The Executive Board of the International Monetary Fund (IMF) on completion of the third review of the arrangement under the Extended Credit Facility (ECF), has approved US$6.97 million disbursement, and concludes 2021 article IV consultation with The Gambia.
A statement, made available to PANA on Thursday, stated that the completion of the review enables the release of SDR 5.0 million (about US$6.97 million), bringing total disbursements under the arrangement to SDR 40.0 million (about US$55.75 million).
Gambia’s 39-month ECF arrangement for SDR 35.0 million (56.3 percent of quota) was approved by the Executive Board on March 20, 2020, and augmented in the context of the first review to SDR 55.0 million (88.4 percent of quota) to help meet financing needs associated with the COVID-19 pandemic.
The ECF-supported programme aims to address the challenges from the pandemic, support inclusive growth, reduce debt vulnerabilities, and advance structural reforms, including on public financial management, domestic revenue mobilization, business environment, and SOEs.
The authorities are delivering on their commitment to the transparency of COVID-19 spending; they published the list of the related procurement contracts and their beneficial owners.
Mr. Bo Li, deputy managing director and acting chair, said “Gambia’s performance under their economic programme, supported by the Extended Credit Facility, has been broadly satisfactory despite the challenging pandemic context.
“The economy is showing some signs of recovery but the third wave of the pandemic in mid-2021 has hampered a vigorous rebound.
“Fiscal policy will need to continue to contain the spread of the pandemic and support economic recovery while reducing debt vulnerabilities. The authorities are making strong communication efforts on COVID-19 vaccination and are delivering on their commitments regarding the transparency of pandemic-related spending.
“In the context of a weak tax base and elevated spending needs, it would be paramount to further streamline tax exemptions, rationalize subsidies to state-owned enterprises, and enhance the prioritization of public investment projects.
“While the accommodative monetary policy stance is warranted at this stage, it should be reassessed if inflation pressures resume. It is important for the central bank to continue strengthening its financial safeguards to bolster policy credibility and to step up bank supervision.
“In view of lingering vulnerabilities, maintaining exchange rate flexibility and adequate external buffers will be critical, the authorities’ decision to use part of the IMF’s recent general SDR allocation while saving the remainder is commendable.
“Adherence to the external borrowing plan under the programme and seeking grants and concessional financing will help secure debt sustainability.
“The authorities should persevere in their ambitious structural reform agenda, especially in view of the upcoming election cycle, to fully reap the benefits from the country’s remarkable socio-political turnaround in recent years.
“Pursuing governance reforms, fighting corruption, improving public procurement processes, and enhancing the business environment are crucial for achieving inclusive and sustainable growth,” he said