Gambia’s economic progress has been dropped from 4.3% to 2.2% after its tourism and real estate sectors took that hardest hit during the two-month long political turmoil sparked by former President Yahya Jammeh’s refusal to hand over power to his rival, Adama Barrow.
The IMF assessed the impact of exogenous shocks that have hit the Gambian economy recently and initiated discussions on providing support through a Rapid Credit Facility. It came less than three years after the Washington-based institution gave the country some US$10 million in emergency funding.
The regional Ebola outbreak caused a shock on the Gambia’s economy. Although the country had no cases, tourists stayed away from West Africa, impacting the Gambia’s economy with a shock.
“Economic growth in 2016 is now estimated to have reached only 2.2 percent, down from 4.3 percent in 2015, due to limited availability of foreign exchange, weak agricultural output and the effect of the political impasse on tourism during high season,” the IMF said in a statement.
Thousands of tourists were flown out of the Gambia as West African forces entered the small nation to oust Jammeh. Thousands more canceled their trips to the country, which relies heavily on tourism for its foreign exchange.
IMF says addressing the effects of the shocks and restoring economic stability will require concerted policy efforts as well as support from the international community. The EU has given the Gambia’s new government more than US$85 million to help jumpstart the economy and create jobs.
The UN did urge international financial support and EU defreeze US$37 million that were held over deteriorating rights concerns during Jammeh’s rule.
Gambia’s government and the IMF are focusing the priority on public spending. Officials say it needs to be in line with available resources to drastically reduce domestic borrowing and interest cost.
Gambia’s new President Adama Barrow is making efforts to reform public enterprises, including the National Water and Electricity Company (NAWEC) and the National Telecom and Mobile Operators (GAMTEL/GAMCEL), which were mugged by Jammeh to place them on a sound financial footing and limit their drain on the state budget.