|
Momodou
Denmark
11833 Posts |
 Posted - 26 Jun 2007 : 19:15:34
|
IMF Statement on The Gambian Economy
The following statement was issued in Banjul by Mr. Tsidi Tsikata, the International Monetary Fund's mission chief for The Gambia:
An IMF mission visited The Gambia during June 8-23, 2007, for discussions on the first review under The Gambia's Poverty Reduction and Growth Facility (PRGF)' arrangement (2007-2009), and completion point under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. The mission met with Secretary of State for Finance and Economic Affairs Mousa Gibril Bala-Gaye, Governor of the Central Bank of The Gambia (CBG) Famara Jatta, Chairman of the National Planning Commission Alieu Ngum, other senior officials of the government and the CBG, members of the national assembly, and representatives of the business community, civil society, and The Gambia's development partners.
The authorities' success in sustaining macroeconomic stability over the last few years has contributed to a substantial inflow of foreign direct investment and vibrant economic activity. Growth is projected to reach 7 percent in 2007, led by strong performance in the construction, telecommunications and tourism sectors. Fuelled mainly by sharp increases in the international prices of some key imported commodities, consumer inflation has been on the rise since January 2007, reaching an annual rate of 6.7 percent in May. However, a strengthening of the dalasi against major currencies in recent months-reflecting a surge in foreign exchange inflows-is expected to help lower inflation to about 5 percent by December. The CBG informed the mission that it will monitor inflation closely in the coming months and take appropriate action to contain inflation at low single digit levels. The mission agrees with this strategy.
Fiscal performance has been strong in the first half of the year, reflecting higher-than- expected revenues and lower-than-programmed expenditures. The introduction of the Integrated Financial Management Information System at the beginning of 2007 has helped enforce budget discipline and strengthen overall public financial management. The mission encouraged the authorities to continue their prudent fiscal policies with a view to reducing domestic debt and facilitating the gradual reduction in domestic interest rates.
The mission commended the authorities for making solid progress in implementing structural reforms critical for progress toward achieving the Millennium Development Goals. Reforms under the PRGF-supported program span the areas of public finance management, central bank governance and operational independence, and financial deepening. In addition, they include steps to improve statistics in order to better inform economic policy making and the general public.
"With respect to the completion point under the enhanced HIPC Initiative, good progress has been made toward meeting almost all the conditions established at the decision point. However, a condition related to privatizing public assets in the groundnut sub sector has not been met. Discussions will continue between the government and the staffs of the IMF and World Bank over the coming weeks on reforms in the groundnut sector.
"The mission welcomed the authorities' plans to strictly limit new debt accumulation, including after the granting of debt relief under the enhanced HIPC and Multilateral Debt Relief Initiatives. The authorities noted that new borrowing would be only on highly concessional terms, and effective debt management should benefit from the planned adoption of a new debt strategy.
"The mission thanks the authorities for their hospitality, close collaboration, and the constructive spirit in which the discussions were held."
EDITORS' ANALYSIS
The IMF has developed a loan facility which takes five and a half years grace period before the commencement of the payment of the principal of the loan. The loan is repayable over a period of 10 years at an annual interest rate of 0.5 percent. However, the loan is given on the basis of programmes developed by low income countries aimed at reducing poverty. The facility provided by the IMF is referred to as Poverty Reduction Growth Facility.
The loan facility is linked to the heavily Indebted Poor Countries Initiative (HIPCI).
The Gambia was required under the HIPC initiative to implement the programmes under the Poverty Reduction Strategy Facility satisfactorily to reach completion point. Once this point is reached the country could benefit from external debt relief or debt cancellation.
Unfortunately, for the Gambia, the failure to meet the agreed targets led to the suspension of the PRGF program by the IMF in 2003 which also deprived the Gambia of the 115 million dollars pledged by donors during the 2002 Geneva Round Table Conference on the Gambia.
Consequently, by the end of the first poverty reduction strategy paper implementation cycle in 2005, less than 40% of the programmes had been implemented.
In October 2005 the government had to negotiate a 6 months monitored programme with the IMF so that a new Poverty Reduction Growth Facility will be negotiated.
The IMF negotiated with the government and agreed in November 2006 to finance the implementation of a new Poverty Reduction and Growth Facility programme (PRGF) for the Gambia between 2007 - 2009.
THE PROMISE MADE BY THE GOVERNMENT IN 2000
According to the Gambia government "After a successful review of the first six months' programme of the PRGF, "The Gambia will reach HIPC completion point and will qualify for Paris Club' Debt Relief and the Multilateral Debt Relief Initiative (MDRI)" which according to SoS for Finance "will unleash substantial resources for the budget and thereby enlarge the fiscal space for more growth and development."
Conclusion
The IMF conducted its first review from 8 - 23 June 2007
However, completion point has not been reached as anticipated. According to the IMF mission "with respect to the completion point under the enhanced HIPC initiative, good progress has been made towards meeting almost all the conditions established at the decision point. However, a condition related to privatizing public assets in the groundnut sub sector has not been met. Discussions will continue between the government and the staff of the IMF and World Bank over the coming weeks on reforms in the groundnut sector".
This is how matters stand.
For more information, book for a copy of the pamphlet entitled "IMF, WORLD BANK AND BUDGETING IN THE GAMBIA" By Halifa Sallah to be published soon by the People's Centre for Social Science Research, Civic Awareness and Community Initiative.
Three other books that are to be published in a series whose manuscripts are ready are:
- 10 YEARS OF CONSTITUTIONAL RULE IN THE GAMBIA, HISTORY STILL IN THE MAKING
- TREATISE ON THE FOUNDING OF THE FEDERATION OF AFRICAN REPUBLICS (FAR) - A HANDBOOK FOR PAN AFRICANISTS
- THE ROLE OF KNOWLEDGE AND CULTURE IN DEVELOPMENT - A HANDBOOK FOR DEVELOPMENT WORKERS AND CHANGE AGENTS
Book for copies through the Foroyaa vendors or through email. sillasi@hotmail.com The number of books and priority of publication will depend on demand.
Source: Foroyaa Newspaper Burning Issue
Issue No.73/2007, 25-26 June, 2007
|
A clear conscience fears no accusation - proverb from Sierra Leone |
|
Topic Locked
