By: Ismaila Manjang
The International Monetary Fund (IMF), in collaboration with the Ministry of Finance and Economic Affairs and the Central Bank of The Gambia on Wednesday 14th June, launched the joint in-country launching of the April 2023 Regional Economic Outlook (REO) for Sub-Saharan Africa.
The REO is the flagship bi-annual publication of the IMF’s African Department, which provides a cross-country analysis of economic developments within Sub-Saharan Africa (SSA).
This latest report, under the theme ‘The Big Funding Squeeze,’ discusses the economic outlook for the SSA region, how the legacy of recent crises translating into persistent global inflation, tighter monetary policies, and the decline in donor flows have led to higher borrowing costs for Sub-Saharan African countries and have placed greater pressure on exchange rates.
The Report also includes three analytical chapters on Geo-Economic Fragmentation; Managing exchange rate pressures in Sub-Saharan Africa; and Concessional climate finance.
Speaking at the event, IMF Res Rep Mamadou Dioulde Barry said “It took an extra-ordinary effort and a great deal of commitment to maintain performance under the program despite multiple shocks including the COVID-19 pandemic, the war in Ukraine, and numerous climatic shocks. We commend the staff of Ministry of Finance and the Central Bank and the Gambians population for this achievement.
“The completion of the sixth review enabled an immediate disbursement of US$ 6.7 million, to help meet the country’s balance-of-payments and budget financing needs and better respond to the cost-of-living crisis and support the most vulnerable.”
According to him, The ECF program was instrumental in providing the fiscal space to respond to the multiple shocks, shielding the most vulnerable population while preserving macroeconomic stability, noting the approval of the program at the onset of the pandemic, with an initial access of US$48 million, set the stage for timely and adequate support to The Gambia.
“Two weeks after the program approval, an emergency COVID-19 support, under the Rapid Credit Facility of US$21.3 million was provided, which enabled the government to implement various pandemic relief programs such as food distribution programs, support to local governments, and to the tourism sector,” he expressed.
However, he added The Gambia received US$85 million from the mid-2021 IMF General Special Drawing Rights allocation, which boosted external reserves and provided US$20 million to address critical financing needs in the 2022 budget.
This, he said, enabled, in early 2022, the financing of multiple projects in the health sector and provide the fiscal space for starting the construction of the Bertil Harding highway, which they are looking forward to seeing completed in due course to boost urban mobility and change the face of the Greater Banjul Area.
He stressed that despite these good performances, debt vulnerabilities remain high, and the inflation is at record level 17.4 percent at end April 2023, which call for sustained and coordinated efforts in implementing strong economic and social reforms.
He “In this cthat ontext the authorities have welcomely requested a successor ECF program. The Gambians can be assured that the IMF remains fully committed to strengthening its cooperation with the government by providing the much-needed policy advice, capacity building, and financing to support the country in its journey to prosperity.”
On his part, Governor othe f the Central Bank, Mr. Buah Saidy, said the discussions have revealed that the multiple global shocks have no doubt interrupted the economic and social progress of the sub-region, adding the shocks continue to threaten to erase the hard-won gains achieved over the last decade.
He added that the challenges present an opportunity for countries to undertake necessary reforms that will enhance economic competitiveness, boost investor confidence, and attract capital inflows to foster sustainable and inclusive growth.
“Therefore, we must seize the moment to re-evaluate, adapt our development programs and aim for long term solutions for better, more inclusive and resilient economies. The stakes are high and with limited resources and policy space, the road will be rough, but we have no choice.It is cruc ial for us to delve into the complexities of this situation and look for sustainable solutions. With hard work and determination, we will get there,” he said.
However, Hon. Seedy Keita Minis of Financtere and Economic Affairs added that have had lessons learn from the program and they can assure the Gambia population that this report must be implemented.
He, therefore, expressed gratitude to Barry for his immense support in making the program a success, and commended on the Sub-Saharan African economic situation.
Meanwhile, Chuks Ugha, Managing Director Standard Chartered Bank also made a comment on the financing conditions in the Gambia, and policies to foster financial innovation and deepening.