December 14, 2022
PRESS OFFICER: Nicolas Mombrial
Phone: +1 202 623-7100Email: MEDIA@IMF.org
Washington, DC: Today, the Executive Board of the International Monetary Fund (IMF) completed the fifth review under the Extended Credit Facility (ECF) arrangement for The Gambia. The completion of the review enables the immediate disbursement of the equivalent of SDR20.55 million, about US$27.41 million, to help meet the country’s balance-of-payments and fiscal financing needs amid challenges, including the repercussions of the war in Ukraine and the lingering impact of the COVID-19 pandemic. This brings total disbursements under the ECF arrangement to SDR 65.55 million (about US$87.44 million).
The Executive Board also approved an augmentation of access under the ECF arrangement from SDR55 million to SDR70.55 million (or 113.4 percent of The Gambia’s quota in the Fund), which is the second augmentation of access under this ECF arrangement. Further, the Executive Board completed the financing assurances review and granted a waiver of nonobservance of a performance criterion on external arrears.
The ECF arrangement with The Gambia was approved by the IMF’s Executive Board on March 23, 2020 , with an initial total access of SDR35 million (or 56.3 percent of quota) that was augmented at the completion of the first ECF review on January 15, 2021 to SDR55 million (88.4 percent of quota). The Gambia has also benefited from an IMF Rapid Credit Facility disbursement of SDR15.55 million and received debt service relief from the IMF under the Catastrophe Containment and Relief Trust, totaling SDR7.9 million.
The Gambian economy is facing multiple exogenous shocks, including the repercussions of the war in Ukraine, the lingering impact of the COVID-19 pandemic, and a major flooding. Growth projections in 2022 have been revised downward from 5.6 percent to 4.5 percent. Inflation reached a record-high level of 13.2 percent (year-on- year) in October 2022. The Central Bank of The Gambia increased further its policy rate to 13 percent in December 2022 to tackle inflationary pressures. The balance of payments is adversely affected by disruptions of timber and cashew exports, weaker-than-expected tourist arrivals, lower remittance inflows, high food and fuel import bills, and elevated freight costs. These shocks are generating foreign exchange shortages and weighing on forex reserves. Budget execution is facing pressures, including civil service salary increase and fuel revenue losses to alleviate the impact of the high global fuel prices on the population.
Executive Board Assessment [1]
Following the Executive Board discussion, Mr. Bo Li, Deputy Managing Director and Acting Chair, made the following statement:
The Gambia’s performance under the economic program supported by the Extended Credit Facility (ECF) has been broadly satisfactory despite economic and social challenges stemming from the repercussions of the war in Ukraine, the lingering impacts of the COVID-19 pandemic, and a recent major flooding. Owing to these exogenous shocks, economic recovery and tax collection are weaker than anticipated, while inflationary pressures and foreign exchange shortages are intensifying.
The central bank is tightening the monetary policy stance to tackle inflation. It would be paramount to allow smooth functioning of the foreign exchange market and ensure that the exchange rate reflects market forces, which would help restore equilibrium.
Fiscal policy aims at alleviating the impact of the high global fuel and food prices on the population while safeguarding debt sustainability. To keep public debt on a downward path, it would be important to bolster domestic revenue mobilization, streamline tax exemptions, rationalize subsidies to SOEs, strengthen cash management, and further prioritize public investment projects.
In view of lingering vulnerabilities, including anticipated increases in debt service obligations at the expiry of the debt service rescheduling period, it would be important to maintain sufficient fiscal and external buffers. To this end, it would be advisable to contain domestic borrowing, strictly adhere to the external borrowing plan, and seek grants and highly concessional loans.
The authorities continue implementation of their ambitious structural reform agenda, including on justice reforms, audits of COVID-19-related spending, public procurement legal framework, and an upcoming governance diagnostic. The authorities are encouraged to further strengthen the business environment to promote private sector-led growth and reduce poverty.
[1] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.
Table 1. The Gambia: Selected Economic Indicators, 2020–2027
|
2020 |
2021 |
2022 |
2023 |
2024 |
2025 |
2026 |
2027 |
|||||
|
Act. |
Prel. |
Prog. |
Proj. |
Prog. |
Proj. |
Projections |
||||||
|
National account and prices |
||||||||||||
|
GDP at constant prices |
0.6 |
4.3 |
5.6 |
4.5 |
6.2 |
6.0 |
6.5 |
5.8 |
5.0 |
5.0 |
||
|
GDP deflator |
2.2 |
7.8 |
6.1 |
9.0 |
6.8 |
9.3 |
6.7 |
5.3 |
4.1 |
4.4 |
||
|
Consumer prices (average) |
5.9 |
7.4 |
8.1 |
11.4 |
8.0 |
11.1 |
8.4 |
6.1 |
5.0 |
5.0 |
||
|
Consumer prices (end of period) |
5.7 |
7.6 |
8.5 |
12.4 |
7.5 |
9.7 |
7.1 |
5.0 |
5.0 |
5.0 |
||
|
External sector |
||||||||||||
|
Exports, f.o.b (US$ values) |
-48.6 |
6.2 |
33.1 |
-38.3 |
22.5 |
151.1 |
27.1 |
7.2 |
6.0 |
5.9 |
||
|
Imports, f.o.b (US$ values) |
-5.2 |
6.9 |
37.1 |
26.2 |
13.1 |
18.3 |
7.4 |
5.3 |
3.4 |
5.5 |
||
|
Terms of trade (deterioration = -) |
1.4 |
-7.5 |
-3.0 |
-3.9 |
-0.9 |
-1.0 |
-1.2 |
-0.9 |
-0.8 |
2.1 |
||
|
Real effective exchange rate
|
-0.8 |
… |
… |
… |
… |
… |
… |
… |
… |
… |
||
|
Money and credit |
||||||||||||
|
Broad money |
22.0 |
19.5 |
6.1 |
4.1 |
6.5 |
6.5 |
10.6 |
10.9 |
6.8 |
6.1 |
||
|
Net foreign assets |
17.6 |
8.8 |
0.4 |
-10.7 |
1.6 |
1.6 |
6.4 |
5.5 |
0.6 |
0.4 |
||
|
Net domestic assets |
4.4 |
10.7 |
5.7 |
14.7 |
4.9 |
4.8 |
4.3 |
5.4 |
6.2 |
5.6 |
||
|
Of which: |
||||||||||||
|
Credit to central government (net) |
3.6 |
9.3 |
5.6 |
5.5 |
2.0 |
3.1 |
1.4 |
1.0 |
0.4 |
0.0 |
||
|
Credit to the private sector (net) |
0.1 |
3.1 |
2.1 |
6.1 |
2.9 |
1.7 |
2.8 |
4.4 |
5.9 |
5.6 |
||
|
Velocity (GDP/broad money) |
1.8 |
1.7 |
1.8 |
1.8 |
1.9 |
2.0 |
2.1 |
2.1 |
2.1 |
2.2 |
||
|
Central government finances |
||||||||||||
|
Domestic revenue
|
14.5 |
14.3 |
14.7 |
11.9 |
13.5 |
12.5 |
13.3 |
14.3 |
15.0 |
15.3 |
||
|
Of which: Tax Revenue |
11.1 |
10.3 |
10.1 |
9.3 |
10.9 |
9.8 |
10.6 |
11.4 |
12.0 |
12.3 |
||
|
Grants |
8.5 |
2.5 |
4.9 |
5.9 |
6.8 |
6.6 |
6.1 |
6.4 |
5.5 |
5.2 |
||
|
Total expenditures |
25.2 |
21.4 |
23.8 |
22.7 |
22.5 |
21.7 |
21.2 |
21.6 |
21.0 |
21.4 |
||
|
Of which:
Interest
|
21.9 |
21.2 |
18.1 |
21.4 |
16.3 |
16.9 |
19.9 |
17.5 |
14.1 |
0.0 |
||
|
Net lending (+)/borrowing (–) |
-2.2 |
-4.6 |
-4.2 |
-4.8 |
-2.2 |
-2.7 |
-1.8 |
-0.9 |
-0.5 |
-0.9 |
||
|
Fiscal financing |
2.2 |
4.6 |
4.2 |
4.8 |
2.3 |
2.7 |
1.8 |
0.9 |
0.5 |
0.9 |
||
|
Foreign |
0.9 |
2.5 |
1.2 |
0.9 |
1.4 |
1.2 |
1.2 |
1.1 |
0.5 |
0.4 |
||
|
Domestic |
1.3 |
2.1 |
3.0 |
3.9 |
1.0 |
1.5 |
0.6 |
-0.2 |
0.0 |
0.5 |
||
|
Primary balance |
1.0 |
-1.6 |
-1.5 |
-2.3 |
0.0 |
-0.6 |
0.9 |
1.6 |
1.6 |
0.9 |
||
|
Public debt |
85.9 |
83.8 |
79.5 |
80.8 |
74.6 |
75.4 |
70.2 |
63.6 |
57.9 |
52.7 |
||
|
Domestic public debt |
36.4 |
35.4 |
33.0 |
32.4 |
30.1 |
29.5 |
26.6 |
23.0 |
19.6 |
16.5 |
||
|
External public debt |
49.5 |
48.4 |
46.5 |
48.4 |
44.5 |
45.9 |
43.6 |
40.6 |
38.3 |
36.2 |
||
|
External public debt (millions of US$) |
893.8 |
965.9 |
985.8 |
1003.7 |
1024.7 |
1,038.2 |
1,066.1 |
1,073.5 |
1,072.4 |
1,080.9 |
||
|
External current account balance |
||||||||||||
|
Excluding official transfers |
-7.5 |
-4.6 |
-14.2 |
-16.8 |
-14.1 |
-14.6 |
-10.8 |
-10.3 |
-9.0 |
-8.6 |
||
|
Including official transfers |
-3.0 |
-3.8 |
-13.3 |
-14.7 |
-11.8 |
-12.6 |
-8.7 |
-9.0 |
-8.3 |
-7.9 |
||
|
Gross official reserves (millions of US$) |
352.1 |
530.4 |
467.7 |
424.6 |
459.5 |
416.4 |
429.6 |
441.2 |
447.7 |
448.0 |
||
|
(months of next year's imports of goods and services) |
5.8 |
7.0 |
4.7 |
4.8 |
4.4 |
4.4 |
4.3 |
4.3 |
4.1 |
3.9 |
||
|
Savings and investment |
||||||||||||
|
Gross investment |
20.2 |
20.7 |
23.6 |
22.2 |
23.5 |
22.5 |
22.5 |
23.9 |
23.7 |
24.3 |
||
|
Of which : Central government |
7.1 |
6.2 |
9.3 |
8.9 |
9.0 |
9.0 |
8.8 |
9.7 |
9.0 |
9.3 |
||
|
Gross savings |
17.2 |
16.9 |
10.3 |
7.5 |
11.7 |
9.9 |
13.8 |
14.9 |
15.4 |
16.4 |
||
|
Memorandum items: |
||||||||||||
|
Nominal GDP (billions of dalasi) |
93.3 |
104.9 |
117.6 |
119.5 |
133.4 |
138.5 |
157.4 |
175.3 |
191.7 |
210.2 |
||
|
GDP per capita (US$) |
747.9 |
816.4 |
847.9 |
845.2 |
889.9 |
881.7 |
920.3 |
956.0 |
984.2 |
1,017.3 |
||
|
Use of Fund resources (millions of SDRs) |
||||||||||||
|
Disbursements |
20.6 |
35.0 |
10.0 |
26.4 |
5.0 |
5.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
|
Of which : 2020 RCF |
15.6 |
… |
… |
… |
… |
… |
… |
… |
… |
… |
||
|
Of which : ECF Augmentation |
… |
20.0 |
… |
… |
… |
… |
… |
… |
… |
… |
||
|
Repayments |
-4.6 |
-3.7 |
-2.0 |
-2.0 |
-4.1 |
-4.1 |
-3.9 |
-5.2 |
-9.5 |
-14.0 |
||
|
CCRT debt relief 1 |
3.2 |
4.0 |
0.8 |
0.8 |
… |
… |
… |
… |
… |
… |
||
|
PV of overall debt-to-GDP ratio |
73.5 |
71.0 |
66.7 |
67.9 |
62.6 |
63.3 |
59.1 |
53.6 |
48.3 |
43.5 |
||
