Can The Gambia secure $6.7mn IMF credit facility by June 2023?

The Gambia is optimistic about securing a $6.7 million IMF credit facility, with expectations of an executive board approval by June this year. Alieu Secka, a Transformation Specialist at ABSS, joined CNBC Africa to discuss the recent mission's visit to the Gambia and the terms of the agreements reached. Despite global economic challenges such as the Ukraine war and the ongoing impact of the COVID-19 pandemic, the IMF has acknowledged the progress made by the Gambian economy. Inflation remains a concern, hovering around 14%, but sectors like tourism, agriculture, and construction have shown signs of recovery. The full return of the tourism sector is crucial for the Gambia to achieve pre-pandemic growth levels. The gradual recovery in tourism has been positive, although it is yet to reach its pre-COVID levels. Measures such as promoting COVID vaccinations and enhancing hygiene practices have been implemented to adapt to the 'new normal' in the tourism industry. Revenue administration has also seen significant progress in the Gambia, with digitization playing a key role. The Gambia Revenue Authority has made strides in promoting compliance among private sector entities, contributing to improved revenue collection. However, headline inflation reached 13.6% in February, prompting the Gambian Central Bank to raise the NPR by 200 basis points this year. Addressing inflation challenges remains a priority for the authorities. Revenue mobilization is crucial to manage debt payments and enhance fiscal stability. Transparency and simplification of tax processes are key to fostering compliance among private sector players. Simplifying the tax regime and rationalizing tax rates can encourage more businesses to fulfill their tax obligations. To attract foreign investment, the Gambian government is focusing on promoting diaspora investment and remittances. Diaspora remittances already account for a significant portion of the Gambian economy, and efforts to encourage more investment from the diaspora community can further boost economic growth. While foreign direct investment remains important, harnessing diaspora resources can also contribute significantly to the country's economic development. As the Gambia navigates economic challenges and works towards securing the IMF credit facility, it remains focused on implementing reforms and policies to drive sustainable growth and stability.