Debt troubled Gambia seeks relief from creditors

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The debt to GDP ratio of Gambia is 88%. This was after the country recalculated its GDP which expanded pushing the debt to GDP ratio down by 48%.  

 

The International Monetary Fund is leading efforts to help Gambia reach a debt relief deal from its creditors, Tao Zhang, the deputy managing director for IMF told a gathering on Monday.

Tao delivered a lecture on the theme “Gambia on path to progress” at the Kairaba Beach Hotel.

The top IMF official said Gambia would need to achieve a debt relief from creditors for it to have access to external financing.

“Unlocking financial support from donors is one critical challenge. This can be overcome by resolving Gambia’s unsustainable public debt challenges,” said Tao.

“IMF is coordinating the debt relief efforts… Gambia is under external debt distress. In other words, in the area of external debt, the country is not sustainable.”

Tao said the Gambian authorities have met creditors last month in Washington and discussed means of accessing debt relief and the response was positive.

“I am please to say that most of the creditors at the meeting have indicated their support. And Government is following up on this development,” said Tao.

As of the fall of 2017, Gambia’s debt to GDP ratio was 129%. Following a recalculation of the country’s GDP, debt to GDP ratio went down by 48%.

This suggest a GDP growth from D49.4 billion in 2013 to D69.5 billion in 2017.

Though this does not affect the country’s debt stock, it gives authorities an opportunity to access more loans from lenders who may be worried that the country can default on its debt.

According to Gambian authorities, debt servicing currently takes 50% of the country’s domestic revenue, thus the country cannot afford to take any more debt without serious consequences.

Lamin Camara, former permanent secretary at the Ministry of Finance who is now at Agriculture Ministry told the gathering that external debt relief will not entirely solve country’s debt situation.

Camara said the domestic debt is currently more than half the total debt stock.

Meanwhile, the administration of President Adama Barrow has promised so much cost-cutting measures in 2017 after inheriting a very sluggish growth and mounting public debt.

Among the reforms were reducing Government fleet of vehicles, reducing the number of civil servant thus reducing the close to D3 billion wage bill, curtailing travelling of public officials, among others.

So far, this remains a mere rhetoric.

Camara said the vehicle policy which the Finance Minister Mamburay Njie claims is being reviewed has been abandoned.

He said new vehicles are still being bought by Government.

 

2019-05-14T23:41:40+00:00

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