- The IMF Executive Board approved a new 18-month arrangement under the Resilience and Sustainability Facility (RSF) for The Gambia for an amount equivalent to about US$63.55 million, to help the authorities improve macroeconomic resilience and build policy buffers against climate shocks. The Executive Board also completed the third review under the existing Extended Credit Facility (ECF) arrangement, enabling immediate disbursement of about US$16.95 million.
- Despite substantial downside risks, The Gambia's economic outlook remains positive, with growth expected to reach 5.7 percent in 2025 and inflation returning to single digits.
- The Gambia has made good progress in implementing their economic reform program despite fiscal policy challenges. Key priorities include increasing domestic revenue and advancing with fiscal consolidation to safeguard debt sustainability while strengthening social and spending.
Washington, DC: The Executive Board of the International Monetary Fund (IMF) has approved an 18-month arrangement under the Resilience and Sustainability Facility (RSF) for The Gambia in the amount of SDR 46.65 million (about US$63.55 million), with disbursements to begin when the first review of the arrangement is completed. The RSF arrangement will help the authorities tackle challenges posed by climate change and reinforce the country's long-term resilience by strengthening the legal framework and institutional environment, green public finance management, climate data and transition taxonomy, adaptation and resilience, and the energy transition.
The Executive Board also completed the third review of The Gambia's Extended Credit Facility (ECF) arrangement, approved on January 12, 2024 , supporting reforms to address long-standing structural impediments to inclusive growth. The completion of the review allows for the immediate disbursement of SDR 12.44 million (about US$16.95 million), bringing total disbursements under this arrangement to SDR 37.31 million (about US$50.82 million).
The Gambia's economic outlook remains positive, with real GDP estimated to expand by 5.7 percent in 2025, supported by continuous recovery in the tourism sector and good performance in the agricultural and construction sectors. Headline inflation has gradually declined, reaching 8.1 percent by end-April 2025. The outlook is subject to significant downside risks stemming from global uncertainty.
While the authorities remain committed to the objectives set out in the ECF arrangement and revenue collection has been strong, unbudgeted spending pressures including from the National Water and Electricity Corporation (NAWEC) continue to weigh on fiscal balances. Going forward, steadfast implementation of the policy and reform agenda will be essential to safeguard macroeconomic gains and debt sustainability.
The Executive Board approved the authorities' request for waivers of nonobservance of the performance criterion on the end-June 2024 floor on the domestic primary balance and the end-December 2024 ceiling on net domestic borrowing, based on corrective actions taken.
Following the Executive Board's discussion, Deputy Managing Director Bo Li issued the following statement:
"The Gambia's economic momentum remains robust, with resilient growth and gradually declining inflation. Program implementation has been mixed, showing satisfactory adherence to quantitative performance criteria and indicative targets but delays in meeting structural benchmarks. The authorities have reiterated their commitment to their reform agenda despite ongoing global geopolitical uncertainties.
"The authorities plan to offset the carryover of 2024 spending commitments and unbudgeted transfers by restraining non-priority spending in 2025. Adhering to the fiscal consolidation and fiscal targets for 2025 is vital for reducing fiscal risks and ensuring debt sustainability. Enhancing revenue collection to build additional fiscal buffers is also critical. Improving public financial management to prevent domestic arrears and better control multi-year commitments will support fiscal discipline and accountability. Furthermore, it is essential to limit fiscal risks from state-owned enterprises and public-private partnerships.
"The Central Bank of The Gambia's tight and data-dependent monetary policy is appropriate and should ensure that inflation converges to the medium-term target. The foreign exchange market is functioning smoothly following the new foreign exchange policy implementation, and it is crucial to maintain an exchange rate that reflects market forces. The central bank's commitment to cease direct financial support to public entities is a welcome measure to protect its balance sheet. Strengthening its regulatory capacity and risk-based supervision is essential to preserve the financial sector's stability.
"Progress with structural reforms is necessary to enhance governance and improve the business environment, thereby promoting private sector development and job creation. Implementation of recommendations from the recent governance diagnostic and prompt appointment of an anti-corruption commission are essential.
"Steadfast implementation of the authorities' climate agenda under the newly approved Resilience and Sustainability Facility (RSF) arrangement will complement the Extended Credit Facility in bolstering economic resilience and reducing balance of payment risks. The RSF is expected to foster tighter coordination among domestic stakeholders and development partners. It will be important to carefully sequence reforms under both arrangements, supported by targeted capacity development."
