IMF to disburse $10 million under Extended Credit Facility for Gambia

Upon completion of the review, SDR 8.29 million (approximately USD 10.95 million) will be immediately disbursable, bringing total disbursements under the arrangement to approximately SDR 16.6 million (approximately USD 21.9 million).

Economic activity continues to recover strongly. Growth is expected to be 5.3% in 2023, supported by good performance in agriculture, services, telecommunications, and construction. Tourist arrivals continue to increase in 2023, but remain slightly below pre-pandemic levels. Remittance inflows also show continued good performance. Headline inflation has declined from a peak of 18.5% (year-on-year) in September 2023 to 11% in April 2024, mainly due to lower global food and energy prices, but remains well above the Central Bank’s medium-term target of 5%. The new foreign exchange policy introduced in December 2023 has helped to narrow the gap between the official and parallel market exchange rates to a large extent and ease foreign exchange shortages. International reserves remain at a comfortable level, exceeding 4.5 months of imports. The outlook remains subject to downside risks from the impact of global and regional conflicts. These risks include international commodity price volatility, lower tourist arrivals, and weak remittance inflows.

Following discussions at the Executive Committee, Deputy General Manager Li Bo issued the following statement:

“The Gambian authorities continue to advance democratic and judicial reforms. The economic recovery is strengthening and inflation, while still high, is gradually easing. Despite a challenging environment, programs under the Extended Credit Facility (ECF) are performing satisfactorily.

“The central bank appropriately maintains a tight monetary policy stance to cope with inflationary pressure. After the introduction of the new foreign exchange policy, the foreign exchange shortage has eased. Looking ahead, the central bank is encouraged to make full use of policy tools to deal with inflation and continue to ensure the marketization of the exchange rate and the smooth operation of the foreign exchange market.

“The 2023 fiscal outcome reflects a good revenue performance, but the fiscal deficit and public debt are higher than expected due to the acceleration of some infrastructure projects. Fiscal policy in 2024 remains based on the approved budget. Efforts to strengthen domestic revenue mobilization and reprioritize spending should continue. To reduce debt vulnerabilities, it is important to adhere to the agreed borrowing program, focus on grants and concessional loans, limit fiscal risks for state-owned enterprises and PPPs, and implement a strong medium-term fiscal framework. In addition, strong external buffers are needed to prepare for the upcoming debt repayment extensions.

“The authorities are encouraged to build on recent progress and continue to advance structural reforms. The passage of the anti-corruption bill by the National Assembly is an important milestone. Further progress remains critical, including by strengthening governance and improving the business environment to foster a strong recovery and inclusive growth. The adoption of strong climate-related policies is critical to strengthening The Gambia’s resilience to climate risks.”