Finance Minister Mambury Njie yesterday disclosed to lawmakers that several international partners have committed themselves to providing comprehensive assistance in financial and material support to the Gambia as part of efforts to fight the spread of deadly coronavirus.
The minister revealed that the overall impact of the pandemic on the Gambian economy is estimated to result in a budget financing gap of about D2.5 billion, coupled with an estimated deterioration in the current account balance.
He said that could potentially see a decline in international reserve cover which could depreciate the exchange rate and build-up inflationary pressures on the country.
The minister further warned that although the Gambia is yet to register any confirmed cases, the virus, if it remains uncontained in the next three months, will result in a revenue loss of about D1 billion.
“The impact if COVID-19 is expected to widen the budget deficit from 1.5 percent as per the 2020 budget to 2.1 percent of GDP, on net domestic borrowing in the absence of stricter expenditure control will expand from 1.9 percent to 2.5 percent of GDP.”
At least 27 African states have so far been affected by the virus, with countries including Senegal imposing hard-line measures in a bid to curb the spread.
There has been growing concern about the ability of some African nations to meet the logistical and financial challenges posed by the fast-spreading virus.
However, Minister Njie said the Gambia has been having conference calls with several international partners and so far D62 billon has already been pledged.
“We are working closely with both the World Bank and the International Monetary Fund. The assessment that we are going to make to formally make the request for assistance is still not completed but we have gone very far to ensure that everything is factored in,” he said.
According to him, preliminary assessment of the impact of the COVID-19 suggests that economic growth in 2020 will be 3 percent lower than the initial estimates of 6.3, adding that the decline is estimated to emanate from trade, remittances, construction, hotels and restaurants.
Minister Njie explained that the government plans to mitigate these effects by introducing stricter expenditure control and planning to provide a suitable mechanism to lessen the impact and ensure sound economic gains registered in past two years are not lost.
“The focus is on health and we are ready to make sure the resources that they requested will be provided for but for the time being, we are able to take care of the operations of government, salaries will be paid and travels have been banned and other luxury items,” Njie added.