The government of The Gambia has subscribed to a US$250 million five-year loan scheme with the International Islamic Trade Finance Corporation (ITFC). Under this scheme penned by Mambury Njie, The Gambia may borrow up to US$ 50 million each year to essentially buy fuel for NAWEC, service the groundnuts and cashew nuts trade season, as well as purchase fertilizers.
The Minister of Finance and Economic Affairs, Mambury Njie, signed for the government of The Gambia. ITFC, a member of the Islamic Development Bank (IDB), said, “the new 5-Year Framework Agreement in favor of the Government of The Gambia is a part of the Corporation’s ongoing efforts to combat the economic repercussions COVID-19 and strengthen critical economic sectors in member countries“.
Over the years, ITFC has availed loans for a total of US$607 million to The Gambia. Many ITFC loans were contracted under Yahya Jammeh’s regime to pay his cohorts of NAWEC suppliers like Muhammed Bazzi. When President Adama Barrow’s government came to power, the World Bank and IMF advised that the government be cautious with overborrowing from the ITFC.
On July 22nd, 2020, the National Assembly approved a Supplementary Appropriation (SAP) Bill totaling GMD2.85 billion (3 percent of GDP). However, the supplemental budget includes large subventions to SOEs, mainly the settlement of ITFC payments on behalf of the NFSPMC. The World Bank deemed such a financial arrangement “Concerning.” The current budget includes transfers to the National Water & Electricity Company (NAWEC) and the National Food Security Processing and Marketing Corporation (NFSPMC) for repayments to the Islamic Trade Finance Corporation.
From all indications, the new loan scheme signed by Mambury Njie is a bis repetita placent to the government of The Gambia as transpired in Minister of Finance and Economic Affairs, Mambury Njie, statement after he signed the scheme. “This would support national development goals to drive economic diversification and job creation across key growth sectors.” The Gambian minister added that the loan scheme would “facilitate trade and investment flows within the country and globally through the country’s participation in agriculture value chains,” Mambury Njie said.
The document inking the agreement states that the US$250 million loan scheme will “provide pre-export financing for major cash crops such as groundnuts and cashew nuts, the primary agricultural produce in a sector that is a significant employer of the country’s workforce. In addition, this agreement will also facilitate the import of essential farm inputs such as fertilizer.”
The ITFC financing will also “enable imports of refined petroleum, which is crucial to generate electricity in the country.” Other sectors that will benefit from the five-year framework agreement include the healthcare sector through importing medicines and health equipment and the private sector through financing facilities to local banks and financial institutions to boost local SMEs.
“Technical assistance for trade development aimed at building capacity and promoting information exchange and knowledge dissemination are other areas covered in the agreement.”