The Gambia: IMF Executive Board Completes the Second Review Under the Extended Credit Facility

IMF News, December 20, 2024

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Canonical URL: The Gambia: IMF Executive Board Completes the Second Review Under the Extended Credit Facility

The Executive Board completed the second review under The Gambia’s Extended Credit Facility (ECF) arrangement approved on January 12, 2024, in the amount of SDR74.64 million (about US$97.3 million).
Completion of the review allows for the immediate disbursement of SDR 8.29 million (about US$10.8 million), bringing total disbursements under the arrangement to about SDR 24.87 million (US$32.4 million).
The disbursed funds are intended to help meet financing needs and bolster inclusive, sustainable growth.

Real GDP growth:
- Expected to reach 5.8 percent in 2024.
- Projected at 5.9 percent in 2025.
- Projected at around 5 percent in the medium term.
Inflation and prices:
- Headline inflation peaked at 18.5 percent in September 2023.
- Inflation decreased significantly but experienced a small uptick to 10 percent in October 2024 due to energy prices.
External and sectoral developments:
- Tourist arrivals are recovering and nearing pre-pandemic levels.
- Remittance inflows remain strong.
- International reserves exceeded targets by the end of September.

Program implementation:
- Performance was mixed, with broadly satisfactory adherence to quantitative performance criteria and indicative targets but delays in implementing structural benchmarks.
- Revenue collection has been strong.
Fiscal pressures:
- Spending pressures from the Organization of Islamic Cooperation (OIC) Summit and emergency support to the public utility company NAWEC have weighed on fiscal balances.
Risks to outlook:
- The country remains vulnerable to global shocks, including global conflicts, commodity price shocks, and fluctuations in tourism and remittance flows.
- Steadfast implementation of the policy and reform agenda is essential to safeguard macroeconomic gains and debt sustainability.

Central bank stance:
- “The Central Bank of The Gambia has appropriately maintained its tight monetary policy stance and is encouraged to remain vigilant and data dependent to ensure that inflation converges to the central bank’s medium-term target.” (statement)
- The central bank is encouraged to continue pursuing an exchange rate that fully reflects market forces.
- The central bank’s commitment to cease financial support to public entities is welcome to prevent risks to its balance sheet.
Foreign exchange policy:
- “The new foreign exchange policy is working well,” and the foreign exchange market has performed well following its introduction.

Structural reform progress:
- Publication of the action plan for the implementation of the recommendations of the governance diagnostic report was a prior action for this review and was described as an important milestone.
- Progress with structural reforms is essential to enhance governance, improve the business environment, promote private sector development, and create jobs.
Debt and fiscal sustainability recommendations:
- Continued commitment to fiscal consolidation is critical to reduce fiscal risks and preserve debt sustainability.
- Finalizing and implementing the Domestic Revenue Mobilization Strategy will help secure consolidation gains and lower reliance on costly domestic and external financing.
- Improving the structure of expenditures will help maintain social services and space for growth-enhancing capital expenditures.
- Strengthening public financial management, including by preventing domestic arrears accumulation, and improving the performance of state-owned enterprises will help contain fiscal risks.
- To reduce debt vulnerabilities, it is crucial to adhere to the agreed fiscal targets, focus on grants and concessional loans, limit fiscal risks from PPPs, and implement a strong medium-term fiscal framework.
Climate-related policy:
- “Adopting strong climate-related policies including through a possible RSF arrangement will be essential to build The Gambia’s resilience to climate risks.” (statement)

SDR74.64 million: total ECF arrangement approval amount.
SDR 8.29 million (about US$10.8 million): immediate disbursement following second review.
SDR 24.87 million (US$32.4 million): total disbursements under the arrangement to date.
US$97.3 million: approximate value of the SDR74.64 million arrangement.
Real GDP growth: 5.8 percent (2024); 5.9 percent (2025); around 5 percent (medium term).
Inflation: 18.5 percent (peak, September 2023); 10 percent (October 2024).

IMF Press Release No. 24/496, December 20, 2024.