The Executive Board of the International Monetary Fund (IMF), has completed the first review of The Gambia’s economic performance under a program supported by a three-year Poverty Reduction and Growth Facility (PRGF) arrangement.

After completing the review, the executive board approved the authorities’ request for waivers of non-observance of two structural performance criteria pertaining to the submission of an audit report on monetary data and the implementation of the Central Project Management and Aid Coordination Directorate (CPMACD), and one quantitative performance criterion relating to the non accumulation of external payments arrear. The completion of the first review enables the release of an account equivalent to SDR 2 million (about U$3.1million) for The Gambia.

The Gambia’s PRGF arrangement was approved on February 21, 2007 for an amount equivalent to SDR 14 million (about US$21.5 million).

According to reports from the IMF, following the executive board discussion on the Gambia’s economic performance, Mr Murilo Portugal, Deputy Managing Director and Acting Chair revealed that, The Gambia has made good progress towards macro-economic stability and higher economic growth and performance under the PRGF-supported program.

 “Fiscal discipline will be vital to achieve debt sustainability and protect social spending. The government is seeking to curtail its domestic borrowing requirement in order to keep real interest rates down and stimulate private investment. To this end, it will continue to strengthen tax administration, fully implement the integrated financial management information system that has been crucial in keeping expenditures in line with appropriations, and avoid extra-budgetary spending. Budget formulation and execution will be guided by the priorities set out in the new poverty reduction strategy paper,” he said.

According to him, the government of The Gambia is committed to maintain price stability and increase the effectiveness of the monetary policy. “To this end, steps are underway to strengthen the operational independence of the Central Bank of the Gambia (CBG), including implementation of an Action Plan to bring CBG lending to the government within statutory limit. The CBG and the government are also working towards improving of the coordination of fiscal and monetary operations in order to enhance the effectiveness of the CBG’s liquidity management,” he observed.

He further noted that, authorities have made good progress towards reaching the completion point under the enhanced heavily indebted poor countries initiatives.

He further added that, reaching the completion will also make The Gambia eligible for assistance under the Multilateral Debt Relief Initiative. “In order to ensure that debt relief move the country’s external debt to a sustainable path, the authorities intend to rely as much as possible on grants rather than external loans to finance their development program,” he stated.

Mr Portugal then announced that loans are contracted and would be on highly concessional terms.