This had increased the fiscal deficit to about 8¾ per cent of the country’s gross domestic product (the total value of goods and services produced in the country) in 2013. In a statement issued after completion of their trip in Banjul, mission chief Bhaswar Mukhopadhyay said due to the higher-than budgeted expenditures by the government, interest rates rose “significantly”.
He said the level of domestic debt rose above 80 per cent of GDP by the end of 2013, and the interest on domestic debt grew to almost 25 per cent of domestic revenue. However, Mr Mukhopadhyay noted that to restore macroeconomic stability, the Gambian authorities embarked on a programme of corrective measures over the first quarter of 2014.
In this vein, the government has implemented concrete measures to boost revenue and contain expenditure, and has instituted a cash budgeting scheme to strengthen budget execution. Notwithstanding, the IMF mission chief to Banjul said the initial policy actions of the government and observed improvements in the macroeconomic outlook of the country for the first quarter of 2014 will require sustained efforts to consolidate.
“Continued policy action will provide a sound basis to lower the government’s domestic borrowing, allow interest rates and domestic interest payments to decline from their presently very high levels, and create room for spending on social and development priorities and private credit growth,” he said.
Mr Mukhopadhyay said the mission welcomed the determination expressed by the Gambian authorities to contain spending, improve revenues, and macroeconomic stability. The IMF stands ready to support the authorities in their endeavor, he affirmed.
During their mission to Banjul, the IMF officials assessed the Gambian authorities’ progress in implementing policies during the first quarter of 2014 to bring their reform program back on track. The programme is supported by an extended credit facility arrangement with the IMF, and had gone off-track mainly because spending significantly exceeded agreed targets following completion of the first review in May 2013.
During the visit, the mission met with Vice-President Njie-Saidy, Secretary General Sabally, Finance Minister Touray, Central Bank Governor Colley, other senior officials, members of parliament, senior officials in public enterprises, the banking sector and development partners.
By Lamin Jahateh]]>