Press Release No. 04/49
March 8, 2004  International Monetary Fund
700 19th Street, NW
Washington, D.C. 20431 USA

IMF Executive Board Reviews Noncomplying Disbursement to The Gambia
The Executive Board of the International Monetary Fund (IMF) has reviewed 
matters related to two noncomplying disbursements to The Gambia, each in an 
amount equivalent to SDR 3.435 million (about US$5.1 million), that were 
made in July and December 2001 following the completion by the Executive 
Board of the first and second review under the third annual Poverty 
Reduction and Growth Facility (PRGF) arrangement. The Executive Board agreed 
that The Gambia would be expected to repay the two noncomplying 
disbursements totaling SDR 6.87 million (US$10.1 million), together with any 
accrued interest. The first of four equal repayments must be made within 30 
days.

The issue of misreporting arose because of inaccurate information provided 
to the Fund relating to the end-March 2001 and end-September 2001 
performance criteria on net official international reserves, net domestic 
assets of the central bank, net bank credit to the central government, and 
the central government basic primary fiscal balance. While the Executive 
Board had granted waivers for nonobservance of these performance criteria at 
the first review, and for net bank credit to the central government at the 
second review, these waivers were based on information provided at the time 
by the authorities with respect to performance under these criteria, which 
has subsequently been shown to be inaccurate.

Following the Executive Board's discussion on The Gambia, Agustín Carstens, 
Deputy Managing Director and Acting Chairman, stated:

"The provision by the Gambian authorities of inaccurate information relating 
to the first and second review under the third annual PRGF arrangement 
raises deep concern. The failure to record spending from the foreign 
exchange reserves and the non-delivery of foreign currency purchased from 
foreign exchange bureaus resulted in a misleading impression of satisfactory 
performance under the Fund-supported program. Furthermore, there have been 
extensive delays in providing information on the unrecorded spending to the 
Fund, despite the authorities' knowledge of the situation, and continued 
withholding of relevant details.

"Deviations from the performance criteria of end-March 2001 and 
end-September 2001 were both substantial and long-lasting and subsequent 
policy actions by the authorities did not correct the imbalances, resulting 
in a failure to meet the program objectives. Moreover, the authorities have 
not yet given an indication that they propose to commission a special audit 
of the foreign exchange activities of the central bank.

"Under these circumstances, the Executive Board has decided to require The 
Gambia to make full repayment of the noncomplying disbursements during 2004, 
together with any interest accrued thereon, with the strong expectation of 
early repayment," Mr. Carstens said.
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