By Omar Bah
Gambia has unlocked access to an additional $10.95 million loan from the International Monetary Fund (IMF) following the completion of first review under extended credit facility (ECF) arrangement.
In a statement shared with The Standard yesterday, the multilateral lender said economic activity continued to recover robustly. It noted that inflation eased but remains well above the central bank’s medium-term objective.
IMF said the country’s performance under the program has been satisfactory, adding that continued implementation of the reforms will help address medium- and long-term macroeconomic challenges and catalyse additional financing from development partners and the private sector.
The IMF Executive Board had on January 12, 2024 approved about $98.7 million for The Gambia under the program. It added that the completion of the review allows for an immediate disbursement of $10.95 million bringing the total disbursement under the arrangement to about $21.9 million.
It said Gambia’s economic growth is estimated at 5.3 percent in 2023, supported by good performance of the agriculture, services, telecommunication, and construction sectors.
“Tourist arrivals continued to increase in 2023 but remain slightly below pre-pandemic levels. Remittance inflows also showed a sustained good performance. Headline inflation eased from a peak of 18.5 percent (year-on-year) in September 2023 to 11 percent in April 2024 mainly due to declining global food and energy prices, but it remains well above the central bank’s medium-term objective of 5 percent,” IMF added.
The UN agency said the introduction of a new foreign exchange policy in December 2023 helped to largely close the wedge between the official and parallel market exchange rates and to ease foreign exchange shortages, adding that international reserves remain at a comfortable level of above 4.5 months of imports.
“The outlook remains subject to downside risks from the repercussions of global and regional conflicts. Such risks include international commodity price volatility, lower tourist arrivals, and weak remittance inflows,” it stated.
The IMF Deputy Managing Director Bo Li said the Gambian authorities continue democratic and justice reforms, economic recovery is strengthening while inflation is progressively decelerating albeit remaining high.
“The central bank has appropriately maintained its tight monetary policy stance to fight inflationary pressures. Foreign exchange shortages have eased following the introduction of the new foreign exchange policy. Going forward, the central bank is encouraged to make full use of its policy toolkit to fight inflation, and continue to ensure a market-based exchange rate and smooth functioning of the foreign exchange market.” He said the country’s fiscal policy in 2024 remains anchored on the approved budget. Efforts to bolster domestic revenue mobilization and reprioritize spending should continue. To reduce debt vulnerabilities, it will be critical to adhere to the agreed borrowing plan, focus on grants and concessional loans, limit fiscal risks from SOEs and PPPs, and implement a strong medium-term fiscal framework. Additionally, strong external buffers are needed to prepare for the upcoming expiration of debt service deferrals.
“The authorities are encouraged to build on recent progress and pursue further structural reforms. The adoption of the anti-corruption bill by the National Assembly was an important milestone.”
