tool is still pending.

### Debt Policy: actions taken and financing profile
- Data management and coordination:
  - Data reconciliation exercise conducted with World Bank support; a LTX from the US treasury is supporting the debt directorate.
  - More frequent debt reconciliation exercises now conducted; project managers channel disbursement requests through the Ministry of Finance.
- Borrowing and financing composition:
  - The Gambia has been prudent in contracting new debt.
  - In 2021, no debt was contracted.
  - In 2022 out of the US$115 million approved in the borrowing plan only US$ 61million was contracted, all concessional.
  - The country has been exploring new financing tools.

### Monetary and Exchange Rate Policies: framework and reserve management
- Monetary policy framework:
  - The Central Bank of The Gambia (CBG) uses the FPAS model to formulate monetary policy and guide quarterly MPC decisions.
- Reserves:
  - Efforts to maintain high reserves resulted in reserves covering 4.5 months of prospective imports, including by saving three quarters of the 2021 SDR allocation for reserves.
- Exchange rate regime and FX management:
  - CBG maintains a de jure flexible exchange rate regime but has faced challenging FX pressures originating from rising import costs.
  - Fund provided a TA mission on FX management; the team is working with CBG on implementing recommendations.

### Financial Sector Policies: supervision, safeguards, inclusion
- Supervision and safeguards:
  - CBG developed capacity to perform quarterly stress testing for all banks.
  - Several supervision directives are being updated.
  - Recommendations of the 2020 safeguards assessment have been implemented; the CBG is timely audited with no adverse opinions.
- Financial inclusion:
  - Financial inclusion strategy finalized and launched; target to provide access to the formal financial system for 70 percent of the adult population by 2025, including the most vulnerable groups, women, and youth.
  - A steering committee has been established; CBG focusing on FinTech, mobile money and expanding payment systems.

### Structural Policies: SOEs, social registry, governance, gender, climate
- SOE governance and fiscal risk measures:
  - New SOEs bill enacted; work underway to create an SOEs commission.
  - Performance contracts signed with four SOEs.
  - Government increased water and electricity tariffs by 30 percent and negotiated a PPP agreement on the Port of Banjul to reduce fiscal burdens and risks.
- Social registry:
  - Social Registry extended to all rural areas and is used by World Bank and UN agencies for targeted support.
  - Data collection ongoing to include the Greater Banjul Area for full national coverage.
- Business environment and governance:
  - Progress on air and road transportation and electricity access; high-level government–private sector dialogue resumed.
  - Governance diagnostic mission conducted; authorities ready to publish the report and implement recommendations.
  - Anti-corruption bill remains pending.
- Gender and inclusion:
  - Ministry of Gender created.
  - Women Enterprise Fund established.
  - 2023-2027 National Strategic Plan on Gender and Women Empowerment prepared.
  - Pilot gender budgeting work underway for the 2024 budget.
  - Several laws enacted or amended to enhance women’s rights.
- Climate and resilience:
  - National Development Plan 2013–27 is green recovery focused and embeds resilience to climate shocks.
  - Country expressed interest in obtaining an RSF and wants to benefit from a climate PIMA from the IMF.
  - World Bank intends to prepare a Country Climate and Development Report (CCDR) for The Gambia by mid-2024.

---

### Annex II — Socio-Economic Progress and Challenges: summary of developments and statistics
- Political and institutional progress:
  - Transition from a 22-year autocratic rule in 2017 led to marked progress in justice, social and economic reforms.
  - Removed from the World Bank fragility list in 2022.
  - Improvements noted in Reporters Without Borders 2022 World Press Freedom and 2022 Global Peace Index.
  - Mo Ibrahim report: improvement of almost 20 points over the last ten years in participation, rights and inclusion.
- Economic management:
  - Development partners, including the IMF, supported reforms; economic management changed radically since 2017.
  - COVID-19 impacts were mitigated relative to peers: economic growth decelerated by a smaller magnitude; public debt did not increase; foreign exchange reserves almost doubled.
- Remaining political challenges:
  - TRRC recommendations still awaiting full implementation.
  - Security sector reform unfinished; ECOMIG peacekeeping mission not yet ended.
  - Attempted coup d’état thwarted in December 2022.
  - Constitutional review stalled due to disagreement over retroactivity of two-term limit.
  - Occasional armed clashes with Casamance rebels disrupt timber exports and cause deaths and displacements.
- Poverty and human development:
  - National poverty rate: 48.6 percent in 2015; about 45.8 percent in 2019; projected to reach 44.9 percent in 2020 (pre-COVID projection); poverty survey showed increase to 53.4 percent in 2020.
  - Rural poverty above 70 percent; urban poverty less than 40 percent.
  - Human Development Index declined from 0.503 in 2019 to 0.500 in 2021.
  - The Gambia ranked 174th out of 191 countries on the 2022 HDI report.
  - Two Voluntary National Review (VNR) processes undertaken; data gaps constrain SDG monitoring.
- Food security and climate shocks:
  - July 2022 flood affected close to 50 thousand households and caused about US$20 million (about 1 percent of GDP) damage.
  - Share of the moderately food insecure population increased from 11.6 percent in the 2021 consolidated food security vulnerability assessment to 24.8 percent in the 2022 nutrition and food security survey; latest information indicates the situation continued to worsen in 2023.
- Structural constraints:
  - Economic dependence on a few sectors: tourism, remittances, and agriculture.
  - Geographic constraints: Gambia river divides country; only three bridges and a few aging ferries along 300 km river complicate service delivery and integration.
  - Absence of specialized commercial courts and weak collateral enforcement; large infrastructure gap.

### Key statistics and exact figures (as presented)
- Reserves cover 4.5 months of prospective imports.
- Saved three quarters of the 2021 SDR allocation for reserves.
- 2021: no debt contracted.
- 2022 borrowing plan approved US$115 million; contracted US$ 61million, all concessional.
- Target: 70 percent of the adult population to have access to the formal financial system by 2025.
- Tariff increases: water and electricity tariffs increased by 30 percent.
- Poverty: 48.6 percent (2015); about 45.8 percent (2019); projected 44.9 percent (2020 pre-COVID); survey 53.4 percent (2020).
- Rural poverty above 70 percent; urban poverty less than 40 percent.
- HDI: 0.503 (2019); 0.500 (2021); ranked 174th out of 191 (2022).
- July 2022 flood: close to 50 thousand households affected; about US$20 million damage (about 1 percent of GDP).
- Moderately food insecure population: 11.6 percent (2021) to 24.8 percent (2022).

---

### Annex III — Risk Assessment Matrix: principal risks, likelihoods, impacts, and policy responses
- External risk: Intensification of regional conflict(s)
  - Relative Likelihood: High
  - Impact if realized: High
  - Policy Response:
    - Diversify economic activities as well as exports destinations and tourists’ origins to reduce vulnerabilities to shocks in a few sectors and dependence on limited groups of countries.
    - Resolve regional trade disruptions to reduce dependence on global trade.
  - Summary: Escalation of regional conflicts would disrupt trade, remittances, FDI, financial flows and payment systems; tourism and exports would decline; growth would slow and FX pressures would reemerge.
- External risk: Commodity price volatility
  - Relative Likelihood: High
  - Impact if realized: High
  - Policy Response:
    - Provide targeted support to vulnerable households using the expanded social registry.
    - Strengthen the fiscal oversight of NAWEC.
    - Accelerate implementation of national energy roadmap with World Bank support, including use of alternative energy production methods.
  - Summary: Supply disruptions and demand fluctuations cause recurrent commodity price volatility, external and fiscal pressures, and social and economic instability.
- External risk: Abrupt global slowdown or recession
  - Relative Likelihood: Medium
  - Impact if realized: High
  - Policy Response:
    - Build adequate fiscal and foreign exchange buffers.
    - Roll-out targeted social programs to support the vulnerable population.
    - Develop the domestic market to reduce dependence on global demand.
  - Summary: A synchronized global slowdown would shrink export markets, impair domestic activity, shrink tax base, raise spending needs and increase debt distress risk.
- Domestic risk: New Covid-19 outbreaks
  - Relative Likelihood: Medium
  - Impact if realized: High
  - Policy Response:
    - Accelerate Covid-19 vaccination campaigns through all possible channels.
    - Strengthen preventive health system.
  - Summary: Resurgent infections would force lockdowns and require broad-based income support.
- Domestic risk: Social discontent and instability
  - Relative Likelihood: High
  - Impact if realized: High
  - Policy Response:
    - Involve CSOs and other stakeholders in society in policy decisions.
    - Strengthen governance further, including through implementation of recommendations from the recent governance diagnostic.
  - Summary: Persistently high inflation eroding real incomes increases inequality and social tensions, harming market confidence and reform momentum.
- Domestic risk: Higher frequency and severity of natural disasters
  - Relative Likelihood: Medium
  - Impact if realized: Medium
  - Policy Response:
    - Strengthen food security and rural feeding programs.
    - Build up fiscal and reserve buffers.
    - Build resilience to natural disasters.
  - Summary: More frequent floods, droughts and storms damage infrastructure and livelihoods, amplify supply disruptions and inflation, cause food shortages, and necessitate increased recovery spending.

*Source: Annex I. Status of Key Recommendations from 2021 Article IV Consultation (content unit 1gmbea2024001).*

### Annex IV. External Sector Assessment

### Annex IV. External Sector Assessment

### Overall assessment
- The external position of The Gambia in 2022 was broadly in line with the level implied by medium-term fundamentals and desirable policies.
- Staff assessment:
  - Current account deficit in 2022: 4.2 percent of GDP.
  - After adjusting for cyclical and transitory factors related to the pandemic, the current account was 0.6   percent of GDP below the estimated norm.
  - Implied real effective exchange rate (REER) overvaluation: 3.7 percent.
- Outlook and risks:
  - The current account balance in 2023 expected to stay similar to 2022, driven by recovery in tourism and increased imports related to large infrastructure projects.
  - Moving forward, lower-than-expected current transfers and the upcoming expiry of debt service deferrals are expected to exacerbate pressure on foreign exchange reserves.
- Potential policy responses:
  - Exchange rate flexibility combined with continued structural reforms and fiscal consolidation.
  - Maintain strong external buffers given heightened vulnerabilities from the adverse external financing environment, Russia’s war in Ukraine, and the anticipated conclusion of debt deferrals.

### Foreign assets and liabilities: position and trajectory
- Background and recent trajectory:
  - NIIP worsened since 2014, reaching approximately -81 percent of GDP in 2021.
  - Gross liabilities in 2021: around 130 percent of GDP, 40 percent of which were debt liabilities.
  - Sizeable share of liabilities denominated in US dollars; external debt and FDI liabilities primary drivers of NIIP.
- Assessment and policy implications:
  - Reducing the persistent current account deficit and improving NIIP would help external debt sustainability in the medium term.
  - Limits on external borrowing under the previous ECF arrangement, and a continued build-up of FX reserves buffers by the Central Bank of The Gambia (CBG), will help maintain external sustainability.
- Key 2021 figures (Percent GDP):
  - NIIP: -81.3
  - Gross Assets: 48.7
  - Debt Assets: 16.4
  - Gross Liabilities: -130
  - Debt Liabilities: -48.8

### Current account: flows, drivers, and assessment
- Background (2022):
  - Current account deficit: 4.2 percent of GDP (or US$ 91 million).
  - Imports increased significantly from 2021, largely due to higher global commodities prices.
  - Tourist arrivals: increased by 80 percent relative to 2021 but remained below pre-pandemic levels by 22 percent.
  - Workers’ remittance inflows: declined from US$527 million in 2021 to US$476 million in 2022.
- 2023 outlook:
  - Current account deficit expected to stay at a comparable level on the back of tourism recovery and an uptick in imports related to ongoing large infrastructure projects.
- EBA-lite assessment for 2022:
  - Current account gap: -0.6 percent of GDP (after including adjustors for the temporary impact of the pandemic on tourism).
  - Adjusted current account deficit: –3.8 percent of GDP against a norm of –3.2 percent of GDP.
  - CA gap of -0.6   percent of GDP is consistent with a REER overvaluation of 3.7 percent.
  - Biggest driver of the relative policy gap: public health expenditure.
- Comparative note:
  - Compared to the External Sector Assessment performed in 2021, the CA gap remains small, reflecting ongoing alignment with medium-term fundamentals and desirable policies.

### Real exchange rate
- Background:
  - Real exchange rate depreciated slightly by 2 percent in 2022.
  - Since January 2023, it had appreciated by 16 percent by September 2023.
- Model assessments for 2022:
  - CA approach (EBA-lite) implies REER overvaluation of 3.7 percent.
  - REER model implies REER overvaluation of 27.4   percent.
  - Given historically poor fit and large residuals of the REER model for The Gambia, staff assess that the REER is broadly in line with fundamentals with an estimated overvaluation in the range of -2   to 8   percent.
  - This REER range is consistent with a CA gap in the range from -1.6   to 0.4   percent of GDP.

### Capital and financial accounts: flows and policy measures
- Background (flows):
  - Capital account: increased from 2.9 percent of GDP in 2021 to 3.8 percent in 2022, driven by higher disbursements of project (capital) grants.
  - Financial account: deteriorated from 9.3 percent of GDP in 2021 to -4.7   percent in 2022, due to a drop in other investment.
- Assessment and outlook:
  - Weak capital and financial accounts have reduced the overall balance-of-payments.
  - Net capital and financial flows are expected to recover over the medium term.

### FX intervention and reserves level
- Reserves level:
  - Gross international reserves in 2022: US$454.7 million, which is 21 percent of GDP or 5.3 months of prospective imports.
  - Reserves rose markedly from a trough of US$60 million in 2016, driven by amplified disbursement of external financial assistance (including from the IMF), CA improvement, and private inflows.
  - Reserves declined to US$426 million in October 2023 due to higher imports.
- FX market intervention:
  - Since 2017, the CBG has intervened on a limited (opportunistic) scale to anticipate government forex transactions (such as for debt service) and dampen short-term exchange rate volatility.
  - Significant forex shortages occurred in 2022, pressuring the CBG to sell forex.
  - Pressures eased in early 2023 during the high tourist season and following depreciation to better reflect market forces, but forex supply fell below demand again in recent months.
  - After being a net forex buyer in early 2023, the CBG became again a net seller.
- Reserve adequacy assessment:
  - Using the Fund’s ARA-CC approach, under a cost of holding reserves of 3 percent, the estimated adequate level of reserves is 3 months of imports.
  - Staff assess that the central bank should be holding foreign exchange reserves corresponding to at least 4.5 months of prospective imports of goods and services, in anticipation of the conclusion of the debt deferral period and given heightened vulnerabilities.

### Annex V: Concession agreement on the Senegambia Bridge (summary of implications)
- Project background:
  - Senegambia Bridge completed in January 2019.
  - Project cost: US$100 million, financed with a grant by the African Development Bank (AfDB).
  - The bridge connects key regions in The Gambia and northern/southern regions of Senegal; national and regional importance.
  - Tourist/traffic management: 24-hour operation enabled by an agreement with Senegal to keep their borders around the bridge open 24/7.
- Concession agreement with Africa50 (Asset Recycling Program):
  - Structure:
    - Private entity jointly owned by Government of The Gambia and Africa50 to operate and maintain the bridge for a duration of either 25 years or until the private company realizes its expected rate of return, whichever is earlier.
    - Concessionaire to pay a concession fee of US$100 million to The Gambian government at different stages of the concession.
    - During concession, no competing route will be developed until traffic volume reaches sustained profitability.
  - Fiscal and revenue implications:
    - The concession will result in lower future non-tax revenue from the bridge in exchange for significant upfront payments.
    - During concession, the government will only receive its equity share (12.5 percent) of dividend payments, with a portion used to maintain access roads.
    - Upfront payments and taxes generated can be utilized to invest in other infrastructure projects expected to yield economic returns.
  - Legal/institutional actions:
    - Authorities are developing a PPP bill to underpin public-private partnerships; it should be finalized and adopted swiftly.

### Annex VI: Capacity Development Strategy, 2023–25 (priorities and challenges)
- Purpose and focus:
  - IMF TA program to support surveillance and the new ECF-supported program objectives.
  - Core TA focus: domestic revenue mobilization (including streamlining tax expenditures), public financial management (including rationalizing spending and enhancing cash management), SOE governance, debt management, monetary policy framework, financial sector supervision, and macroeconomic statistics.
- Delivery modalities:
  - Three resident advisors at GRA (revenue mobilization), MOFEA (macro-fiscal analysis) and CBG (banking supervision) to continue supporting CD to the end of their donor-funded TA projects.
  - Increased virtual and in-person missions and resident advisors to mitigate risks from high staff turnover and low staffing levels.
- Alignment:
  - CD priorities aligned with the authorities’ National Development Plan (NDP) 2023-2027 and structural reform agenda under the new ECF-supported program.
- Priority areas, objectives, and challenges (selected items):
  - Tax Policy and Revenue Administration:
    - Objectives: Agree on new Tax Expenditure Policy; strengthen core tax and customs administration; continue GRA digital transformation; strengthen Tax Policy Directorate; develop medium-term revenue mobilization strategy; reform upstream petroleum fiscal regime.
    - Challenges: Limited human and institutional capacity at the GRA.
  - Public Financial Management (PFM):
    - Objectives: Implement PFM TSA roadmap, strengthen cash flow forecasting and prudent budget execution and control, enhance performance monitoring, reduce subsidies for SOEs, expand IFMIS to subvented agencies and projects, improve fiscal data and reporting, risk monitoring, transparency, and legislation (revised Public Finance Bill), support Budget Directorate to align PBB proposals with NDP and MTEF, establish framework for public investment management, create conditions for climate and gender sensitive budgeting.
    - Challenges: Weak human and institutional capacity at MoFEA, weak internal management and expenditure controls at SOEs and subvented agencies.
  - Debt Management Reporting and Reconciliation:
    - Objectives: Strengthen external debt reporting and reconciliation; develop a domestic borrowing plan aligned with MTDS to lengthen maturity of domestic debt; improve data dissemination from DLDM to the CBG.
    - Challenges: Weak capacity in the debt unit in MoFEA; slow adoption and limited use of improved systems and processes.
  - Implementation of 2019 FSSR recommendations:
    - Objectives: Strengthen supervision, stress testing, macroprudential policy, bank safety nets, resolution, and crisis management.
    - Challenges: Weak capacity, low staff numbers, dependence on donor support.
  - Monetary policy and markets:
    - Objectives: Improve monetary policy modeling; improve liquidity forecasting and management and interbank FX market; operationalize oversight and risk management for financial market infrastructures/payment systems.
    - Challenges: Staff turnover; weak capacities and infant stage development for payment systems oversight.
  - Statistics (GFS, external sector, real sector):
    - Objectives: Strengthen compilation and dissemination of Government finance statistics (GFS), public sector debt statistics (PSDS), balance of payments and IIP statistics, external debt statistics; update and rebase National Accounts and Price statistics regularly and improve data quality and timeliness.
    - Challenges: Institutional capacity constraints; high turnover of compilers; source data shortcomings (imports—mostly re-exports, grants, and direct investment); lack of coordination among CBG, GRA, GBoS, MoFEA and Ministry of Foreign Affairs; dependence on donor support for surveys.

### Annex VII: Enhanced Safeguards (summary)
- Overview:
  - The size of Gambia’s de facto senior debt and other multilateral debt as a share of total external debt is around 68 percent and is projected to decline over time.
  - Share at end-2024 (assuming two disbursements under the new ECF arrangement) projected to fall to around 62 percent.
  - Debt held by institutions with preferred creditor status (IMF, World Bank, and other major development banks) accounts for 30 percent of total external debt.
  - Total multilateral debt as a share of GDP is projected to fall from around 32 percent of GDP at end-2022 to below 24 percent at end-2025.
  - The Gambia has no collateralized debt.
- Selected projected debt stock and ratios (In US$ millions; projections reported by Gambian authorities):
  - Debt Stock (end of period) — Total debt:
    - 2022: 1,669.3
    - 2023: 1,691.8
    - 2024: 1,764.8
    - 2025: 1,788.0
  - External debt:
    - 2022: 1,029.3
    - 2023: 1,032.0
    - 2024: 1,084.2
    - 2025: 1,112.4
  - Multilateral creditors:
    - 2022: 701.5
    - 2023: 664.4
    - 2024: 667.0
    - 2025: 706.6
  - IMF:
    - 2022: 129.5
    - 2023: 131.3
    - 2024: 167.1
    - 2025: 191.5
  - World Bank:
    - 2022: 127.2
    - 2023: 124.6
    - 2024: 121.4
    - 2025: 129.4
  - Domestic debt:
    - 2022: 640.0
    - 2023: 659.7
    - 2024: 680.6
    - 2025: 675.6
  - Memo item — Nominal GDP:
    - 2022: 2,161.2
    - 2023: 2,391.7
    - 2024: 2,748.5
    - 2025: 3,019.2
- Multilateral debt shares:
  - Percent of external debt (multilateral debt):
    - 2022: 68.2
    - 2023: 64.4
    - 2024: 61.5
    - 2025: 63.5
  - Percent of GDP (multilateral debt):
    - 2022: 32.5
    - 2023: 27.8
    - 2024: 24.3
    - 2025: 23.4
  - o/w: IMF and WB — Percent of external debt:
    - 2022: 24.9
    - 2023: 24.8
    - 2024: 26.6
    - 2025: 28.9
  - o/w: IMF and WB — Percent of GDP:
    - 2022: 11.9
    - 2023: 10.7
    - 2024: 10.5
    - 2025: 10.6
- Note:
  - Debt coverage is the same as the DSA and reported by Gambian authorities according to their classification of creditors, including by official and commercial.

*Source: Annex IV. External Sector Assessment, as provided in the supplied content unit.*

### 2.      The Gambia’s capacity to repay the Fund is adequate, but subject to significant risks

### 2.      The Gambia’s capacity to repay the Fund is adequate, but subject to significant risks

### Capacity to repay: headline findings
- The stock of debt to the Fund as a share of GDP "exceeds largely the top quartile of past PRGT arrangements" and is "amongst the PRGT’s top exposures in the last decade."
- Indicators of the stock of debt to the Fund peak in 2026 and "gradually converge towards other PRGT cases during the projection period."
- Based on existing and prospective drawings, debt service to the Fund:
  - is projected to rise from around 2.0-2.1 percent in 2024,
  - peaking in 2030 at around 5.2-5.5 percent.
- These debt-service ratios are "well above the top quartile of past PRGT arrangements."
- A "high ratio of debt to multilateral creditors," which is more difficult to restructure, contributes to elevated capacity-to-repay risks.

### Debt vulnerabilities, sustainability, and fiscal projections
- Public debt is deemed sustainable but "at high risk of external and overall debt distress."
- Debt vulnerabilities improved in 2021-23 under the previous Fund-supported program, driven mostly by expenditure restraints.
- The planned 2024 fiscal consolidation is expected to deliver a reduction of public debt of about 6 percentage points of GDP.
- The medium-term fiscal framework relies on "enhanced domestic revenue mobilization and spending restraints" and foresees further fiscal consolidation to place public debt on a downward path amid "expiring debt deferrals and large development and social needs."
- Present and projected debt thresholds:
  - The PV of external debt "remains within the threshold of 40 percent of GDP for the entire forecast horizon."
  - The PV of total public debt is "projected to decline below the benchmark of 55 percent of GDP from 2024."
- Some liquidity indicators "breach their respective thresholds for some years" but "decline at the end of the projection period."

### Downside risks to capacity to repay
- Identified significant downside risks include:
  - the war in Ukraine,
  - commodity price shocks,
  - a global slowdown,
  - natural disasters,
  - other fiscal pressures.
- These risks could worsen debt-service burdens and external/liquidity positions.

### Mitigating factors and policy measures under the new ECF-supported program
- Mitigation of capacity-to-repay risks is expected from:
  - the authorities’ "strong track record of servicing their debt obligations to the Fund,"
  - strengthening of debt and liquidity management,
  - implementation of policies and reforms under the new ECF-supported program.
- Specific policy directions in the program include:
  - enhancement of fiscal buffers through both revenue and spending measures,
  - strengthening of external buffers through forex market and exchange rate policies,
  - authorities’ commitment to other structural reforms under the ECF arrangement.

### Related program financing and commitments (authorities' request and measures)
- The authorities request a 36-month arrangement under the Extended Credit Facility (ECF) in the amount of SDR74.64 million (120 percent of quota).
- They request disbursement of the first tranche of SDR 8.29 million, with SDR 4 million to be on-lent from the CBG to the treasury upon signing a memorandum of understanding.
- The MEFP and TMU are attached to the authorities’ request and form the basis of medium-term policy commitments.

### Macroeconomic context and policy settings relevant to repayment capacity
- Recent macro data and pressures:
  - GDP growth: 4.9 percent in 2022; projected above 5 percent in 2023; growth will peak "at around 6 percent in 2024," then stabilize "around 5 percent in the medium term."
  - Inflation: reached 18.4 percent (y-o-y) in July-August 2023.
  - Food inflation: 24.3 percent (y-o-y).
  - Electricity tariffs adjustment: 37 percent.
  - Dalasi depreciation vis-à-vis the US$: 21 percent (y-o-y); official exchange rate depreciated by 11 percent between end-December 2022 and end-October 2023; wedge with parallel rate about 9 percent.
  - Remittances: declined in 2022 but increased "by 15 percent during 2023H1 relative to 2022H1."
  - Tourist arrivals: 2023H1 increased by 25 percent relative to 2022H1 but "remain 20 percent below the figures in 2019."
  - Gross reserves: "about 4.4 months of prospective imports"; CBG net seller of forex since March 2023; CBG sold on a net basis the equivalent of US$35 million in the interbank forex market for the first nine months of 2023.
- Fiscal and public finance indicators:
  - Total revenue fell below projections by 0.6 percent of GDP in the first three quarters of 2023.
  - Domestic revenue increased by 33 percent in nominal terms compared to the same period in 2022.
  - Central bank dividend contributed 0.6 percent of GDP.
  - Wages increased 23 percent in nominal terms relative to the same period last year.
  - Capital spending increased 55 percent in nominal terms relative to the previous year but was below projections as a ratio of GDP by about 0.1 percentage point.
  - Overall deficit stood at 3.0 percent of GDP compared to a projection of 2.4 percent of GDP; excess net domestic borrowing by 1.4 percent of GDP.
  - Government will implement a fiscal consolidation plan to reduce the fiscal deficit by 1.8 percent of GDP between 2023 and 2026.
- Monetary and forex policy settings relevant to buffers:
  - Monetary policy: MPC hiked the policy rate to 17 percent in August 2023; the MPC "stands ready to further tighten the policy rate" if necessary; CBG aims to mop up excess liquidity via CBG bills in early 2024, use of the deposit window, and changing the reserves requirement ratio as needed.
  - CBG target for inflation: "around the CBG’s target of 5 percent."
  - Foreign exchange policy: CBG committed to "maintaining an exchange rate that fully reflects market forces" and moving forex transactions into the banking system; Daily Reference Rate and Weekly Valuation Rate replaced with a single official exchange rate; band around the reference exchange rate removed; guidelines for forex operations of regulated institutions to be prepared and published.

### Structural and governance reforms that support repayment capacity
- Progress and commitments:
  - SOE commission created following adoption of the SOE bill; performance contracts being extended to additional SOEs.
  - PFM bill undergoing amendments; PPP bill submitted to Cabinet; anticorruption bill under consideration at the National Assembly.
  - Authorities "stand ready to implement the recommendations from the recent governance diagnostics mission" by the Fund.

*Source: 1gmbea2024001 - 2.      The Gambia’s capacity to repay the Fund is adequate, but subject to significant risks*

### 12. The 2024 budget will pursue fiscal consolidation to curb public debt. We will anchor the

### 12. The 2024 budget will pursue fiscal consolidation to curb public debt. We will anchor the

### Fiscal framework and headline targets
- Anchor 2024 fiscal framework on an overall fiscal deficit of about 2.7 percent of GDP.
- Fiscal consolidation under the ECF-supported program aims to reduce the overall fiscal deficit by about 1.5 percentage points of GDP during the program period.
- Improvement in the domestic primary balance targeted at about 2 percentage points of GDP (the fiscal parameter under direct government control).
- Pace of spending will be tied to completion of major OIC-related infrastructure projects and containment efforts.

### Revenue-side measures
- Continue efforts to allow full passthrough of fuel prices while balancing social cohesion; targeted social programs contingent on completion of the social registry.
- Cabinet to adopt a revised GIEPA act with more limited tax incentives (structural benchmark end-June 2024). Revisions to include:
  - restrict coverage to priority sectors;
  - eliminate possibility to extend SICs based on expansion and re-investment;
  - cancel SICs that do not perform in line with expected deliverables;
  - exclude fuel from list of tax exempted goods;
  - require all SIC holders to be compliant with local tax obligations.
- Strengthen revenue collection and enforcement for the telecom sector through enhanced audits (structural benchmark end-September 2024).
- Expand rental property taxation by updating the rental property register.
- Enforce collection of CIT and withholding taxes on companies executing donor-funded projects.
- Bolster collection of non-tax revenue, including administrative fees not adjusted for several years.
- Ensure full operation of the platform and command center for the single window of customs administration (structural benchmark end-February 2024); thereafter complete the e-tracking system and the construction of a weigh bridge for domestic and re-export cargo.
- Accelerate digitalization through implementation of ITAS.
- Strengthen compliance risk management focused on key economic sectors; strengthen customs border and inland controls, improve post-clearance audits, and enhance internal integrity mechanisms.
- Develop a domestic revenue mobilization strategy (structural benchmark end-September 2024).

### Spending-side and PFM measures
- Rationalize subsidies to NFSPMC (GGC), NAWEC and subvented agencies.
- Prepare a study on consolidating redundant subvented agencies with MDAs (structural benchmark end-December 2024).
- Tighten overseas travel and execute infrastructure projects within available resources.
- Submit to the National Assembly a 2024 budget consistent with the program parameters before consideration of the new ECF program by the IMF Board (prior action).
- Expand scope of the Gambia Strategic Review Board (GSRB) selection criteria to domestically financed investment projects and PPPs, with reinforced GSRB appraisal function.
- Finalize and enact regulations for recently approved bills, including the GPPA and SOE acts; accelerate adoption of the PFM and PPP bills.
- Newly created directorate of revenue and tax policy to improve revenue forecasting and budget ceiling estimates to align annual budgets with the medium-term fiscal framework and the RF-NDP.
- Train all ministries on program-based budgeting and prepare a roadmap for Cabinet approval in early 2024 to ensure pilot ministries submit 2025 budget in compliance (structural benchmark end-December 2024).
- Pilot gender-responsive budgeting in five ministries for the 2024 budget and roll out progressively to all ministries.
- Improve effectiveness of the cash management committee.

### Medium-term fiscal strategy and innovative financing
- Intend to broadly base consolidation equally on domestic revenue efforts and domestically financed spending, while forcefully intensifying domestic resource mobilization.
- Explore innovative options to finance infrastructure without worsening debt vulnerabilities, including an Asset Recycling Program promoted by Africa50 (supported by the African Development Bank).
- Commit to ensuring innovative financing conforms with fiscal and debt objectives and does not create additional fiscal risks.
- Contain domestic borrowing and CBG advances, adhere to agreed external borrowing plan, and prevent SOE- and PPP-related fiscal risks and contingent liabilities.
- Build fiscal and forex buffers in preparation for expiration of debt deferrals.

### SOE sector reforms and governance
- Transform SOEs from fiscal burdens to revenue sources by improving governance and operational and financial performance.
- Expand signing of performance contracts to four other SOEs—Gambia International Airlines Ltd (GIA), Gambia Printing and Publishing Corporation (GPPC), National Food Security Processing and Marketing Corporation (NFSPMC-GGC), and Gambia Postal Services Corporation (GAMPOST) (structural benchmark end-February 2024).
- Pursue partial or full privatization of GAMCEL (structural benchmark end-March 2025).
- Continue and expand publication and coverage of the fiscal risk statement and financial performance of the SOE sector despite the backlog of audited financial statements for 2022 and 2023.
- Publish governance diagnostic report and finalize implementation plan (structural benchmark end-April 2024).
- Collaborate to accelerate adoption of the anti-corruption bill and set up a high-level anti-corruption commission.
- Transmit the Ombudsman reports for 2021 and 2022 to the National Assembly and publish on the website of the Office of the Ombudsman (structural benchmark end-March 2024).
- Prepare a revised draft of AML/CFT legal framework aligned with FATF standards (structural benchmark end-March 2024).
- Build capacity and accelerate digitalization of administrative processes for transparency and public access to laws and regulations.

### Unlocking growth potential and private sector measures
- Strengthen business environment: create and expand one-stop-shops for business creation and facilitation.
- Employment Policy target: create 150,000 jobs in the next five year.
- Revived National Business Council chaired by the President.
- Discuss establishment of a free trade zone around the Senegambia corridor to access the regional market.
- Develop a capital market to increase access to finance.
- Organize farmers to enhance self-financing, expand activities outside the four-month agricultural season, and revive non-farming rural activities.
- Review the Gambia Competition and Consumer Protection act.
- Set up a digital platform for business registration with EU and UNCTAD support (structural benchmark end-December 2024).
- Accelerate expansion of Banjul port and conduct studies for deep sea Sanyang port.
- Reform land tenure and land management systems.
- Strengthen bilateral cooperation, utilize ECOWAS trade agreement, and AfCFTA.

### Social inclusion, human capital, and safety nets
- Extend social registry to urban areas, including Banjul and the Kombo areas (structural benchmark end-December 2024); roll out targeted social programs thereafter in consultation with development partners.
- Registry intended to replace existing subsidy system as a more effective targeting tool.
- Improve education provision and quality: open a new university campus in Faraba and new TVET centers.
- Design and roll out a new health insurance scheme to improve access to health services.
- Enhance access to finance for women and youths, expand Women’s Enterprise Fund, and reduce dependence on informal financial services.
- Increase investment in maternal health and childcare services; close gender gap in higher education and labor markets.
- Continue implementation and expansion of gender budgeting pilot program.

### Climate change resilience
- Adopt Long-Term Climate-Neutral Development Strategy 2050 to realize the 2050 Climate Vision and meet Paris Agreement commitments; policies and actions deemed compatible with the goals of the 1.5°C Paris climate agreement.
- Policies to encourage renewable energy generation and energy security.
- Adaptation measures: strengthen early-warning systems, increase crop diversification and rotation, switch to drought-tolerant crop and animal species.
- Strengthen public finance and investment management to attract climate finance and benefit climate investment.
- Conduct a Climate-PIMA assessment and integrate climate considerations in PFM processes.

### Capacity development and IMF engagement
- Continue engagement with the IMF for TA missions in revenue administration, public financial management, macroeconomic statistics production and dissemination, tax policy, fuel pricing, forex policy, SOEs, and governance diagnostic.
- Work with TA to advance GDP rebasing project; TA including resident experts facilitates in-depth diagnostics.

### Program monitoring, reviews, and timelines
- Program subject to semiannual reviews and performance criteria, indicative targets and structural benchmarks as set out in Tables 1–3 and the Technical Memorandum of Understanding.
- Expect first program review (based on end-December 2023 quantitative targets and structural benchmarks around that period) to be completed on or after March 15, 2024.
- Second program review based on end-June 2024 targets expected on or after September 15, 2024.
- Third program review based on end-December 2024 targets expected on or after March 31, 2025.

### Key quantitative performance criteria and indicative targets (selected figures from Table 1)
- Overall presentation: cumulative from beginning of calendar year to end of month indicated; millions of dalasi, unless otherwise indicated.
- Performance criteria (2024 targets, cumulative from beginning of calendar year):
  - Net domestic borrowing of the central government (ceiling): Mar. 2,300; Jun. 1,300; Sep. 2,600; Dec. 2,800; (Dec. column also lists 2,700 in another row context).
  - Domestic primary balance (cumulative floor): Mar. -1,150; Jun. -160; Sep. -100; Dec. 1,100; (another entry shows 1,040).
  - Stock of net usable international reserves of the central bank (floor, US$ million): Mar. 280; Jun. 277; Sep. 265; Dec. 267; (another entry shows 282).
  - New external payment arrears of the central government (ceiling, US$ million): 2 (applies on a continuous basis): 0.0; 0.0; 0.0; 0.0; 0.0.
  - New nonconcessional external debt contracted or guaranteed by central government (ceiling, US$ million): 2: 0.0; 0.0; 0.0; 0.0; 0.0.
  - Outstanding stock of external public debt with original maturity of one year or less (ceiling, US$ million): 2: 0.0; 0.0; 0.0; 0.0; 0.0.
  - New concessional external debt contracted or guaranteed by central government (ceiling, US$ million): 3: 119; 90; 90; 90; 90.
- Indicative targets:
  - Total tax revenue (floor): Mar. 13,800; Jun. 4,400; Sep. 8,900; Dec. 13,100; (another entry 17,200).
  - Monthly ceiling on central bank credit to the central government at non-market terms (GMD millions): 4: 0; 0; 0; 0; 0.
  - Stock of net domestic assets of the central bank (ceiling): 10,904; 11,365; 11,825; 12,285; 12,745.
  - Poverty-reducing expenditure (floor): 10,000; 2,500; 5,000; 7,500; 11,000.
- Memorandum items:
  - Budget Support (grants, US$ millions): 64.8; 8.9; 8.9; 23.3; 50.0.
  - Base Money (stock, GMD millions): 21,234; 21,577; 21,919; 22,261; 22,603.
  - IMF disbursements (SDR millions): 5.0; 11.2; 22.4; 22.4; 33.5.
- Notes:
  - 2 These criteria apply on a continuous basis.
  - 3 The debt limit is formulated in nominal terms due to authorities’ limited capacity to monitor and observe conditionality on aggregate debt levels (including in PV terms).
  - 4 First disbursement of SDR 5.0 million (8.0 percent of quota) was made on March 31, 2020.
  - 1 For definitions and related adjustors, see the Technical Memorandum of Understanding (TMU). End-June and End-December are test dates. Targets for end-March and end-September are indicative targets (ITs), except for continuous performance criteria.
  - The zero ceiling applies to all outstanding credit at non-market terms as of the end of each quarter, excluding the RCF onlending and the 30-year bond held by the CBG.

*Source: 1gmbea2024001 - 12. The 2024 budget will pursue fiscal consolidation to curb public debt. We will anchor the (PDF chapter).*

### Introduction

### Introduction

### Purpose and scope
- Sets out the understandings between The Gambian authorities and IMF staff regarding definitions of quantitative targets and structural benchmarks to monitor performance under the ECF-supported program through January 2027.
- Specifies related reporting requirements and describes adjustors that will be applied to certain quantitative targets.
- Unless otherwise specified, all quantitative performance criteria (PCs) and indicative targets (ITs) will be evaluated in terms of cumulative flows from the beginning of the period.

### A. Cumulative Floor on the Central Government Domestic Primary Balance
- Definition of central government: institutions currently covered under the state budget, including central administration, public institutions and other entities financed through the budget; includes Ministries, Departments, and Agencies; excludes local and regional governments and public enterprises.
- Domestic primary balance (above-the-line): measured in accordance with the monthly consolidated Central Government budget report on budget execution (Statement of Government Operations) for the month and cumulatively from the beginning of the year.
- Calculation: Domestic primary balance = Domestic revenue (cash basis; tax and non-tax revenues) minus expenses (except interest payment) and domestically financed capital expenditures.
- Revenue exclusions: financial transfers from the Central Bank (except dividends payments), interest income from intra-public sector holdings of securities and debt obligations, proceeds from sale of financial assets, and SDRs allocated by the Fund or received bilaterally from other IMF members.
- Adjuster: The cumulative floor will be adjusted downward by the excess of the dalasi equivalent of total budget support grants received in that period relative to program forecasts specified below.
- Supporting material: Reporting on the domestic primary fiscal balance will form part of the consolidated budget report described in ¶32.

### B. Net Domestic Borrowing (NDB) of the Central Government
- Definition: Change in net treasury position at the Central Bank of the Gambia, the government bond (30-year bonds) held by the CBG, and the stock of securities (T-bills, T-bonds, Sukuk, NAWEC Bond) held by banks and the non-monetary sector.
- Net treasury position components: balance of the treasury main account (TMA), the consolidated revenue account, the revenue accounts, the special deposit accounts (T-bills, T-bonds and Sukuk) accounts, and any other accounts that receive central government revenue or pay central government spending (currently the special deposit account, Gambia Africard revenue account, Senegambia bridge toll facility, and Covid 19 recovery project; list to be updated at every program review).
- Exclusions: (i) on-lending of IMF credit (under RCF or ECF) to the budget and lending to the Treasury of any portion of the SDR general allocation, (ii) changes in balances of other deposit accounts (including project accounts), and (iii) face value of government securities issued to increase the CBG’s capital to statutory level in the CBG Act.
- Adjuster: NDB targets adjusted downward/upward by the excess/shortfall of the dalasi equivalent of total budget support grants received relative to program forecasts. Upward adjustment cap to compensate for shortfall: may not exceed GMD 1 billion at end-December 2023 and GMD 1 billion at each quarter of 2024.
- Program forecasts of external budget support grants (Cumulative flow in millions of US dollars):
  - December 2023: 44.8
  - March 2024: 8.9
  - June 2024: 8.9
  - September 2024: 23.3
  - December 2024: 50.0
- Supporting material: Reporting on net domestic borrowing will form part of the consolidated budget report (¶32) and the IMF weekly data produced by the Central Bank.

### C. Net Domestic Assets (NDA) of the Central Bank (CBG)
- Definition: NDA = Reserve money − Net foreign assets of the CBG.
- Reserve money: currency issued by the CBG (currency in circulation) + deposits of commercial banks at the CBG.
- Net foreign assets: foreign assets minus foreign liabilities; foreign assets/liabilities defined as claims on nonresidents and liabilities to nonresidents, respectively.
- Valuation: For program monitoring, foreign assets and liabilities will be converted at the prevailing exchange rates.
- Supporting material: Monthly CBG balance sheet (compiled based on the TMU rates) transmitted within four weeks of month end; balance sheet compiled on a current-rate basis also to be submitted for analytical purposes.

### D. Net Usable International Reserves (NIR) of the CBG
- Definition: NIR = Usable reserve assets − Reserve liabilities.
- Usable reserve assets: readily available claims on nonresidents denominated in convertible foreign currencies, including CBG holdings of SDRs, foreign currency cash, foreign currency securities, deposits abroad, and country’s reserve position at the IMF.
- Exclusions from usable assets: assets pledged/collateralized/encumbered, claims on residents, claims from derivatives vis-à-vis domestic currency, precious metals, assets in nonconvertible currencies, and illiquid assets (including capital shares in international organizations).
- Reserve liabilities: all foreign exchange liabilities to residents and nonresidents, including commitments to sell foreign exchange from derivatives, and all credit outstanding from the IMF, but excluding liabilities to the IMF’s SDR Department.
- Valuation: For monitoring, foreign assets and liabilities converted at prevailing exchange rates.
- Adjusters:
  - Quarterly NIR targets adjusted downward/upward by the US dollar equivalent of the shortfall/excess of total budget support grants received in that quarter relative to program forecasts (table above).
  - Downward adjustment capped at US$40 million to compensate for shortfall in budget support.
  - In case of an IMF SDR allocation, NIR will be adjusted upward by the amount of the SDR allocation.
- Supporting material: Detailed reserve statement with end-month data on NIR transmitted within seven days of month end.

### E. New External Debt Payment Arrears of the Central Government
- Definition of external debt: outstanding actual (not contingent) liabilities requiring future payment(s) of principal and/or interest owed to nonresidents by residents.
- External debt payment arrears: central government external obligations not paid when due per contractual terms (accounting for contractual grace periods).
- Exclusions from arrears: (i) government financial obligations for which creditor has accepted in writing to negotiate alternative schedules before the relevant payment; (ii) arrears on claims the government has represented as disputed; (iii) arrears that cannot be settled due to international sanctions; (iv) arrears on trade credits, except arrears on payments due to the International Islamic Trade Finance Corporation (ITFC).
- Target: Non-accumulation of new external debt payment arrears by the central government is a continuously observed target.
- Supporting material: Monthly accounting of non-reschedulable external arrears (if any) by creditor type, transmitted within four weeks of month end; separate accounting for Central Government and other public sector entities by creditor type. Any non-observance must be reported immediately.

### F. New Non-Concessional External Debt Contracted or Guaranteed by the Central Government
- Definition: Refers to new non-concessional external debt contracted or guaranteed by the Central Government denominated in any currency other than the Gambian dalasi; includes commitments contracted or guaranteed for which value has not been received.
- Guarantees: Arise from explicit legal or contractual obligation of the central government to service a third-party debtor’s debt.
- Debt considered contracted when conditions for entry into effect met, including National Assembly approval.
- Exclusions: Loans or purchases from the IMF and concessional debts as defined below; any debt with maturity of one year or less.
- Assessment: Continuous.
- Concessionality rule (¶20): A debt is concessional if grant element ≥ 35 percent. PV of debt at contracting is calculated by discounting future debt-service payments. For variable-rate debts (benchmark + fixed spread), PV calculated using program reference rate plus fixed spread.
  - Program reference rate for six-month USD LIBOR: 2.42 percent (fixed for program duration).
  - Spread of six-month EURIBOR over six-month USD LIBOR: -250 basis points.
  - Spread of six-month JPY LIBOR over six-month USD LIBOR: -250 basis points.
  - Spread of six-month GBP LIBOR over six-month USD LIBOR: -150 basis points.
  - For debts with grant element equal or below zero, PV set equal to nominal value.
  - Discount rate used: unified discount rate of 5 percent per Executive Board Decision No. 15248-(13/97).
- Supporting material: Quarterly comprehensive loan-by-loan accounting of all new concessional and non-concessional debt contracted or guaranteed by the Central Government, transmitted within four weeks of quarter end; immediate reporting of any non-observance.
- Requirement: MoFEA to forward within four weeks of contracting/guaranteeing any new external loan the loan’s terms and conditions including interest rate, grace period, maturity, interest, fees, principal payment schedule and all annexes.

### G. New Concessional External Debt Contracted or Guaranteed by the Central Government
- Definition: Ceiling on new concessional external debt contracted or guaranteed by the Central Government denominated in any currency other than the Gambian dalasi; concessionality as defined in ¶16.
- For borrowing packages with loan and grant components, only loan components count toward the borrowing limit if overall package meets 35 percent grant element threshold.
- Supporting material and data provision: Refer to ¶17 and ¶18.

### H. Outstanding Stock of External Public Debt with Original Maturity of One Year or Less
- Definition: Stock of outstanding external public debt with original maturity of one year or less, owed or guaranteed by the public sector (public sector = Central Government, regional governments and other public agencies, including the central bank).
- Exclusions: Trade credits are excluded, including ITFC credits.
- Assessment: Continuous.
- Supporting material: Quarterly comprehensive record of all external debt with original maturity less than one year owed or contracted by the public sector, transmitted within four weeks of quarter end; immediate reporting of any non-observance.

### I. Tax Revenue (Indicative Target)
- Definition: Taxes and duties collected by the Domestic Taxes Department and Customs and Excises Department of the Gambia Revenue Authority (GRA).
- Tax revenue equals the sum of revenues collected against all the tax codes outlined in Text Table 2 (Customs and Excise; Domestic Taxes).
- Exclusions: Non-tax revenue (licensing fees, fines, levies collected by GRA) and levies collected by the GRA on behalf of other organizations (National Education & Technology Training Levy, AU Levy, ECOWAS Levy).
- Supporting material: Monthly report on revenue collected by the GRA transmitted within four weeks of month end.
- Text Table 2 (selected entries as presented):
  - Customs and Excise: 115101 Import Duty Oil; 115102 Import Duty Non-Oil; 114121 Import VAT Oil; 114122 Import VAT Non-Oil; 114201 Import Excise Tax; 114202 Domestic Excise Duty; 115602 Environmental Tax on Imports; 115201 Export Duties; 111301 Miscellaneous
  - Domestic Taxes: 111101 Personal Tax; 111201 Company Tax; 113301 Capital Gains; 112010 Payroll Tax; 114523 Business Registration Fees; 114404 Entertainment; 142250 Pool Betting Levy; 114402 Air Transport Levy; 111102 Stamp Duty; 114111 Environmental Tax; 114123 Excise Telecom; 114521 Casino, Gaming & Machines Licences; 114533 Value Added Tax (VAT); 142231 Road tax; 114528 Firearms and games licenses; 142205 International Certificate for Motor Vehicles; 142206 General Dealers License; 142230 Mandatory Fine for Motor Traffic Violation

### J. Central Bank Credit to the Central Government at Non-Market Terms
- Definition: Consolidated balance on the Treasury Main Account, Consolidated Revenue Fund, other revenue accounts, and special security proceeds accounts; includes all gross claims on the Central Government on the central bank balance sheet with terms materially different from market terms for Treasury bills and bonds at acquisition time.
- Also covers overdue payments of principal and interest on Central Government securities held by the central bank.
- Assessment: End of each month.
- Monitoring rule: Negative balance of the TMA should not exceed 10 percent of the previous year’s tax revenue. Overdrafts on the TMA shall be fully repaid at year end.
- Supporting material: Reporting on new central bank credit to government at nonmarket terms will form part of monetary sector data described in ¶34 and ¶35.

### K. Poverty-Reducing Expenditures
- Definition: Expenditures financed out of The Gambia Local Fund (GLF) on the following areas:
  - Agriculture and Natural Resources
  - Education
  - Health
  - Nutrition, Population and HIV-AIDS
  - Infrastructure Program
  - Social Fund for Poverty Reduction
  - Implementation and Monitoring of Poverty Reduction Programs
  - Support to Cross-Cutting Programs
  - ICT Research and Development
  - Decentralization and Local Government Capacity Building
  - Governance and Civil Service Reform Program
- Supporting material: Monthly report on poverty-reducing expenditures transmitted within four weeks of month end.

### Other data requirements and reporting standards
- In addition to data for PCs, ITs, and structural benchmarks, authorities will transmit specified data within timeframes below.

### L. Prices
- Monthly disaggregated consumer price index, including weights for each major category, with January 2020 = 100, transmitted within four weeks of month end.

### M. Government Accounts Data
- Monthly consolidated Central Government budget report (Statement of Government Operations) for the month and cumulatively from beginning of year, transmitted within four weeks of month end, covering:
  - (i) Revenue data by major items (taxes on income, profits, and capital gains; domestic taxes on goods and services; taxes on international trade and transactions; other taxes; non-tax revenue).
  - (ii) External grants by type (e.g., budget support grants, project grants).
  - (iii) Details of recurrent expenditure (goods and services, interest payments, subsidies and other current transfers).
  - (iv) Details of capital expenditure and net lending (including externally financed capital expenditure, expenditure from the Gambia Local Fund, and net lending).
  - (v) The overall balance, the primary and the basic balance.
  - (vi) Details of budget financing (including net domestic and net external borrowing and their components).

*Source: Introduction (1gmbea2024001).*

### 38.      End-week data on net domestic borrowing will be transmitted weekly within five

### 1gmbea2024001 - 38.      End-week data on net domestic borrowing will be transmitted weekly within five

### Net domestic borrowing
- "End-week data on net domestic borrowing will be transmitted weekly within five business days of the end of each week."

### Monetary Sector Data
- "The balance sheet of the CBG, prepared on the basis of current and program exchange rates, will be transmitted on a monthly basis to the IMF within four weeks of the end of each month."
- The CBG balance sheet will "explicitly identify all claims on, and liabilities to, the government."
  - Claims include: "overdrafts, holdings of treasury bills, government bonds, advances to the government in foreign currency, and other claims on the government."
  - Liabilities include: "balances in the treasury expenditure account, the consolidated revenue fund and other revenue accounts, the treasury bill special deposit account, the privatization proceeds account, and other deposit accounts."
- "The transmission will include the individual balances on the government accounts listed in Table 1."
- "The consolidated balance sheet of the commercial banks and a monetary survey (i.e., a consolidation of the accounts of the CBG and commercial banks), including foreign currency deposits held by residents of The Gambia with commercial banks, will be transmitted within four weeks of the end of each month."
- "Daily data on reserve money will be transmitted weekly within five business days of the end of each week."

### Treasury Bill Market and Interbank Money Market
- "Weekly data on the amounts offered and issued, net issuance, over/under subscription, and yields (interest rates) of the various instruments will be transmitted on a weekly basis within five business days of the end of each week."
- "Data on treasury bills and CBG bills outstanding (both at face value and at discounted value and including information on the distribution by bank and non-bank holders) will be transmitted on a monthly basis within six weeks of the end of each month."
- "Daily data on the interbank money market (interest rates, maturities, and volumes of transactions) will be transmitted weekly within five business days of the end of each week."

### External Sector Data
- "The CBG will also forward within four weeks of the end of each month, data on transactions in official reserves."
- "Daily interbank market exchange rates, defined as the simple average of the daily weighted average buying and selling rates, will be transmitted on a weekly basis within five business days of the end of the week."
- "Weekly interbank market exchange rates, defined as the simple average of the weekly weighted average buying and selling rates, will be transmitted on a monthly basis within seven days of the end of the month."
- "The CBG’s monthly average and end-month exchange rates, including those for all currencies in which foreign assets and liabilities are denominated, will be transmitted within seven days after the end of each month."
- "Daily data on foreign exchange intervention by the central bank will be transmitted weekly within five business days of the end of each week."
- "A detailed reserve statement with end-week data on net usable international reserves of the CBG will be transmitted weekly within five business days of the end of each week."
- "The CBG will also forward monthly data on the volume of transactions (purchases, sales, and total) in the foreign exchange market by each major group of participants (CBG, commercial banks, and foreign exchange bureaus) in dalasi within seven days of the end of each month."
- "The CBG will publish daily on its website the official exchange rates reflecting the market conditions prevailing on that same day."

### Public Enterprises’ Data
- "MoFEA will forward within eight weeks of the end of each quarter, data on monthly cash flow of NAWEC, GNPC, GAMTEL, GAMCEL, GCAA, SSHFC, and NFSPMC."

*Source: 1gmbea2024001*

### 51.      MoFEA will forward within eight weeks of the end of each quarter, data on the stock

### 1gmbea2024001 - 51.      MoFEA will forward within eight weeks of the end of each quarter, data on the stock

### Quarterly reporting requirement
- MoFEA will forward within eight weeks of the end of each quarter, data on the stock of consolidated Central Government’s stock of payment arrears to NAWEC at the end of each month.

### Membership, IMF resource positions, and arrangements
- Membership status: Joined September 21, 1967. Accepted Article VIII obligations on January 21, 1993.
- Quota and holdings:
  - Quota: 62.20 (SDR Million) = 100.00 percent of quota
  - IMF's Holdings of Currency (Holdings Rate): 52.91 = 85.06 percent
  - Reserve Tranche Position: 9.35 = 15.03 percent
- SDR Department:
  - Net cumulative allocation: 89.38 = 100.00 percent
  - Holdings: 55.86 = 62.50 percent
- Outstanding Purchases and Loans:
  - RCF Loans: 27.99 = 45.00 percent of quota
  - ECF Arrangements: 70.55 = 113.42 percent of quota
- Latest financial commitments (selected):
  - ECF arrangement approved Mar 23, 2020; Date of Expiration Jun 14, 2023; Amount Approved 70.55 (SDR Million); Amount Drawn 70.55 (SDR Million)
- Outright Loans (commitment dates and amounts):
  - RCF Apr 15, 2020: Amount Approved 15.55 (SDR Million); Amount Drawn 15.55 (SDR Million)
  - RCF Jun 26, 2017: Amount Approved 11.66; Amount Drawn 11.66
  - RCF Apr 02, 2015: Amount Approved 7.78; Amount Drawn 7.78

### Projected payments to the Fund (SDR Million; based on existing use of resources and present holdings of SDRs)
- Forthcoming principal and charges/interest (annual):
  - 2023: Principal 0.78; Charges/Interest 0.34; Total 1.12
  - 2024: Principal 3.89; Charges/Interest 1.37; Total 5.25
  - 2025: Principal 5.17; Charges/Interest 1.36; Total 6.53
  - 2026: Principal 9.44; Charges/Interest 1.36; Total 10.81
  - 2027: Principal 13.94; Charges/Interest 1.36; Total 15.31

### HIPC, MDRI, and CCR implementation (selected figures)
- HIPC Enhanced Framework:
  - Decision point date: Dec 2000
  - Assistance committed by all creditors: 66.60 (US$ Million)
  - IMF assistance (US$ million): 2.30 (SDR equivalent in millions) 1.80
  - Completion point date: Dec 2007
  - Total IMF disbursements: 2.29 (SDR Million)
- MDRI-eligible debt (SDR Million): 9.42
  - Financed by MDRI Trust: 7.44
  - Remaining HIPC resources: 1.98
- Catastrophe Containment and Relief (CCR) — Amounts committed and disbursed (SDR million):
  - Apr 13, 2020: 2.10 committed, 2.10 disbursed
  - Oct 02, 2020: 2.10 committed, 2.10 disbursed
  - Apr 01, 2021: 1.87 committed, 1.87 disbursed
  - Oct 06, 2021: 1.09 committed, 1.09 disbursed
  - Dec 15, 2021: 0.78 committed, 0.78 disbursed

### Safeguards, exchange rate regime, and recent developments
- Safeguards assessment (CBG, July 2020): Noted progress in legal framework, internal audit modernization, and financial reporting; recommendations included:
  - Strengthen external audit arrangement with the Auditor General.
  - Ensure compliance with International Financial Reporting Standards.
  - Address capacity constraints in the Internal Audit Department.
  - Revise the Audit Committee Charter to explicitly provide for independence, including removing requirement for Deputy Governors to attend meetings.
  - Engage an expert in financial reporting and/or auditing to assist the Audit Committee.
- Progress since 2020: Considerable progress including strengthening CBG’s financial position and external audit mechanism, and revising the Audit Committee Charter; further progress needed in foreign reserves management and internal audit capacity.
- Exchange rate arrangement:
  - De jure: “free floating”
  - De facto: “other managed”
  - W-ERM II participation requires maintaining spot exchange rate between the dalasi and the US dollar within ±15% of the central rate; measures not yet implemented.
  - Since mid-2022: tight foreign exchange market, depreciation of the Dalasi, emergence of a wedge of about 10 percent between the official and the parallel exchange rate.
- Last Article IV consultation: Executive Board concluded November 24, 2021.

### Technical assistance (selected missions and topics; dates preserved)
- Fiscal Affairs Department (selected):
  - October 2023: TA mission advised on digitalization of internal auditing functions.
  - September 2023: TA mission provided training on customs border and inland control.
  - August/September 2023: TA mission advised on customs risk management.
  - August 2023: TA mission advised on development of an organogram for SOE commission.
  - July/August 2023: TA mission advised on ITAS implementation.
  - March 2023: TA mission provided training on customs risk management.
  - January 2023: TA mission advised on international profit shifting and tax incentives; also advised on petroleum fiscal regime; performed a governance diagnostic.
- Monetary and Capital Markets Department (selected):
  - September/October 2023: TA mission followed up on enhancing stress testing framework.
  - August 2023: TA mission advised on developing forecasting and policy analysis system.
  - June 2023: TA mission advised on improving FX market operations and on improving IFRS implementation.
  - March 2023: TA mission advised on improving cyber resilience.
  - January 2023: TA mission advised on improving liquidity forecasting and liquidity management framework.
- Statistics Department (selected):
  - June 2023: TA mission provided support on the development of quarterly GDP.
  - April 2023: TA mission advised on BOP/IIP source data.
  - December 2022: TA mission advised on GDP rebasing.
  - March/April 2022: TA mission advised on improving the PPI and provided support on the development of quarterly GDP.
- Resident Representative: Mr. Patrick Gitton since September 8, 2023.

### Relations with other financial institutions
- Collaborates with World Bank Group, African Development Bank, and Islamic Development Bank (as of December 12, 2023).

### Statistical issues, data adequacy, and dissemination
- Overall: Data provision has some shortcomings but is broadly adequate for surveillance.
- National Accounts:
  - GBoS implemented SNA 2008 through GDP rebasing to base year 2013.
  - Published quarterly GDP estimates for 2013Q1-2022Q4 in May 2023.
  - Capacity and financial constraints remain for timely processing.
- Price statistics:
  - GBoS working to update CPI weights using 2020 Integrated Household Survey (IHS); current CPI weights from 2015/16 IHS.
- Government Finance Statistics:
  - Upgrading IFMIS to apply GFSM 2014; monthly data on domestic government financing available with a delay of about four weeks.
  - Compilation of project grant disbursements and use remains a challenge.
- Monetary and Financial Statistics:
  - CBG reports using Standardized Report Forms; reports to STA with a lag of 3 to 6 months; gap in historical data between May 2015 and December 2016.
  - Coverage of ODCs excludes credit institutions and deposit-taking microfinance companies.
  - CBG developing data for other financial corporations (insurance corporations and National Provident Fund).
- Financial sector surveillance:
  - Data quality improved after automated platform for regulatory returns; cross border exposure data for financial corporations not available.
  - CBG reported FSIs to STA in October 2016 (11 of 12 core indicators and 8 encouraged indicators) but does not regularly update FSIs.
- External sector statistics:
  - CBG produces quarterly BOP following BPM6 and recently resumed BOP data submission to STA.
  - Shortcomings: All transfer inflows classified as current transfers (some relate to real estate purchases by nonresidents); lack of reliable sources for direct investment and other financial account transactions; financial account transactions of central bank and commercial banks estimated as differences of positions without exchange rate change adjustments, causing incorrect recording of revaluations as transactions.
  - A foreign assets and liabilities survey (FALS) was conducted in 2022 covering 2015-2020.
  - 2023 TA assisted preparation of preliminary partial IIP statistics for 2021.
- Data standards:
  - Implemented e-GDDS by launching National Summary Data Page in May 2018.
  - A data ROSC was published on December 1, 2005.

### Common Indicators Required for Surveillance (as of November 29, 2023) — selected timeliness and frequency entries
- Reserve/Base Money: Date of latest observation 8/2023; Date Received 9/2023; Frequency of Data D W M; Frequency of Reporting W W M; Frequency of Publication M M M
- Broad Money: Date of latest observation 8/2023; Date Received 9/2023; Frequency of Data M; Frequency of Reporting M; Frequency of Publication M
- Consumer Price Index: Date of latest observation 10/2023; Date Received 11/2023; Frequency M M M
- Revenue, Expenditure, Balance and Composition of Financing – Central Government: Date of latest observation 10/2023; Date Received 11/2023; Frequency M M M
- External Current Account Balance: Date of latest observation Q2/2023; Date Received 9/2023; Frequency Q Q Q
- GDP/GNP: Date of latest observation 2022; Date Received 5/2023; Frequency A A A
- Gross External Debt: Date of latest observation 8/2023; Date Received 10/2023; Frequency Q I A

### Debt Sustainability Analysis (summary findings)
- Joint Bank-Fund DSA conclusions:
  - Risk of external debt distress: High
  - Overall risk of debt distress: High
  - Granularity in the risk rating: Sustainable
  - Application of judgment: No
- Key DSA findings:
  - Overall and external debt distress risk ratings remain high and public debt continues to be deemed sustainable.
  - Under the updated macro framework, breaches remain of indicative thresholds for:
    - PV of external debt-to-exports
    - External debt service-to-exports
    - External debt service-to-revenue
  - Breaches primarily reflect continued weaknesses in projected exports in the early years and rising debt service commitments in the medium term.
  - PV of overall debt-to-GDP ratio remains on a downward sloping path and drops below its benchmark of 55 percent of GDP in 2024, supported by fiscal consolidation, reliance on grants and concessional loans, and development partner support.
  - Downside risks: protracted war in Ukraine and the path of the COVID-19 pandemic that could weaken recovery, intensify fiscal pressures, and adversely affect the debt profile.
- Composite Index and capacity:
  - The Gambia’s Composite Index is estimated at 2.99 and is based on October 2023 WEO update and 2022 WB CPIA published in July 2023; the debt carrying capacity remains medium.

*Prepared By Staff of the International Monetary Fund; THE GAMBIA — STAFF REPORT FOR THE 2023 ARTICLE IV CONSULTATION AND REQUEST FOR A PROGRAM SUPPORTED UNDER THE EXTENDED CREDIT FACILITY ARRANGEMENT—INFORMATIONAL ANNEX; December 18, 2023*

### 1.      Similar to the previous DSA in June 2023 (sixth ECF review), the current DSA uses end-2022

### 1gmbea2024001 - 1.      Similar to the previous DSA in June 2023 (sixth ECF review), the current DSA uses end-2022

### Coverage of public debt and contingent-liability design
- Public sector coverage:
  - Central government: included
  - Central bank (borrowed on behalf of the government): included
  - Government-contracted State-owned enterprise (SOE) debt: included
  - Guarantees to other entities (including SOEs): included
- Definition and measurement:
  - Uses a currency-based definition of external debt. There is no significant difference between a currency-based and residency-based definition of external debt.
- SOE-related figures:
  - Outstanding external loans contracted by the Government for SOEs amounted to 16.6 percent of GDP at end-2022.
  - Outstanding debt to ITFC amounted to 1.1 percent of GDP at end-2022.
  - Accounting for covered on-lent, guaranteed external and domestic debt, the unguaranteed SOE debt approximates to 2.0 percent of GDP.
- Contingent liability tailored stress-test settings:
  - Other elements of general government not captured: 0.0 percent of GDP
  - SOE debt (guaranteed and not guaranteed by the government): 2.0 percent of GDP
  - PPP: 35 percent of PPP stock → set to 0.00 (PPPs are estimated to be marginal as a proportion of GDP)
  - Financial market shock: 5 percent of GDP (default minimum for LICs)
  - Total tailored contingent-liability shock (2+3+4+5): 7.0 percent of GDP
- Notes on methodology:
  - Default shock of 2% of GDP triggered where government-guaranteed debt not fully captured; can be reduced if already included and risks negligible.
  - Locally issued LC-denominated debt held by non-residents and locally issued FX-denominated debt held by residents are insignificant.

### Recent debt developments and composition (end-2022)
- Stock ratios:
  - Total public debt-to-GDP: about 84 percent as of end-2022.
  - External debt-to-GDP: about 52 percent as of end-2022.
- Creditor composition of PPG external debt:
  - Multilateral creditors: 68 percent
  - Bilateral creditors: 29 percent
  - Commercial creditors: 3   percent
  - Around 30 percent of PPG external debt is owed to the IMF and MDBs; about 70 percent is owed to a combination of various creditors from the Middle East.
- Debt-service and undisbursed loans:
  - Overall external debt service between 2022-2029 (existing debt baseline): cumulative US$652 million.
    - Amortization: $562 million
    - Interest charges: $90 million
  - Undisbursed loans: US$250 million in December 2022 (compared to US$298 million at end-2021).
- Arrears:
  - The Gambia has arrears on external debt owed to Libya and Venezuela; discussions on debt reconciliation with Libya ongoing (most recent correspondence March 2022).

### Macroeconomic assumptions underpinning the baseline
- Growth:
  - Real GDP growth: revised to 5.3 percent in 2021 and 4.9 percent in 2022.
  - Growth projected to hover around 6 percent in 2023-24.
  - Projected long-term steady-state growth: 5 percent.
- Inflation and drivers:
  - Headline inflation: 18.5 percent (y-o-y) in September 2023.
  - Contributing factors: food inflation 24.4 percent; electricity tariffs adjustment 37 percent; depreciation of the Dalasi vis-à-vis the US$ 10.2 percent (y-o-y).
  - Inflation projected to gradually ease and converge to the CBG’s target of 5 percent from 2026.
- Fiscal:
  - Fiscal deficit: authorities committed to achieve an overall fiscal deficit of 2.3 percent of GDP at end-2023.
  - Fiscal consolidation measures: electricity tariff adjustment, adjustments to domestic fuel prices, revenue mobilization (streamlining tax exemptions, cleansing tax ledgers, implementing Asycuda World, consolidating toll bridge collection), privatization proceeds, dividend payments, asset recycling, sale of stolen assets under the Janneh Commission.
  - Financing composition assumption: over next five years, 80 percent of all new domestic debt financed via T-bills, 15 percent via 3-year bonds, remaining via 5-year bonds; gradual shift toward longer-term maturities in the medium term.
- External financing:
  - Expected sources: multilaterals and official bilaterals, including IMF’s new ECF lending (100 million US dollars during 2024-2026) and World Bank IDA financing.
  - No new commercial borrowings assumed.
- Current account and reserves:
  - Current account deficit in 2022: 4.2 percent of GDP (or US$ 91 million).
  - Gross international reserves: US$454.7 million in 2022, equal to 21 percent of GDP or 5.3 months of prospective imports.
  - Reserves declined to US$426 million in October 2023 due to higher imports.
- External shocks and uncertainty:
  - Macroeconomic outlook subject to exceptionally large uncertainty owing to the war in Ukraine and conflict in the Middle East.
  - Pressures on balance of payments and foreign exchange expected to persist in 2023-24 and possibly longer if external shocks do not dissipate.

### Realism and consistency checks
- The DSA is consistent with the macroeconomic framework in the staff report and assumes sound macroeconomic policies, structural reforms, and an ambitious infrastructure investment plan.
- Fiscal adjustment:
  - Projected fiscal adjustment for next three years is in the top quartile of approved Fund-supported programs for LICs since 1990.
  - Drivers: phasing out COVID-19 and war-related measures, completion of OIC-related projects, revenue measures, development partner disbursements.
- Investment and growth drivers:
  - Government investment contribution to growth is conservative and broadly in line with historical magnitudes.
  - Baseline growth deviations relative to different fiscal multiplier scenarios are acknowledged; projected rebound seen as reasonable given partner support and strong policies.
- Residuals in debt forecasts:
  - Residuals include real exchange rate movements, debt changes not captured by debt-creating flows (e.g., project grants), and coverage adjustments between fiscal accounts and DSAs.
  - Relatively large residual in 2023 partly attributed to debt data reconciliation.

### Country classification and stress-test thresholds
- Capacity classification:
  - Uses CI vintage October 2023 WEO and 2022 CPIA.
  - The Gambia’s CI score: 2.99 (classified as “medium”), higher than in the previous DSA.
  - Main contributors to CI score: import coverage of reserves (most significant) and CPIA value.
- Relevant thresholds for public and publicly guaranteed external debt:
  - PV of debt-to-GDP ratio: 40 percent
  - PV of debt-to-exports ratio: 180 percent
  - Debt service-to-exports ratio: 15 percent
  - Debt service-to-revenue ratio: 18 percent
- Benchmark for PV of total public debt-to-GDP ratio: 55 percent

*Source: 1gmbea2024001 - 1.      Similar to the previous DSA in June 2023 (sixth ECF review), the current DSA uses end-2022*

### 8.      Stress tests follow the standardized settings, with none of the individual tailored stress tests

### 8.      Stress tests follow the standardized settings, with none of the individual tailored stress tests applicable for The Gambia

### Stress test settings
- The standardized stress tests use the default settings.
- The combined contingent liabilities test assumes a shock of 7.0 percent of GDP (5 percent of GDP for financing sector shock and 2.0 percent of GDP for non-guaranteed SOEs debt).

### External DSA — baseline and stress test findings
- Baseline scenario:
  - Three of the four external debt indicators breach the threshold for varying periods within the forecast horizon.
  - PV of external debt-to-exports breaches the threshold level of 180 in 2023 and 2024, then falls below the threshold and continues to decline for the remainder of the projection period.
  - Debt-service-to-exports ratio breaches the threshold level of 15 percent in 2023, and again between 2025-27.
  - External debt service-to-revenue ratio breaches the threshold level of 18 percent in 2023, and then again between 2025-28, before falling below the threshold for the remainder of the forecast horizon.
  - PV of external debt-to-GDP remains within the threshold level of 40 percent for the entire forecast horizon.
- Stress test scenarios:
  - Under the combined bound test, PV of debt-to-GDP breaches the threshold level of 40 percent in 2024 and falls below the threshold in 2030.
  - Under the bound test of exports, PV of debt-to-exports breaches the threshold level of 180 percent in 2023 and remains above the threshold for the remainder of the forecast horizon.
  - Under the bound test of exports, debt-service-to-exports ratio breaches the threshold level of 15 percent in 2023 and remains above the threshold for the remainder of the forecast.
  - With the combined bound test, debt-service-to-revenue ratio breaches the threshold level of 18 percent in 2023 and remains above the threshold for the remainder of the forecast horizon.

### Debt carrying capacity and thresholds (applicable thresholds reported)
- PV of debt in % of Exports: 180
- PV of total public debt in percent of GDP: 55
- GDP threshold (PV of total public debt in percent of GDP): 40
- Debt service in % of Exports: 15
- Debt service in % of Revenue: 18

### Public DSA — baseline and stress scenario findings
- Baseline scenario:
  - PV of total public debt-to-GDP breaches the benchmark level of 55 percent in 2023 but falls within the benchmark level in 2024 and continues to decline thereafter throughout the forecast horizon.
  - PV of debt-to-revenue and debt service-to-revenue are on a declining trend for the entire duration of the forecast horizon in the baseline scenario.
- Stress scenario:
  - With the bound test of other flows, PV of total public debt-to-GDP remains above the benchmark until 2030.

### Risk rating and vulnerabilities
- Overall assessments:
  - The Gambia’s external debt has a high risk of distress but is sustainable.
  - The Gambia’s overall public debt position is assessed at high risk of debt distress but remains sustainable, based on the public DSA and the external DSA.
- Drivers and timing:
  - Weakness in exports weighs on export-related external debt service indicators in the near term.
  - Breaches of debt-service thresholds in later years reflect the period when debt-service deferrals negotiated with creditors are expected to expire, potentially leading to higher debt-service payments and tighter liquidity.
  - Resumption of external debt servicing obligations is expected to absorb significant resources from social and infrastructure investments.
- Mitigating factors:
  - Authorities are implementing measures to bolster domestic revenue mobilization in the near and medium term, including overhaul of the SOE sector to reduce fiscal burdens and generate revenue.
  - Efforts to develop the tourism sector and diversify exports are underway.
  - Policies aimed at supporting foreign exchange reserves will help address liquidity constraints.
- Rationale for sustainability judgment:
  - PV of total public debt-to-GDP follows a firmly downward sloping path, remains within the benchmark from around 2024 onwards, and continues to decline thereafter.
  - Since the indicator falls below the benchmark within 3 years of the projection horizon and remains under benchmark thereafter, the overall debt position is deemed sustainable.
  - Public debt sustainability is supported by fiscal consolidation, reliance on grants and concessional loans, and development partner support.
  - Authorities are implementing a debt management policy that reduces roll-over risks, including by lengthening maturity.
- Downside risks:
  - Risks stem from a protracted war in Ukraine, renewed waves of COVID-19 infections, uncertainty over donor support disbursements, uncertainty in capital inflows from remittances, and climate change (e.g., major flooding in July 2022).
  - In a downside scenario, growth could fall by about 2.0 percentage points below the baseline in the near term.
  - Under such a downside scenario, the fiscal deficit would widen, PV of total public debt would fall below the benchmark level of 55 percent two years later than under the baseline, and foreign exchange reserves would come under pressure.
  - Strengthened and successful domestic revenue mobilization could help mitigate these risks.
- Factors affecting future assessments:
  - Data revisions, availability of concessional financing for infrastructure projects, and potential decline in donor support.
  - Need for improved data collection and reconciliation for debt and external sector statistics; strengthening inter-agency coordination and data sharing on public debt and grants recommended.
  - Execution of large public investment projects (including Port of Banjul extension and Bertil Harding highway) should remain within external borrowing plan ceilings; deviations could pose risks to the debt outlook.
  - Any significant change in donor grant disbursements toward budget support or infrastructure financing will have implications for The Gambia’s debt profile.
  - The World Bank will continue support for debt management, SOEs, and public investment management under the planned Public Administration Modernization Project (PAMP, P176924) with complementary reform actions through Development Policy Financing operations and SDFP.

### Authorities’ views and policy actions
- Authorities concurred with the main points of the analysis and acknowledged highlighted challenges.
- Observations and constraints:
  - Debt stock pressures due to COVID-19 pandemic, repercussions of the war in Ukraine, and substantial infrastructure investment needs.
  - Expiration of debt service deferral period and anticipated increase in debt service commitments from 2025 pose further challenges.
- Policy responses and commitments:
  - Implemented measures aimed at reducing overall debt burden and addressing the persistent high risk of debt distress.
  - Commitment to continued restraint in new borrowing and implementing a robust medium-term fiscal framework.
  - Progress in discussions to reconcile longstanding external arrears with Libyan authorities.
  - Efforts underway to engage with Venezuelan authorities to resume discussions regarding arrears.

*Source: 1gmbea2024001 - 8.      Stress tests follow the standardized settings, with none of the individual tailored stress tests applicable for The Gambia*

### 10. The  authorities  are  strengthening  efforts  to  increase  domestic  revenue  collections.  They

### 10. The authorities are strengthening efforts to increase domestic revenue collections. They

### Domestic revenue mobilization and tax administration
- Plans to establish a platform and command center for a single window of customs administration.
- Operationalize the E-tracking system and install a weight bridge at the Port to adequately determine the right duties and taxes.
- Streamline tax incentives under special investment certificates (SICs):
  - Restrict SIC coverage to priority sectors.
  - Eliminate the possibility of extension.
  - Cancel SICs that do not perform in line with the expected deliverables.
  - Remove fuel from the list of tax exempted goods.
  - Require all SIC holders to ensure compliance with their local tax obligations.
- Strengthen revenue collection and enforcement for the telecoms sector through enhanced audits.
- Expand rental property taxation by updating the rental property register.
- Enforce collection of corporate income tax (CIT) and withholding taxes on companies executing donor-funded projects.
- Enhance non-tax revenue collection through:
  - Court-mandated license penalties and adjusted administrative fees.
  - Dividend payment from the CBG.
  - A tranche from the Africa50’s Asset Recycling Program (ARP).
  - Anticipated benefits under the Millennium Challenge Corporation.

### Public debt and fiscal framework
- Implement a strong medium-term fiscal framework to put public debt on a downward trajectory.
- Bolster domestic revenue mobilization to increase the tax-to-GDP ratio.
- Mitigate fiscal risks from state-owned enterprises (SOEs).
- Explore innovative options to finance infrastructure projects without worsening debt dynamics.
- Rely more on grants and highly concessional loans while adhering to the agreed external borrowing plan.
- Strengthen debt management through regular data reconciliation, production and publication of regular debt bulletins, and building buffers.

### Monetary policy and inflation control
- The CBG is committed to fight inflation by tightening monetary policy:
  - Increased the policy rate at each Monetary Policy Committee (MPC) meeting to 17 percent in September 2023 from 10 percent in March 2022.
  - Kept the policy rate unchanged at its end-November 2023 MPC meeting because inflation declined slightly in October 2023.
  - Plans to increase the reserve requirement ratio and issue CBG bills to mop-up excess liquidity.
  - Will intensify the inflation fight and tighten liquidity conditions, including through appropriate fiscal consolidation measures.
  - Remains committed to bring down inflation to the 5 percent inflation target.

### Foreign exchange (FX) market and exchange rate policy
- Take steps to allow interplay of market forces in the FX market to help absorb external shocks.
- Prepare and publish guidelines for forex operations of regulated institutions to ensure smooth functioning of the forex market.
- Publish a robust FX policy, including an intervention policy, to:
  - Enhance flexibility of the official exchange rate.
  - Improve the efficiency of the forex market.
  - Safeguard forex reserves.
- Ensure the official exchange rate is based on actual same day forex transactions and expand coverage of transactions to reflect market conditions.
- Publish the official exchange rate daily to be applied to all market participants; use the official exchange rate as the reference rate.

### Financial sector resilience and regulatory strengthening
- Financial sector described as solid, sound, and resilient with ample liquidity.
- Continue to strengthen supervision and regulatory practices:
  - Revise regulatory guidelines and the Banking Act to conform with regional standards.
  - Revise the Deposit Insurance Act to bolster consumer protection and advance financial inclusion by leveraging the new payment system and the recently launched capital market.
- Strengthen the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework by addressing identified deficiencies to preserve corresponding banking relationships and restore financial stability.
- Prepare for an IMF safeguards assessment mission scheduled for early 2024.

### Structural reforms to support recovery and inclusive growth
- Harness private sector potential to implement the RF-NDP given limited fiscal space and heightened debt vulnerabilities.
- Create a one-stop-shop to facilitate accelerated establishment of businesses to support job creation and economic diversification.
- Developed and launched an Employment Policy and revived the National Business Council.
- Establish a free trade zone around the Senegambia corridor to access regional markets and leverage bilateral cooperation with Senegal, ECOWAS trade agreements, and AfCFTA.
- Accelerate expansion of the Banjul port; reform land tenure and land management systems; promote all-year-long agriculture production; broaden digital infrastructure; increase financial access to individuals and businesses.
- Complete the social registry process to better target social support and distribute growth benefits.

### Governance, anti-corruption, and public financial management (PFM)
- National Assembly approved the anti-corruption bill on December 21, 2023.
- Commit to implement and publish recommendations of the recent IMF governance diagnostic mission.
- Plan to set up a high-level anti-corruption commission and strengthen the asset declaration framework.
- Amend the PFM and public private partnership (PPP) bills; expand Gambia Strategic Review Board (GSRB) selection criteria to domestically financed investment projects and PPPs; reinforce GSRB appraisal function to strengthen PFM.
- Trained officials in all ministries on program-based budgeting and prepared a roadmap for program-based budgeting to be approved by the Cabinet.
- Develop capacity and accelerate digitalization of administrative processes to enhance transparency and publish all laws and regulations for public access.

### Climate resilience and green recovery
- Developed a Long-Term Climate-Neutral Development Strategy 2050 to realize the 2050 Climate Vision and meet Paris Agreement commitments.
- Authorities’ policies and actions on climate are deemed compatible with the goals of the 1.5°C Paris climate agreement.
- Plan to adopt climate policies encouraging renewable energy generation while supporting energy security.
- Introduce climate adaptation and mitigation measures including reforms to fossil fuel subsidies, strengthening early warning systems, increasing crop diversification and rotation, and switching to drought-tolerant crop varieties and animal species.
- Strengthen public finance and investment management to attract additional climate finance; requested a Climate Public Investment Management Assessment (C-PIMA).
- View Fund support under the Resilience and Sustainability Facility (RSF) as essential to support ambitious climate efforts.

### Gender equality and social inclusion
- Introduce prohibitions of discrimination in the constitution and translate into domestic law the Maputo Protocol and CEDAW.
- Support the Ministry of Gender, Children and Social Welfare to tackle gender-based gaps.
- Piloted gender-responsive budgeting in five ministries for the 2024 budget with plans to roll out to all ministries.
- Increase investment in maternal health and childcare services and close gender gaps in higher education, political participation, and access to land.
- Plan to expand the Women’s Enterprise Fund to facilitate financial access for women and reduce dependence on informal financial services.

### Conclusion and program stance
- Authorities remain committed to reforms articulated in the MEFP and LOI despite multiple shocks.
- View a successor Fund arrangement as critical to entrench macroeconomic stability and provide an important policy anchor.
- Seek a successor arrangement to catalyze additional donor support and address remaining structural challenges.
- Look forward to continued Fund technical and policy support to help realize growth and development aspirations.

*Source: IMF staff summary as provided in the content unit.*

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_Source: https://www.imf.org/-/media/files/publications/cr/2024/english/1gmbea2024001.pdf_