The Gambia

Following the historical transition to a democratically elected government in January 2017, the new administration has had to contend with a dire economic situation with unsustainable debt, failing SOEs, and crowding out of the private sector. Moreover, the economy was hit by economic shocks in 2016/17 (agriculture, tourism, trade). The new administration is strongly committed to breaking with past policies and to restoring economic stability and debt sustainability. Substantial financial support has been provided by development partners, including budget support of $56 million from the World Bank and €25 million from the EU. The Fund has supported the authorities through a $16.2 million RCF disbursement accompanied by a one-year staff-monitored program (SMP), performance under which is included in the report for information of the Executive Board. The new administration is now well established and an economic recovery is underway, bolstered by improved market confidence, favorable rains, a much-improved foreign exchange supply, and resurgent trade and tourism. The authorities are requesting an extension of the SMP approved in June 2017 by six months through September 2018. Staff supports the request, which would provide more time to establish a track record of performance for the transition to an ECF arrangement to which the authorities aspire, including because the outcome of the donor conference delayed to May 2018 will be an important input to the design of an ECF.