The Gambia Emergency Development Policy Financing
Banjul, July 11, 2017
Statement by Mrs. Louise J. Cord
World Bank Country Director
Honorable Minister of Finance and Economic Affairs
Since the trip of the Vice-President of the World Bank for the Africa region and his meeting with President Barrow and the new government, last February, I have to say that there has been a very positive tension within our team. We had to keep the promise made to the Gambian people to support the government reform efforts proactively, in this time of formidable economic challenges and opportunities.
I think the promise has been fulfilled since our Board of Executive directors has approved on June 30 this $56 million Emergency Development Policy Financing we are pleased to sign today.
This DPF was prepared at a defining moment in The Gambia’s history. Since January, 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. We are all aware that The Gambia is a fragile country, and the current economic crisis may threaten the success of the political transition. In this fragile situation with high risks involved, the World Bank has leaned forward to support the government and help build the conditions for a turnaround. The Bank has also demonstrated agility by preparing this operation in a very short time, and this would not have been possible without a strong commitment to reforms on the part of the government.
Through this Emergency DPF, we aim to provide a rapid response to the country’s urgent financing needs, but also to lay the groundwork for future, deeper structural reforms. The goal is to help put the country back on a stable macro-economic path. The three pillars of the program—supporting fiscal stabilization measures, addressing critical fiscal risks stemming from state-owned enterprises, and mitigating the social impact of the economic crisis in health centers—are key elements to address the causes of fragility and support the transition back to economic stability and growth.
And progress is already being made. You have shown your commitment to improve fiscal and debt discipline, by revising the budget for 2017 to better align expenditures with available resources. You have also successfully carried out an audit of the civil service and Security forces to address irregularities in the public payroll, and limit waste of scarce public resources.
I am also confident that the special audits of state-owned enterprises that you have undertaken with the support of this DPF and our investment operations will provide your government with key information for future reforms which are critical for improved delivery of public services, because we know how committed you are to address the longstanding issue of loss-making state-owned enterprises, which drain the budget. You have also shown your commitment to transparency by making the financial statements of all state-owned enterprises available to the public on the website of the Ministry of Finance and Economic Affairs.
Obviously, energy is a key priority for your government and a central element in the support we bring to your country. 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. With the support of this DPF, your government has liberalized the fuel market, which will generate savings of about $1.5 million this calendar year for the utility company NAWEC. This is an important step forward in the reform of the sector.
I recognize that The Gambia still has a long road to travel in terms of reforms. The government is finalizing its Second Program for Accelerated Growth and Employment, and the Bank is preparing a Country Engagement Note to support these priorities. This Emergency DPF is an important first step, which sets the stage for more and deeper policy and institutional reforms. Indeed, more will need to be done in the coming months to maintain sound fiscal management, bring the public debt down to manageable levels, reform state-owned enterprises, restore adequate energy and telecommunications services, and address longstanding constraints on growth. This will be vital to expanding economic opportunities for the population. This is a broad undertaking, and this is why I am very delighted by the presence of the civil society organizations and the private sector, because generally, signing Financial agreements is done between the Bank and the Government.
Before concluding, allow me to thank the Government team for a very fruitful and constructive collaboration, and let me also thank the Bank team. The two teams have worked very hard together during these last months to design and implement this program. I wish all the best to the Government in carrying out its reforms, and would like to reiterate the strong commitment of the World Bank Group to support these efforts in the future.