Wednesday, the World Bank’s Board of Executive Directors approved $20 million in supplementary funds for Gambia’s Second Fiscal Management, Energy and Telecom Reform Development Policy Financing (PDF).
A statement in Banjul on Thursday said the money will support the government’s efforts to improve debt and public investment management; strengthen financial viability and service delivery in the energy and telecommunications sectors, and enhance the transparency and governance framework of state-owned enterprises (SOEs).
“The Supplemental Financing responds to the spillover effects of the war in Ukraine on The Gambia’s economy compounding an already challenging situation due to the COVID-19 pandemic, it said.
According to the statement, the conflict disrupted agricultural supply chains and food trade, impacting food, feed, fertilizer, and fuel prices and driving inflation up to double digits for the first time in three decades.
“The war in Ukraine has led to a slowdown in economic activities in The Gambia and as a result impacted the country’s economic growth. This has reduced domestic revenues; at the same time, the country has to meet pressing basic social and productive sector needs to be exacerbated by rising inflation,” said Wilfried Kouame, World Bank Country Economist and Task Team Leader of the project.
The grant will support efforts to improve the country’s economic resilience and recovery by mitigating revenue losses, boosting forex reserves, cushioning the impact of rising prices of essential products on the most vulnerable, and ensuring that the government’s reform programme remains on track.
Feyi Boroffice, World Bank Resident Representative, said the Government adopted several measures to mitigate the spillover effects of the war in Ukraine on the population, including foregoing part of the revenues from petroleum products, partially offsetting the rising costs of fertilizers and food products through subsidies, and a continuation of the removal of taxes on bread and rice.
While reducing the impact of the crisis on the people, these measures have generated significant fiscal costs. The additional support is part of a coordinated effort to fill the resulting financing gap.