The Executive Board of the International Monetary Fund (IMF) has approved emergency financial assistance under the Rapid Credit Facility (RCF) in the amount equivalent to SDR11,662,500 (about US$16.1 million) for The Gambia to enable the authorities to meet their urgent balance of payment needs.
In addition, the Board was informed about the IMF Managing Director’s approval of a one-year staff-monitored program (SMP) to guide policy implementation.
With the recent political transition, the new government has inherited a dire economic situation and the country is faced with an urgent balance of payments need and a precariously low level of usable international reserves.
The Gambia has been hit by a bad agricultural season, the political turmoil following the elections in December 2016 has greatly reduced tourism receipts in early 2017, and higher fuel and commodity prices put further strain on the balance of payments. These shocks have exacerbated an already fragile macroeconomic situation, reflecting past economic mismanagement.
The IMF financial assistance is intended to address urgent balance of payments needs that have arisen on account of the shocks. It will help fill budgetary gaps while the authorities implement economic and structural policies aimed at restoring macroeconomic stability and reducing poverty.
The Executive Board’s approval of the RCF disbursement will also enable the authorities to engage in further discussions with the donor community regarding assistance to meet their remaining financing needs. The Board’s approval enables the immediate disbursement of the full amount of the RCF loan, which is equivalent to 18.75 percent of The Gambia’s quota in the IMF.
Source: Africafeeds.com / Fred Dzakpata
