News Brief: IMF Completes Review Under The Gambia's PRGF Arrangement and Approves US$4 million Disbursement
IMF News, December 6, 2001
Source details
- Canonical URL
- News Brief: IMF Completes Review Under The Gambia's PRGF Arrangement and Approves US$4 million Disbursement
Other formats
Bibliographic details
- Published: December 6, 2001
Review outcome and disbursement
- The Executive Board completed the second review of The Gambia's performance under the third annual Poverty Reduction and Growth Facility (PRGF) arrangement.
- As a result, The Gambia will be able to draw up to SDR 3.4 million (about US$4 million).
- So far, The Gambia has drawn SDR 17.18 million (about US$22 million) under the arrangement.
Program background and financing
- The three-year program was originally supported by a three-year arrangement under the Enhanced Structural Adjustment Facility (ESAF) approved on June 29, 1998 for SDR 20.61 million (about US$26 million).
- On November 22, 1999, the IMF's facility for low income countries, the Enhanced Structural Adjustment Facility (ESAF), was renamed Poverty Reduction and Growth Facility (PRGF), and its purposes were redefined.
- PRGF loans carry an annual interest rate of 0.5 percent and are repayable over 10 years with a 5 1/2 -year grace period on principal payments.
Economic performance and corrective measures (IMF assessment)
- Findings highlighted by Eduardo Aninat, Deputy Managing Director and Acting Chairman:
- "The Gambian authorities are to be commended for The Gambia's generally encouraging economic performance since 1998 under the PRGF arrangement."
- During this period, The Gambia experienced sustained per capita GDP growth and low inflation and an improvement in the fiscal balance.
- The authorities took corrective measures, including the adoption of an appropriate macroeconomic framework and supporting policies for 2002-2004 in response to pressures on the budget that emerged earlier this year.
- On the basis of the corrective measures, the Board granted a waiver for the nonobservance of the quantitative performance criterion with respect to net bank credit to the central government, and the second review was completed.
- Policy recommendations and priority actions listed by the IMF:
- Strengthen fiscal performance in 2002 to maintain a sustainable level of government domestic debt.
- Implement planned revenue and expenditure reforms to free up resources for social sector spending and poverty reduction.
- Enhance revenue collection, in particular improvements in customs administration.
- Support measures to maintain fiscal discipline with actions to enhance the transparency and accountability of the public finances.
- Continue to implement a prudent monetary policy.
- Promote closer interaction of banks and foreign exchange bureaus and introduce foreign currency deposits to help deepen the interbank foreign exchange market.
- Enhance supervision and monitoring of financial institutions.
- Consolidate and broaden structural reforms to stimulate private sector activity and accelerate poverty reduction.
PRSP progress and debt relief prospects
- An interim PRSP has been designed by The Gambian authorities and incorporates sector policies that are part of the program pillars to reduce poverty.
- Considerable progress has been made with respect to the preparation of the full PRSP, including recent measures to help ensure completion by the recently revised date of early 2002.
- Executive Directors considered that work toward the development of a full PRSP, as reflected in the PRSP Preparation Status report, is satisfactory and provides a sound basis for continued access to Fund concessional lending.
- Full implementation of the measures in the macroeconomic framework for 2002-04, including the 2002 budget that draws on the building blocks for the full PRSP under preparation, is necessary to consolidate macroeconomic stability and further build on the track record leading to debt relief under the enhanced HIPC Initiative.
Source: IMF External Relations Department — News Brief dated December 6, 2001.