The Executive Board of the International Monetary Fund (IMF) has approved a new arrangement for The Gambia under the Extended Credit Facility (ECF) to the tune of about US$28.3 million.
This decision will enable an immediate disbursement equivalent to about US$14.2 million.
According to a statement from the IMF Banjul office on Monday, this is aimed at meeting an acute balance of payments need arising from the recent crop failure due to drought, and helping to catalyze support from development partners for The Gambia’s new poverty reduction strategy, the Programme for Accelerated Growth and Employment (PAGE).
Over the medium term, the IMF seeks to ease The Gambia’s heavy debt burden through fiscal adjustment, while implementing a strong economic reform agenda in support of the PAGE.
In the statement, Naoyuki Shinohara, IMF’s Deputy Managing Director, said the Gambian economy has made good progress in achieving strong growth and making a substantial reduction in poverty.
However, he said, major crop failure due to the drought has created hardship that calls for effective and timely delivery of assistance for the most vulnerable households.
“The Gambia’s heavy debt burden poses high costs for the government and risks for the economy,” Mr Shinohara said.
“To address this problem,” he continued, “the IMF's new ECF-supported program rightly focuses on fiscal adjustment to curb government's domestic borrowing. Limiting external borrowing to concessional loans is also necessary to reduce the risk of debt distress.”
