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The Gambia and the IMF Press Release: IMF Approves In Principle a Three-Year, US$27 Million PRGF Arrangement for The Gambia Country's Policy Intentions Documents |
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The Gambia—Letter
of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding
Mr. Horst Köhler Dear Mr. Köhler: 1. On behalf of the government of The Gambia, we have the honor of transmitting the attached memorandum of economic and financial policies (MEFP) that sets out the objectives and policies that the government intends to pursue during 2002/03-2004/05 (April-March). The MEFP is itself based on the Strategy for Poverty Alleviation (SPA II—our version of the poverty reduction strategy paper (PRSP)),1 whose focus is on a longer-term development strategy to reduce poverty with sustainable growth and external debt management, as well as structural reforms. The reforms entail enhanced public participation in policy formulation, accelerated economic growth with increased private sector activity, and various social sector measures to enhance human capital. The government intends to make the contents of this letter and those of the attached MEFP and technical memorandum of understanding (TMU), as well as the staff report on the request for the three-year arrangement under the Poverty Reduction and Growth Facility (PRGF), available to the public and authorizes you to arrange for them to be posted on the IMF website, subsequent to Board approval. 2. In support of these objectives and policies, the government of The Gambia hereby requests a three-year arrangement under the PRGF, in an amount equivalent to SDR 20.22 million (65 percent of quota). Moreover, in support of its overall economic program, the government will also be requesting support from bilateral and multilateral donors and creditors. 3. The government of The Gambia will provide the Fund with such information as the Fund requests in connection with the progress made in implementing the economic and financial policies and achieving the objectives of the program. 4. The government of The Gambia believes that the policies and measures set forth in the attached memorandum are adequate to achieve the objectives of the program, but it will take any further measures that may prove necessary to this end. During the period of the three-year PRGF arrangement, the government will consult with the Managing Director on the adoption of any measures that may be appropriate, at the initiative of The Gambia or whenever the Managing Director requests such a consultation. Moreover, after the period of the three-year arrangement and while The Gambia has outstanding financial obligations to the Fund arising from loans under that arrangement, The Gambia will consult with the Fund from time to time, at the initiative of the government or whenever the Managing Director requests consultation on The Gambia's economic and financial policies. Sincerely yours,
1The PRSP was forwarded separately to you and the President of the World Bank. |
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Memorandum of Economic and Financial Policies for 2002/03–2004/05 I. Introduction 1. This memorandum reviews performance under the recently completed program supported under the Poverty Reduction and Growth Facility (PRGF) for 1998-2001. It also outlines the government's medium-term program for 2002/03-2004/05 (April-March), focusing especially on the current financial year, in support of which the government of The Gambia is requesting a new three-year arrangement under the PRGF. The government's program is formulated against the background of the launching of the Strategy for Poverty Alleviation (SPA II—our version of the poverty reduction strategy paper (PRSP)) and the December 2000 decisions by the Fund and World Bank Executive Boards approving debt relief for The Gambia under the enhanced Initiative for Heavily Indebted Poor Countries (HIPC Initiative). The latter provided a significant boost to the government's effort to reduce poverty. II. Performance During the Prgf-supported Program and Recent Economic Developments A. Performance under the PRGF-supported program (1998-2001) 2. Overall economic performance under the PRGF-supported program for 1998-2001 was mixed. Notwithstanding robust real GDP growth (led by a recovery in the agricultural sector, particularly groundnuts), accompanied by low inflation and good progress in a number of structural reforms, there were slippages in implementing the budget. In addition to shortfalls in customs revenue collection (partly reflecting the faulty introduction of a preshipment inspection (PSI) scheme during 1999-2000 and weak customs administration), budgetary expenditure exceeded program targets as a result of payments associated with the government's seizure in January 1999 of property belonging to Alimenta—a Swiss groundnut marketing company—and on-lending to the electricity public enterprise to purchase generators. Accordingly, the fiscal deficit (excluding grants), which had declined from 7.8 percent of GDP in 1997 to 3.6 percent in 2000, increased to 8.7 percent in 2001. Borrowing to cover the fiscal deficits and delays in the receipt of donor grants contributed to an increase in domestic debt to over 33 percent of GDP by end-2001. Broad money growth was uneven and accelerated to 35 percent in 2000 in conjunction with efforts to finance the groundnut crop before moderating toward the end of the program. 3. The external sector, while experiencing a significant improvement, remained under pressure, partly reflecting delays in the disbursement of donor grants. Thus, international gross reserves declined to the equivalent of 4.9 months of imports at the end of the program, while the exchange rate depreciated by an average of about 4 percent annually in real effective terms during 1998-2001. However, the depreciation contributed to the improvement in The Gambia's external competitiveness, as did the extensive reforms to reduce the maximum external tariff from 90 percent in 1998 to 18 percent in 2000; the number of tariff bands was reduced from 30 to 3 over the same period. 4. Among the key structural reforms were the fiscal reforms entailing the (a) introduction of an automated system for customs data (ASYCUDA); (b) preparation of public expenditure reviews (PERs) for three key social sectors with assistance from donors; (c) enhanced expenditure control and reporting, partly through procedures to better manage the below-the-line (BTL) accounts; and (d) closing of government accounts for 1991/92 (July-June)-1999; the latter two reforms were implemented with the assistance of a Fund resident budget advisor. Significant legislation was prepared and part of it approved by the National Assembly to support the legal and institutional reforms for the financial sector and to enhance private sector activities (on issues such as privatization, regulation, and competition). The government privatized the Atlantic Hotel and the Trust Bank in 1999. Moreover, it reached a settlement with Alimenta on the property dispute, and the democratic process was strengthened through elections. 5. The government remains determined to consolidate the overall economic gains made over the last four years. Accordingly, and in conjunction with the preparation of the PRSP, it is coordinating with its development partners the preparation of a comprehensive technical assistance program to strengthen institutional capacity. This should allow the achievement of better results, building on past efforts that include (a) an emphasis on continued robust economic growth (focusing on the groundnut sector) to enhance income-generating activities; (b) budgetary reforms to improve transparency, accountability, and the allocation of resources (targeting agriculture, education, and health) in order to enhance the provision of services; and (c) an enhanced focus on developing the financial sector, and more broadly private sector activities, via a supportive macroeconomic and legal environment as part of a strategy to broaden economic participation. These and other initiatives to better involve the Gambian people, especially the poor in the poverty reduction and growth process, will inform our efforts in the future, as discussed below. B. Recent Economic Developments1 6. In 2001, real GDP is estimated to have grown by 6 percent, thanks to the robust performance of the agricultural sector (especially groundnuts), which benefited from very good rain distribution. At the same time, the fisheries, construction, trade, and transport and communication sectors experienced rapid expansion. Notwithstanding the good harvest, the expansionary fiscal policies and sizable depreciation of the dalasi (see below) contributed to higher inflation: end-of-period inflation increased to 8 percent compared with the program target of 3½ percent. 7. The external current account deficit (excluding official transfers) widened to about 14¾ percent of GDP in 2001 as a result of the unprogrammed importation of three electricity generators (funded from a donor concessional loan and supplier's credit) and higher imports for domestic use. Gross official reserves, at the equivalent of about five months of imports, also fell short of the 2001 target, largely because of an estimated delay in the disbursement of donor grants of 1.6 percent of GDP. The latter also contributed to a further depreciation of the dalasi of 8 percent in real effective terms in 2001. 8. Slippages occurred in the implementation of the 2001 budget; the overall deficit (excluding grants) is estimated at 8.7 percent of GDP, exceeding the revised target of 5.9 percent of GDP. This was mainly the result of shortfalls in customs duty receipts, but recurrent expenditure, including other charges, also exceeded the program target. In addition, the government incurred unprogrammed expenditure (on-lending to a public enterprise) in purchasing electricity generators and related equipment and making payments to commercial banks (see below). Since September, further shortfalls in customs and sales tax (on imports and domestic goods) revenue amounting to an estimated 1.3 percent of GDP have accumulated, including a buildup of tax arrears by public enterprises. Notably, the Gambia Telecommunications Company (GAMTEL)—which operates a fast-growing mobile telephone business with significant forward sales of telephone cards—incurred tax arrears amounting to D 32 million,2 while the National Water and Electricity Corporation (NAWEC) was unable to pay D 27 million in tax arrears. There were also shortfalls in nontax revenue (0.5 percent of GDP) and overruns in net lending (0.4 percent of GDP), reflecting the financial problems of public enterprises. An additional 0.4 percent of GDP in excess outlays was incurred through the BTL accounts to accelerate development projects in response to election pressures. The government had recourse to net bank financing amounting to about 26 percent of beginning period money stock, compared with 8 percent under the program; outstanding government domestic debt had risen to about 33 percent of GDP by end-2001.3 9. In 2001, domestic credit expansion was dominated by government borrowing, which crowded out the private sector. This outcome resulted in part from government payments to commercial banks (D 64 million, equivalent to 1.1 percent of GDP) for the nonperforming crop finance loans extended to private operators in 1999/2000 in the aftermath of the seizure of the Alimenta assets. Nevertheless, broad money growth was contained at 19 percent (35 percent in 2000) following efforts by the central bank to mop up liquidity through sales of treasury bills; these sales contributed to an increase in the treasury bill rate from 12 percent to 15 percent during the year. Notwithstanding these efforts, four quantitative performance criteria for end-March 2001 and one such criterion for end-September 2001 were not observed; however, waivers were approved by the Fund's Executive Board. With regard to fourth quarter performance, two end-December 2001 quantitative indicative targets concerning net bank credit to, and the basic primary balance of, the central government were not observed (Appendix I, Table 1). 10. On December 17, 2001, the National Assembly approved the budget for 2002, providing for an overall deficit (excluding grants) of about 4 percent; including grants, the deficit was projected at 1 percent of GDP. The budget incorporated poverty-reducing expenditure funded with interim debt relief under the enhanced HIPC Initiative and also reflects key sector priorities derived from PERs in the agricultural, education, and health sectors. In January 2002, the central bank seized the Continent Bank, following a further deterioration in the latter's financial situation and pending a resolution plan. 11. The implementation of structural measures was somewhat behind schedule; nevertheless, by end-2001, all but one of the structural performance criteria and structural benchmarks had been fully implemented (Appendix I, Table 2). There were technical delays in establishing a regulatory framework, issuing guidelines, and authorizing commercial banks to establish foreign currency deposits. However, by year's end, one bank had been authorized to offer foreign currency deposits, while others were working toward reaching this goal. Moreover, the Central Bank of the Gambia (CBG) introduced a 364-day treasury bill effective September 2001 and had earlier established a new Department of Rural Finance to focus efforts on improving the supervision of microfinancing institutions and promoting the provision of rural/informal finance, consistent with the authorities' efforts to better serve the poor. The Central Statistics Department (CSD) suffers from an acute manpower shortage and has not been in a position to either improve the consumer price index (CPI)4 or to rebase the national accounts to a more recent date (from the 1976/77 base currently used). The Fund technical assistance mission in September 2001 recommended emergency measures to bolster the CSD personnel, and the government agreed to provide funding for an immediate increase of personnel in the National Accounts Section. 12. Progress on other key reforms has been encouraging. With the assistance of the Fund budget advisor, government accounts for 1998-99 were closed in August 2001 and, as in the case of the 1991/92-97 accounts, were submitted to the Auditor General; it is expected that, despite the loss of some relevant public records, arrangements can be made to complete the audit of these accounts and permit the timely audit of public accounts for subsequent years. 13. During 2001, substantial progress was made in improving access to technical assistance in order to strengthen institutional capacity. Government undertook initial discussions with Fund staff on the proposed Technical Cooperation Action Plan (TCAP), which aims to provide more comprehensive and better-coordinated technical assistance in support of an improved formulation and implementation of macroeconomic policies. Within this context, the Fund agreed to extend the services of the resident budget advisor for one year, and to provide a macroeconomic advisor in the Department of State for Finance and Economic Affairs (DOSFEA). To complement these efforts, several Fund technical assistance missions were mounted to review (a) the capacity to track poverty-reducing expenditures, including those funded from enhanced HIPC Initiative debt relief; (b) the need for strengthening tax administration; (c) the means to enhance the compilation of monetary, price, and national accounts data; and (d) the requirements for strengthening the institutional capacity of the central bank. The most recent mission found that, despite its considerable need to strengthen institutional capacity, the central bank had implemented only a limited number of past IMF recommendations. It was thus important to use a more integrated approach for future technical assistance and monitor it carefully; meanwhile, the central bank would have to continue to demonstrate its strong commitment to implement reforms. 14. The government also worked better with multilateral institutions and donors in identifying the technical assistance requirements for the PRSP. To this end, DOSFEA set up a technical assistance coordination desk and has been working closely with the United Nations Development Program (UNDP) in preparing a comprehensive technical assistance program for the SPA II (PRSP). Moreover, the government agreed on a Capacity-Building Project with the World Bank to strengthen public finance systems. The World Bank and the United Kingdom Department for International Development (DFID) have also provided assistance in developing the PERs, the poverty assessment, and the participatory process. 15. With regard to the governance and political process, the settlement reached with Alimenta should enhance investor confidence and catalyze reforms in the key groundnut-marketing sector. The presidential elections were conducted in October 2001, and President Jammeh was reelected with 53 percent of the vote. During his second inauguration in December, he condemned the September 11 attacks, granted amnesty to the former president and his family, and called for national unity. The National Assembly elections took place in January 2002, and the new Assembly was inaugurated on February 1. Following these elections, the United States agreed in March to remove the suspension of economic aid to The Gambia in force since the military coup in 1994. Local government elections were held in April 2002. 16. Economic developments through the first quarter of 2002 were characterized by the implementation of expansionary fiscal policies. While revenues were broadly on target (reflecting continued robust economic activity that benefited income tax collections and measures to close tax loopholes, especially for public entities) expenditure overshot the targets by about 2 percent of GDP, as elections-related outlays continued. There were some increases in recurrent expenditure, funded mainly from the BTL accounts, where timely reporting and control proved ineffective. Construction was started on the Mandinaba-Soma road, funded by a payment of US$2.6 million on the US$35 million contract with the construction company (Tetrax), and the implementation of a number of projects was also accelerated.5 A balance from the disbursement of some funds by Taiwan Province of China for the power project (including electricity generators imported in 2001) helped cushion the level of the net government credit from the banking system and led also to a drop in the stock of outstanding treasury bills. However, the end-March 2002 quantitative indicative targets with respect to the basic primary balance of the central government and the net domestic assets of the central bank were not observed. Delays in receipts of groundnut exports and border controls that impeded the reexport trade added to pressure on the exchange rate of the dalasi. Notwithstanding sales of foreign exchange by the central bank, the dalasi depreciated by 5 percent vis-à-vis the U.S. dollar. The end-March 2002 indicative target on net official international reserves was not observed. III. Objectives and Policies for 2002/03-2004/05 17. Consistent with the SPA II (the full PRSP) objectives, the government has formulated a medium-term macroeconomic framework that aims at achieving macroeconomic stability through market-based incentives that are conducive to robust private sector activities and poverty alleviation. To this end, the focus will be on (a) further strengthening public finances to contain the budget deficit and thus the high level of domestic debt; (b) continuing and deepening structural reforms; (c) strengthening institutional capacity through extensive recourse to technical assistance; (d) implementing a comprehensive social sector agenda, especially in the agricultural, education, and health sectors; and (e) further strengthening the macroeconomic and social databases to facilitate the formulation of policies that link macroeconomic and social targets, especially focusing on the poor. 18. The key macroeconomic objectives are to (a) maintain real GDP growth of about 6 percent annually during 2002-05; (b) limit average inflation to below 4 percent per annum over the 2002-05 period; (c) contain the external current account deficit (excluding official transfers) at about 10 percent by 2005; and (d) maintain gross external reserves over the period at about 5_ months of imports of goods and services. Total investment is projected to increase from 17¾ percent of GDP in 2001 to 27¼ percent in 2005 from (4¾ percent to 12¼ percent, respectively, for the government), and the envisaged increase in the government saving-investment balance of 7 percentage points of GDP (before PRSP-related expenditure) would contribute to the improvement in the external current account IV. The Program for 2002/03 19. For 2002, real GDP is projected at about 6 percent on the basis of expected continued strength in agriculture, buttressed by the reforms envisaged in groundnut marketing following the settlement of the Alimenta dispute. Moreover, tourism and the reexport sectors are expected to recover fully with the improved border relations, and overall economic activity should benefit from improved infrastructure and utilities (electricity and telephones). With the help of good weather and a bumper crop in 2001, coupled with tightened financial policies, inflation is projected to decline to below 6 percent by end-2002. A. Fiscal Policy 20. Modifications have been introduced in the budget for 2002 to incorporate the impact of recent developments, including the preliminary outturn for 2001 and the updated PERs in the key social sectors, which reflect the costings of the priority policy interventions. The budget incorporates interim debt relief of about US$4.4 million under the enhanced HIPC Initiative provided by the Fund, the World Bank, and the African Development Bank/Fund. On this basis, the overall deficit (excluding grants) is now projected at 5 percent of GDP; including grants, the deficit will be reduced to 2½ percent of GDP. Allowing for the enhanced HIPC Initiative debt-relief expenditure, the overall deficit would reach 6¼ percent of GDP. 21. Revenues are projected at about 17½ percent of GDP in 2002, underpinned by measures to improve tax administration. These measures, in turn, are supported by Fund (tax administration and tax policy missions visited Banjul in November 2001 and February 2002, respectively) and World Bank technical assistance under the Capacity-Building Project. Measures have been taken to prevent the emergence of new tax arrears6 and collect existing arrears (estimated at D 32 million, or 0.5 percent of GDP), while a decision has been made to discontinue the summer sales tax relief for hotels that was granted in 2001. The government undertook an independent audit of the 2001 operations of the Customs and Excise Department in April to ascertain and, if necessary, address revenue leakages; this constitutes a prior action for the PRGF-supported program. With a view to ensuring satisfactory control of duty exemptions and the timely collection of customs duties, the authorities will no longer use the direct delivery system (with the exception of perishable and bulk cargo items) unless a voucher is presented at the time of clearance. At the same time, action has been taken to process such applications expeditiously to minimize the inconvenience to importers. To support these efforts, the list of exemptions has been updated and will be gazetted shortly. As recommended by the Fund tax administration mission, the domestic sales tax unit will be transferred from the Customs and Excise Department to the Central Revenue Department as soon as possible to facilitate tax administration.7 Measures have been initiated to set up a headquarters office to oversee the proposed tax reforms (and leave the existing Tax Department to focus on collecting revenue) as a first step toward establishing an autonomous revenue authority. Coordination among the revenue departments should benefit from computerization, including the planned implementation of ASYCUDA II in the Customs and Excise Department. Moreover, the government intends to follow up on the recommendations of the Fund tax policy mission. A joint World Bank/Fund mission in June 2002 prepared a joint work agenda to introduce the other planned reforms. 22. On the expenditure side, the aim is to reduce recurrent expenditure to 17¾ percent of GDP in 2002 from the estimated 20¼ percent in 2001 (the latter partly reflects the nonrecurring current expenditure from last year). The key social and poverty sectors identified in SPA II (PRSP) have received allocative priority, while a 6 percent across-the-board increase in the civil service salaries and public wages has been provided to help retain skilled staff following a wage freeze for senior personnel in 2001. The government provided a one-month salary advance to civil servants for Tobaski (a religious festival falling in February 2002), which is repayable over a six-month period through automatic salary deductions. Additional resources from the enhanced HIPC Initiative interim debt relief will augment allocations to the priority social sectors. With donor support, capital expenditure is projected to increase to 6¼ percent of GDP in 2002 (4¾ percent in 2001), in order to strengthen the physical infrastructure and the agricultural, health, education, and judicial sectors; the ultimate goal is to alleviate poverty, strengthen private sector activity, and promote exports. 23. To address the first quarter expenditure overruns, the government has agreed to finance the Mandinaba-Soma road project with grants now expected from two donors. Progress has been made in this regard, and as of early June 2002, US$1.6 million in grants had been disbursed. Moreover, funds that had been set in escrow for this project (D 42 million) have been repatriated and paid back into the consolidated revenue fund. Recurrent expenditure and the disbursement on a number of development projects, including the Mandinaba-Soma road, will be slowed via tightened controls on the relevant BTL accounts. Effective May 2002, all expenditure from BTL accounts will require proper documentation and reporting. Additionally, the filling of vacancies in the budget unit and the Auditor General's office should help improve expenditure control and auditing. 24. A cabinet paper approved in September 2001 outlined comprehensive budgetary reforms associated with the requirements of the SPA II (PRSP), triggers for debt relief under the enhanced HIPC Initiative, and the PRGF-supported program. These reforms are centered on the Accountant General's Office and are aimed at improving the reporting and control of expenditure, including the BTL accounts, as well as expediting the reconciliation and closing of public accounts. The new system should also subsequently facilitate conversion to program budgeting in line with the objectives of the PERs (and, eventually, the medium-term expenditure framework—MTEF) and improve expenditure classification to reflect better the SPA II (PRSP) and enhanced HIPC Initiative priorities. Complementary reforms will also be aimed at the Auditor General's Office, among other things, to expedite the audit of accounts. Currently, the white paper on the Commission of Inquiry on the former Auditor General and a paper on its recommendation have been placed on the cabinet's agenda. The government looks forward to continued Fund technical assistance in those areas, with the return of the resident budget advisor and the placing of a DOSFEA macroeconomic advisor in Banjul. The work of the latter would also facilitate coordination within DOSFEA and between the DOSFEA and the central bank through improved regular reporting and projections of fiscal data (revenue, expenditure, debt service, external assistance, and government borrowing requirements); the latter is a key input in liquidity forecasting and would facilitate monetary policy formulation. Other donors, including the World Bank, UNDP, and DFID, would also play a key role in implementing these reforms. 25. The government is implementing measures to deal firmly with the reemergence of cross arrears between the government and the public enterprises (PEs), including the above-mentioned tax arrears, owed, among others, by GAMTEL and NAWEC. As of end-January 2002, the government had accumulated arrears of D 43.5 million (0.7 percent of GDP) to PEs, while the latter had accumulated an estimated D 138 million in arrears to the government. A cabinet paper was prepared to highlight the problem and proposed a comprehensive program to address the financial problems of the PEs and a mutual settlement of these arrears. Quarterly targets leading to the elimination of these cross arrears by mid-2003 were agreed with the key public enterprises. The longer-term issues of PEs will be addressed in a donor-funded study that will provide recommendations to restructure or privatize eight Track II PEs (see also Subsection D below). B. Monetary Policy and Financial Sector Reforms 26. The key objectives of monetary policy during 2002 are to reduce inflation and strengthen external reserves. To these ends, the government will maintain prudent fiscal policies and a tight monetary policy (while providing adequate credit to the private sector), and promote exchange rate flexibility consistent with a further buildup of official reserves. The avoidance of unprogrammed increases in net credit to the government, such as those associated with payments to Alimenta and related developments in 2001, will also be an important objective for monetary policy in 2002. Through sales of securities, the central bank will seek to moderate the growth of broad money from an estimated 19 percent during 2001 to 13 percent by end-2002, in line with projected nominal GDP growth. 27. Reforms in the financial sector will aim at improving the operation of the money market, making interest rates more flexible, and enhancing the soundness and efficiency of the financial system. To assist in these tasks, the CBG received three Fund technical assistance missions in 2001, including the December mission, which undertook a diagnostic review of the capacity requirements and past Fund technical assistance. In August 2001, the CBG received additional Fund technical assistance, which recommended measures to improve monetary statistics. The recommendations of these missions to address weaknesses in the CBG's core functions—supervision, monetary operations, reserve management, payments systems, and internal controls—will form a key part of the medium-term reforms. The latter in turn, should also take into account the need for the central bank to continue to demonstrate a strong commitment to implement reforms, as well as the means to improve the effectiveness of technical assistance. To these ends, the central bank has started to implement a package of measures that will also trigger its access to Fund technical assistance under the TCAP. These measures include (a) a CBG board resolution to support the above-mentioned reform measures; (b) initiation of a review of the Central Bank Act; (c) revision (to reflect the mission's recommendations) and resubmission of the Financial Institutions and the Insurance Bills for parliamentary approval; (d) establishment of a committee to prioritize, coordinate, and enhance the CBG's training program; (e) preparation of a resolution plan for an insolvent bank and two insurance companies; (f) introduction of a liquidity-forecasting framework and operation of the book-entry system; (g) issuance of the revised foreign currency deposit prudential regulations to commercial banks; and (h) the filling of vacancies, particularly in the banking and insurance areas. Items (a) and (b) above, which were both implemented in February 2002, are also prior actions for the PRGF-supported program for 2002/03-2004/05. The proposed legislation and the various technical assistance recommendations require extensive revisions in the financial institutions' reporting requirements, which will be addressed during 2002-03. 28. Nonperforming loans had declined to 6.8 percent of total outstanding loans by end-March 2002 from 13.6 percent in June 2000, and provisioning for nonperforming loans at end-March 2002 remained above 90 percent of such loans in 2001. The government will encourage banks to maintain their capital adequacy ratios above the legal requirement of 8 percent and has taken steps to strengthen the management capacity of a financial institution that has not been meeting some of these standards.8 The CBG is now working on a resolution plan for the Continent Bank and has commissioned an audit of the bank by an international firm—KPMG. Details of the resolution plan will be discussed with the Fund before it is finalized and implemented. The CBG's Rural Finance Department is expected to play a key role in efforts to improve the supervision and growth of the microfinance sector. 29. During 2002, The Gambia will continue to pursue regional monetary integration through collaboration with five other countries in west Africa9 to establish a West African Monetary Zone (WAMZ) by 2003. In April 2001, the West African Monetary Institute (WAMI) was established, with a mandate to prepare the groundwork for the establishment by 2003 of the West African Central Bank (WACB), which will function as the central authority of the WAMZ. 30. To address the problem of the large stock of government domestic debt (33 percent of GDP at end-2001), whose service absorbs more than 20 percent of government domestic revenue, the government has focused on efforts to reduce the fiscal deficit (excluding grants and the fully-funded HIPC Initiative expenditure) to sustainable levels. Furthermore, the government plans to use part of the proceeds from privatization, available donor assistance, and a part of debt relief under the enhanced HIPC Initiative to further reduce the stock of domestic debt. Since a sizable part of this debt is held by commercial banks, it will be important that its reduction avoid an injection of liquidity in the economy. A solution may lie in the establishment of an offshore entity that would take over the debt, or through debt/equity swaps for selected public institutions. C. External Sector Policies 31. On the basis of the economic policies detailed above, the external current account deficit (excluding official transfers) is projected to decline to about 13¼ percent of GDP in 2002. The volume of total exports (excluding reexports) is projected to increase by about 6.8 percent, reflecting a further expansion in groundnut, fruit, and fish production. It is also expected that groundnut exports will contain a larger proportion of high-quality nuts. While import volumes are projected to decline by about 2.7 percent in 2002,10 the reexport trade is expected to continue to recover, with improved cross-border relations and external competitiveness via a depreciated exchange rate, as well as the better availability of foreign exchange, including through the introduction of foreign currency deposits. The terms of trade, excluding reexports, are projected to improve by 1.4 percent in 2002. Receipts from tourism are expected to increase significantly as the sector—supported by an increase in weekly flights and the recent creation of the National Tourism Authority (see below)—continues to recover from the sharp decline in 2000. Donor assistance is also projected to increase, contributing to gross official reserves of SDR 87.7 million in 2002, a level equivalent to about five months of import cover. A financing gap of SDR 10.3 million is projected for 2002 (SDR 76.5 million, including PRSP-related funding gaps for 2002-05), which is expected to be covered by recourse to Fund and donor assistance, the latter likely through a donor roundtable meeting planned for September 2002. 32. The government remains committed to a liberal trade and exchange system. It will continue to assess the impact of the reduction in the external tariff to a maximum rate of 18 percent and in the number of tariff bands from ten to three in 2000, as well as of the reforms in the neighboring West African Economic and Monetary Union (WAEMU) countries (which maintain a maximum external tariff of 20 percent). Efforts have been intensified to improve the balance of payments data, based on the recommendation of the September 2000 Fund technical assistance. Technical assistance was received from DFID in 2001 to launch surveys of foreign direct investment, while the UNDP assisted with the full introduction of ASYCUDA to, inter alia, generate trade data on a timely basis. The reduction in external tariffs, together with the pursuit of prudent financial policies and a market-based flexible exchange rate, should benefit The Gambia's external competitiveness. 33. The government intends to use the remaining proceeds of the Fund interim assistance under the enhanced HIPC Initiative, approved on December 15, 2000, to meet debt-service payment on its existing debt to the Fund as they fall due during 2002. Measures have been taken to strengthen the loan and debt management unit at the DOSFEA with additional staffing and equipment, in order to improve the quality and timeliness of external debt data. Efforts are also under way to obtain debt relief from all other creditors. The Gambia will opt to participate in the sovereign credit rating assessment, funded either by the U.S. government or the UNDP. D. Structural and Sectoral Policies 34. The efforts to modernize business-related legislation and regulations have gathered momentum with the December 2001 National Assembly enactment of the Regulatory and Procurement Acts, which also provide for the establishment of implementing agencies to regulate privatized utilities and handle public procurement, respectively. A contract has been tendered for a DFID-funded PE regulatory study. Since May 2000, the government has worked closely with the Commonwealth Secretariat to develop a competition policy (a draft has been completed) and, eventually, a Competition Bill to remove legal and regulatory impediments to competitive markets. In July 2001, legislation was approved by the National Assembly that, inter alia, set up the National Tourism Authority (a largely private sector-driven body) to promote the industry, including through the classification of hotels to improve the quality of service. Preparatory work is about to be launched on the Tourism Master Plan for 2002-20, funded by the AfDB. A part of the broader agenda on private sector legislation will entail efforts to introduce various bills (on business transactions, organization, and partnership), which together, will replace the existing antiquated Company Act. The Mortgage and Money-Laundering Bills will be drafted, which would help to streamline and further strengthen the regulation of the financial sector. 35. Regarding the public enterprise sector, the Privatization Act introduced in 2000, inter alia, formalized the establishment of the Gambia Divestiture Agency (GDA). The GDA is undertaking a major review of public enterprise finances to help disentangle government finances from the former, while a longer-term study will pave the way for further privatization. Already, the privatization of Track I public enterprises11 has been approved by cabinet; the GDA will channel part of the privatization proceeds into the divestiture account at the central bank. In 2002, up to D 25 million will be transferred from the divestiture account to reduce the government's domestic debt. 36. During 2002, the government will start to implement the Trade Gateway Project (US$23 million) approved by the World Bank in February 2002. The project will, among other things, enable The Gambia to establish an export-processing zone to promote private sector activity consistent with the PRSP objectives. The project will also promote investment in the country through the one-stop Investment Promotion Center and will support further efforts toward privatization. To this end, further studies on public enterprises, beyond the cabinet paper mentioned above, would assist the government in elaborating policies and reforms in this area. 37. In agriculture, the government intends to continue to work with the European Union (EU) and the Agri-Business Service Plan Association (ASPA), the latter comprising farmers and buyers, in order to improve the marketing of groundnuts and encourage the ASPA to adhere to a schedule of public announcements of producer prices early in the planting season. The settlement of the Alimenta dispute and the proposed privatization of its processing plants and barges among competing and reputable firms should promote private crop financing while contributing to better earnings by farmers. This privatization program is being prepared by the GDA; meanwhile, experts provided through EU technical assistance have evaluated the assets in preparation for their expected offers for sale. Already, the government has injected some D 15 million to improve these assets, in order to facilitate groundnut marketing during the 2001/02 season and the subsequent asset sale. Moreover, the proposed EU audit of the 1999/2000 operations of the trading companies will provide remedies to ensure adherence to proper internal control measures in compliance with industry standards. The government intends to make timely arrangements to help provide improved seed, fertilizer, and microfinance facilities to farmers, the latter through the US$10 million International Fund for Agricultural Development Rural Finance and Community Initiative. Significant support for the fishing sector will be provided by projects, worth some US$13 million, to build a second cold storage facility and establish artisanal facilities in during 2002. 38. The government is implementing a governance program adopted during the March 2000 roundtable meeting in Banjul, including reforms to (a) strengthen the constitutional and electoral processes; (b) strengthen the National Assembly structures and processes; (c) promote civic education and enhance civil participation in the political process; (d) improve the legal and judicial processes; (e) decentralize and reform the local government system; and (f) improve the management and transparency of public finances. A number of these reforms are also being supported by the DFID, EU, and UNDP and are being implemented in the context of the SPA II (PRSP). 39. As part of implementing the PRGF-supported program, the government intends to put in place measures that comprise structural benchmarks outlined in Table 11 of this Appendix. E. Social and Poverty Reduction Policies 40. The launching of the SPA II (PRSP), which has drawn on The Gambia's experience since 1992 to develop a comprehensive poverty reduction strategy, marks a milestone in, among other things, the evolution of the PRGF-supported program. The latter is now based on SPA II (PRSP) and thus incorporates the views of Gambians, including the poor. SPA II (PRSP) has significantly improved the government's ability to identify the poor and the sources of poverty, and to intensify efforts to develop intervention to better target the poor. Accordingly, the PRGF highlights the SPA II (PRSP) program "pillars," namely, the efforts to create an environment conducive to sustained high growth (targeting income generation in rural agriculture), while providing the means to increase the allocation of public resources and the delivery of social services. While our articulation of the agricultural sector strategy will require more time to develop, the preparation of PERs in key sectors has provided an early means of linking sector and national budget priorities—a process that has been reinforced by interim resources provided through debt relief under the enhanced HIPC Initiative. Moreover, the PRGF-supported program draws extensively on our efforts, in collaboration with various donors, to promote the role of the private sector; enhance transparency and accountability for public finances; improve macroeconomic and social data to strengthen poverty policy analysis; and access technical assistance to support institutional capacity. 41. The budget for 2002 provides the first attempt at integrating PERs and debt relief under the enhanced HIPC Initiative, in order to allocate increased resources for the social sectors and for development expenditure. The system for reporting on poverty-reducing expenditure established last year, including the special HIPC Initiative account at the central bank, will become fully operational in 2002 with the issuance of the first biannual reports (May and November), designed, inter alia, to make further progress toward the triggers for the enhanced HIPC Initiative completion point. The broader resource requirements of the SPA II (PRSP) have been evaluated in conjunction with the financing gaps in the PRGF-supported program and will be presented to the donor roundtable meeting planned for the second half of 2002. 42. The government is aware that the updating of the comprehensive poverty reduction strategy will place a considerable burden on institutional capacity and necessitate further reforms to improve the delivery and monitoring of enhanced public services. In this regard, it intends to intensify collaboration with donors, including the Fund, to ensure timely access to, and effective use of, technical assistance. F. Statistical Issues 43. The Gambia's economic and financial statistics remain in need of improvement, especially with regard to the major components of the balance of payments, the national accounts and prices, public investment, the public enterprise sector, and employment. Moreover, data on the social sectors and poverty need to be substantially improved and better integrated with mainstream economic data. The government has benefited from the recommendations of various recent Fund technical assistance missions to strengthen the compilation of economic data. A notable development is the recent effort to improve the staffing of the CSD on an interim basis, pending the longer-term restructuring of the department into an independent agency, by offering better incentives to retain staff. Apart from generating macroeconomic data, the CSD is expected to play an important role in carrying out the household survey, the baseline delivery survey for social amenities, and the 2003 housing and population census. These efforts are key to improving the capacity for undertaking poverty and social impact analyses. The country is also benefiting from participation in the General Data Dissemination System (GDDS) and uses the framework to improve the quality, timeliness, and transparency of data provision. G. The Technical Cooperation Action Plan (TCAP) 44. Following our request to the Fund management for technical assistance in April 2001, the government has worked closely with the Fund staff and other donors to prepare a comprehensive technical assistance program for the PRSP. It is expected that the coordinated effort will promote complementary efforts aimed at covering the key requirements for technical assistance through a careful identification of gaps. These gaps would then be presented to the donor roundtable meeting planned for September 2002, together with the SPA II (PRSP) for funding. Within this framework, considerable work has been undertaken by the Fund staff to prepare a comprehensive TCAP aimed at promoting performance under a possible new three-year PRGF arrangement. V. Program Monitoring and Review 45. To monitor policy implementation under the program, prior actions, a number of quantitative performance criteria for end-September 2002, and quantitative benchmarks have been identified. Issuance of the papers on the request for the PRGF arrangement will be subject to three prior actions, comprising (a) a CBG board resolution in support of the reforms recommended by the December 2001 Fund technical assistance mission; (b) the initiation of a review of the Central Bank Act, with a view to modernizing the act; and (c) the audit of the 2001 operations of the Customs and Excise Department. Items (a) and (b) are drawn from a group of measures that will also trigger Fund technical assistance to the CBG under the TCAP. 46. Performance under the first annual program under the PRGF arrangement will be monitored on the basis of the following quantitative performance criteria for end-September 2002: (a) a ceiling on net bank credit to the government; (b) a ceiling on net domestic assets of the central bank; (c) a floor on the basic primary balance of the government; (d) the nonaccumulation of external payments arrears; (e) a minimum level of net official international reserves; (f) a limit on new nonconcessional external loans contracted or guaranteed by the central government in the maturity ranges of 1-12 years; and (g) a zero ceiling on the outstanding stock of short-term external public debt (excluding normal import-related credits). The performance criterion on the nonaccumulation of external payments arrears will be applied on a continuous basis. Also, quantitative benchmarks have been established for these variables for end-June 2002; indicative targets on the same variables were agreed for end-December 2002. In addition, quarterly financial indicators were established on total government revenue, the wage bill, and the primary budget balance. 47. The program also includes a number of structural benchmarks for various dates as indicated in Table 2 of this Appendix. 48. In addition, policy implementation under the first annual program under the PRGF arrangement will be assessed by two reviews. Disbursement of the second loan under the PRGF arrangement will be conditional on the observance of the end-September 2002 performance criteria and the completion of the first review no later than end-December 2002. The disbursement of the third loan will be subject to the observance of the end-March 2003 performance criteria and completion of the second review no later than end-June 2003.
1Details of developments through September 2001 are provided in our letters to you dated June 29, 2001 and November 14, 2001, as well as staff reports EBS/01/104 (7/2/01) and EBS/01/189 (11/19/01). 2Owing to delays in closing its accounts, GAMTEL was also recently assessed an estimated D 25 million in overdue income tax, which, together with sales tax arrears, amounts to 0.4 percent of GDP. 3This outcome was in part aggravated by the payment (amortization) for the Alimenta settlement (US$6.7 million in 2001) and the nondisbursement of donor grants that could have partly offset this payment. 4The CPI covers low-income urban households, and the basket has not been updated since 1974. 5This level of implementation is not sustainable given resource and other constraints including the onset of rains in May-June. 6A directive was issued in February 2002 that, henceforth, oil companies will pay the full customs duty due on all oil products imported on behalf of NAWEC, thereby fully closing a loophole through which that enterprise had accumulated tax arrears. 7Access to corporate income statements provides the Central Revenue Department with the best means to also administer the domestic sales tax. This will require a change in the law to mandate the relevant department to assume such responsibilities, even though administrative changes have already commenced. 8The CBG proscribed the Continent Bank in August 10, 2001 and seized it on January 11, 2002 following a deterioration of the latter's financial situation. 9The other countries that are signatories to the April 2000 Accra Declaration are Ghana, Guinea, Liberia, Nigeria, and Sierra Leone. 10Taking into account the generators imported in 2001. 11Ten public enterprises that can be sold without need for legislative and regulatory support, including the former Alimenta, Denton Bridge, and Kaur processing plants and barges.
I. Introduction 1. This memorandum sets out the understandings between the Gambian authorities and staff of the International Monetary Fund (IMF) regarding the definitions of quantitative and structural performance criteria and benchmarks for the third annual arrangement under the Poverty Reduction and Growth Facility (PRGF), as well as the related reporting requirements. The tables with the latest actual data for the monetary aggregates, as well as the preliminary estimates for March 2002 used for the derivation of the flows for the program period, are included in the staff report (Tables 6 and 7). II. Quantitative Performance Criteria: Definitions and Reporting Standards A. Net International Reserves of the Central Bank of The Gambia 2. Definition. Net international reserves (NIR) are defined as reserve assets less liabilities to foreign residents of maturity of one year or less and less borrowing from the IMF. Gold holdings will be valued at U.S. dollar market prices, together with foreign currency holdings, at the bilateral exchange rates prevailing on March 31, 2002. The NIR shall be converted into dalasis at the exchange rate prevailing on March 31, 2002 (estimated at D 21.3000 per SDR). Reserve assets are defined for this purpose as external assets readily available to, or controlled by, the Central Bank of The Gambia (CBG). Pledged or otherwise encumbered reserves assets, including, but not limited to, reserves assets used as collateral or guarantee for third-party external liability, are to be excluded. 3. Adjustment clauses. The floor on the net international reserves of the central bank will be adjusted upward (downward) by the amount of disbursed external budgetary support (comprising non-project-related loans and grants) at the end of each quarter in excess (in shortfall) of the programmed amounts in the budget (Appendix I, Table 1). 4. Supporting material. Net international reserves of the central bank will be transmitted on a weekly basis within ten days of the end of each week; the net foreign assets of the commercial banks and external budgetary support will be transmitted on a monthly basis within six weeks of the end of each month. B. Net Domestic Assets of the Central Bank 5. Definition. The net domestic assets of the central bank are defined as the difference between reserve money (the sum of currency outside banks and all deposits of the commercial banks, excluding deposits of the central government) and the net foreign assets of the central bank, converted at the foreign exchange rate specified in paragraph 2. Net foreign assets are defined as NIR plus other claims on, and liabilities to, foreign residents. 6. Adjustment clauses. The ceiling on net domestic assets of the central bank will be adjusted downward (upward) by the amount of disbursed external budgetary support (comprising non-project-related loans and grants) at the end of each quarter in excess (in shortfall) of the programmed amounts in the budget (Appendix I, Table 1). 7. Supporting material. Net domestic assets of the central bank will be transmitted on a monthly basis within four weeks of the end of each month. C. Net Claims on the Central Government by the Central Bank of The Gambia 8. Definitions. The net claims on central government by the central bank are defined as claims on the central government by the central bank less deposits of the central government with the central bank. 9. Adjustment clauses. The ceiling on net claims on the central government by the central bank will be adjusted downward (upward) by the amount of disbursed external budgetary support (comprising non-project-related loans and grants) at the end of each quarter in excess (in shortfall) of the programmed amounts in the central government budget (Appendix I, Table 1). 10. Supporting material. Data on cumulative government revenue and expenditure, on the net central government position with the central bank, and on treasury bills outstanding, as well as data on external loans and grants to the government, will be transmitted on a monthly basis within six weeks of the end of each month. D. Basic Primary Balance of the Central Government 11. The basic primary balance is defined as government domestic revenue (tax and nontax) minus total expenditure and net lending, excluding interest payments and externally financed capital expenditure. E. External Payments Arrears 12. Definition. External payments arrears are defined as the stock of external arrears on loans contracted or guaranteed by the public sector (as defined below in paragraph 14), except on debts subject to rescheduling or a stock-of-debt operation. 13. Supporting material. An accounting of nonreschedulable external arrears by creditor countries (if any), with detailed explanations, will be transmitted on a monthly basis within four weeks of the end of each month. This accounting would include, separately, arrears owed by the central government and other public sector entities to Paris Club creditors, non-Paris Club creditors, and other creditors. F. New Nonconcessional External Public Sector Debt Contracted or Guaranteed by the Central Government 14. Definitions. In this memorandum, the public sector consists of the central and regional governments and other public agencies, including the Central Bank of The Gambia. This performance criterion is on the contracting or guaranteeing of external debt with original maturity of 1-12 years by the government.1 Excluded from this performance criterion is debt with borrowing from the IMF and with a grant element of at least 35 percent. The grant element is to be calculated by using currency-specific discount rates reported by the OECD (commercial interest reference rates): for maturities of less than 15 years, the grant element will be calculated based on six-month averages of commercial interest rates, and, for maturities longer than 15 years, the grant element will be calculated based on ten-year averages. 15. Supporting material. A comprehensive record, including a loan-by-loan accounting of all new concessional and nonconcessional debt contracted or guaranteed by the public sector, with detailed explanations, will be transmitted on a quarterly basis within four weeks of the end of each quarter. Nonconcessional external debt over one year includes financial leases and other instruments giving rise to external liabilities, contingent or otherwise, on concessional terms. G. Outstanding Stock of External Public Debt 16. This performance criterion is the outstanding stock of external public sector debt with original maturity of less than one year owed or guaranteed by the central government.2 Excluded from this performance criterion are normal import-related credits. 17. Supporting material. A comprehensive record of all external debt with original maturity of less than one year owed or contracted by the public sector, with detailed explanations, will be transmitted on a quarterly basis within four weeks of the end of each quarter. III. Prior Actions and Quantitative Performance Criteria and Benchmarks 18. To monitor policy implementation, three prior actions and a number of quantitative benchmarks have been proposed over the course of the program, as well as quantitative performance criteria and benchmarks for end-September 2002 (see Appendix I, Table 1). The prior actions entail (a) a CBG Board resolution in support of the reforms recommended by the December 2001 Fund technical mission; (b) initiation of a review of the Central Bank Act; and (c) an audit of the 2001 operations of the Customs and Excise Department. The proposed benchmarks for end-June 2002 will comprise the following: (a) a ceiling on net bank credit to the central government; (b) a ceiling on net domestic assets of the Central Bank of The Gambia; (c) a floor on the basic primary balance of the central government, defined to exclude interest payments and foreign-financed investment spending; (d) the nonaccumulation of external payments arrears; (e) a floor on net official international reserves; (f) a ceiling on new nonconcessional external loans contracted or guaranteed by the public sector for maturities of 1-12 years; and (g) a zero ceiling on the outstanding stock of short-term external public debt owed or contracted by the public sector (excluding normal import-related credits). The criterion on the nonaccumulation of external payments arrears will be applied on a continuous basis. Limits on items (a)-(g) above for end-September 2002 will serve as quantitative performance criteria. Indicative targets have been set for end-December 2002. Five structural benchmarks are outstanding, set for specific dates through end-November 2002, and a continuous indicative target on the avoidance of external arrears has also been set (Appendix I, Table 2). IV. Structural Performance Criteria and Benchmarks 19. Lastly, the authorities will notify the African Department of the Fund of developments with respect to structural performance criteria and benchmarks as soon as they occur. The authorities will provide the following documentation, according to dates in Appendix I, Table 2, elaborating the steps taken to (a) complete Stage I of the Household Survey (dry season), which will form a basis for constructing an updated and comprehensive consumer price index; (b) complete the automated system for customs data (ASYCUDA) II; (c) complete public reports on poverty-reducing expenditure; (d) complete a quarterly schedule for eliminating government-public enterprise cross arrears based on a review of a public enterprise study and cabinet paper; and (e) complete the enterprise survey in order to compile data on the international investment position in the balance of payments. V. Other elements of the program - program-monitoring committee 20. Definition. The Gambian authorities shall establish a program-monitoring committee composed of senior officials from the Department of State for Finance and Economic Affairs (DOSFEA), the CBG, and other relevant agencies. The committee shall be responsible for monitoring the performance of the program, recommending policy responses, informing the Fund regularly about the progress of the program, and transmitting the supporting materials necessary for the evaluation of performance criteria and benchmarks. The committee shall provide the Fund with a progress report on the program on a monthly basis within four weeks of the end of each month, using the latest available data. VI. Data Requirements A. Production and Prices 21. Reporting standard. The monthly disaggregated consumer price index will be transmitted within four weeks of the end of each month. B. Government Accounts Data 22. Reporting standard. A consolidated budget report of the central government will be transmitted comprising (a) the revenue data by each major item, including that collected by the Commissioner of Taxes and the Customs and Excise Department, as well as transfers from privatizations to the budget; (b) details of the recurrent and capital expenditure of the central government; (c) details of budget financing (domestic and external), which will be transmitted on a monthly basis within six weeks of the end of each month; and (d) details on the government's outstanding arrears outstanding, as of end-March 2002, including payments and other arrangements to discharge them (these data will be transmitted on a monthly basis within six weeks of the end of each quarter). The government's arrears amounted to D 43 million as of end-December 2001, while public enterprises owed the government about D 138 million. C. Monetary Sector Data 23. Reporting standard. The balance sheet of the central bank and the consolidated balance sheets of the commercial banks will be transmitted on a monthly basis within six weeks of the end of each month. The results of the Treasury bill auctions will be transmitted on a biweekly basis within five business days. The stocks of government securities, balances in the divestiture account, detailed information on interbank loans (terms, duration, and participating institutions), and interest rate developments will be transmitted on a monthly basis within two weeks of the end of each month. D. External Sector Data 24. Reporting standard. The following standard will be adhered to: (a) the interbank market exchange rate, as the simple average of the daily-weighted average buying and selling rates, will be transmitted on a weekly basis within five business days of the end of the week; (b) the results of foreign exchange auctions (on a weekly or more frequent basis) will be transmitted on a weekly basis within five business days of the end of each week; and (c) balance of payments data will be transmitted on a quarterly basis within six weeks of the end of each quarter. 1This performance criterion applies not only to debt as defined in point no. 9 of the "IMF Guidelines on Performance Criteria with Respect to Foreign Debt" (adopted by the Executive Board of the Fund on August 24, 2000), but also to commitments contracted or guaranteed for which value has not been received 2The term "debt" has the meaning set forth in point no. 9 of the "IMF Guidelines on Performance Criteria with Respect to Foreign Debt," adopted on August 24, 2000. |
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