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The Gambia: Staff Report for the 2011 Article IV Consultation—Informational Annex

Author(s):
International Monetary Fund
Published Date:
January 2012
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RELATIONS WITH THE FUND

(As of October 31, 2011)

Membership status. Joined September 21, 1967. The Gambia accepted the obligations under Article VIII, Sections 2(a), 3, and 4, of the Fund’s Articles of Agreements on January 21, 1993. It maintains an exchange system that is free of restrictions on the making of payments and transfers for current international transactions.

General Resources Account

SDR Million% Quota
Quota31.10100.00
Fund holdings of currency29.5995.14
Reserve position in Fund1.544.96

SDR Department

SDR Million% Allocation
Net cumulative allocation29.77100.00
Holdings24.5882.57

Outstanding Purchases and Loans

SDR Million% Quota
ECF arrangement22.5572.50

Latest Financial Arrangements

AmountAmount
TypeApproval DateExpiration DateApproved (SDR Million)Drawn (SDR Million
ECFFeb. 21, 2007Mar. 31, 201124.8822.55
ECFJul. 18, 2002Jul. 17, 200520.222.89
ECFJun. 29, 1998Dec. 31, 200120.6120.61

Projected Payments to Fund (SDR million; based on current use of resources and present holdings of SDRs)1

Forthcoming
20112012201320142015
Principal0.201.002.113.84
Charges/interest0.000.070.070.070.06
Total0.000.271.072.183.90
Implementation of HIPC Initiative
Enhanced

Framework
Commitment of HIPC assistance
Decision point date2Dec. 11, 2000
Assistance committed (year-end 2000 NPV terms)3
Total assistance (US$ million)66.60
Of which: IMF assistance (US$ million)2.30
SDR equivalent, million1.80
Completion point dateDec. 19, 2007
Disbursement of IMF assistance (SDR million)2.29
Assistance disbursed1.80
Interim assistance0.44
Completion point balance1.36
Additional disbursement of interest income 40.49
Implementation of Multilateral Debt Relief Initiative (MDRI)
MDRI-eligible debt (SDR million)59.42
Financed by: MDRI Trust7.44
Remaining HIPC resources1.98
Debt Relief by Facility (SDR million)
Eligible Debt
Delivery DateGRAPRGTTotal
December 2007N/A9.429.42

Safeguards assessments

Safeguards assessments of the Central Bank of The Gambia (CBG) were completed in February 2004, February 2007, and November 2009. The 2007 assessment concluded that the CBG had initiated steps to improve its safeguards framework and recommended additional measures to strengthen the CBG’s internal controls and financial reporting practices. The 2009 update report concluded that the CBG had made good progress in implementing safeguards recommendations. The central bank continued to be audited by a reputable audit firm and implemented International Financial Reporting Standards. The assessment stressed that key safeguards should remain in place and recommended that the central bank formalize a framework for extension of credit to government to ensure compliance with the statutory limits. The term of the previous audit firm expired and the Auditor General appointed a new external auditor for a three-year term starting in 2011.

Exchange rate arrangement

Until January 20, 1986, the Gambian currency, the dalasi, was pegged to the pound sterling at a rate of D5 = £1. On January 20, 1986, an interbank market for foreign exchange was introduced, and since then the exchange rate has been determined by market forces. Effective February 2, 2009, the classification of the de facto exchange rate arrangement has been changed from managed floating with no predetermined path for the exchange rate to floating, retroactively to April 30, 2008, due to the revision of the classification methodology. As of end–September 2011, the midpoint exchange rate in the interbank market was D30.06 per U.S. dollar. The Gambia has accepted the obligations of Article VIII, Sections 2(a), 3 and 4 and maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions, except for restrictions maintained solely for the preservation of national or international security, which have been notified to the Fund in accordance with the procedures set forth in Executive Board decision 144-(52/51).”

Last Article IV consultation

The Executive Board concluded the 2010 Article IV consultation (SM/10/188) on August 25, 2010.

Technical assistance

The Fund has been providing The Gambia with extensive technical assistance in macroeconomic, fiscal, and monetary areas, and in improving the compilation of macroeconomic statistics. Specific technical assistance projects since 2007 are the following:

Fiscal Affairs Department
September 2011A couple of experts advised on PFM (preparing a Budget Framework Paper) and on VAT preparations.
August 2011Peripatetic expert advised on improving compliance and tax administration.
April/May 2011TA mission advised on VAT preparations.
April 2011TA mission reviewed the pricing formula for petroleum products.
February/March 2011TA mission reviewed status of revenue administration reforms, including VAT implementation plans.
November/December 2010Peripatetic expert advised on VAT preparations.
August 2010Peripatetic expert advised on VAT preparations.
June 2010TA mission on public financial management (PFM).
April/May 2010TA mission advised on improvements in revenue administration and provided input into the design of tax reforms.
April 2009TA mission advised on measures to reform the tax system.
July 2008Peripatetic regional advisor followed up on the work of the August/September 2007 FAD mission.
August/September 2007TA mission assessed all areas of public financial management and provided an action plan to secure the actual implementation of reforms initiated in the recent past.
Monetary and Capital Markets Department
September 2011TA mission conducted stress testing and helped built capacity in this area.
February/March 2011TA mission conducted a diagnostic assessment of the banking system.
March/April 2010Technical expert advised the CBG on banking supervision.
January 2010Technical expert advised on monetary operations and liquidity forecasting.
January 2009Technical expert advised the CBG on banking supervision.
September 2007Mission advised on improving the monetary policy framework and enhancing the effectiveness of the monetary, foreign exchange, and debt management operations for the CBG.
March/May 2007Technical expert advised the CBG on banking supervision.
March/April 2007Technical expert advised the CBG on strengthening its capacity in internal auditing.
January/February 2007Technical expert advised the CBG on improving monetary operations.
Statistics Department
September 2011DfID-funded TA mission advised the authorities on improving BOP statistics.
July 2011DfID-funded short-term expert advised the authorities on improving national accounts statistics.
March/April 2011 September 2010DfID-funded TA mission advised the authorities on improving BOP statistics.
September 2010DfID-funded short-term expert advised the authorities on improving national accounts statistics.
August/September 2010DfID-funded TA mission advised the authorities on improving BOP and IIP statistics.
February 2010TA mission advised on measures to improve monetary and financial statistics.
June 2008Fourth visit of the DfID-funded TA mission assisted the authorities in improving the compilation of national accounts statistics, particularly in rebasing the GDP series and in calculating GDP by the expenditure approach, using the results from the 2004 Economic Census.
April/May 2008Follow-up visit of a 2006 TA mission to assist the CBG in improving the compilation of monetary and financial statistics and in preparing the standardized report forms for reporting monetary data to the IMF.
March 2008Third visit of the DfID-funded TA mission assisted the authorities in improving the compilation of national accounts statistics, particularly in rebasing the GDP series and in calculating GDP by the expenditure approach, using the results from the 2004 Economic Census.
October/November 2007Second visit of the DfID-funded TA mission assisted the authorities in improving the compilation of national accounts statistics, particularly in rebasing the GDP series using the results from the 2004 Economic Census.
September 2007A DfID-funded TA mission helped improve the compilation of balance of payments statistics.
August 2007A DfID-funded TA mission assisted in improving the compilation of national accounts statistics, particularly in rebasing the GDP series using the results from the 2004 Economic Census.
Others
March/April 2007A Poverty and Social Impact Analysis (PSIA) mission analyzed the planned reform of the groundnut sector and discussed with the authorities the implications of the reform.

Resident Representative

Mr. Meshack Tjirongo was appointed the Fund’s Resident Representative to The Gambia in January 2010.

JOINT BANK-FUND WORK PROGRAM

(December 2011 – December 2012)

TitleProductsTiming of MissionsTarget Board Date
A. Mutual Information on Relevant Work Program
Bank work

program in next

12 months
Economic Management and

Public Service Delivery
1. Public Financial Management

and Growth Grant
June 2011March/April 2012
2. IFMIS: Additional FinancingMarch 2012October/November 2012
Growth and Competitiveness
3. Commercial Agriculture and

Value Chain Project
June 2011July 2012
Fund work

program in next
Policy Advice
12 months1. Article IV consultationOctober/November 2011January 2012
2. Negotiations for a new ECFFebruary/March 2012April 2012
3. First review under new ECFAugust/September 2012October/November 2012
Technical Assistance
1. VAT preparationsDecember 2011; resident advisor

beginning in January 2012
2. Public financial managementJanuary 2012; resident advisor

beginning in April 2012
3. Strengthening bank supervision

and stress-testing capacity
January 2012; February/March 2012
4. Price statistics and national

income and product accounts
March 2012; March 2012
5. Balance of payments statisticsMarch 2012
B. Requests for Work Program Inputs
Fund request to

Bank
Periodic updates on: CPIA, PFM

reform, and civil service reform.
Bank request to

Fund
Periodic updates on

macroeconomic framework.
C. Agreement on Joint Products and Missions
Joint products

in next 12
Debt Sustainability Analysis (DSA)October/November 2011January 2012
monthsJSAN on new PRSPFebruary/March 2012April 2012
DSA UpdateFebruary/March 2012April 2012

THE GAMBIA: STATISTICAL ISSUES

Data have shortcomings but are broadly adequate for surveillance. While the authorities have made significant progress in improving the compilation of economic and financial statistics, substantial shortcomings remain in balance of payments, national accounts, and external debt statistics. Data reports to the Fund are sometimes delayed. The country participates in the General Data Dissemination System (GDDS), with its metadata last updated in the second half of 2003.

The National Assembly passed a new Statistics Act in December 2005 and work began in June 2006 to implement the plan for transforming the Central Statistics Department (CSD) into The Gambia Bureau of Statistics (GBoS). GBoS is now the single official source for important macroeconomic series, including national accounts, price, and international trade data. However, data output continues to be affected by capacity weaknesses. A mission visited Banjul in February 2005 to prepare a data ROSC, which was published by the Fund in November 2005.

Real sector

The main constraints to improving the national accounts include inadequate source data due to inadequate survey coverage, poor quality of external sector data, and inattention to other important sources (such as the livestock census and the census of industrial production). The GBoS continues to face human and financial constraints to undertaking such surveys and to processing the data.

STA missions on national accounts in 2007, 2008 and 2009 assisted the GBoS in implementing the 1993 System of National Accounts methodology and in rebasing the national accounts to properly reflect the country’s economic structure, output levels, and relative prices. More specifically, STA missions have helped the authorities to: (1) process the data collected for the 2004 Economic Census; (2) rebase the GDP series using the results of the 2004 Economic Census; and (3) improve the GDP estimates by the production approach. The authorities now publish improved real and nominal GDP series compiled by the production approach for the period 2004–10 (with a base year of 2004). GDP series by the expenditure approach are still in the process of being developed. The data continue to suffer from shortcomings and a number of recommendations provided by TA missions have not been implemented. The GDP numbers have undergone a couple of large revisions in the past 18 months.

In May 2007, the country began participating in the second phase of the GDDG Project for Anglophone Africa on national accounts, which is funded by the U.K. Department for International Development (DfID). The authorities have also been recently invited to participate in a follow-up DfID supported program with a similar focus on macroeconomic statistics, the Enhanced Data Dissemination Initiative (EDDI), starting in July 2010.

The World Bank has been providing technical assistance to the GBoS to update the consumer price index (CPI) using the 2003 household expenditure survey to better reflect current consumption patterns. In early 2007, the GBoS began to publish a new national CPI based on an August 2004 representative expenditure basket. Currently, the GBoS is working on rebasing the CPI using the results of the 2010 integrated household survey. The GBoS has also done some preliminary work on constructing a PPI.

Government finance

The authorities release data on central government transactions with a lag of about four weeks for both revenues and expenditures. With the introduction of the IFMIS in 2010, the compilation of expenditure data by functional category and by administration is now possible. However, the authorities have not yet started to systematically report these data or make them available to the public at regular intervals, contrary to best practices. The compilation of project grant disbursements and project grant use has been a challenge, leading to financing discrepancies. Monthly data on domestic government financing are available with a delay of about four weeks.

At a meeting with STA in October 2007, the authorities expressed interest in technical assistance to facilitate the migration to GFSM2001. No data are being reported for publication in the Government Finance Statistics Yearbook or in the International Financial Statistics (IFS).

Monetary data

The Central Bank of The Gambia (CBG) has improved data reporting to the Fund, but sometimes the reports are delayed. Following earlier STA TA missions in April–May 2006 and April-May 2008, another follow-up mission in February 2010 flagged CBG’s poor progress in implementing earlier recommendations for the compilation of monetary and financial statistics. This is mainly due to a delay in reforming the source data for the central bank and for other depository corporations (ODCs). The 2008 mission designed a bridge table for compiling the standardized report forms (SRF) for the central bank and a new report form for ODCs. However, neither has been implemented. Therefore, the 2010 mission redesigned the bridge tables so that they could automatically generate the SRFs for the central bank and the ODCs from the data that the CBG has used for its operational work. As a result, the CBG should now be in a position to compile the SRFs and submit the SRF-based monetary data to the Fund for publication in the IFS. Finally, the mission recommended that the CBG starts collecting a wider range of interest rates, including lending and deposit rates, by type of currency. The CBG has started collecting such data, but has not yet started reporting them to the Fund.

External sector statistics

Despite some improvements, balance of payments statistics continue to be affected by serious shortcomings. These include delays in the collection of trade, customs, and tourist arrival data; outdated methods for estimating the reexport trade; poor data on capital flows; lack of a register of firms and establishments engaged in external transactions; poor classification of balance of payments data; and lack of a consistent methodology. Institutional weaknesses have also been a major impediment to improving statistics. Official grant and loan disbursements and repayments are generally well recorded, but there are some gaps in project disbursements. Due to the various data shortcomings, there is a large discrepancy between the BOP data reported by the authorities to STA and the adjusted data used by AFR. For example, data reported by the authorities to STA point to a small current account surplus, while adjusted AFR data indicate that the country is running a large current account deficit.

The CBG produces balance of payments statistics according to the Balance of Payments Manual, 5th edition (BPM5). These statistics are published in the IFS and in the 2007 IMF Balance of Payments Statistics Yearbook (BOPSY 2007). The CBG has been compiling quarterly balance of payments statistics through a Fund-administered technical assistance project funded by DfID. The most recent data available are for the second quarter of 2011.

With DfID assistance the CBG conducted an enterprise survey in March 2006 to collect data for the international investment position. In April 2006, the CBG also initiated a series of surveys funded by the World Bank to collect data on selected components of the current account. The authorities have been conducting surveys on tourist expenditures, remittances, re-exports, and FDI, but these exercises are time-consuming and infrequent (once a year, at most).

The Gambia: Table of Common Indicators Required for Surveillance(As of November 15, 2011)
Date of Latest

Observation
Date ReceivedFrequency of

Data6
Frequency

of

Reporting6
Frequency of

Publication6
Memo Items:
Data Quality

Methodological

Soundness7
Data Quality

Accuracy and

Reliability8
Exchange rates11/3/1111/9/11DWM
International reserve assets and reserve liabilities of the monetary authorities19/30/1110/28/11MMM
Reserve/base money11/4/1111/9/11DWMLO, LO, LO, LOLNO, LO, O, LO, LNO
Broad money9/30/1110/28/11MMM
Central Bank balance sheet9/30/1110/28/11MMM
Consolidated balance sheet of the banking system9/30/1110/28/11MMM
Interest rates211/2/1111/9/11WWM
Consumer Price Index9/30/1110/17/11MMM
Revenue, expenditure, balance, and composition of financing3 – general

government4
LO, LO, O, OLNO, LO, LO, LNO, NO
Revenue, expenditure, balance, and composition of financing3– central government9/30/1110/15/11MMM
Central government and central government-guaranteed debt511/4/1111/9/11WWM
External current account balance6/30/119/30/11QQALNO, LNO, LNO, LOLNO, LNO, LNO, LO, NO
Exports and imports of goods and services6/30/1110/11/11MIA
GDP/GNP20108/18/11AAALNO, LNO, O, LOLNO, O, LNO, LO, NO
Gross external debt9/30/1110/19/11AIA

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially determined, including discount rates, money market rates, and rates on treasury bills, notes, and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extrabudgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Daily (D), weekly (W), monthly (M), quarterly (Q), annually (A), irregularly (I), not available (NA).

Reflects the assessment provided in the data ROSC published on November 8, 2005, and based on the findings of the mission in February 2005. For the dataset corresponding to the variable in each row, the assessment indicates whether international standards concerning (respectively) concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).

Same as footnote 7, except referring to international standards concerning (respectively) source data, assessment and validation of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially determined, including discount rates, money market rates, and rates on treasury bills, notes, and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extrabudgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Daily (D), weekly (W), monthly (M), quarterly (Q), annually (A), irregularly (I), not available (NA).

Reflects the assessment provided in the data ROSC published on November 8, 2005, and based on the findings of the mission in February 2005. For the dataset corresponding to the variable in each row, the assessment indicates whether international standards concerning (respectively) concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).

Same as footnote 7, except referring to international standards concerning (respectively) source data, assessment and validation of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

The Fund approved the decision on 12/15/2000 as Decision 12365-(00/126). The World Bank Board decision was taken on 12/14/2000.

Assistance committed under the enhanced HIPC Initiative is expressed in net present value (NPV) terms at the decision point.

Under the enhanced HIPC Initiative, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as of end-2004 that remains outstanding at the time the member qualifies for such debt relief.

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