Gambia Secures US$10.95 Million as IMF Completes First Review Under Extended Credit Facility Arrangement
Washington D.C., July 9, 2024
The International Monetary Fund (IMF) Executive Board has completed its first review under the Extended Credit Facility (ECF) arrangement for The Gambia, allowing for an immediate disbursement of approximately US$10.95 million.
Economic Recovery Continues
Economic activity in The Gambia is continuing to recover robustly, with economic growth estimated at 5.3 percent in 2023. Key sectors such as:
- Agriculture
- Services
- Telecommunications
- Construction
have contributed to this growth, while tourist arrivals have increased but remain slightly below pre-pandemic levels. Remittance inflows have also shown a sustained good performance.
Challenges Remain
However, headline inflation remains above the central bank’s medium-term objective of 5 percent, albeit easing from its peak of 18.5 percent in September 2023 to 11 percent in April 2024 due to declining global food and energy prices.
Progress Under ECF Arrangement
The Gambian authorities have made satisfactory progress under the ECF arrangement despite a challenging environment, with the central bank maintaining a tight monetary policy stance to combat inflationary pressures. Foreign exchange shortages have also eased following the introduction of a new foreign exchange policy in December 2023.
Recommendations from IMF
The IMF has encouraged the Gambian authorities to continue implementing structural reforms to address medium- and long-term macroeconomic challenges and catalyze additional financing from development partners and the private sector.
Key Recommendations:
- Make full use of the central bank’s policy toolkit to fight inflation
- Ensure a market-based exchange rate and smooth functioning of the foreign exchange market
- Focus on bolstering domestic revenue mobilization, reprioritizing spending, and reducing debt vulnerabilities
- Adopt strong climate-related policies to build resilience to climate risks
Governance and Anti-Corruption Efforts
The adoption of the anti-corruption bill by the National Assembly was hailed as an important milestone, with further progress needed to enhance governance, improve the business environment, and foster inclusive growth. The country is also urged to adopt strong climate-related policies to build its resilience to climate risks.
Quotes
“We encourage the central bank to make full use of its policy toolkit to fight inflation, and continue to ensure a market-based exchange rate and smooth functioning of the foreign exchange market.” - Deputy Managing Director Bo Li