Staff completes virtual mission for the second review of the Gambia Extended Credit Facility
April 1, 2021
End-of-mission press releases include statements from staff teams that communicate preliminary findings after a country visit. The views expressed in this statement are those of the staff of the IMF and do not necessarily represent the views of the Executive Board of the IMF. Based on the preliminary findings of this mission, staff will prepare a report which, subject to management approval, will be presented to the IMF Executive Board for discussion and decision.
- The COVID-19 pandemic has significantly affected the Gambian economy. GDP growth is estimated at zero percent in 2020. Authorities have taken swift and effective measures to deal with the spread of the pandemic, support the population and the economy.
- Performance under the ECF-supported program has been strong. All the quantitative objectives at the end of December 2020 have been achieved. Good progress has been made under a broad program of structural reforms.
- Unlocking the ongoing constitutional reform would be important for advancing some key macroeconomic policies, including on public enterprises and public financial management.
Washington, DC – April 1, 2021:
A team from the International Monetary Fund (IMF), led by Mr. Ivohasina Fizara Razafimahefa, Head of Mission for The Gambia, carried out a virtual mission with the Gambian authorities from March 22 to April 1, 2021 to discuss the second review of the economic situation from The Gambia. program supported by the IMF’s Extended Credit Facility (ECF).
At the end of the mission, Mr. Razafimahefa made the following statement:
“The mission team reached a staff level agreement with the Gambian authorities on the economic and financial policies likely to support the approval of the second review of the ECF-supported program. Performance under the program has been strong despite the challenges caused by the COVID-19 pandemic. All the quantitative objectives at the end of December 2020 have been achieved. The structural benchmarks have also been completed. The staff-level agreement is subject to approval by IMF management and the IMF Executive Board. The review by the Board is tentatively scheduled for May 2021; Upon approval of this second program review, SDR 10 million (approximately US $ 14 million) will be made available to The Gambia.
“The Gambian economy has been significantly affected by the COVID-19 pandemic. Economic growth is estimated to have slowed from 6.1% in 2019 to zero% in 2020, mainly due to a sharp decline in the tourism sector, partly mitigated by good agricultural production and strong private construction financed by d ‘large flows of remittances. Inflation fell from 7.7% (year-on-year) at the end of 2019 to 5.7% at the end of 2020, partly reflecting weak domestic demand. The budget deficit was contained at 2% of GDP despite the rapid and effective responses of the authorities to deal with the spread of the COVID-19 pandemic and support the population and the economy. This commendable budgetary result has helped to further lower the ratio of public debt to GDP. Liquidity increased significantly, fueled by private remittances, but credit to the private sector only increased by 0.8% as banks took a cautious approach to lending given the very uncertain economic environment. Foreign exchange reserves further strengthened, exceeding 5 months of potential imports in February 2021.
“The Gambian authorities are meeting their commitments to transparency of spending related to COVID-19. They have posted details of all public procurement related to COVID-19 on the Gambia Public Procurement Authority (GPPA) website. An audit of these expenditures is underway and the report is expected to be published in September 2021. Good progress has also been made in revenue administration and public finance management, particularly with regard to the cleaning of the taxpayer register. , a digital transformation of revenue administration, an audit of ministries / departments / agencies, civil service reforms, selection of public investment projects, cash management and deployment of the integrated information system financial management. It would be important to unblock the process of constitutional reform, still under debate, to allow progress to be made on certain key macroeconomic policies, in particular on public enterprises and the management of public finances.
“In the future, some recovery in economic activity is expected in 2021, based on continued good performance in private construction and agriculture, the acceleration of projects related to the Organization of Islamic Cooperation, as well as a gradual resumption of other activities following the COVID -19 vaccination campaign. In the medium term, economic growth is expected to return to its long-term average of around 6% as tourism returns to pre-pandemic levels and the global economy recovers. The authorities are making the necessary efforts to address fiscal pressures on revenues and expenditures in 2021. They are committed to continuing their prudent borrowing policy to continue reducing debt vulnerabilities over the medium term.
“The mission had talks with the Minister of Finance and Economic Affairs Mambury Njie, the Governor of the Central Bank of The Gambia Buah Saidy, senior officials of the Ministry of Finance and Economic Affairs, the Central Bank of The Gambia, the Ministry of agriculture, Ministry of Public Works and Transport, Ministry of Tourism, Ministry of Justice and some public enterprises. The mission also met with representatives of the private sector and development partners. The mission would like to thank the Gambian authorities for the constructive discussions and their spirit of cooperation. ”
The Extended Credit Facility (ECF) provides financial assistance to countries facing protracted balance of payments problems. It supports countries’ economic programs aimed at moving towards a stable and sustainable macroeconomic position compatible with strong and sustainable poverty reduction and growth. ECF can also help catalyze additional foreign aid.