By Abdoulie John
The World Bank and Gambia’s government on Tuesday have signed an emergency funding amounting to US$56 million for a 40-year concessional period. While 55% of the said amount is a credit-based loan, the remaining 45% is offered as a grant. This is part of budget support aimed at supporting to improve the social sector.
“Macroeconomic developments 2016 have been impacted considerably by the economic mismanagement or fraudulent practices of the previous regime and external shocks,” Gambia Finance Minister Amadou Sanneh told reporters.
The funding announcement came on the heels of efforts by govt to help the country recover from consequences of economic malpractices. This breath of fresh air for Gambian economy also arose out of commitments made in February this year by World Bank Vice-President of the Africa region Mocktar Diop to help the country overcome the huge challenges lying ahead.
Minister Sanneh said economic growth in 2016 is now estimated to have reached 2.2 percent, markedly lower than the 4.3 percent growth in 2015. He then outlined the factors behind this economic downturn and cited limited availability of foreign exchange, weak agricultural output and the negative impacts of the post-electoral crisis on the tourism industry.
Minister Sanneh said the annual inflation stood at 8.8 percent in 2017, contrasting with the Central Bank’s target of 5.5 percent. A situation he attributed to rising food prices and the continued depreciation of the dalasi against the American dollar.
“It is in this light that the Government engaged the World Bank for assistance through a budget support. The World Bank has since then worked closely with the Government and this culminated in the World Bank Board approval of $56M as budget support. And we are delighted to be signing today this agreement for the Development Policy Financing,” he said.
He expressed hope that the external financing provided through the DPF will go a long way towards reducing the costly domestic borrowing and ease the fiscal burden of high domestic interest payments.
World Bank country Director Louise Cord reminded the gathering that promise has been fulfilled, saying the Board of Executive Directors has approved on June 30 this $56 million Emergency Development Policy Financing (DPF).
“This DPF was prepared at a defining moment in The Gambians history. Since January, the government has been striving to address the political, social, and economic turbulence generated by a momentous political transition,” she stated.
As Gambia govt has embarked on series of reforms, she said the special audits of State-owned enterprises will help provide key information for the reforms expected to improve public service delivery.
She emphasized the fact that the energy sector is a key priority for the new authorities “Households and businesses, and particularly very small enterprises, suffer a lot from the lack of affordable, reliable electricity supply,and this is a major handicap for the country,” she stressed.
She welcomed the move taken by govt to liberalise the fuel market, and disclosed this will pay dividends as it will generate savings of about US$1.5 million for the country’s utility company NAWEC.