The resident representative of the International Monetary Fund (IMF) in the country has confirmed that the Gambia economy continues to perform well, coming off another strong year for agriculture, particularly in rice and groundnut production.

Meshack Tunee Tjirongo was speaking Wednesday at the IMF office in Cape Point, Bakau during a press conference convened following the recent IMF mission’s visit to the country [18-31 May, 2011] to initiate negotiations on a policy framework that could be supported by a new three-year arrangement under the IMF’s Extended Credit Facility (ECF). 

While in the country, the team, which was led by the IMF mission chief for The Gambia, David Dunn held several discussions with government officials including the vice president and minister of Women’s Affairs, Aja Dr Isatou Njie-Saidy; the minister of Finance and Economic Affairs, Mambury Njie; the governor of the Central Bank of The Gambia (CBG) Amadou Colley; and other senior officials. The mission also met representatives of non-governmental organisations, the private sector and development partners. 

Tjirongo said The Gambia’s tourism sector has remained suppressed, owing to lingering effects of the economic slowdown in key European markets, but is expected to pick up later in the year. He further stated that the country’s Gross Domestic Product (GDP) is projected to grow by five and half per cent in real terms in 2011, while annual inflation would remain moderately elevated at about six per cent, reflecting food and fuel price pressure. “The long-term economic outlook is generally positive, although Gambia’s heavy debt burden remains a concern,” Tjirongo added.

He said the team appreciates the candid policy discussions with the authorities and welcomes the president’s leadership on addressing the debt problem. “We support the intention of the government to curb its borrowing needs beginning in 2011, with the goal of achieving near-zero net domestic borrowing by 2014. The achievement of this target requires a gradual, but steady fiscal adjustment including a reversal of the decline in government revenue in recent years and firm restraint on spending,” he further stated. 
He also expressed IMF’s appreciation of the country’s recently introduced cash-budgeting approach to contain monthly expenditures, which, he said should assist in reducing the government’s net domestic borrowing to about two per cent of GDP in the current year. He explained that this would help to ease pressure on interest rates, generate fiscal savings and avoid the crowding out of credit to the private sector.

Tjirongo further explained that the new ECF agreement, which the authorities have requested, will support the forthcoming Programme for Accelerated Growth and Employment (PAGE). “Financing of the PAGE will pose a significant challenge in light of the country’s already heavy debt burden,” he said. Tjirongo hinted that in addition to seeking development partner support for the PAGE, IMF welcomes the Gambia authorities’ aim to embark on a programme of private sector participation in critical areas of infrastructure investment including telecommunications and electricity generation. “To build broad support for the PAGE, the IMF team encourages the authorities to further engage civil society, the donor community and other stakeholders in the final formulation of the strategy,” he concluded.