IMF Management Approves a Staff-Monitored Program with The Gambia
IMF News, May 7, 2019
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Bibliographic details
- Published: May 7, 2019
Key facts and timeline
- Management approved a Staff-Monitored Program (SMP) with The Gambia on April 24, 2019.
- The SMP covers the period from January to December 2019.
- The 2019 SMP builds on the previous SMP that covered April 2017 to September 2018.
- SMPs are informal and flexible instruments for dialogue between the Fund staff and a member country; SMPs are not accompanied by financial assistance nor endorsed by the IMF Executive Board.
Economic context and recent performance
- Growth exceeded 6½ percent in 2018.
- Inflation eased to 6½ percent at end‑2018.
- Gross official reserves more than doubled, reaching 2.7 months of prospective imports.
- Debt service absorbs more than half of domestic revenue.
- The Gambia is assessed to be in external debt distress.
Objectives and policy focus of the 2019 SMP
- Main objectives:
- Consolidate gains from the previous SMP.
- Help anchor debt sustainability.
- Policy and reform priorities:
- Enhance domestic revenue mobilization.
- Strengthen public financial management.
- Improve SOE governance and strengthen monitoring of fiscal risks stemming from SOEs.
- Tighten external debt contracting and pursue mainly grant financing.
- Develop a Medium-Term Debt Strategy (MTDS) and strengthen debt management.
- Step up structural reforms to stimulate private investment, sustain growth, and make growth more inclusive.
- Maintain monetary policy focus on controlling inflation and ensuring financial stability.
Debt sustainability and external support
- Restoring debt sustainability is identified as a primary concern.
- Restoring debt sustainability will require:
- A combination of debt relief,
- Prudent fiscal policy supported by reforms of state-owned enterprises (SOEs),
- Predominantly grant financing for The Gambia’s development program.
- The authorities are continuing discussions with their external creditors to seek debt relief, which is also needed to catalyze additional donor support.
Expected outcomes and prospects
- Satisfactory performance under the SMP is expected to pave the way to a possible Extended Credit Facility (ECF) arrangement with the IMF, once debt sustainability is restored.
Press Release No. 19/150 — IMF Communications Department, May 7, 2019.