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IMF completes sixth review under The Gambia's ECF arrangement

Mar 3, 2010, 3:07 PM

The executive board of the International Monetary Fund (IMF) on 19th February 2010 completed the sixth review of The Gambia's economic performance under a programme, supported by the Extended Credit Facility (ECF).

The board also approved a waiver for the non-observance of the fiscal performance criterion based on corrective actions, notably the government's 2010 budget approved by the National Assembly, which aims for a near-zero basic balance. The board?s decision allows the government to request a further disbursement amounting to SDR 2.0 million (about US$3.0 million), bringing total disbursements under the ECF to The Gambia to SDR 20.2 million (about US$30.8 million).

The executive board also approved an extension for a one year and an augmentation by SDR 4.67 million (about US$7.1 million) of The Gambia's ECF arrangement, originally approved on February 21, 2007.

At the conclusion of the executive board's discussion on The Gambia, Mr. Murilo Portugal, Deputy Managing Director and Acting Chair, stated:

"The Gambian authorities are pursuing satisfactory economic policies that have contributed to robust economic growth and low inflation. However, even after extensive debt relief, The Gambia remains at high risk of debt distress. Highly yields on Treasury bills-largely as a result of fiscal slippage and the government's recourse to domestic borrowing have added to the domestic debt burden. The government's efforts to strengthen its debt management strategy are, therefore, welcome. Until the debt burden is reduced, it will remain important to continue to limit external borrowing to highly concessional loans."

"The government's budget for 2010 appropriately targets a near-zero basic balance that will return The Gambia to a path of declining domestic debt, fiscal restraint will ease pressure on T-Bill yields and eventually generate fiscal savings for other spending priorities. Disciplined budget execution will be key to achieve these results, and the government's new action plan to improve public financial management will help achieve such discipline."

"The authorities are committed to maintain low inflation and to take steps to ease pressure on interest rates. The reinforced banking supervisory framework, including the phase-in increase in the minimum capital requirement, will contribute to ensuring continued soundness in the banking system."