Financial Position with the IMF
(includes other documents & reports such as indebtedness,
Multilateral Debt Relief Initiative, Poverty Reduction Strategy
Paper, Letters of Intent, Commitment of HIPC assistance, Total
disbursements and press releases).
Email: GMBContact@imf.org
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Background Information:
The
Gambia
joined the IMF on September 21, 1967.
The IMF is an international
organization of 185 member countries. It was established to promote
international monetary cooperation, exchange stability, and orderly
exchange arrangements; to foster economic growth and high levels of
employment; and to provide temporary financial assistance to countries
to help ease balance of payments adjustment.
Statement by an IMF Staff Mission to The
Gambia
Press Release No. 08/130
June 3, 2008
An International Monetary Fund (IMF) staff mission led by Mr. Tsidi
Tsikata visited The Gambia during May 11-25, 2008, to conduct
discussions for the 2008 Article IV consultation and the third review
under the Poverty Reduction and Growth Facility (PRGF) arrangement.
The mission met with Secretary of State for Finance and Economic
Affairs Mousa Gibril Bala-Gaye, Governor of the
Central Bank of The
Gambia (CBG) Momodou Bamba Saho, Chairman of the National Planning
Commission Alieu Ngum, other senior officials of the
government and
the CBG, the Speaker and other members of the
National Assembly, and
representatives of the business community, civil society, and The
Gambia's development partners.
At the conclusion of the visit, the mission issued the following
statement:
"Since the last Article IV consultation in 2006, the authorities'
policy strategy has been successful in maintaining macroeconomic
stability and sustaining high growth. Fiscal performance has been
good, and monetary policy has been geared to maintaining low
inflation.
"Real GDP growth has been strong at over 6 percent a year, a
performance that compares favorably with the record of other countries
in the region. Growth has been led by the construction, tourism, and
telecommunications sectors, facilitated by a steady inflow of foreign
direct investment and remittances. A relatively tight monetary policy
stance and appreciation of the dalasi have helped contain the impact
of rising world food and oil prices on inflation in The Gambia.
Inflation rose to 6-7 percent during most of 2007 from less than 1
percent in December 2006, but has been falling thus far in 2008.
However this trend may be reversed if world prices remain high. The
mission commended the government for adjusting the pump price of
petroleum products in order to safeguard the budget from the heavy
burden that would be associated with subsidizing these products, which
would tend to benefit the better off segment of the population more
than the poor. In this connection, the mission understands the
government's recent decision to remove the sales tax on rice imports
in order to provide some relief, especially to poor households.
Possible further mitigation measures for the most vulnerable
households could include the expansion of existing social programs
such as school feeding programs. The mission recommended that the
authorities avoid generalized subsidies, which tend to be ineffective
and have created budgetary problems in neighboring countries.
"The marked appreciation of the dalasi over the last year appears to
have reduced the profitability of the tourism industry and the
re-export trade, and would likely contribute to slower growth in 2008.
The main factors affecting The Gambia's international competitiveness,
however, include weak infrastructure, lack of access to long-term
financing, and the burden of a multiplicity of taxes and local
government charges. These problems will need to be addressed through
further structural reforms.
"The mission welcomed the government's intention to use the savings
from debt relief to boost poverty reducing expenditures in line with
the priorities in the PRSP and also to pay down domestic debt in order
to put downward pressure on interest rates. The mission urged the
authorities to speed up the preparation of a national debt strategy to
help the country avoid falling back into debt distress.
"With regard to the PRGF-supported program, the mission found that
performance against the quantitative financial targets has been
strong. However, progress has been slower than expected in
implementing some structural reform measures such as establishing a
fully functioning credit reference bureau.
"The Executive Board of the IMF is tentatively scheduled to discuss
the report of the mission in early August 2008. The mission wishes to
express its gratitude to the authorities for their hospitality and the
very constructive spirit in which the discussions were held."
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