IMF Executive Board Approves US$47.1 million Extended Credit Facility (ECF) Arrangement for The Gambia
IMF News, March 23, 2020
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- Published: March 23, 2020
Overview
- Executive Board approved a thirty-nine-month Extended Credit Facility (ECF) arrangement for The Gambia in the amount of SDR35 million (about US$47.1 million, or 56.3 percent of The Gambia’s quota in the Fund).
- The decision enables an immediate disbursement of SDR5 million, about US$6.7 million, with remaining disbursements phased over the program subject to six half-yearly reviews.
- The ECF arrangement is intended to help anchor macroeconomic stability, support structural reforms, and provide a framework to assist the authorities in developing and implementing policy responses to the COVID-19 pandemic.
Program objectives and intended uses
- Anchor macroeconomic stability and progress on structural reforms achieved under the 2019 Staff Monitored Program (SMP).
- Provide a framework for effective policy responses to COVID-19 and help catalyze donor financing, particularly grants for budget support.
- Maintain momentum in reducing debt vulnerabilities and deliver on commitments in the National Development Plan 2018–2021 with a focus on inclusive growth and poverty reduction.
- Reinforce balance-of-payments buffers to cope with the impact of the COVID-19 outbreak.
Key policy recommendations and reform priorities (from IMF statement)
- Remain committed to fiscal consolidation in the medium-term to ensure debt sustainability.
- Finance major projects through grants or highly concessional financing; strengthen public procurement and project selection.
- Improve governance and financial management of state-owned enterprises to reduce fiscal risks and enhance public service delivery efficiency.
- Further strengthen tax administration and public financial management to boost resources for priority investment and social spending.
- Enhance the monetary policy framework, including by gradually adjusting the interest rate corridor and enabling the SDF rate to effectively anchor interbank market functioning; strengthen the central bank’s balance sheet.
- Address vulnerabilities identified in the 2019 Financial Sector Stability Assessment to ensure financial sector soundness and improve legal and supervisory frameworks for banking supervision.
- Leverage the financial inclusion strategy, including mobile banking, while strengthening oversight of non-banking institutions and monitoring mobile-banking risks.
- Support social programs and commit to structural reforms and governance improvements as outlined in the National Development Plan.
Recent economic developments (selected)
- Real GDP growth is estimated to have reached 6 percent in 2019 despite erratic rainfall causing a 10–percent decline in agricultural production.
- Inflation averaged 7.1 percent in 2019, with core inflation described as subdued.
- Monetary policy remained appropriately neutral in the context of moderate core inflation.
- Private sector consumption and investment were robust, supported by a record tourist season despite the bankruptcy of Thomas Cook (UK).
- The banking system remained well capitalized, liquid and profitable, with non-performing loans at 4.5 percent of gross loans at end-2019.
- Renewed confidence helped rebuild external buffers and replenish bank liquidity, contributing to credit growth.
Program summary and structural agenda
- Program aims to help attain poverty reduction and growth objectives in the 2018–21 National Development Plan and increase support for social programs using fiscal space partly created by debt service deferrals.
- Emphasis on further public financial management (PFM) reforms to improve governance and increase efficiency in public resource use, including improving state-owned enterprise performance.
- Structural agenda focus areas:
- Bolstering domestic revenue mobilization through a multi-year program to modernize tax administration based on a TADAT-based roadmap.
- Consolidating gains in fiscal policy formulation, PFM, and debt sustainability by strengthening budget preparation and execution, cash management, debt management, and fiscal reporting.
- Pursuing a multipronged strategy to improve economic governance, including public investment (using the 2019 Public Investment Management Assessment), procurement, and reform of state-owned enterprises (corporate governance, financial management, reporting).
- Broadening reforms to sustain growth and poverty reduction: fostering financial inclusion (building on the 2019 Financial Sector Stability Review), mainstreaming gender equality, and counteracting climate change impacts.
Selected economic and financial indicators (2018–25) — key figures preserved exactly as presented
- GDP at constant prices: 2018 Act. 6.5; 2019 EBS/19/26 5.8; 2020 Prel. 6.0; 2021 Proj. 6.3; 2022 Proj. 5.5; 2023 Proj. 5.2; 2024 Proj. 5.0; 2025 Proj. (blank in source).
- Consumer prices (average): 2018 6.1; 2019 7.1; 2020 6.7; 2021 5.1.
- Non-performing loans: 4.5 percent of gross loans at end-2019.
- Domestic revenue (taxes and other revenues): 2018 12.1; 2019 13.1; 2020 14.4; 2021 13.7; 2022 14.3; 2023 15.0.
- Total expenditures and net acquisition of financial assets: 2018 21.7; 2019 23.9; 2020 24.4; 2021 24.2; 2022 23.4; 2023 22.7; 2024 22.0.
- Interest (percent of government revenue): 2018 26.1; 2019 24.3; 2020 22.3; 2021 19.9; 2022 18.1; 2023 15.3; 2024 14.9; 2025 13.2; (additional 12.6 appears in table context).
- Net lending (+)/borrowing (–): 2018 -6.2; 2019 -3.2; 2020 -2.6; 2021 -1.8; 2022 -1.4; 2023 -1.1; 2024 -0.7; 2025 -0.4.
- Public debt (percent of GDP): 2018 86.6; 2019 81.8; 2020 83.8; 2021 77.9; 2022 72.7; 2023 68.3; 2024 64.3; 2025 60.1; (55.8 appears in table context).
- External public debt (millions of US$): 2018 756.6; 2019 774.5; 2020 796.3; 2021 836.0; 2022 876.7; 2023 915.6; 2024 949.0; 2025 967.7; (979.0 appears in table context).
- External current account balance (excluding budget support): 2018 -10.7; 2019 -13.8; 2020 -8.5; 2021 -11.9; 2022 -12.4; 2023 -11.8; 2024 -10.9; 2025 -10.3.
- External current account balance (including budget support): 2018 -9.7; 2019 -5.3; 2020 -8.7; 2021 -9.9; 2022 -9.6; 2023 -9.0; 2024 -9.1; 2025 -8.8.
- Gross official reserves (millions of US$): 2018 157.0; 2019 187.0; 2020 225.0; 2021 268.0; 2022 313.4; 2023 349.5; 2024 382.4; 2025 410.5; 450.1 appears in table context.
- Months of next year's imports of goods and services (reserves): 2018 3.7; 2019 4.1; 2020 4.3.
- Nominal GDP (billions of dalasi): 2018 78.6; 2019 87.4; 2020 88.7; 2021 100.2; 2022 111.9; 2023 123.7; 2024 136.0; 2025 149.3; 164.3 appears in table context.
- GDP per capita (US$): 2018 712.5; 2019 782.4; 2020 750.9; 2021 795.8; 2022 840.0; 2023 883.1; 2024 923.2; 2025 964.5; 1008.5 appears in table context.
- Use of Fund resources (millions of SDRs) — Repayments: -5.5; -4.3; -3.6; -4.0; -2.8; -3.9 (values presented in table context).
IMF press release, March 23, 2020.
