By Tabora Bojang
The International Monetary Fund IMF has warned that the recent shift in trade policy of the United States coupled with massive cutting of foreign aid by donor countries like UK, Germany and Belgium, will impact growth in The Gambia and other sub Saharan countries.
According to the IMF, the region’s four – year crisis which began with Covid-19 and subsequently the Russia-Ukraine war is far from over, as recovery from these shocks is being undermined by the recent shift in trade policy of the US under the new Trump administration.
Bernard Mendy, an economist at the IMF Gambia office explained to a media conference yesterday that the impact of the first round of this sudden shift is projected to affect Sub-Sahara minimally but individual countries are going to be proportionately affected and key among them are countries whose gross domestic product in terms of trade to the US is around 0.5 percent and above.
He said prior to the current period, the IMF’s projection was that growth in the region will move to about 4 percent in 2024 and to 4.2 percent in 2025 and even higher in 2026 but “we have now scaled out our growth projection to about 4 percent for 2025 to about 3.8 percent.”
Mendy explained that despite these external shocks, growth in The Gambia is projected to decline to 5.3 percent in 2026 from an initial projection of 5.5 percent.
He further warned that at least one third of the countries in the sub-region have 3 or more imbalances simultaneously, suggesting greater vulnerability to potential shocks.
“This situation is going to be compounded by the fact that there is a drop in aid. Many countries have announced a reduction in their foreign aid budget and this is even expected to increase. The US has announced a 53 percent cut to their aid budget, the Netherlands 30 percent cut, Belgium 25 percent cut, France 37 percent cut and the UK 40 percent cut. Key among the countries in the Sub-Saharan region that are going to be affected is Central African Republic, South Sudan, Mozambique and Gambia all of which have 15 to 30 percent of the size of the Official Development Assistance (ODA) being equivalent to 30 percent of their GDP,” Mendy disclosed.
The IMF resident representative Patrick Gitton said it is worth knowing that The Gambian economy has grown at a stronger pace than the region’s average for several years now and was estimated to have reached 5.3 percent in 2024.
“Inflation in the Gambia was at 9.4 percent in February 2025 and has further declined to 8.1 percent at the end of April. This is a great improvement because inflation in the country was above 18 percent in September 2023. This reduction is mainly due to decline in food inflation which has trended down since November 2023. At the regional level food price inflation has dropped from a peak of 14 percent in February 2023 to below 6 percent in February 2025,” Gitton disclosed.
He said the gains would have been significantly sustained if not the brutal change in the external economic landscape.
