The Gambia: First Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility, and Request for Waiver and Modification of Performance Criteria–Informational Annex

This paper discusses key findings of the First Review Under the Poverty Reduction and Growth Facility (PRGF). Overall performance under the program has been strong. All but one of the quantitative performance criteria and indicative targets were met. Fiscal performance has been impressive, reflecting higher-than-projected revenues and strengthened expenditure control. However, two structural performance criteria were not observed. The medium-term macroeconomic framework underlying the program has been modified slightly. Maintaining fiscal discipline remains key to lowering domestic public debt and protecting poverty-reducing expenditures.


This paper discusses key findings of the First Review Under the Poverty Reduction and Growth Facility (PRGF). Overall performance under the program has been strong. All but one of the quantitative performance criteria and indicative targets were met. Fiscal performance has been impressive, reflecting higher-than-projected revenues and strengthened expenditure control. However, two structural performance criteria were not observed. The medium-term macroeconomic framework underlying the program has been modified slightly. Maintaining fiscal discipline remains key to lowering domestic public debt and protecting poverty-reducing expenditures.

The Gambia: Relations with the Fund

(As of June 30, 2007)

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

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SDR Department

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Outstanding Purchases and Loans

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Latest Financial Arrangements

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Projected Obligations to the Fund (without HIPC Assistance) (SDR million; based on current use of resources and present holdings of SDRs)11

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Projected Obligations to the Fund (with Board-Approved HIPC Assistance)

(SDR million; based on current use of resources and present holdings of SDRs)

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Implementation of HIPC Initiative

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Safeguards assessments

An update Safeguards Assessment of the Central Bank of The Gambia (CBG) was conducted in November 2006. This update assessment was performed against the backdrop of previous safeguards findings, which identified significant vulnerabilities in the CBG’s safeguards framework. While the CBG has instituted a series of control reforms since that assessment, a key challenge looking forward is to build on existing progress to strengthen remaining vulnerabilities in the CBG’s safeguards framework, including controls over international reserves and procedures for extending credit to the government. The update assessment, completed on February 10, 2007, recommended certain priority actions to be taken, including semi-annual audits of monetary program data, the implementation of segregation of duties in the reserves management function, a phased implementation of International Financial Reporting Standards, and an action plan to ensure that government borrowing from the CBG is brought within the statutory limits. The CBG is progressively implementing these recommendations.

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 June 30, 2002, the exchange rate arrangement of The Gambia was reclassified from independently floating to managed float with no preannounced path. As of June 30, 2007, the midpoint exchange rate in the interbank market was D26.5164 per U.S. dollar.

The Gambia has been part of the exchange rate mechanism of the West African Monetary Zone (WAMZ) since April 2002.

Last Article IV consultation

The Executive Board concluded the 2006 Article IV consultation (IMF Country Report No. 06/444) on October 13, 2006.

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 are the following:

Fiscal Affairs Department

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Resident Representative

Mr. Alex Segura-Ubiergo was appointed the Fund’s first Resident Representative to The Gambia in September 2006. He is also the Resident Representative to Senegal.

The Gambia: Relations with the World Bank Group

(As of July 26, 2007)

The Bank and the Fund cooperate closely in providing support for the implementation of The Gambia’s development strategy. The country’s strategy is set forth in the Poverty Reduction Strategy Paper (PRSP). The second PRSP covers the period from 2007 to 2011. It outlines a medium-term development strategy to reduce poverty through the following five key objectives: (i) macroeconomic stability and effective public resource management; (ii) promotion of pro-poor growth and employment through private sector development; (iii) improved basic social services; (iv) strengthened local communities and civil society organizations (CSOs); and (v) mainstreamed multisectoral programs on gender, environment, nutrition, and population. The PRSP includes a multidimensional poverty analysis, an outline of a monitoring and evaluation framework, preliminary performance indicators and targets, estimates of the cost of implementation, and an indicative financing gap. The second PRSP and the Joint Staff Advisory Notes (JSAN) were discussed at the Bank’s Board on July 19, 2007.

The Bank’s support to The Gambia is outlined in its 2003 Country Assistance Strategy (CAS). A new Joint Assistance Strategy (JAS) for the period FY08-11 is being prepared jointly by the World Bank and the African Development Bank. The CAS is aligned with the PRSP, particularly in the following areas: (1) establishing a macroeconomic and sectoral environment conducive to economic growth; (2) rehabilitating and building infrastructure; (3) enhancing human capital by providing more efficient social services; and (4) building capacity in departments responsible for economic management. The Bank’s direct support in recent years has mainly been sector-based investment projects and analytical work. The Fund has traditionally led the dialogue on macroeconomic policy, including fiscal, monetary, and exchange rate policies. Areas of close collaboration include public expenditure management reform and government statistics. Collaboration on trade issues has increased with the ongoing Diagnostic Trade Integration Study exercise led by the Bank.

As of July 26, 2007, IDA had approved 34 credits worth a total of about US$296 million. The current portfolio consists of five projects in capacity building for economic management, private sector development (trade gateway), education, community-driven development, and locust prevention (regional), totaling US$52.9 million, of which US$29.3 million is undisbursed.

A Capacity Building for Economic Management Project was approved in July 2001 to help build (1) government capacity for economic planning, policy formulation, and execution, and (2) the capacity of the judicial and financial systems to facilitate private sector development. Reforms supported by the project include establishment of the Gambia Revenue Authority, the Gambia Bureau of Statistics, and the Gambia Public Procurement Authority (GPPA), implementation of the Integrated Financial Management Information System (IFMIS), and establishment of an alternative dispute resolution (ADR) court system.

The current closing date for the project is December 2007. However, the authorities have requested additional financing for the project, which is expected to extend the closing date to December 2008.

The Trade Gateway Project was approved in February 2002 to help the country establish itself as a globally competitive business park by laying the foundations for expanded private investment, export-oriented production, and employment through a free zone and an improved institutional environment. The current closing date for the project is August 31, 2007.

The second phase of the Education Project was approved on June 1, 2006, to help The Gambia improve conditions for teaching and learning in basic education by (1) improving the performance of students, teachers, and schools, (2) strengthening capacity building and performance management, and enhancing monitoring and evaluation, and (3) expanding access to underserved communities. The current closing date for the project is March 31, 2011.

A Community-Driven Development Project was approved on August 31, 2006, to help rural communities, in partnership with local government authorities, plan, implement and maintain their priority social and economic investments. The current closing date for the project is April 30, 2012.

A regional Emergency Locust Project covering Burkina Faso, Chad, Mali, Mauritania, Niger, Senegal, and The Gambia was approved in December 2004. To help reduce the hardships imposed on people and the environment by current and future locust invasions, the project supports improved strategies for prevention, early warning, reaction, and mitigation at both the national and regional levels. The current closing date for the project is June 30, 2009.

In addition to investment projects, the Bank is currently conducting several analytical initiatives, some of them jointly with other donors: (i) civil service reform and capacity assessment; (ii) poverty assessment; (iii) Diagnostic Trade Integrated Framework study; and (iv) Investment Climate Assessment (ICA).

IFC is not currently active in The Gambia. Nonetheless, IFC has identified two or three commercial banks as possible candidates for the Global Trade Finance Program. In addition, Foreign Investment Advisory Service will provide assistance in developing the regulatory and legal framework for a free trade zone being developed under the World Bank-financed Gateway project. Private Enterprise Partnership for Africa and African Management Services Company are seeking opportunities to build the capacity of micro, small and medium size enterprises (MSMEs) and institutions that support MSMEs. No new IFC projects have been approved in The Gambia since 1998. As of February 28, 2007, IFC’s outstanding portfolio in The Gambia was US$760,000.

IDA, MIGA, and the IFC will continue to coordinate their efforts to support development activities in The Gambia. Their activities are enhanced by the IFC office in Dakar, which also oversees IFC activities in The Gambia.

Summary of IDA Credits in The Gambia

(As of July 14, 2007; millions of U.S. dollars)

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Source: The World Bank Integrated Controller’s System.

The Gambia: IFC’s Held and Disbursed Portfolio

(As of July 31, 2006; millions of U.S. dollars)

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Source: IFC.

Questions may be referred to Mr. Soh Hoon (email: or Ms. Françoise Perrot (email:

The Gambia: Relations with the African Development Bank

(As of May 31, 2007)

The African Development Bank (AfDB) Group began lending to The Gambia in 1974. As of 31 May, 2007, it had approved 53 operations with total commitments (net of cancellations) of UA205.2 million (US$305.5 million) in the following sectors: transport (25 percent); agriculture (21.7 percent); social (24.6 percent); public utilities (12.1 percent); multisectoral (8.8 percent); environment (5.8 percent); and industry (2.0 percent).15 About 84.7 percent of the Bank Group’s net commitments were made from the resources of the African Development Fund (ADF), 8.6 percent from the AfDB nonconcessional window, and 6.7 percent from the Nigeria Trust Fund (NTF).

As of 31 May, 2007, 36 operations had been completed, 2 were cancelled at the government’s request, and 15 others continue, including 3 multinational projects, all in agriculture. Implementation of the portfolio is generally satisfactory; it achieved a rating score of 2.01 (on a scale from 0 to 3) during the Bank Group’s 2005 portfolio review. The portfolio has a relatively low project-at-risk (PAR) rate of 33.3 percent, which compares well with the Bank-wide average of 43 percent stated in the AfDB’s 2004 Annual Portfolio Performance Review (APPR). Total disbursement rates for the portfolio are also satisfactory. By the end of May 2007, they were 83.1 percent (overall), 100 percent (AfDB-financed projects), 83.6 percent (ADF), and 44.5 percent (NTF). The disbursement rate for the ongoing portfolio was 41.7 percent as of May 31, 2007. The satisfactory performance of the portfolio is attributed to the supervision missions conducted by the AfDB, especially since 2003.

The AfDB is also a major participant in The Gambia’s enhanced Heavily Indebted Poor Countries (HIPC) Initiative program, under which it is due to grant debt relief of US$15.7 million in net present value (NPV) terms (23.6 percent of total debt relief under the program).

The AfDB is currently preparing a Joint Assistance Strategy (JAS) with the World Bank to cover 2008-11. The draft JAS is based on two main pillars—(1) strengthening the institutional framework for economic management and public service delivery, and (2) supporting private sector development and productive capacity of the poor. The JAS will help support the Government’s national priorities through the main channels of budget and project support in the context of growth poles and enhanced service delivery. The strategy is yet to be approved. The last Country Strategy Paper (CSP) for The Gambia, which covered 2002-04, was designed to help the country in its efforts to meet the Millennium Development Goals (MDGs) by addressing specific institutional and human capacity constraints. Both the previous CSP and the JAS currently under preparation are anchored to the Gambia’s poverty reduction strategies as specified in the Poverty Reduction Strategy Paper (PRSPI), which is also known as Strategy for Poverty Alleviation II (SPA-II), and PRSP II (2007-2011). The base-case scenario focuses on the interventions shown in the table below.

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Under ADF-X, The Gambia is a grants-only recipient. Additional resources can be made available if there is improvement in both performance under the Country Policy Institutional Assessment (CPIA) and portfolio performance.

The AfDB’s strategy is implemented through both lending and nonlending activities. The extent of lending depends on finalization of the new PRSP, satisfactory performance under the IMF-supported Poverty Reduction Growth Facility (PRGF) arrangement, progress toward reaching the HIPC Initiative completion point, advances in strengthening public expenditure management, and improved performance of AfDB-sponsored projects. Nonlending intervention is designed to strengthen policy dialogue between the government and stakeholders and focuses mainly on studies, funded through grants, to improve governance, mainstream gender, fight HIV/AIDS and communicable diseases, and improve the energy supply. The AfDB has recently prepared a Governance Profile for The Gambia and is currently working jointly with the World Bank to prepare a study on Civil Service Reform.

The Gambia: Statistical Issues

The authorities have made some progress in improving the compilation of economic and financial statistics. Nevertheless, the poor quality of some data and complete lack of others hamper the analysis of economic developments. There are substantial weaknesses in national accounts, balance of payments, and external debt statistics. Data reporting to the Fund is somewhat irregular. The Gambia participates in the General Data Dissemination System (GDDS) and its metadata were posted on the Fund’s Dissemination Standards Bulletin Board on May 22, 2000.

A data ROSC mission in February 2005 assessed data quality in four main areas of macroeconomic statistics (national accounts, government finance, monetary, and balance of payments statistics) based on the Fund’s Data Quality Assessment Framework (DQAF, July 2003), with dissemination assessed in terms of the GDDS recommendations. 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). Recently, a Statistics Council and a Statistician General have been appointed. The GBoS is expected to be fully staffed by August 2007.

Real sector

Annual national account estimates are compiled using only the production approach. In the absence of more comprehensive information, there is heavy reliance on activity indicators. The CSD, with STA assistance, prepared a program to (1) improve the quality of source statistics by improving and expanding existing surveys; (2) improve the coverage and methodology of GDP estimates, including implementation of the System of National Accounts (1993 SNA); (3) rebase the constant price estimates—the current baseline is 1976/77—to a more recent period; and (4) prepare independent estimates of expenditure aggregates. In May 2007, The Gambia began participating in the second phase of the U.K. Department for International Development (DfID)-funded GDDS Project for Anglophone Africa on national accounts.

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, and update the national accounts. The GBoS has begun to publish a new CPI series with the base of August 2004=100. In due course, it will phase out publication of the old CPI which was based on weights derived from a 1974 survey of low-income households in the Greater Banjul area.

Government finance

The authorities release data on central government transactions with a lag of about eight weeks for both revenue and expenditure. Reporting in the treasury ledger is subject to considerable delay; the central government accounts for 1991-99 were not audited until 2005. Inadequacies persist in compiling data on an economic basis and in tracking foreign-financed expenditure. Monthly data on domestic government financing are available with a delay of six to eight weeks.

Monetary data

The Central Bank of The Gambia (CBG) has improved data reporting to the Fund, but sometimes it reports data with delay. The commercial banks follow a uniform chart of accounts to report financial data to the CBG. They also transmit flash reports of key monetary data to the CBG on a weekly basis. Several times over the past few years, the CBG has reclassified the monetary accounts to improve sectorization and coverage, as well as to harmonize the data reported to STA and AFR. In particular, there were substantial revisions to data on foreign exchange transactions and lending to the central government for 2001-03. An STA mission in April-May 2006 made further recommendations to expand the coverage of depository corporations to include credit unions. The mission also recommended that accrued interest be included in the value of financial instruments. Given the significant influence of the Social Security and Housing Development Corporation in monetary developments, the mission recommended compilation of a financial survey. To improve the accuracy and classification of government accounts, it designed a supplementary form for reporting government positions at the CBG, to be reported to the IMF monthly. It also introduced standardized report forms (SRFs). A follow-up mission in FY08 will continue the work on the SFRs for reporting data on the central bank and other depository corporations to STA. The mission also envisages establishing an integrated monetary database, which would generate alternative outputs for use by the CBG and STA for publication purposes and to support AFR in the context of program monitoring and surveillance.

Balance of payments

A significant proportion of external transactions, including reexports, are informal. Reexport trade data assume that reexports are a fixed share of total imports. Tourism receipts are derived from a simple function of tourist arrivals and average length of stay. Data on private capital flows are weak, but the CBG is working toward improvement. Official grant and loan disbursements and repayments are generally well recorded, but there are some gaps in project disbursements. Data on the gross and net CBG international reserves are available with a short lag, but had to be substantially revised for 2001-03.

Since June 1999, STA has provided The Gambia with technical assistance on balance of payment statistics in several forms including through missions as well as training. However, until the February 2005 ROSC mission, progress in implementing STA recommendations on balance of payments had been slow.

On the recommendation of the ROSC mission, the CBG revamped the balance of payments unit by elevating it to a full section with additional staff. In support of the authorities’ efforts to strengthen capacity for compiling balance of payments statistics, the Fund has provided substantial training to the CBG staff in 2005-07 through seminars held at the Fund headquarters as well as in regional workshops organized in collaboration with the West African Institute for Financial and Economic Management (WAIFEM).

As a result, and in line with the recommendations of the February 2006 technical assistance mission, the CBG produced balance of payments statistics for 2003-05 according to the Balance of Payments Manual, 5th edition (BPM5), in October 2006. These statistics were published in the November 2006 issue of International Financial Statistics (IFS) and in the 2006 IMF Balance of Payments Statistics Yearbook (BOPSY 2006), for the first time since 1997. The CBG also has begun to compile quarterly balance of payments statistics beginning from the first quarter of 2007.

With assistance from the DfID, the CBG conducted an enterprise survey in March 2006 to collect data for the international investment position (IIP). In April 2006, the CBG also initiated a survey funded by the World Bank to collect data on selected components of the current account. The Fund is administering a technical assistance project funded by DfID to improve the compilation of balance of payments and IIP statistics during FY2008-10.

The government, with the assistance of the World Bank, recently installed the new version of the Commonwealth Secretariat’s debt-reporting and management system.


The CBG has begun to regularly disseminate some macroeconomic statistics on its website. Until 2005, macroeconomic data were provided to the public only through references in the annual budget speech. The CBG has also resumed the publication of its annual reports and quarterly bulletins by posting in August 2006 its annual reports for 2003 and 2004 as well as several quarterly bulletins for 2004 and 2005. The CSD/GBoS’s publications are not issued on a regular basis.

There has been no reporting of data for publication in the Government Finance Statistics Yearbook since 1993 or in the IFS, other than monetary and CPI data, since 1997. As noted above, the authorities have recently reported balance of payments statistics for 2003-05 for publication in BOPSY and in IFS.

The Gambia: Table of Common Indicators Required for Surveillance

(As of July 26, 2007)

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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); irregular (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, statistical techniques, assessment and validation of source data, 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.


UA stands for unit of account = 1 SDR (equivalent to about $1.52418 as of May 31, 2007).

The Gambia: First Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility, and Request for Waiver and Modification of Performance Criteria: Staff Report; Staff Supplement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for The Gambia
Author: International Monetary Fund