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afrol News, 24 July - The International Monetary Fund (IMF) has approved the poverty reduction programme presented by the Gambian government, and will support it with an estimated US$ 27 million. The final approval of the arrangement makes the first disbursement of about US$ 4 million available for The Gambia. The final decision of the IMF Executive Board had been "contingent on a decision by the Executive Board of the World Bank" on 18 July, according to an IMF statement. That decision concluded that The Gambia's Poverty Reduction and Strategy Paper (PRSP) provides a sound basis for concessional assistance by the World Bank. Eduardo Aninat of the IMF earlier commented that the Gambian authorities had achieved "a broadly encouraging economic performance under their previous Poverty Reduction and Growth Facility (PRGF) arrangement, including sustained real GDP and per capita income growth, and low inflation." These achievements were important to approve the new PRSP. Notable achievements had included the reforms in the financial sector, the substantial reduction and rationalization of external tariffs, the settlement of the property dispute with Alimenta, and the preparation of a comprehensive PRSP, Aninat said. "However, fiscal slippages in 2001 and continuing through the first quarter of 2002 have partly undermined these positive achievements." The revised budget for 2002 provided for "an appropriate strengthening of fiscal performance to reduce the fiscal deficit and the stock of domestic debt in line with the medium-term framework," the IMF representative added. To achieve the program's fiscal objectives, the authorities were to press ahead with reforms to strengthen revenue, including by improving tax administration; maintain strict expenditure controls; and "slow down the pace of implementation of certain projects." Broader budgetary reforms aimed at enhancing the transparency and accountability of public expenditure would also "be crucial to support the emphasis on key social sector priorities," Aninat added. - Implementation of structural reforms, including measures to improve business legislation, continuation of the privatisation program, and the creation of a sustainable marketing arrangement for groundnuts with minimal government involvement, will be essential to strengthen the foundations for private sector activity and accelerating poverty reduction, Aninat concluded.
Sources: Based on IMF and afrol archives
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