The Executive Board of the International Monetary Fund (IMF) Friday completed the first review of The Gambia’s performance under a programme supported by a 39-month Extended Credit Facility (ECF) arrangement and approved an immediate disbursement of US$28.8 million to the country.
The funds will help The Gambia meet its balance-of-payments and fiscal financing needs and support the post-pandemic recovery, the IMF said in a statement, noting that “this brings total disbursements under the arrangement to US$36 million”.
Since the onset of the COVID-19 pandemic, The Gambia has also benefited from an IMF Rapid Credit Facility disbursement of US$ 21.3 million and is receiving debt service relief under the Catastrophe Containment and Relief Trust, expected to total US$5.83 million.
An IMF statement, made available on Saturday said The Gambian authorities had maintained prudence in economic management and advanced structural reforms, including in governance, for a transparent use of funds and effective delivery of public services.
“The fiscal and monetary policy stances were relaxed to help meet pandemic-related humanitarian needs and support economic activity. Improved domestic revenue mobilization and judicious public financial management helped maintain fiscal discipline and deliver much-needed emergency response, while prudent monetary policy helped ensure price stability and lower domestic borrowing costs,” it explained.
Reflecting the impact of the COVID-19 pandemic, Gambia’s growth in 2020 is estimated at about zero percent. Predicated upon a gradual normalisation of global conditions and strong fiscal stimulus, growth is projected to reach 6.0 percent in 2021, and average of 6.5 percent per year over the medium term.
The IMF foresees high downside risks, as The Gambia remains fragile and vulnerable to shocks, while being exposed to a prolonged standstill in tourism. The Gambia continues to be assessed at high risk of debt distress, with limited borrowing space.
Following the Executive Board discussion, IMF Acting Chair and Deputy Managing Director, Mr. Tao Zhang, remarked that despite the severe impact caused by the COVID-19 pandemic, The Gambian authorities’ decisive response to the pandemic had helped to moderate its impact and set the stage for economic recovery.
“Continued commitment to prudent policies and adhering to the fiscal envelope, while protecting social spending is critical to support the recovery and the attainment of programme objectives. Efforts to strengthen domestic revenue mobilization should focus on reducing tax exemptions and reinforcing tax and customs administration,” he said
