- IMF Flags Fiscal Slippages in The Gambia Despite Strong Growth and Cooling Inflation
The International Monetary Fund has reached staff-level agreement with The Gambian authorities on the fifth review of the country’s Extended Credit Facility programme and the second review under the Resilience and Sustainability Facility, even as the Fund warned that fiscal slippages and commodity price shocks could complicate the country’s economic outlook.
The agreement follows discussions held in Banjul from April 22 to May 6, 2026, and remotely thereafter, under the 2026 Article IV consultation. The IMF team was led by Eva Jenkner.
According to the IMF, the staff-level agreement on the Extended Credit Facility includes a proposed six-month extension of the arrangement to July 2027 and an augmentation of access by SDR 12.44 million, equivalent to about $17 million, to help address challenges stemming from the war in the Middle East.
Subject to approval by the IMF Executive Board and implementation of agreed prior actions, the deal would enable a disbursement of SDR 6.22 million, or about $8.5 million, bringing total disbursements under the ECF arrangement to SDR 55.97 million, equivalent to about $76.6 million.
The 36-month ECF arrangement was approved in January 2024 for total access of SDR 74.64 million, or about $102.2 million.
The Fund also reached staff-level agreement on the second review under The Gambia’s 18-month Resilience and Sustainability Facility arrangement, approved in June 2025 for total access of SDR 46.65 million, or about $63.9 million.
That agreement would unlock a further SDR 10.36 million, about $14.2 million, taking total disbursements under the RSF to SDR 25.9 million, equivalent to about $35.5 million. The RSF arrangement is also expected to be extended by six months to July 2027 to allow more time for climate-related reform implementation.
The IMF Executive Board is tentatively scheduled to consider the reviews in early July 2026.
The Fund said The Gambia’s economic recovery remains strong, with real GDP growth estimated at 6 per cent in 2025, supported by agriculture and construction. Tourist arrivals and remittance inflows also remained robust.
Inflation has also eased significantly. After peaking at 18.5 per cent year-on-year in September 2023, headline inflation declined to 7 per cent in April 2026, supported by lower global food and energy prices over much of the period.
However, the IMF cautioned that inflation remains above the Central Bank of The Gambia’s medium-term target of 5 per cent, while higher commodity prices linked to the war in the Middle East have begun feeding through to the inflation outlook.
“The war is expected to affect significantly the macroeconomic outlook and amplify domestic risks in 2026 and beyond,” Ms Jenkner said.
Fiscal performance, however, was weaker than expected in 2025.
The IMF said tax revenue overperformed, but spending exceeded targets due to unbudgeted transfers, arrears payments, emergency subsidies for the National Water and Electricity Company Limited, and support to the National Food Security Processing and Marketing Corporation.
This pushed the fiscal deficit to 5 per cent of GDP, larger than expected, while public debt reached about 79 per cent of GDP in 2025, although the Fund said it remains sustainable.
“Given limited fiscal buffers, fiscal policy will need to remain prudent while managing the challenging impact of the war in Iran which will require the reallocation of some expenditure,” the IMF noted.
Programme performance was mixed. The Gambia met five of seven quantitative performance criteria for end-December 2025, while two were missed by a large margin mainly due to expenditure overruns. All indicative targets were met.
On structural reforms, five of six benchmarks covering public financial management, statistics and financial sector stability have been completed, with the remaining measure expected in the coming weeks.
The IMF urged the Central Bank of The Gambia to maintain a tight policy stance and incorporate forward-looking analysis to bring inflation back to its 5 per cent medium-term target.
It also said the exchange rate should be determined by market forces, with foreign exchange interventions limited to smoothing excessive volatility and building reserves.
The Fund further encouraged the central bank to focus on its core mandate and cease any direct or indirect financial assistance to the public sector, adding that the ongoing revision of the Central Bank Act should reflect those principles.
Although the banking sector remains sound, the IMF warned that high exposure to the public sector requires scrutiny.
On governance, the Fund encouraged the government to strengthen its anti-corruption reform agenda, improve access to public information and promote conditions for private investment-led growth. It said the establishment of an anti-corruption commission would send a positive signal.
From a climate policy perspective, the IMF said The Gambia is now better equipped to incorporate fiscal risk analysis into its budget process and has identified an opportunity to introduce a carbon-based excise, which could reduce the fiscal burden on fuels and align fuel prices with carbon content when prices return to more moderate levels.
For The Gambia, the agreement provides continued policy support and potential new financing at a time when external shocks are testing fiscal and inflation management.
But the IMF’s message is also clear: strong growth and falling inflation are not enough. The country’s reform credibility will depend on whether government can contain spending overruns, protect debt sustainability, strengthen governance and preserve central bank independence.
The staff-level deal therefore gives The Gambia breathing space. The harder task will be turning that space into fiscal discipline, climate resilience and private-sector-led growth.
