IMF Executive Board Concludes Second Review under the Extended Credit Facility Arrangement with The Gambia and Approves US$ 14.4 Million Disbursement

IMF News, May 27, 2021

Source details

Canonical URL

IMF Executive Board Concludes Second Review under the Extended Credit Facility Arrangement with The Gambia and Approves US$ 14.4 Million Disbursement

Other formats

• Markdown version
• Structured JSON version
• Bundle manifest

Bibliographic details

• Published: May 27, 2021

Executive Board decision and financing

• The Executive Board completed the second review under the Extended Credit Facility (ECF) arrangement with The Gambia on a lapse-of-time basis.
• The completion enables an immediate disbursement of SDR 10 million, about US$ 14.4 million, to help meet the country’s balance-of-payments and fiscal financing needs and support the post-pandemic recovery.
• Total disbursements under the ECF arrangement to date amount to SDR 35 million, about US$ 50.5 million.
• The ECF arrangement was approved on March 23, 2020 with initial total access of SDR 35 million; it was augmented at the completion of the first ECF review on January 15, 2021 to SDR 55 million (88.4 percent of quota).
• The Gambia has also benefited from an IMF Rapid Credit Facility (RCF) disbursement of SDR 15.55 million.
• The Gambia is receiving debt service relief from the IMF under the Catastrophe Containment and Relief Trust (CCRT), expected to total SDR 7.9 million, of which SDR 6.1 million has already been approved.

Near-term economic outlook and performance

• COVID-19 impact and recovery:
  • The second wave of the COVID-19 pandemic has dampened economic activity, with attendant socio-economic costs.
  • For 2020, economic growth is estimated at 0.0 percent.
  • For 2021, economic growth is expected to rebound to 4.9 percent, supported by the global and domestic vaccine rollout and resilience in some sectors.
• Sectoral performance:
  • The tourism sector was hit hard in 2020.
  • The agricultural and construction sectors showed resilience in 2020.
• Inflation and reserves:
  • Inflation (year-on-year) dropped from 7.7 percent at end-2019 to 5.7 percent at end-2020 before picking up to 7.4 percent at end-March 2021 due to seasonal factors.
  • Large official and private forex inflows helped boost reserves to 4.7 months of imports at end-2020.
• Public debt:
  • Public debt declined (see Table 1 projections for levels and composition).

Policy assessment and recommendations

• Fiscal policy:
  • At the onset of the pandemic, authorities relaxed fiscal and monetary policy stances to meet humanitarian needs and support activity, while keeping within program limits.
  • Going forward, adequate fiscal policy prioritization is key to addressing the pandemic, supporting recovery, and reducing debt vulnerabilities.
  • Tax exemptions will be further streamlined, and savings will be made on subsidies to State-Owned-Enterprises (SOEs).
  • Pursuing a prudent fiscal policy will help reduce the high risk of debt distress in the medium term.
• Monetary and financial policy:
  • Monetary policy remains appropriately accommodative.
  • Liquidity and inflation developments need to be monitored.
  • Pockets of financial vulnerabilities should be tackled.
  • Given slow credit growth in a context of ample liquidity, structural obstacles to credit should be addressed.
• Structural reforms:
  • It is critical to persevere in the ambitious structural reform agenda, especially ahead of upcoming presidential and parliamentary elections, to fully reap benefits from recent progress.
  • Swift implementation of the business environment strategy will support strong and inclusive growth.
  • The Public Procurement Act should be enacted to improve the value-for-money of spending.
  • The SOE Bill, currently on hold because of stalled constitutional reform, should be finalized to improve SOEs’ performance and reduce their reliance on the state budget.

Selected economic indicators and projections (highlights from Table 1)

• GDP at constant prices (percent change): 2019: 6.1; 2020: 0.0; 2021: 6.0; 2022: 4.9; 2023: 6.5; 2024: 7.0; 2025: 5.8; 2026: 5.6.
• GDP deflator: 2019: 7.1; 2020: 7.2; 2021: 4.3; 2022: 4.2; 2023: 4.1; 2024: 5.3; 2025: 4.6.
• Consumer prices (average): 2019: 5.9; 2020: 5.5; 2021: 5.1; 2022: 5.0.
• Consumer prices (end of period): 2019: 7.7; 2020: 5.7; 2021: 5.2.
• Exports, f.o.b (US$ values, percent change): 2019: 23.8; 2020: -10.7; 2021: -50.8; 2022: 23.1; 2023: 62.9; 2024: 35.9; 2025: 26.9; 2026: 8.9.
• Imports, f.o.b (US$ values, percent change): 2019: 14.6; 2020: -1.7; 2021: -2.4; 2022: 17.9; 2023: 27.7; 2024: 12.2; 2025: 2.0; 2026: 2.8.
• Broad money (contributions; percent): 2019: 27.1; 2020: 15.5; 2021: 22.0; 2022: 9.5; 2023: 12.6.
• Credit to central government (net, contribution): 2019: 4.0; 2020: 3.6; 2021: 6.7.
• Credit to the private sector (net, contribution): 2019: 1.3; 2020: 0.1; 2021: 2.9.
• Domestic revenue (taxes and other revenues, percent of GDP): 2019: 13.9; 2020: 13.3; 2021: 13.8; 2022: 14.1; 2023: 14.0; 2024: 14.4; 2025: 14.5; 2026: 14.7.
• Of which: Tax Revenue (percent of GDP): 2019: 10.9; 2020: 10.4; 2021: 10.5; 2022: 11.2; 2023: 11.6; 2024: 12.0; 2025: 12.4; 2026: 12.7.
• Grants (percent of GDP): 2019: 10.3; 2020: 8.1; 2021: 7.4; 2022: 8.0; 2023: 7.3.
• Total expenditures and net acquisition of financial assets (percent of GDP): 2019: 23.6; 2020: 25.2; 2021: 24.0; 2022: 25.4; 2023: 25.5; 2024: 22.9; 2025: 21.6; 2026: 21.0.
• Net lending (+)/borrowing (–, percent of GDP): 2019: -2.5; 2020: -2.1; 2021: -3.9; 2022: -4.0; 2023: -0.6; 2024: -0.2; 2025: -0.1.
• Public debt (percent of GDP): 2019: 80.2; 2020: 76.4; 2021: 77.2; 2022: 74.4; 2023: 76.7; 2024: 72.7; 2025: 66.3; 2026: 61.4.
• Domestic public debt (percent of GDP): 2019: 35.6; 2020: 33.6; 2021: 34.0; 2022: 31.1; 2023: 31.9; 2024: 29.4; 2025: 25.0; 2026: 20.3.
• External public debt (percent of GDP): 2019: 44.6; 2020: 42.8; 2021: 43.2; 2022: 43.3; 2023: 44.8; 2024: 41.3; 2025: 38.9; 2026: 36.0.
• External public debt (millions of US$): 2019: 798.1; 2020: 813.8; 2021: 820.4; 2022: 888.0; 2023: 905.6; 2024: 953.1; 2025: 993.0; 2026: 1015.9; 2027: 1023.6; 2028: 1040.6.
• External current account balance (excluding official transfers, percent of GDP): 2019: -9.2; 2020: -10.9; 2021: -8.3; 2022: -14.1; 2023: -14.5; 2024: -16.3; 2025: -15.0; 2026: -12.6; 2027: -11.0; 2028: -10.3.
• External current account balance (including official transfers, percent of GDP): 2019: -6.2; 2020: -11.9; 2021: -12.4; 2022: -13.9; 2023: -13.0; 2024: -9.4; 2025: -8.8.
• Gross official reserves (millions of US$): 2019: 225.0; 2020: 330.0; 2021: 352.0; 2022: 389.8; 2023: 412.3; 2024: 432.8; 2025: 449.1; 2026: 458.4; 2027: 473.8; 2028: 506.4.
• Gross official reserves (months of next year's imports): 2019: 3.9; 2020: 4.7; 2021: 4.5.
• Gross investment (percent of GDP): 2019: 19.4; 2020: 18.5; 2021: 21.8; 2022: 24.2; 2023: 23.9; 2024: 23.7; 2025: 22.7.
• Of which: Central government (percent of GDP): 2019: 9.0; 2020: 7.8; 2021: 10.0; 2022: 10.1; 2023: 9.9; 2024: 8.7; 2025: 8.3.
• Gross savings (percent of GDP): 2019: 13.2; 2020: 12.3; 2021: 15.4; 2022: 11.8; 2023: 13.7.
• Nominal GDP (billions of dalasi): 2019: 91.4; 2020: 98.0; 2021: 108.3; 2022: 107.1; 2023: 119.0; 2024: 132.6; 2025: 146.9; 2026: 163.7; 2027: 180.8.
• GDP per capita (US$): 2019: 774.2; 2020: 787.4; 2021: 785.3; 2022: 830.0; 2023: 819.4; 2024: 865.8; 2025: 917.6; 2026: 967.9; 2027: 1025.7; 2028: 1075.7.
• Use of Fund resources (millions of SDRs) — Disbursements: 2020 RCF: 15.6; Total disbursements: 20.6; 35.0 (table entries).
• Repayments (millions of SDRs): -4.3; -3.6; -2.8; -4.1; -5.2; -9.5.
• CCRT debt relief (millions of SDRs): 3.2.
• PV of overall debt-to-GDP ratio (percent): 2019: 70.4; 2020: 67.5; 2021: 67.4; 2022: 65.9; 2023: 66.7; 2024: 63.0; 2025: 57.1; 2026: 52.9; 2027: 48.6; 2028: 43.8.

IMF Press Release No. 21/144, May 27, 2021 — IMF Communications Department

References

• https://www.imf.org/-/media/images/imf/bios/imfboard.jpg
• The Executive Board
• The Gambia and the IMF
• Press Releases
• PRESS CENTER
• approved by the IMF’s Executive Board on March 23, 2020
• was augmented at the completion of the first ECF review on January 15, 2021
• Rapid Credit Facility disbursement
• IMF under the Catastrophe Containment and Relief Trust,
• https://www.imf.org/en/home