The World Bank and the Gambia Government today signed a $56 million Development Policy Financing operation on both credit and grant basis for a forty year concessional period through the international Development Association of the bank to support strengthening the government of the Gambia’s fiscal position while restoring the provision of essential public services, the Freedom Newspaper can report. The budget support from the world bank described as “Emergency response to consolidate stability in the Gambia” is a 45% grant and 55% credit is meant to improve the social sector of the country payable in forty years time.
Speaking at the signing ceremony, Mrs Louise J. Cord, World Bank Country Director said that after a positive tension within her team, the bank was able to keep their promise and approved the DPF on the 30th June to the Gambian people to support the government reform efforts proactively in this formidable economic challenges and opportunities. She said the DPF was prepared at a defining moment in the Gambia’s history since the government has been striving to address the political, social and economic turbulence generated by a momentous political transition and a legacy of macroeconomic imbalances and challenging public sector situation.
Madam Cord further revealed that the Emergency DPF aimed to provide a rapid response to the country’s urgent financing needs, but also to lay the ground for future, deeper structural reforms to help the country back on a stable macro-economic path.
According to her, the goal has three pillars of the program including supporting fiscal stabilization measures, addressing the critical fiscal risks stemming from state-owned enterprises, and mitigating the social impact of the economic crisis in health centers are the key elements to address the causes of fragility and support the transition back to economic stability and growth.
In her final note, Mrs Cord thanked the government team for a fruitful and constructive collaboration with the bank team led by Ms Chritine Richaud and Ms Patricia Geli for their hard during the last months to design and implement the DPF assuring the strong commitment of the World Bank Group support in the future.
Hon. Amadou Sanneh, Finance Minister briefly said that the macroeconomic developments in 2016 have been impacted considerably by the economic mismanagement of fraudulent practices of the previous regime and external shocks adding that the economic growth in 2016 is now estimated to have reached 2.2%, markedly lower than the 4.3% growth in 2015 which is due to limited availability of foreign exchange, weak agricultural output and the effect of the political impasse on tourism.
Minster Sanneh further said that according to per-harvest report , the erratic rainfall during the summer might cause some 90% of groundnut cash crop will be lost whilst annual inflation stood at 8.8% in February 2017 which is well above the CBG’s target of 5% driven by high food prices and the depreciation of the dalasi against the Dollar.
“ Net international reserves have fallen to a precariously low level of only $22.3 million in February, less than one month of imports cover” and “ in recent times the government has faced challenges in the increasing cost of operational expenditures which is consistently above government available resources, leading to increasing government borrowing, thus generating a debt to GDP ratio of about 120% at the end of 2016 compared to 108% in 2015,” Minister Sanneh noted.
He said government is committed to reforms that would ensure macro-economic stability that includes reducing net domestic borrowing to 1% by december2017 compared to 11% in 2016 adding that the Bank’s DPF will support the govt in ensuring the provision of essential public services, restore macro-economic stability that would help to shield the poor and vulnerable households from the impact of the economic crisis inherited.
He thanked the World Bank team led by the country director Madam Cord and the Vice president for Africa, Mr Mahtarr Jobe for the visit to the country and showing great leadership and commitment to the development of the country at the very early age of the political transitions.
The Signing ceremony was attended by Information Minister D A Jawo, Governor Jammeh, CBG, Secretary General and head of civil services and the interior minister Mai Ahmed Fatty and other dignitaries and bank official
Written By Our Banjul Correspondent