By: Kebba AF Touray
The International Monetary Fund (IMF) said its board has approved US$98.4 million for the Gambia.
The IMF made this disclosure in a press release issued on Friday,May 3, 2024, which came following discussion between Mr. Ivohashina Fizara Razafimahefa, the IMF representative who was sent to The Gambia to discuss with Gambian authorities in Banjul between April 23 and May 3, 2024, and said a staff-level agreement was reached on the first review of the program supported under the 36-month Extended Credit Facility (ECF) arrangement which was approved in January 2024, for total access of Special Drawing Rights (SDR) of 74.64 million or about US$98.4 million.
Subjected to approval by the IMF’s Executive Board, the completion of the review will enable a disbursement of SDR 8.29 million or about US$10.9 million, bringing the total disbursement under the arrangement to about US$21.8 million.
At the conclusion of the discussions, Mr. Razafimahefa reportedly told the IMF that Gambian authorities remain committed to their reform agenda and that their efforts have been commendable. He said the introduction of a new foreign exchange policy by the Gambian authorities has allowed the official exchange rate of the local currency to closely reflect market developments and has alleviated foreign exchange shortages. According to the release, he said governance and structural measures are advancing in the Gambia including the adoption of the anti-corruption bill and the oversight of SOEs. It added that the 2023 fiscal outturns reflected good revenue performance, but said capital spending exceeded projections due to an accelerated execution of donor funded infrastructure projects, especially for the just ended Organization of Islamic Cooperation (OIC) Summit.
“Public debt to GDP ratio has started to decline, and performance under the ECF-supported program has been satisfactory. All quantitative performance criteria and indicative targets were met,” Mr. Razafimahefa said.
He also indicated that four structural benchmarks were also met, and that good progress is being made on the remaining structural benchmarks. He outlined that economic activity within the country continues to recover robustly, with economic growth estimated at 5.3 percent for 2023, supported by good performance of the agriculture, services, tele-communications and construction sectors.
He however said that tourist arrivals continue to increase in 2023, but still remains below the pre-pandemic level, and said remittance inflows also show a sustained good performance.
“Inflation eased from a peak of 18.5 percent 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,” Mr. Razafimahefa said, and further explained that policy discussions which they had with the authorities focused on preserving the hard-won macro-economic gains by supporting strong and inclusive economic growth. He continued to say that 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 reducing debt vulnerabilities, and IMF staff has 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,” Mr. Razafimahefa said.
The statement said that the Central Bank of The Gambia is committed to maintaining a tight monetary policy stance to ensure that inflation firmly declines, and to also continue a close implementation of the recently introduced foreign exchange policy to prevent a re-emergence of foreign exchange shortages. He said structural reforms cover domestic revenue mobilization, public financial management, governance and transparency, management of SOEs, access to finance, and the business environment.
According to the IMF Press Release, discussions were also held on climate related risks and vulnerabilities and the authorities’ strategy and collaboration with development partners in these areas, and that Mr. Razafimahefa expressed the mission’s thanks to its counterparts for the constructive dialogue.
The release said the IMF Mission met with the Minister of Finance and Economic Affairs, Seedy Keita; the Minister of Public Service, Administrative Reform and Policy Management, Baboucarr Bouy; the Minister of the Environment, Climate Change and Natural Resources, Rohey John Manjang; the Minister of Trade, Industry, Regional Integration and Employment, Baboucarr Ousmaila Joof; the Governor of the Central Bank of The Gambia, Buah Saidy; Commissioner General of the Gambia Revenue Authority, YankubaDarboe; Auditor General Modou Ceesay; and senior government and central bank officials.
The release noted that the IMF mission team also had fruitful discussions with representatives of the private sector, civil society organisations and development partners.
