By Osman Kargbo
IMF team Leader Ivohasina Fizara Razafimahefa
The Gambia’s reform agenda has continued to advance with robust economic recovery and decelerating inflation (18.5% to 14.9%), the International Monetary Fund has said, looking forward to disbursing to the government another US$10.9 million ECF fund, subject to IMF board approval.
An IMF team, which had discussions with the Gambian authorities in Banjul from April 23 to May 3, 2024, stated in its report published on May 3 this year that “pressures on the foreign exchange market are easing”, and advised the Gambian authorities to continue the good job of persevering in strong policies to maintain government’s “ambitious development agenda”.
According to the IMF team led by Ivohasina Fizara Razafimahefa, IMF staff and the Gambian authorities have “reached a staff-level agreement on economic policies” to conclude the first review of the program under the Extended Credit Facility (ECF) arrangement.
The 36-month Extended Credit Facility arrangement of a total amount of about US$98.4 million (SDR 74.64 million) for The Gambia was approved in January this year.
Subject to approval by the IMF’s Executive Board, the completion of the review would “enable another disbursement” of about US$10.9 million (SDR 8.29 million), bringing the total disbursement under the arrangement to about US$21.8 million.
At the end of the discussions on the first review of the program under the Extended Credit Facility arrangement, the head of the IMF team that visited The Gambia from 23 April to 3 May this year, Mr Razafimahefa, issued the following statement:
“The authorities remain committed to their reform agenda; their efforts have been commendable. The introduction of a new foreign exchange policy has allowed the official exchange rate to closely reflect market developments and alleviated foreign exchange shortages. Governance and structural measures are advancing, including the adoption of the anti-corruption bill and the oversight of SOEs.
“The 2023 fiscal outturns reflected good revenue performance, but capital spending exceeded projections due to an accelerated execution of donors-funded infrastructure projects, especially for the Organization of Islamic Cooperation (OIC) summit during May 4-5, 2024.
“The public debt-to-GDP ratio has started to decline. Performance under the ECF-supported program has been satisfactory. All quantitative performance criteria and indicative targets were met. Four structural benchmarks were also met. Good progress is being made on the remaining structural benchmark.
“Economic activity continues to recover robustly. Economic growth is estimated at 5.3 percent for 2023, supported by good performance of the agriculture, services, telecommunication, and construction sectors. Tourist arrivals continued to increase in 2023 but remain below the pre-pandemic levels. Remittance inflows also show a sustained good performance. Inflation eased from a peak of 18.5 percent (y-o-y) in September 2023 to 14.9 percent at end-March 2024, but remains well above the central bank’s medium-term objective of 5 percent.
“Policy discussions focused on preserving the hard-won macroeconomic gains and supporting strong and inclusive economic growth. Fiscal policy in 2024 will remain anchored on the parameters of the budget approved by the National Assembly. The medium-term fiscal framework will aim at continuing reducing debt vulnerabilities. Staff advised the authorities to address the costly subsidies on domestic fuel prices while strengthening the social registry to provide targeted support to the vulnerable population.
“The Central Bank of The Gambia is committed to maintaining a tight monetary policy stance to ensure that inflation firmly declines. It will also continue close implementation of the recently introduced foreign exchange policy to prevent re-emergence of foreign exchange shortages.
“Structural reforms cover domestic revenue mobilization, public financial management, governance and transparency, management of SOEs, access to finance, and the business environment. Discussions were also held on climate-related risks and vulnerabilities, the authorities’ strategy, and the collaboration with development partners in these areas.
“The mission would like to thank its counterparts for a constructive dialogue.”
The report added that the mission team also had fruitful discussions with representatives of the private sector, civil society, and development partners.
