IMF Executive Board Completes First Review under the Extended Credit Facility Arrangement for The Gambia, and Approves US$28.8 Million Disbursement

IMF News, January 15, 2021

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IMF Executive Board Completes First Review under the Extended Credit Facility Arrangement for The Gambia, and Approves US$28.8 Million Disbursement

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• Published: January 15, 2021

Program and Financing

• The 39-month Extended Credit Facility (ECF) arrangement: total access of SDR 35 million (about US$47.1 million at the time of approval, or 56.3 percent of quota), approved March 23, 2020.
• Completion of the first review enables an immediate disbursement of SDR 20 million, about US$28.8 million, to help meet balance-of-payments and fiscal financing needs and support the post-pandemic recovery.
• Total disbursements under the arrangement to date: SDR 25 million, about US$36 million.
• The Executive Board approved an augmentation of access under the ECF from SDR 35 million to SDR 55 million (or 88.4 percent of The Gambia’s quota).
• Financing assurances review completed and waiver granted of nonobservance of a continuous quantitative performance criterion relating to a zero ceiling on the accumulation of external payment arrears.
• Additional IMF support since the pandemic onset:
  • IMF Rapid Credit Facility (RCF) disbursement: SDR 15.55 million (US$ 21.3 million at the time of approval).
  • Catastrophe Containment and Relief Trust (CCRT) debt service relief expected to total SDR 7.9 million, of which SDR 4.2 million (about US$5.83 million) has already been approved.

Economic Outlook and Assessment

• Pandemic impact: growth in 2020 is estimated at about zero percent.
• Growth projections:
  • 2021: 6.0 percent.
  • Medium term average: 6.5 percent per year.
  • GDP at constant prices (selected years): 2018: 7.2; 2019: 6.1; 2020: 2.5 (RCF Prel.); 2021: 0.0; 2022: 6.5; 2023: 6.0; 2024: 7.0; 2025: 5.8.
• Inflation and prices:
  • GDP deflator (selected): 2018: 7.1; 2019: 6.2; 2020: 5.9; 2021: 4.3; 2025: 4.8.
  • Consumer prices (average): 2018: 6.7; 2019: 5.5; 2020: 5.1; 2021: 5.0.
  • Consumer prices (end of period): 2018: 6.4; 2019: 7.7; 2020: 5.2.
• External sector:
  • Exports, f.o.b (US$ values) growth (selected): 2018: -0.9; 2019: 24.1; 2020: -11.3; 2021: -10.7; 2022: 29.1; 2023: 23.1; 2024: 12.7; 2025: 14.0.
  • Imports, f.o.b (US$ values) growth (selected): 2018: 11.9; 2019: 14.7; 2020: -0.1; 2021: -1.7; 2022: 20.5; 2023: 17.9; 2024: 6.6.
  • Terms of trade (deterioration = -) (selected): 2018: -3.3; 2019: -4.8; 2020: -3.4; 2021: 1.4; 2025: -0.6.
• Reserves and external position:
  • Gross official reserves (millions of US$) (selected): 2018: 157.0; 2019: 225.0; 2020: 258.0; 2021: 330.0; 2022: 303.4; 2023: 389.8; 2024: 410.1; 2025: 426.5; 2026 (mem.): 435.8; 2027 (mem.): 451.3.
  • Months of next year's imports (selected): 2018: 2.7; 2019: 4.6; 2020: 4.5.
• Debt and debt distress:
  • The Gambia continues to be assessed at high risk of debt distress, with limited borrowing space.
  • Public debt (percent of GDP) (selected): 2018: 84.6; 2019: 80.1; 2020: 80.3; 2021: 76.4; 2022: 74.1; 2023: 74.4; 2024: 70.4; 2025: 65.7; 2026: 60.8; 2027: 55.9.
  • External public debt (percent of GDP) (selected): 2018: 46.3; 2019: 44.6; 2020: 46.2; 2021: 42.8; 2022: 43.8; 2023: 43.3; 2024: 42.0; 2025: 40.0; 2026: 37.6; 2027: 34.9.
  • External public debt (millions of US$) (selected): 2018: 756.6; 2019: 798.1; 2020: 847.4; 2021: 813.8; 2022: 883.4; 2023: 888.0; 2024: 934.9; 2025: 973.9; 2026: 995.5; 2027: 1,001.5.
  • PV of overall debt-to-GDP ratio (selected): 2018: 69.9; 2019: 68.5; 2020: 67.5; 2021: 63.4; 2022: 65.9; 2023: 62.1; 2024: 56.2; 2025: 52.3; 2026: 48.2.
• External current account balance (percent of GDP) (selected):
  • Excluding official transfers: 2018: -10.4; 2019: -8.4; 2020: -13.6; 2021: -10.9; 2022: -12.6; 2023: -14.1; 2024: -14.8; 2025: -12.8; 2026: -11.5; 2027: -10.0.
  • Including official transfers: 2018: -5.3; 2019: -9.8; 2020: -6.2; 2021: -11.9; 2022: -12.5; 2023: -9.9.

Policy Assessment and Recommendations (from Acting Chair Mr. Tao Zhang)

• Continue commitment to prudent policies and adhere to the fiscal envelope while protecting social spending to support recovery and program objectives.
• Strengthen domestic revenue mobilization by focusing on reducing tax exemptions and reinforcing tax and customs administration.
• Strengthen public financial management to improve public service delivery and reduce fiscal risks; near-term priorities include:
  • Putting state-owned enterprises on a sound financial footing.
  • Strengthening budget execution.
  • Improving debt management to prevent recurrence of external payment arrears.
  • Ensuring transparency in COVID-19-related spending.
• Monetary policy recommendations:
  • Maintain a prudent monetary policy stance to support low inflation.
  • Strengthen the balance sheet of the central bank, entrench its autonomy, and maintain financial credibility.
• Financial sector recommendations:
  • Strengthen the legal framework for banking supervision and crisis preparedness to address mounting risks to financial sector stability.
  • Support greater financial inclusion by strengthening oversight of non-bank financial institutions and monitoring risks from mobile banking.
• Governance and anti-corruption:
  • Ardent pursuit of governance reforms, including in public procurement, anti-money laundering, and the overall anti-corruption framework, to enhance transparency and support private sector-led inclusive growth.

Key Statistics and Memorandum Items

• GDP per capita (US$) (selected): 2018: 729.0; 2019: 774.2; 2020: 766.7; 2021: 787.4; 2022: 817.1; 2023: 830.0; 2024: 877.5; 2025: 929.7; 2026: 980.8; 2027: 1,033.9.
• Nominal GDP (billions of dalasi) (selected): 2018: 80.4; 2019: 91.4; 2020: 96.5; 2021: 98.0; 2022: 108.8; 2023: 108.3; 2024: 120.4; 2025: 134.2; 2026: 148.8; 2027: 165.0.
• Central government finances (percent of GDP) (selected):
  • Domestic revenue (taxes and other revenues): 2018: 11.8; 2019: 13.9; 2020: 13.1; 2021: 13.3; 2022: 13.8; 2023: 14.1; 2024: 14.3; 2025: 14.6; 2026: 14.9.
  • Of which: Tax Revenue: 2018: 10.1; 2019: 10.9; 2020: 11.1; 2021: 10.4; 2022: 11.2; 2023: 11.6; 2024: 12.0; 2025: 12.4.
  • Grants: 2018: 3.3; 2019: 9.3; 2020: 10.3; 2021: 8.2; 2022: 7.8.
  • Total expenditures and net acquisition of financial assets: 2018: 21.2; 2019: 23.2; 2020: 24.8; 2021: 25.1; 2022: 23.9; 2023: 25.2; 2024: 23.5; 2025: 22.5; 2026: 21.8.
  • Net lending (+)/borrowing (–): 2018: -6.1; 2019: -2.5; 2020: -2.6; 2021: -1.8; 2022: -3.9; 2023: -2.0; 2024: -0.8; 2025: -0.2.
• Use of Fund resources (millions of SDRs):
  • Disbursements: 0 (2018); 35.0 (2019).
  • Of which: 2020 RCF: 15.6.
  • Repayments (selected): -5.5; -4.3; -3.6; -4.0; -2.8; -4.1; -5.2.
  • CCRT debt relief: 3.2.

Sources: The Gambia authorities; and IMF staff estimates and projections.

References

• https://www.imf.org/-/media/images/imf/bios/imfboard.jpg
• The Executive Board
• IMF COVID-19 Hub
• Policy Tracker
• Financial Assistance
• Questions & Answers
• The Gambia and the IMF
• Special Drawing Rights (SDRs) -- A Factsheet
• Press Releases
• PRESS CENTER
• was approved by the IMF Executive Board on March 23, 2020
• Rapid Credit Facility disbursement
• IMF under the Catastrophe Containment and Relief Trust,
• https://www.imf.org/en/home