The International Monetary Fund (IMF) has approved a significant financial package for The Gambia aimed at fortifying the nation’s economy against climate shocks and sustaining its ongoing recovery. The IMF’s Executive Board greenlit an 18-month arrangement under the Resilience and Sustainability Facility (RSF) worth approximately $63.55 million, alongside completing the third review of the Extended Credit Facility (ECF), unlocking an immediate disbursement of $16.95 million. Together, these measures provide a critical boost to The Gambia’s efforts to navigate global uncertainties and maintain macroeconomic stability.
The RSF arrangement, designed to enhance The Gambia’s resilience to climate change, will support reforms to strengthen green public finance management, improve climate data systems, and advance the country’s energy transition. Disbursements under the RSF will commence following the first review of the arrangement. Meanwhile, the ECF, initiated in January 2024, continues to back structural reforms to promote inclusive growth, with total disbursements now reaching $50.82 million.
The Gambia’s economy is on a promising trajectory, with real GDP growth projected at 5.7% for 2025, driven by a rebound in tourism and strong performances in agriculture and construction. Inflation, which stood at 8.1% by April 2025, is expected to ease into single digits, signaling progress toward stability. However, global uncertainties and domestic fiscal pressures pose significant risks to this outlook.
Despite robust revenue collection, unbudgeted spending, particularly from the National Water and Electricity Corporation (NAWEC), has strained fiscal balances. The IMF approved waivers for missed fiscal targets in 2024, citing corrective actions by the authorities. Moving forward, the government plans to curb non-priority spending in 2025 to offset these pressures and maintain debt sustainability. Enhanced revenue mobilization and improved public financial management are also critical to preventing domestic arrears and controlling multi-year commitments.
“The Gambia’s economic momentum remains strong, with resilient growth and declining inflation,” said IMF Deputy Managing Director Bo Li following the Board’s discussion. “However, steadfast implementation of fiscal consolidation and structural reforms is essential to safeguard these gains and reduce fiscal risks.”
The Central Bank of The Gambia has maintained a tight monetary policy to guide inflation toward its medium-term target. Recent reforms to the foreign exchange market have ensured smooth operations, with the central bank committed to letting market forces determine the exchange rate. Additionally, the bank’s decision to halt direct financial support to public entities is expected to strengthen its balance sheet, while enhanced regulatory oversight will bolster financial sector stability.
Structural reforms remain a cornerstone of The Gambia’s agenda, with a focus on improving governance and fostering private sector growth. The government is urged to act swiftly on recommendations from a recent governance diagnostic and to appoint an anti-corruption commission. These steps are seen as vital to creating a conducive environment for investment and job creation.
The newly approved RSF complements the ECF by addressing climate-related vulnerabilities, which are particularly acute for a low-lying coastal nation like The Gambia. The facility will promote coordination among domestic stakeholders and development partners, ensuring that climate adaptation and resilience measures are effectively integrated into the country’s economic framework. Careful sequencing of reforms under both arrangements, supported by targeted capacity development, will be key to maximizing their impact.
Analysts view the IMF’s support as a vote of confidence in The Gambia’s reform efforts, though challenges remain. “The combination of the RSF and ECF provides a robust framework for addressing both immediate fiscal needs and long-term climate risks,” said an economic expert familiar with the region. “But the government must stay disciplined to avoid derailing these gains.”
As The Gambia navigates a complex global landscape, the IMF’s financial and technical assistance offers a lifeline to sustain growth, stabilize public finances, and build resilience against future shocks. With $80.5 million in new funding and a clear reform roadmap, the country is better positioned to achieve its economic and environmental goals, provided it maintains its commitment to fiscal prudence and structural transformation.
The authorities have expressed their resolve to meet these challenges head-on, with plans to strengthen coordination and accountability across government institutions. As the nation looks toward 2025, the success of these efforts will hinge on balancing immediate fiscal demands with the long-term imperative of sustainable development.
