The Gambia is a small, fragile country in West Africa. Stretching 450 km along the Gambia River, the country (all 10,689 square kilometers of it) is surrounded by Senegal, except for a 60-km Atlantic Ocean front. The country has a population of 2.1 million. With 176 people per square kilometer, it is one of the most densely populated countries in Africa. Most of the population (57%) is concentrated around urban and peri-urban centers.
Political Context
The December 2016 presidential election resulted in a political transition after the incumbent, President Yahya A.J.J. Jammeh who had led the country for 22 years, was defeated by Adama Barrow, the presidential candidate of a political coalition.
Parliamentary elections in April 2017 led to an absolute majority for the United Democratic Party (UDP) with 31 seats in the 58-seat National Assembly. The former ruling Alliance for Patriotic Reorientation and Construction (APRC) party was reduced to five seats. Local elections in May 2018 resulted in 62 of 120 seats going to the UDP and 18 to the APRC.
In December 2019, President Adama Barrow formed a new political party, the National People’s Party, which would allow him to seek a second term in the 2021 elections. A new draft Constitution, which introduces a two-term limit for the presidency, was delivered in November 2019 and is pending approval by the National Assembly and endorsement by the Gambian people through a referendum.
Economic Overview
Following strong performance under the 2019 International Monetary Fund (IMF) Staff-Monitored Program , with a sharp reduction in the fiscal deficit, and debt relief from key plurilateral and bilateral creditors, The Gambia has been able to exit from debt distress. This has paved the way for an Enhanced Credit Facility approved by the IMF Board on March 23, 2020. The fiscal deficit has been reduced from 6.2% of GDP in 2018 to 2.6% of GDP in 2019, supported by increased tax revenues and strong donor inflows. Growth has remained robust at around 6% despite the fiscal adjustment and external shocks, including in the tourism sector. International reserves have been brought closer to prudential levels, interest rates have eased, and inflation has remained stable.
The global COVID-19 pandemic is expected to have severe socioeconomic consequences. GDP growth is projected to decline to between 2.5 and -2.4% in 2020. Heavily dependent on tourism, The Gambia is mainly impacted by a reduction in tourists, particularly from key markets in Europe, but also from trade disruption and lower commodity prices. Limited fiscal, monetary, and financial buffers and high risk of debt distress limit room to maneuver. Health sector capacity is weak and social safety nets do not exist.
The government has taken some steps to protect lives and livelihoods during the relief period with support from development partners. The World Bank is providing support through its $10 million COVID-19 Emergency Response Project, and the IMF through its US$21.2 million Rapid Credit Facility. Moreover, the IMF has approved the Catastrophe Containment and Relief Trust debt relief ($2.9 million). The European Union has disbursed a $9.7 million budget support grant, while the World Bank Social Safety Net Project has been front loaded with an additional $6 million.
The Gambia also seeks debt service deferral under the G20 initiative that could provide between $2.19 million from the creditors already endorsing the initiative to close to $6.68 million if the plurilateral and private creditors endorse the initiative.
Last Updated: Jul 14, 2020
