The
Executive Board of the International Monetary Fund (IMF) approved a
thirty-nine-month Extended Credit Facility (ECF) arrangement for The Gambia in
the amount of SDR35 million (about US$47.1 million, or 56.3 percent of The
Gambia’s quota in the Fund) today.
The
ECF-supported programme aims to anchor macroeconomic stability and progress on
structural reforms achieved under the 2019 Staff Monitored Programme (SMP) and
would provide a framework to assist the authorities in developing and
implementing effective policy responses to address the COVID-19 challenges.
The
program will also help catalyze much needed donor financing, particularly in
the form of grants for budget support, maintain the momentum in reducing debt
vulnerabilities, and deliver on key commitments in the National Development
Plan 2018–2021, with the focus on inclusive growth and poverty reduction.
The
IMF Executive Board’s decision enables an immediate disbursement of SDR5
million, about US$6.7 million. Disbursements of the remaining amount will be
phased over the duration of the programme, subject to six half-yearly reviews.
Following
the Executive Board’s discussion on The Gambia, Mr. Tao Zhang, deputy managing
director and acting chair, stated in a press release that The Gambian
authorities’ commitment to prudent policies and institutional improvements has
supported robust economic growth, while voluntary debt service deferrals from
their main external creditors have helped attain debt sustainability.
He
indicated that the ongoing covid-19 pandemic would challenge the authorities’
efforts to further strengthen economic performance and resilience.
“The
39-month ECF arrangement, focused on advancing reforms in revenue mobilisation,
public financial management, and economic governance to support inclusive
growth, will help anchor macroeconomic stability and meet balance-of-payments
needs. Grant financing and technical assistance from development partners will
be needed to support the authorities’ reform efforts.”
“The
authorities should remain committed to fiscal consolidation in the medium-term
to ensure debt sustainability. Major projects should be financed through grants
or highly concessional financing and public procurement and project selection
should be strengthened. The governance and financial management of state-owned
enterprises need to be improved to help reduce fiscal risks and enhance
efficiency in public service delivery. Further strengthening of tax
administration and public financial management is also needed to boost
resources for priority investment and social spending.”
“The
monetary policy framework needs to be enhanced, including by gradually
adjusting the interest rate corridor, and enabling the SDF rate to effectively
anchor the functioning of the interbank market, and the central bank’s balance
sheet should be strengthened.”
“The
vulnerabilities identified in the 2019 Financial Sector Stability Assessment
should be addressed to ensure soundness of the financial sector and improve
legal and supervisory framework for banking supervision. The authorities should
leverage the financial inclusion strategy, including through mobile banking,
while strengthening the oversight of non-banking institutions and monitoring of
risks involved in mobile banking.”
“The
authorities’ support for social programs and commitment to structural reforms
and improvement in governance, as outlined in the authorities’ National
Development plan, will be necessary to help address social needs, combat
corruption and promote private-sector-led inclusive growth.”
