June 10, 2022
PRESS OFFICER: Nicolas Mombrial
Phone: +1 202 623-7100Email: MEDIA@IMF.org
Washington, DC : The Executive Board of the International Monetary Fund (IMF) today completed the fourth review under the Extended Credit Facility (ECF) arrangement for The Gambia. The completion of the review enables an immediate disbursement of SDR 5 million, about US$ 6.72 million, to help meet the country’s balance-of-payments and fiscal financing needs, support the post-pandemic recovery, and address challenges from the war in Ukraine. This brings total disbursements under the ECF arrangement to SDR 45 million. The Board also completed a financing assurances review and granted a waiver of nonobservance of a performance criterion on the ceiling on the net domestic borrowing of the central government.
The ECF arrangement for The Gambia was approved by the IMF’s Executive Board on March 23, 2020 , with an initial total access of SDR 35 million (or 56.3 percent of quota) that was augmented to SDR 55 million (88.4 percent of quota) at the time of the completion of the first review under the ECF, on January 15, 2021 . The Gambia has also benefited from an IMF Rapid Credit Facility disbursement of SDR 15.55 million approved on April 15, 2020 and received debt service relief from the IMF under the Catastrophe Containment and Relief Trust, totaling SDR 7.9 million.
The Gambia’s economic growth is estimated at 4.3 percent in 2021 despite the various waves of the COVID-19 pandemic . Growth is projected to reach 5.6 percent in 2022, predicated on strong remittance inflows, a robust expansion of the construction sector, and large public investment projects. The repercussions of the war in Ukraine intensify inflationary pressures, exacerbate pandemic-related uncertainties, dampen tourism prospects, and disrupt the supply of food and agricultural inputs. The central bank took initial measures to contain inflationary pressures, as inflation reached 11.7 percent at end-April 2022. The authorities are advancing reforms on several fronts, including the transparency of COVID-19 spending, the institutional framework of State-Owned Enterprises, revenue administration, and public financial management.
Following the Executive Board’s discussion, Mr. Bo Li, Deputy Managing Director, made the following statement:
“The Gambia’s democratic progress is commendable, including the successful organization of peaceful and transparent presidential and parliamentary elections. Performance under the economic program supported by the Extended Credit Facility (ECF) has been broadly satisfactory despite challenges related to the COVID-19 pandemic and the electoral context. The economy is gradually recovering but the spillovers from the war in Ukraine are hampering a vigorous rebound and intensifying inflationary pressures.
“Fiscal and monetary policies aim at ensuring an appropriate balance between supporting the post-pandemic economic recovery, addressing the repercussions of the war in Ukraine, containing inflationary pressures, and safeguarding debt sustainability. In the context of a weakened tax base and elevated spending needs, it would be paramount to further streamline tax exemptions, rationalize subsidies to SOEs, strengthen cash management, and better prioritize public investment projects. The authorities are advancing reforms on governance, including the transparency of COVID-19-related spending and the management of state-owned enterprises (SOEs).
“In view of lingering vulnerabilities, including anticipated increases in debt service at the expiry of the debt service rescheduling period, it would be important to maintain adequate fiscal and external buffers. To this end, it would be advisable to adhere to the external borrowing plan under the ECF-supported program and seek grants and highly concessional loans.
The authorities would be encouraged to persevere in their ambitious structural reform agenda, including on transitional justice reforms and the improvement of the business environment to support private sector-led growth and poverty reduction, as well as to build resilience to climate change.”
