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afrol News, 7 December - The International Monetary Fund (IMF) has completed a review of The Gambia's economic performance under the third annual Poverty Reduction and Growth Facility arrangement. "The Gambian authorities are to be commended for The Gambia's generally encouraging economic performance," the IMF concludes. As a result of the positive assessment, The Gambia will be able to draw up US$ 4 million from the Poverty Reduction and Growth Facility (PRGF), the IMF reports. The favourable PRGF loans carry an annual interest rate of 0.5 percent and are repayable over 10 years with a 5 1/2 -year grace period on principal payments. Eduardo Aninat, IMF Deputy Managing Director stated in his report that The Gambia generally had experienced encouraging economic performance since 1998 under the PRGF arrangement. "During this period, The Gambia experienced sustained per capita GDP growth and low inflation and an improvement in the fiscal balance." - The authorities took corrective measures, including the adoption of an appropriate macroeconomic framework and supporting policies for 2002-2004 in response to pressures on the budget that emerged earlier this year, Aninat said. On the Gambian budget for 2002, Aninat said it provided "for a strengthening of fiscal performance in line with the goal of maintaining a sustainable level of government domestic debt. The planned revenue and expenditure reforms will free up resources for spending on the social sector and poverty reduction." - Especially important will be efforts to enhance revenue collection, in particular improvements in customs administration, Aninat said. "The measures envisaged to maintain fiscal discipline will need to be supported by actions to enhance the transparency and accountability of the public finances." - The authorities should continue to implement a prudent monetary policy, the IMF director concluded. "The authorities are taking steps to enhance the supervision and monitoring of financial institutions." Aninat also noted that The Gambia's open and liberal trade regime had made it "a key regional trading center." The Senegalese neighbours however claim this "positive" sign is due to active Gambian undermining of its tax regime. The IMF director further noted that further meassures prescribed by the IMF would "be challenging as well as necessary to consolidate macroeconomic stability and further build on the track record leading to debt relief under the enhanced HIPC Initiative." Aninat concluded that the government's efforts to meet the IMF requirements on poverty reduction had been "satisfactory" and provided "a sound basis for continued access to Fund concessional lending." GDP growth has been averaging about 5 percent during 1997-99, compared with an average of about 1 percent during 1993/94-1995/96. The key objectives of the IMF/Gambian policy are further "to accelerate real GDP growth". The Gambia however remains one of the world's poorest countries. Especially in terms of such dimensions as food security, access to basic services and assets, poverty is very widespread. There is also evidence that suggest that extreme poverty may have sharply deteriorated between 1992 and 1998. Inequity is on the rise, according to independent assessments. The Gambia in effective being very much obedient to IMF policies and strategies, thus in many ways can be seen as a showcase of its policy. Macroeconomic indicators are positive in general, but the rural majority in The Gambia, as in most of rural Africa, does not play an active role within these indicators, critics to the IMF point out.
Sources: Based on IMF and afrol archives
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