The International Monetary Fund (IMF) and The Gambia have reached a staff-level agreement on the fifth review of the country's Extended Credit Facility (ECF) program. This agreement also covers the second review under the Resilience and Sustainability Facility (RSF). The IMF simultaneously warned that fiscal slippages and commodity price shocks could complicate The Gambia’s economic outlook.
Key outcomes from this agreement include a proposed six-month extension of the ECF arrangement to July 2027. The IMF also plans an augmentation of access by SDR 12.44 million, approximately $17 million. This additional funding aims to help The Gambia address economic challenges stemming from the war in the Middle East. Subject to approval by the IMF Executive Board, a disbursement of SDR 6.22 million, about $8.5 million, is expected.
This development comes as Ghana faces its own ongoing IMF program and fiscal challenges. Both nations are working to stabilize their economies amidst global uncertainties and domestic spending pressures. The caution from the IMF to The Gambia highlights a broader regional trend. African economies often grapple with balancing development ambitions against fiscal prudence. Data from the World Bank shows that fiscal deficits across sub-Saharan Africa remain a concern.
Eva Jenkner, the IMF team lead, indicated that the war in the Middle East is expected to significantly affect The Gambia's macroeconomic outlook. This will amplify domestic risks in 2026 and beyond. She stated, “The war is expected to affect significantly the macroeconomic outlook and amplify domestic risks in 2026 and beyond.”
The agreement on the ECF and RSF programs, including the financial disbursements, faces final approval by the IMF Executive Board in early July 2026. This approval will unlock critical funds for The Gambia, but the country must address its fiscal vulnerabilities. Decision-makers in The Gambia will need to reallocate some expenditure to manage the impact of the war in Iran. Markets will closely watch the country's ability to contain its fiscal deficit and manage public debt.
The Gambia's economic recovery remains strong with real Gross Domestic Product (GDP) growth estimated at 6% in 2025. This growth was mainly driven by agriculture and construction. Robust tourist arrivals and remittance inflows also supported the economy. Inflation has notably eased, falling from 18.5% in September 2023 to 7% in April 2026. This was helped by lower global food and energy prices. However, this inflation rate remains above the Central Bank of The Gambia's 5% medium-term target.
Fiscal performance in 2025 was weaker than projected despite strong tax revenue. Spending exceeded targets due to unbudgeted transfers, arrears payments, and support for utilities and food security entities. This increased the fiscal deficit to 5% of GDP. Public debt reached about 79% of GDP, though the IMF still considers it sustainable. The IMF urged the Central Bank to maintain tight monetary policy and limit foreign exchange interventions to smooth excessive volatility.