- IMF staff and the Gambian authorities conducted productive discussions on economic policies to conclude the second review of the program under the Extended Credit Facility (ECF) arrangement.
- Economic recovery is strengthening while inflation has decelerated to single digits.
- The Gambia's reform agenda is advancing despite challenges to fiscal policy.
- The IMF remains committed to supporting The Gambia and discussions will continue remotely and in Washington D.C. over the coming weeks to finalize agreement.
Washington, DC: An International Monetary Fund (IMF) team, led by Ms. Eva Jenkner, conducted productive discussions with the Gambian authorities in Banjul from September 30 to October 11, 2024, on the second review of the program supported under the 36-month Extended Credit Facility (ECF) arrangement, which was approved in January 2024 for total access of SDR 74.64 million (about US$99.5 million). Discussions will continue remotely and in Washington D.C. over the coming weeks to finalize agreement. Subject to later approval by the IMF's Executive Board, the completion of the review will enable a disbursement of SDR 8.29 million (about US$11.05 million), bringing the total disbursement under the arrangement to about US$33.2 million.
At the conclusion of the discussions, Ms. Jenkner issued the following statement:
"The authorities remain committed to their reform agenda and program objectives. Despite significant revenue collection efforts, fiscal outturns of the first half of 2004 were weaker than expected, mainly reflecting strong spending pressures stemming from the OIC Summit, accelerated infrastructure projects and emergency support to the national utility NAWEC. Regardless, ten out of eleven quantitative performance criteria and indicative targets under the ECF-supported program were met. Also, progress was made on significant structural benchmarks, such as audits of large taxpayers and improvements in public financial management, and the public debt-to-GDP ratio remains on a downward trajectory.
"Economic activity is strengthening. Economic growth is estimated at 5.8 percent for 2024, supported by agriculture, services, telecom, and construction sectors. Tourist arrivals continued to recover, reaching a level closer to the pre-pandemic peak levels. Remittance inflows also strengthened. Inflation declined to 9.8 percent at end-August 2024, from a peak of 18.5 percent at end-2022.
"Policy discussions focused on the implementation of the National Development Strategy for 2023-27 and further support for the structural transformation of the economy.
"The Central Bank of The Gambia is committed to maintaining a monetary policy stance consistent with a convergence of the inflation rate towards its medium-term objective of 5 percent. It will also remain vigilant to ensure a market-determined exchange rate, a smooth functioning of the foreign exchange market, as well as a strong financial position.
"While fiscal policy in 2024 remains largely anchored on the parameters of the budget approved by the National Assembly, the strong spending pressures from the OIC Summit and emergency support to NAWEC entailed major reallocations across budget lines, putting pressure on social spending. Staff advised the authorities to maintain fiscal responsibility and vigorously pursue their domestic resource mobilization and reform of state-owned enterprises (SOEs) to increase the room for responding to large social and developmental needs and protecting the most vulnerable. Structural reforms under the program cover domestic revenue mobilization, public financial management, governance and transparency, management of SOEs, the business environment, and addressing climate-related risks and vulnerabilities. The medium-term fiscal framework aims to further reduce debt vulnerabilities.
"We reaffirm our commitment to supporting The Gambia and the IMF team and the Gambian authorities will continue their constructive dialogue to conclude the second review of the ECF in time for the expected Board approval at end-December.
"The mission would like to thank the Gambian authorities for their kind hospitality and candid discussions."
The mission met with His Excellency President of the Republic Barrow; His Excellency Vice-President Jallow; Minister of Finance and Economic Affairs, Seedy Keita; Minister of Public Service, Administrative Reforms and Policy, Baboucarr Bouy; Governor of the Central Bank of The Gambia, Buah Saidy; Commissioner General of the Gambia Revenue Authority, Yankuba Darboe; National Auditor General, Modou Ceesay; and senior government and central bank officials. The mission team also had fruitful discussions with representatives of the private sector, civil society, and development partners.
