The Executive Board has completed the 2026 Article IV Consultation for The Gambia and the fifth review of The Gambia's Extended Credit Facility (ECF) arrangement, approved on January 12, 2024, to support reforms to address long-standing structural impediments to inclusive growth.
The completion of the ECF review, which took place on 6 July this year, allows for the immediate disbursement of SDR6.22 million (about US$8.44 million), bringing total disbursements under this arrangement to SDR55.97 million (about US$75.98 million). The Executive Board also completed the second review under the Resilience and Sustainability Facility (RSF) arrangement, approved on June 18, 2025, to help the authorities improve macroeconomic resilience and build policy buffers against climate shocks, allowing for an immediate disbursement of SDR10.36 million (about US$14.06 million), bringing The Gambia's total access under the RSF arrangement to about SDR 25.90 million (about US$ 35.16 million). The Executive Board also approved a six-month extension, augmentation and rephasing of access under the ECF arrangement, along with a six-month extension and rephasing of access under the RSF. The ECF extension and augmentation of SDR 12.44 million (20 percent of quota) would help address emerging balance of payments needs due to the war in the Middle East, while the RSF extension and rephasing would allow additional time to implement complex climate-related reforms.[2]
The Gambia's macroeconomic outlook remains broadly favorable but faces elevated downside risks from spillovers from the war in the Middle East as well as climate shocks. Growth is projected to moderate to 4.7 percent in 2026, from 6 percent in 2025, before stabilizing at around 5 percent over the medium term. Inflationary pressures have reemerged, delaying convergence to the central bank's target, while downside risks remain significant.
In response to end-2025 spending overruns, fiscal policy will be tightened in 2026 through additional revenue mobilization and reprioritization of spending. The central bank will maintain a data driven stance to contain inflation and safeguard external stability, alongside continued efforts to strengthen financial sector supervision and resilience. Structural reforms will be accelerated to strengthen fiscal institutions, SOE management and governance, alongside continued efforts to enhance climate resilience under the RSF arrangement.
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IMF capacity development (CD) has been instrumental in supporting implementation of reforms under the ECF and RSF arrangements. The Gambia is among the most intensive recipients of CD, ranking sixth in terms of total allocation over FY2022-26 (US$10.4 million) and highest on a per capita basis among the top 15 recipients of CD. CD has contributed to progress in domestic revenue mobilization, exchange rate stabilization, and macro financial stability, while strengthening public financial management, SOE oversight, economic data reporting, and supports climate related reforms under the RSF arrangement.
In completing the ECF review, the Executive Board approved the authorities' requests for waivers for the nonobservance of the end December 2025 quantitative performance criteria on net domestic borrowing and the domestic primary balance based on corrective measures taken by the authorities.
Following the Executive Board's discussion, Deputy Managing Director Bo Li issued the following statement:
"The Gambia's economy continues to grow strongly, while headline inflation rebounded in April following a steady decline, reflecting pressures from higher food and energy costs. Implementation of the Extended Credit Facility (ECF) program and reforms under the Resilience and Sustainability Facility (RSF) has been mixed. The authorities request a six-month extension of both ECF and RSF arrangements, and augmentation of access under the ECF, to sustain the implementation of their reform agenda, help address balance of payments needs due to the war in the Middle East, and reinforce efforts to meet the program's objectives.
"The authorities are committed to tightening fiscal policy in 2026 and 2027 to correct the fiscal slippage in 2025 through additional revenue mobilization efforts and stronger fiscal discipline. They remain dedicated to safeguarding fuel revenue despite significant increases in fuel import prices. It is essential to contain spending pressures in this election year through strict expenditure prioritization and control, while accommodating targeted short-term mitigation measures, including cash transfers to protect vulnerable populations, financed by a World Bank grant. Further strengthening public financial management will support fiscal discipline and accountability. Containing fiscal risks from SOEs and improving data consistency will be key to enhancing transparency.
"With rising inflationary pressures driven by the war in the Middle East, maintaining a tight monetary policy stance, underpinned by forward-looking analysis, is essential. Maintaining a market-determined exchange rate is critical to preserving external stability. The implementation of measures to refrain from quasi-fiscal operations is a positive development. Strengthening supervisory capacity and advancing risk-based supervision, alongside close monitoring of sovereign exposures, will be important for maintaining financial stability.
"Continued progress on structural reforms is needed to strengthen governance, enhance the anti-corruption framework, and improve the business environment to support private sector-led growth and job creation.
"The authorities have advanced key reforms with extensive Fund capacity development support. Continued CD will be critical to strengthen implementation capacity, including in revenue administration, public financial management, financial sector oversight, and statistics, and to address remaining data gaps.
"Steadfast implementation of the climate agenda under the RSF will support resilience, stability, collaboration with development partners and the private sector, and help mobilize additional financing."
Executive Board Assessment
Executive Directors agreed with the thrust of the staff appraisal. They welcomed The Gambia's strong economic growth, while observing that headline inflation recently rebounded following a period of decline, reflecting higher food and energy prices. Noting mixed program performance, and downside risks including from the difficult external environment, domestic vulnerabilities, and climate shocks, Directors underscored the need to strengthen reform implementation to safeguard macro financial stability, and support resilient, inclusive growth.
Given recent fiscal slippages, and elevated debt vulnerabilities, Directors welcomed the authorities' commitment to fiscal consolidation in 2026-27. They underscored that stronger domestic revenue mobilization, expenditure controls, and improvements in public financial, investment, and debt management will be critical to create space for priority spending and safeguard debt sustainability. They called for prudent budget execution in the 2026 election year, including strict enforcement of commitment controls, enhanced oversight of state owned enterprises, and stronger fiscal risk management.
Directors agreed that the monetary policy stance should remain appropriately tight and data dependent to guide inflation back to the medium term target. They underscored the importance of exchange rate flexibility to help absorb external shocks. Directors also encouraged further strengthening of the regulatory and supervisory framework to bolster financial sector resilience and urged the timely amendment of the Central Bank Act to strengthen its mandate, governance, and autonomy.
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Directors called for accelerated structural reforms to promote sustainable private sector led growth and job creation. They emphasized the need to strengthen governance by operationalizing the anti corruption commission, expediting Cabinet approval and enactment of the revised AML/CFT law and the National Audit Office Act, and accelerating implementation of governance diagnostic recommendations. They also highlighted the importance of improving the business environment to support private investment, formalization, and job creation. Directors welcomed the progress made in strengthening climate resilience through the RSF supported reforms, and emphasized the importance of integrating climate risks into the macro fiscal framework.
Directors highlighted that Fund capacity development has been instrumental in supporting program implementation, notably in domestic revenue mobilization, exchange rate stabilization, and macro financial stability. They underscored the importance of well calibrated CD support to strengthen revenue administration, public financial management, SOE oversight, and governance, as well as to improve macroeconomic statistics and data quality.
It is expected that the next Article IV Consultation with The Gambia will be held in accordance with the Executive Board decision on consultation cycles for members with Fund arrangements.
Washington, DC
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