IMF Executive Board Completes Fourth Review under the Extended Credit Facility Arrangement for The Gambia and Approves US$ 6.72 Million Disbursement

IMF News, June 10, 2022

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Canonical URL: IMF Executive Board Completes Fourth Review under the Extended Credit Facility Arrangement for The Gambia and Approves US$ 6.72 Million Disbursement

Immediate disbursement approved: SDR 5 million (about US$ 6.72 million).
Purpose of disbursement: 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.
Total disbursements under the ECF arrangement to date: SDR 45 million.
Waivers and reviews:
- The Board completed a financing assurances review.
- The Board granted a waiver of nonobservance of a performance criterion on the ceiling on the net domestic borrowing of the central government.
ECF arrangement history:
- ECF approved on March 23, 2020 with initial total access of SDR 35 million (or 56.3 percent of quota).
- Access augmented to SDR 55 million (88.4 percent of quota) at completion of the first review on January 15, 2021.
Other IMF support:
- IMF Rapid Credit Facility disbursement: SDR 15.55 million (approved April 15, 2020).
- Debt service relief under the Catastrophe Containment and Relief Trust: SDR 7.9 million.

Real GDP growth:
- 2021: 4.3 percent (estimated, despite COVID-19 waves).
- 2022: projected 5.6 percent (predicated on strong remittance inflows, robust expansion of the construction sector, and large public investment projects).
Inflation and external pressures:
- Inflation reached 11.7 percent at end-April 2022.
- Repercussions of the war in Ukraine: intensify inflationary pressures, exacerbate pandemic-related uncertainties, dampen tourism prospects, and disrupt supply of food and agricultural inputs.
Policy response:
- The central bank took initial measures to contain inflationary pressures.

Authorities remain committed to:
- Strong policy measures and structural reforms, including on fiscal management, State-Owned Enterprises (SOEs), and governance.
- Reforms on transparency of COVID-19 spending, institutional framework of State-Owned Enterprises, revenue administration, and public financial management.
Recommended reform priorities highlighted by IMF management:
- Further streamline tax exemptions.
- Rationalize subsidies to SOEs.
- Strengthen cash management.
- Better prioritize public investment projects.
- Adhere to the external borrowing plan under the ECF-supported program and seek grants and highly concessional loans to maintain adequate fiscal and external buffers.
- Persevere with ambitious structural reform agenda, including transitional justice reforms and improvement of the business environment to support private sector-led growth and poverty reduction, and to build resilience to climate change.

Democratic progress: successful organization of peaceful and transparent presidential and parliamentary elections commended.
Program performance: broadly satisfactory despite COVID-19 and electoral challenges.
Risks and vulnerabilities:
- Spillovers from the war in Ukraine hampering a vigorous rebound and intensifying inflationary pressures.
- Lingering vulnerabilities include anticipated increases in debt service at the expiry of the debt service rescheduling period; maintaining fiscal and external buffers is important.

Press Release No. 22/194, June 10, 2022.