THE GAMBIA: IMF Executive Board Completes the First Review Under the Extended Credit Facility

IMF News, July 9, 2024

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Canonical URL: THE GAMBIA: IMF Executive Board Completes the First Review Under the Extended Credit Facility

The Extended Credit Facility (ECF) arrangement was approved by the IMF Executive Board on January 12, 2024, in the amount of SDR74.64 million (about US$98.7 million).
Completion of the first review allows an immediate disbursement of SDR 8.29 million (about US$10.95 million).
Total disbursement under the arrangement following this review: about SDR16.6 million (US$21.9 million).
Program performance under the ECF arrangement has been described as satisfactory.

Economic growth is estimated at 5.3 percent in 2023.
Sector contributors to growth: agriculture, services, telecommunication, and construction.
Tourist arrivals increased in 2023 but remain slightly below pre-pandemic levels.
Remittance inflows showed sustained good performance.
Headline inflation: eased from a peak of 18.5 percent (year-on-year) in September 2023 to 11 percent in April 2024.
Central bank medium-term inflation objective: 5 percent.
International reserves: above 4.5 months of imports.
The introduction of a new foreign exchange policy in December 2023 helped largely close the wedge between the official and parallel market exchange rates and ease foreign exchange shortages.

The outlook remains subject to downside risks from the repercussions of global and regional conflicts.
Specific risks include:
- international commodity price volatility,
- lower tourist arrivals,
- weak remittance inflows.

Monetary policy:
- The central bank has maintained a tight monetary policy stance to fight inflationary pressures.
- Authorities are encouraged to make full use of the central bank’s policy toolkit to fight inflation, ensure a market-based exchange rate, and smooth functioning of the foreign exchange market.
Fiscal policy:
- 2023 fiscal outturns: good revenue performance, but the fiscal deficit and public debt exceeded projections due to accelerated execution of some infrastructure projects.
- Fiscal policy in 2024 remains anchored on the approved budget.
- Recommended actions:
- bolster domestic revenue mobilization,
- reprioritize spending,
- adhere to the agreed borrowing plan,
- focus on grants and concessional loans,
- limit fiscal risks from SOEs and PPPs,
- implement a strong medium-term fiscal framework.
- Strong external buffers are needed to prepare for the upcoming expiration of debt service deferrals.
Structural and governance reforms:
- Authorities are encouraged to build on recent progress, including the adoption of the anti-corruption bill by the National Assembly.
- Further progress is critical on enhancing governance and improving the business environment to foster a strong recovery and inclusive growth.
- Adopting strong climate-related policies is essential to build The Gambia’s resilience to climate risks.

The Gambia: Press Release No. 24/264, July 9, 2024, International Monetary Fund.