An International Monetary Fund (IMF) staff team, led by Jaroslaw Wieczorek, visited Banjul from May 3–9, 2018.
The team assessed implementation of The Gambia’s Staff-Monitored Program (SMP) [1] with the International Monetary Fund (IMF) from end-September 2017 to end-March 2018. Forward-looking discussions focused on economic and financial policy commitments for the remainder of the SMP, which was extended through September 2018 to enable the completion of the program reform agenda.
At the end of the visit, Mr. Wieczorek issued the following statement:
“Emerging from over two decades of autocratic rule, The Gambia remains a fragile state with significant developmental and infrastructure gaps. It was ranked 173 out of 187 countries in the UNDP’s 2016 Human Development Index, and, at 48.6 percent, poverty remains pervasive and has remained relatively stagnant.
“Gambia’s economic recovery is gaining traction. Economic growth rebounded to 3.5 percent in 2017, from just 2.2 percent a year earlier, owing to a stronger agricultural season and a pickup in tourism, trade and transportation. Headline inflation declined from a peak of 8.8 percent in January 2017 to 6.5 percent in March 2018, reflecting the stabilization of the dalasi and a rebound in food supply. Significant external financial support boosted international reserves and allowed the government to reduce its reliance on domestic borrowing, leading to a sharp fall in T-Bill yields.
“In 2018, GDP growth is expected to rise to 5–5½ percent, inflation is projected to drop to about 5¼ percent close to the Central Bank of the Gambia’s target of 5 percent, and the international reserves to strengthen to 3.4 months of next year’s imports of goods and services.
“Performance to date under the Staff Monitored Program has been broadly satisfactory, with all quantitative targets at end-December 2017 and end-March 2018 being met, although the implementation of the structural reform agenda encountered some delays. The team reached understandings on a timetable for the completion of the program reform agenda and fiscal measures needed to ensure consistency of budget implementation with the SMP.
“The Gambia’s debt stock has risen further to about 130 percent of GDP at end-2017 (of which more than half is owed to external creditors) mainly due to legacy issues, including faster disbursements of previously contracted loans and the recognition of external arrears incurred by the former administration, and government’s assumption of State-Owned Enterprises (SOEs) liabilities. Maintaining debt sustainability will necessitate refraining from contracting new government debt or contingent liabilities before additional fiscal and borrowing space has been achieved, and leveraging more private investment. In addition, strengthened fiscal discipline and domestic revenue mobilization are needed to reduce debt vulnerabilities.
“Reform of SOEs remains critical. Efforts are needed to strengthen the financial oversight of SOEs, including through the conduct of special multiyear audits, and enforcement of SOE compliance with monthly, quarterly and annual reporting requirements.
“The Central Bank of The Gambia (CBG) should maintain its flexible exchange rate policy and take concrete steps to strengthen the monetary policy framework to help ensure price stability. Looking forward, the establishment of an interest rate corridor for the policy rate will help to ensure that monetary conditions are consistent with the objective of keeping inflation at or below 5 percent.
“The team met with Finance Minister Sanneh, Central Bank Governor Jammeh, other senior government and public enterprise officials, representatives of the private sector, banks, civil society, and development partners (including visiting World Bank Executive Directors).
“The team thanks the authorities for their openness and excellent cooperation, and fruitful discussions, and looks forward to continued close cooperation in the period ahead.”
With the stock of debt estimated to be 130 percent of GDP as end December 2017, we are still living beyond our means. Interestingly, this new government has raised the debt levels by 20per cent since taken over power more than a year ago. Corruption in the new Gambia is eating a far bigger chunk of our tiny economic resources than the combined effect of debt repayments and interest charges on the debts. We must cut down government excesses and fight the rising scourge of grafts in the public sector if we want to achieve economic success comparable to Ghana.
The IMF have again deflected any criticism from the Government and themselves by simply blaming the previous administration. An administration that they {the IMF} were supervising and advising throughout It’s 22 year rule. Since January 2017 the IMF have been supervising the Barrow transitional government and it’s offices. I would suggest any reason for inflation to fall { only slightly } is entirely because the majority of Gambians have no jobs to create disposable income with which to measure any consumer impact upon this situation. Poverty has increased significantly over the last 16 months. Government debt has increased by 20%. This is again due to the excesses and luxuries afforded to those in power. I did say in the past that Gambia would recover even without government and IMF input or policies for debt reduction, growth and assistance for its prime income from Agriculture and Tourism. It was expected that both these guaranteed incomes would rebound positively. But what we have witnessed suggests that any policy implemented has not assisted or increased this rebound in the slightest. { perhaps there are no policies } Indeed, we can suggest that if there was no government or wages for the privileged few at the top of this very weak and sick tree, the weight upon the heavily debt burdened people, would be significantly less and allow energy to create something useful. Creating and maintaining this expensive government that only adds to the debt burden carried by the poorest, is an affront if not an assault upon the peace and dignity of the Gambian people. The honeymoon is over. This report suggests that Gambia was even better off under Jammeh by 20% It also condemns the Barrow government who’s lavish lifestyle and borrowing and spending on government, is entirely responsible for the increase in debt to GDP ratio. But what did we expect ? The Gambia can no longer afford this government. It is not cost effective.
I disagree with mike. Whose professional assessment shall.we trust? you or IMF. I know IMF is not blameless but certainly they want us to succeed. I was in that ministry and know what data to collate and analyse. The country is in hands of a an able Finance minister and he will turn the tables arround soon. Gambia faces a broad economic and governance re-orientation and that cannot be denied but it cannot be achieved quickly. UK is faced with similar budgetary problems and had cut NHS investement and seem to more enthused with privatization of NHDS based on the American model.
Watch out for the performance indicators which IMF used globally you will fine an upward trajectory. Debt if channelled precipitously can be a blessing even though there are antecedent risks to economic health in the long term. America is the most most indebted country on earth yet they manage to reduce unemployemnt and improve on inflation, growth and poverty reduction although their is much to be desired. So is France, Greece, Italy and spain which are all faced with perennial financial problems.p
With the stock of debt estimated to be 130 percent of GDP as end December 2017, we are still living beyond our means. Interestingly, this new government has raised the debt levels by 20per cent since taken over power more than a year ago. Corruption in the new Gambia is eating a far bigger chunk of our tiny economic resources than the combined effect of debt repayments and interest charges on the debts. We must cut down government excesses and fight the rising scourge of grafts in the public sector if we want to achieve economic success comparable to Ghana.
The IMF have again deflected any criticism from the Government and themselves by simply blaming the previous administration. An administration that they {the IMF} were supervising and advising throughout It’s 22 year rule. Since January 2017 the IMF have been supervising the Barrow transitional government and it’s offices. I would suggest any reason for inflation to fall { only slightly } is entirely because the majority of Gambians have no jobs to create disposable income with which to measure any consumer impact upon this situation. Poverty has increased significantly over the last 16 months. Government debt has increased by 20%. This is again due to the excesses and luxuries afforded to those in power. I did say in the past that Gambia would recover even without government and IMF input or policies for debt reduction, growth and assistance for its prime income from Agriculture and Tourism. It was expected that both these guaranteed incomes would rebound positively. But what we have witnessed suggests that any policy implemented has not assisted or increased this rebound in the slightest. { perhaps there are no policies } Indeed, we can suggest that if there was no government or wages for the privileged few at the top of this very weak and sick tree, the weight upon the heavily debt burdened people, would be significantly less and allow energy to create something useful. Creating and maintaining this expensive government that only adds to the debt burden carried by the poorest, is an affront if not an assault upon the peace and dignity of the Gambian people. The honeymoon is over. This report suggests that Gambia was even better off under Jammeh by 20% It also condemns the Barrow government who’s lavish lifestyle and borrowing and spending on government, is entirely responsible for the increase in debt to GDP ratio. But what did we expect ? The Gambia can no longer afford this government. It is not cost effective.
Mike,
I couldn’t agree more!
Mike,
I couldn’t agree more!
I disagree with mike. Whose professional assessment shall.we trust? you or IMF. I know IMF is not blameless but certainly they want us to succeed. I was in that ministry and know what data to collate and analyse. The country is in hands of a an able Finance minister and he will turn the tables arround soon. Gambia faces a broad economic and governance re-orientation and that cannot be denied but it cannot be achieved quickly. UK is faced with similar budgetary problems and had cut NHS investement and seem to more enthused with privatization of NHDS based on the American model.
Watch out for the performance indicators which IMF used globally you will fine an upward trajectory. Debt if channelled precipitously can be a blessing even though there are antecedent risks to economic health in the long term. America is the most most indebted country on earth yet they manage to reduce unemployemnt and improve on inflation, growth and poverty reduction although their is much to be desired. So is France, Greece, Italy and spain which are all faced with perennial financial problems.p