IMF Reaches $28mn Financing Agreement with Gambia as Economy Set to Grow 5.1%

WASHINGTON, October 30, 2026 — The International Monetary Fund has reached a staff-level agreement with The Gambia that could unlock about $28mn in additional financing, as the West African country seeks to sustain economic growth, contain inflation and address mounting financial pressures in its electricity sector.

The agreement follows discussions in Banjul between October 19 and 30 and covers the sixth review of The Gambia’s Extended Credit Facility (ECF) programme and the third review under the Resilience and Sustainability Facility (RSF), which supports reforms aimed at strengthening climate resilience.

The IMF said on Friday that completion of the reviews, subject to approval by its executive board and implementation of agreed prior actions, would bring cumulative disbursements under the two arrangements to approximately $142mn.

The financing agreement comes as The Gambia’s economy continues to demonstrate resilience despite global economic uncertainty and domestic electricity supply disruptions.

The fund projects real gross domestic product growth of 5.1 per cent in both 2026 and 2027, supported by construction, tourism and remittance inflows.

Inflation has also moderated, declining to 6.1 per cent in September from 7 per cent in April, although it remains above the Central Bank of The Gambia’s 5 per cent target.

Eva Jenkner, who led the IMF mission to Banjul, said the country’s economic outlook remained favourable but warned that vulnerabilities in the energy sector, volatile commodity prices and climate-related shocks continued to pose risks.

“The Gambian economy remains resilient despite external uncertainties and domestic energy supply disruptions,” Jenkner said.

She added that the country’s economic performance had been supported by continued implementation of reforms under the IMF-backed programmes.

The fund said The Gambia had met all eight quantitative performance criteria assessed at the end of June 2026 and achieved three of four indicative targets, narrowly missing its tax revenue target.

Progress on structural reforms included improvements in government cash management and the partial privatisation of Gambia Telecommunications Cellular Company Limited (GAMCEL).

However, the IMF warned that further improvements in public financial management, governance and domestic revenue collection would be necessary to preserve economic stability.

Electricity crisis raises fiscal concerns

The country’s electricity sector emerged as a central concern during the IMF discussions, with the fund warning that financial and operational weaknesses at the National Water and Electricity Company (NAWEC) posed risks to public finances and economic activity.

The Gambian government has provided emergency financial assistance to the state-owned utility to clear outstanding payments to regional electricity suppliers and restore electricity generation capacity.

The intervention has required authorities to adjust spending priorities while maintaining commitments to fiscal consolidation.

“The recent electricity crisis underscores the urgency of strengthening National Water and Electricity Companies (NAWEC)’s operational efficiency and financial sustainability,” Jenkner said.

The IMF called for measures to reduce operational losses, improve revenue collection and gradually move electricity tariffs towards levels that recover the cost of supply, while protecting vulnerable households.

Such reforms would be important to reducing the utility’s dependence on government financial support and limiting the risk that further electricity disruptions could undermine economic activity.

The fund also urged the government to maintain fiscal discipline, with the proposed 2027 budget targeting an overall deficit of approximately 1 per cent of GDP.

It said stronger tax collection, expenditure controls, improved cash management and timely clearance of government arrears would be essential to reducing debt vulnerabilities.

At the same time, the IMF stressed the importance of protecting priority social spending to address persistent poverty.

Banking sector risks and central bank reforms

The IMF said The Gambia’s banking sector remained resilient but warned that financial institutions’ exposure to government debt and concentration risks required continued monitoring.

It recommended that the Central Bank of The Gambia maintain a prudent monetary policy stance to bring inflation sustainably towards its medium-term target.

Exchange rate flexibility and adequate foreign exchange reserves would also remain important to maintaining external stability.

The fund called for stronger central bank independence and governance, including amendments to the Central Bank of The Gambia Act and an end to quasi-fiscal activities.

These reforms are intended to strengthen the institution’s ability to manage monetary policy without taking on financial responsibilities that could undermine its core mandate.

The IMF also welcomed progress in public accountability, particularly the National Audit Office’s clearance of longstanding audit backlogs.

However, it urged authorities to accelerate the operationalisation of the Anti-Corruption Commission and strengthen transparency and governance standards to improve the investment climate.

Climate reforms and private investment

Beyond immediate fiscal and monetary challenges, the IMF said The Gambia had continued implementing climate-related reforms under the Resilience and Sustainability Facility.

These include measures to improve groundwater management and incorporate climate resilience into coastal zoning regulations.

The initiatives are intended to reduce the country’s exposure to climate-related risks while supporting access to financing for adaptation and resilience projects.

The IMF said sustained implementation of these reforms could help contain future fiscal costs associated with climate shocks and improve the country’s ability to attract climate financing.

The fund also emphasised the need to create a more favourable environment for private sector investment and job creation.

Jenkner said continued fiscal discipline, stronger governance and improvements in the business environment would be necessary to translate macroeconomic stability into broader economic opportunities.

“The IMF remains committed to supporting the authorities’ reform efforts through financing, policy advice, and technical assistance,” she said.

The IMF mission held discussions with senior Gambian officials, including Finance and Economic Affairs Minister Seedy Keita, Attorney General Dawda Jallow, central bank officials and representatives of the private sector and civil society.

The agreement now awaits approval by the IMF’s executive board and completion of the required policy measures before the additional financing can be released.