Press Release No. 24/137

The Gambia: IMF Staff Reaches Staff-Level Agreement on the First Review of the Extended Credit Facility Arrangement

May 3, 2024

• 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 Gambia continues to advance its reform agenda. Economic activity continues to recover robustly. Inflation is decelerating but remains elevated. Pressures on the foreign exchange market are easing.
• Persevering in strong policies is paramount to underpin the authorities’ ambitious development agenda.

Washington, DC: An International Monetary Fund (IMF) team, led by Mr. Ivohasina Fizara Razafimahefa, conducted discussions with the Gambian authorities in Banjul from April 23 to May 3, 2024, and reached a staff-level agreement 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 SDR 74.64 million (about US$98.4 million). Subject to approval by the IMF’s Executive Board, the completion of the review would enable a disbursement of SDR 8.29 million (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 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 mission met with Minister of Finance and Economic Affairs, Seedy Keita; Minister of Public Service, Administrative Reforms and Policy, Baboucarr Bouy; Minister of Environment, Climate Change and Natural Resources, Rohey John Manjang; Minister of Trade, Industry, Regional Integration and Employment, Baboucarr Ousmaila Joof; Governor of the Central Bank of The Gambia, Buah Saidy; Commissioner General of the Gambia Revenue Authority, Yankuba Darboe; National Auditor General, Modou Ceesay; and senior government and central bank officials. The mission team also had fruitful discussions with representatives of the private sector, civil society, and development partners.