Gambia's economy to grow by 7%, IMF predicts
afrol News, 26 June - The Gambia's economy is expected to
reach the 7% growth in 2007, the International Monetary Fund
(IMF) predicts.
This is contained in a report by the IMF's mission to the
West African country. The team that had talked to officials
of all walks of life in the country, including the donor partners,
civil societies and the government, is headed by Mr. Tsidi
Tsikata.
The mission opened weeks of 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 government's "success in sustaining macroecnomic
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 theconstruction, telecommunications and tourism
sectors."
Despite the projected growth, consumer inflation, which is
mainly fuelled by sharp increases in the international prices
of some key imported commodities, has been on the rise since
January 2007. It reached an annual rate of 6.7% in May.
However, the strengthening of the local currency, the Dalasi,
against major international currencies in recent months has
resulted to a surge in foreign exchange inflow and is expected
to help lower inflation to about 5%by December.
The Central Bank officials assured the IMF mission of their
readiness to closely monitor and take appropriate action inflation
so that it can be contained to the lowest single digit levels
- a strategy that gets the mission's endorsement.
"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 IMF report said.
"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."
The Gambia has also been commended for recording remarkable
progress toward meeting almost all the conditions for the
completion point under the enhanced HIPC Initiative.
However, the mission reported that condition related to privatizing
public assets in the groundnut sub-sector has not been met.
The IMF and World Bank will engage the government on discussions
on reforms in the groundnut sector in the coming weeks.
"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 DebtRelief
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."
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