Gambia: IMF Approves U.S.$27 Million (D1675 Million) for the Gambia

The Worldwide Financial Fund (IMF), on Wednesday, 14th December 2022, introduced the approval of US$27.41 million disbursement for the Gambia, by the Government Board of the organisation, throughout its fifth evaluate of its Prolonged Credit score Facility association.

In line with the IMF, the completion of the evaluate allows the fast disbursement of the equal of SDR20.55 million, about US$27.41 million, to assist meet the nation’s balance-of-payment and financial financing wants amid challenges, together with the repercussions of the struggle in Ukraine and the lingering influence of the COVID-19 pandemic.

The Government Board, in accordance with the IMF additionally accepted an augmentation of entry underneath the ECF association from SDR55 million, to SDR70.55 million (or 113.4 p.c of The Gambia’s quota from the Fund), which is the second augmentation of entry underneath this ECF association; that the Government Board accomplished financing assurances evaluate and granted a waiver of non-observance of a efficiency criterion on exterior arrears.

“The ECF association with The Gambia was accepted by the IMF’s Government Board on twenty third March, 2022 with an preliminary whole entry of SDR35 million (or 56.3 p.c of quota) that was augmented on the completion of the primary ECF evaluate on January, fifteenth 2022, to SDR55 million (88.4 p.c of quota). The Gambia has additionally benefited from an IMF Speedy Credit score Facility disbursement for disaster containment and reduction belief of SDR15.55 million in addition to debt service reduction,” the IMF reported. The IMF additional buttressed that the Gambian financial system is going through a number of exogenous shocks, together with the repercussions of the struggle in Ukraine, the lingering influence of the COVID-19 pandemic, and devastations attributable to a significant floods, saying “development projections in 2022 have been revised downward from 5.6 p.c to 4.5 p.c, with inflation reaching a record-high degree of 13.2 p.c (year-on- yr) in October 2022.”

The IMF additionally indicated that The Central Financial institution of The Gambia additional elevated its coverage fee to 13 p.c in December 2022, to deal with inflationary pressures.

“The steadiness of funds is adversely affected by disruptions of timber and cashew exports, weaker-than-expected vacationer arrivals, decrease remittance inflows, excessive meals and gas import payments, and elevated freight prices. These shocks are producing overseas alternate shortages and weighing on foreign exchange reserves. Price range execution is going through pressures, together with civil service wage will increase and gas income losses to alleviate the influence of the excessive international gas costs on the inhabitants.”

Mr Bo Li, Deputy Managing Director and Performing IMF Chair, in his assertion mentioned that The Gambia’s efficiency underneath the financial program supported by the Prolonged Credit score Facility (ECF), has been broadly passable regardless of financial and social challenges stemming from the repercussions of the struggle in Ukraine, the lingering impacts of the COVID-19 pandemic, and a latest main flooding.

He confused that owing to those exogenous shocks, financial restoration and tax assortment are weaker than anticipated, whereas inflationary pressures and overseas alternate shortages are intensifying.

He mentioned the Central Financial institution of the Gambia is tightening the financial coverage stance to deal with inflation. “It might be paramount to permit clean functioning of the overseas alternate market and be sure that the alternate fee displays market forces, which might assist restore equilibrium.”

He defined that the Fiscal coverage goals at assuaging the influence of the excessive international gas and meals costs on the inhabitants whereas safeguarding debt sustainability, underscoring that to maintain public debt on a downward path, it might be vital to bolster home income mobilisation, streamline tax exemptions, rationalise subsidies to SOEs, strengthen money administration, and additional prioritise public funding initiatives.

“In view of lingering vulnerabilities, together with anticipated will increase in debt service obligations on the expiry of the debt service rescheduling interval, it might be vital to keep up enough fiscal and exterior buffers. To this finish, it might be advisable to include home borrowing, strictly adhere to the exterior borrowing plan, and search grants and extremely concessional loans,” he mentioned.