The International Monetary Fund (IMF) Executive Board has announced its decision to allow for an immediate disbursement of about US$ 14.4 million to The government of The Gambia. The Brettonwood institution says the money will help The Gambia to meet her financing needs and support the post-Covid19 pandemic recovery.
The Executive Board of the International Monetary Fund (IMF) decided on a lapse-of-time basis to bail out The Gambia after it has completed on Thursday the second review under the Extended Credit Facility (ECF) arrangement with The Gambia.
This brings total disbursements under the ECF arrangement to about US$ 50.5 million.
IMF first approved a US$47.1 million extended credit facility (ECF) arrangement for The Gambia in March 2020. The immediate first disbursement of US$6.7 million to The Gambia followed suit to help The Gambia to be better prepared for external shocks, pursue high and inclusive growth, lessen debt vulnerabilities, strengthen public financial management, and bolster domestic revenue mobilization.
IMF later augmented its credit scheme to The Gambia to 88.4 percent of quota. The Gambia benefited from an IMF Rapid Credit Facility disbursement of SDR 15.55 million and is receiving debt service relief from the IMF under the Catastrophe Containment and Relief Trust, expected to total SDR 7.9 million, of which SDR 6.1 million has already been approved.
The stick after the carrot
Although IMF says, “The authorities (of The Gambia) deserve praise for the strong program performance and their ability to maintain macroeconomic stability,” the truth is that the Fund had to use the stick to get President Adama Barrow’s government to bend on the guarantees it presents on transparency and accountability.
The pressing request of the IMF left the minister of Finance Mambury Njie with no option but to accept an emergency meeting with parliamentarians to revive the draft “Public Procurement Act” that Adama Barrow’s government left dusting in the drawers, to the bewilderment of The Gambia’s financial partners.
The International Monetary Fund has consequently recommended to Gambian authorities that Mambury Njie and his ministry continue with strong policies to maintain good program performance. The fund further recommends that adequate fiscal policy prioritization be key to addressing the pandemic and supporting economic recovery while reducing debt vulnerabilities.
The IMF has also asked that The Gambia streamlines tax exemptions and apply prudent fiscal policy while liquidity and inflation developments need to be monitored. The government is also asked to tackle pockets of financial vulnerabilities and address structural obstacles to credit, given the slow credit growth in a context of ample liquidity.
According to the International Monetary Fund, The Gambia must persevere in the ambitious structural reform agenda, especially in the context of upcoming presidential and parliamentary elections. IMF also believes that there is a need for a swift implementation of the business environment strategy to support strong and inclusive growth.