Identifier
Created
Classification
Origin
07BANJUL101
2007-02-27 11:55:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Banjul
Cable title:
THE GAMBIA: BACK ON TRACK WITH IMF
VZCZCXRO8813 RR RUEHMA RUEHPA DE RUEHJL #0101 0581155 ZNR UUUUU ZZH R 271155Z FEB 07 FM AMEMBASSY BANJUL TO RUEHC/SECSTATE WASHDC 7335 INFO RUEHZK/ECOWAS COLLECTIVE RUEATRS/DEPT OF TREASURY WASHDC RUEHLMC/MILLENNIUM CHALLENGE CORP RUCPDOC/DEPT OF COMMERCE WASHDC
UNCLAS BANJUL 000101
SIPDIS
SENSITIVE
SIPDIS
SECSTATE PASS EXIMBANK, OPIC, AND USTDA
E.O. 12958: N/A
TAGS: ECON EAID ETRD EFIN PREL IMF GA
SUBJECT: THE GAMBIA: BACK ON TRACK WITH IMF
REF: 06 BANJUL 722
IMF APPROVES NEW DISBURSING PROGRAM
------------------------------------
UNCLAS BANJUL 000101
SIPDIS
SENSITIVE
SIPDIS
SECSTATE PASS EXIMBANK, OPIC, AND USTDA
E.O. 12958: N/A
TAGS: ECON EAID ETRD EFIN PREL IMF GA
SUBJECT: THE GAMBIA: BACK ON TRACK WITH IMF
REF: 06 BANJUL 722
IMF APPROVES NEW DISBURSING PROGRAM
--------------
1. (U) We note, per the IMF's press release, the IMF
Executive Board's February 21 approval of a three-year, dols
21 million Poverty Reduction and Growth Facility (PRGF) for
The Gambia. According to the IMF's announcement, the
Executive Board also approved additional interim assistance
of dols 0.5 million under the enhanced Heavily Indebted Poor
Countries (HIPC) Initiative. The IMF's resumption of a
disbursing program here represents the culmination of the
GOTG's several-year effort to get back on track with the IMF,
following its suspension in 2003 of the then-existing PRGF
arrangement due to the GOTG's misreporting of its foreign
exchange balances.
2. (U) Approval of the new PRGF followed a November 2006
visit to The Gambia by IMF officials (reftel),who expressed
satisfaction with the GOTG's overall performance under the
Staff Monitored Program (SMP) instituted here by the IMF
prior to deciding whether to go ahead with a new disbursing
program. In their readout to us, the IMF officials indicated
that the GOTG was firmly on course for a new PRGF and
subsequently, assuming the Gambians' satisfactory performance
under the PRGF for at least six months, debt relief under the
Multilateral Debt Relief Initiative (MDRI).
CHALLENGES AHEAD
--------------
3. (U) In announcing the new PRGF, IMF Deputy Managing
Director Murilo Portugal commended the GOTG for successful
economic stabilization policies over the previous three
years, citing, inter alia, tightened monetary policies and
prudent macroeconomic policies. However, he also went on
mention "formidable economic challenges" to be addressed
under the PRGF: "widespread poverty, vulnerability to
exogenous shocks, and a heavy public debt burden." The IMF
official stated that the GOTG's maintaining "fiscal
discipline" would be crucial for the achievement of
macroeconomic objectives enshrined in the PRGF and noted, in
particular, the need for the GOTG to "contain" domestic
borrowing.
COMMENT
--------------
4. (SBU) The GOTG wasted no time in signalling its
satisfaction over the IMF's move, issuing a statement that
contained excerpts from the IMF press release and that ran as
the lead item in two dailies on February 23. In past
discussions with us, the two leading architects of the GOTG's
normalization of ties with the IMF -- Finance and Economy
Minister Musa Bala Gaye and Central Bank Governor Famara
Jatta -- indicated awareness of the need for the GOTG to
continue economic reforms following anticipated approval of
the PRGF so as to achieve their top priority -- reaching HIPC
completion point and qualifying for debt relief under MDRI by
mid-2007. At the same time, these two officials acknowledged
a key economic "challenge" cited by IMF offical Portugal --
keeping spending and borrowing under control -- that the
GOTG had to face in order to help ensure performance under
the new PRGF that would earn debt relief. END COMMENT
STAFFORD
SIPDIS
SENSITIVE
SIPDIS
SECSTATE PASS EXIMBANK, OPIC, AND USTDA
E.O. 12958: N/A
TAGS: ECON EAID ETRD EFIN PREL IMF GA
SUBJECT: THE GAMBIA: BACK ON TRACK WITH IMF
REF: 06 BANJUL 722
IMF APPROVES NEW DISBURSING PROGRAM
--------------
1. (U) We note, per the IMF's press release, the IMF
Executive Board's February 21 approval of a three-year, dols
21 million Poverty Reduction and Growth Facility (PRGF) for
The Gambia. According to the IMF's announcement, the
Executive Board also approved additional interim assistance
of dols 0.5 million under the enhanced Heavily Indebted Poor
Countries (HIPC) Initiative. The IMF's resumption of a
disbursing program here represents the culmination of the
GOTG's several-year effort to get back on track with the IMF,
following its suspension in 2003 of the then-existing PRGF
arrangement due to the GOTG's misreporting of its foreign
exchange balances.
2. (U) Approval of the new PRGF followed a November 2006
visit to The Gambia by IMF officials (reftel),who expressed
satisfaction with the GOTG's overall performance under the
Staff Monitored Program (SMP) instituted here by the IMF
prior to deciding whether to go ahead with a new disbursing
program. In their readout to us, the IMF officials indicated
that the GOTG was firmly on course for a new PRGF and
subsequently, assuming the Gambians' satisfactory performance
under the PRGF for at least six months, debt relief under the
Multilateral Debt Relief Initiative (MDRI).
CHALLENGES AHEAD
--------------
3. (U) In announcing the new PRGF, IMF Deputy Managing
Director Murilo Portugal commended the GOTG for successful
economic stabilization policies over the previous three
years, citing, inter alia, tightened monetary policies and
prudent macroeconomic policies. However, he also went on
mention "formidable economic challenges" to be addressed
under the PRGF: "widespread poverty, vulnerability to
exogenous shocks, and a heavy public debt burden." The IMF
official stated that the GOTG's maintaining "fiscal
discipline" would be crucial for the achievement of
macroeconomic objectives enshrined in the PRGF and noted, in
particular, the need for the GOTG to "contain" domestic
borrowing.
COMMENT
--------------
4. (SBU) The GOTG wasted no time in signalling its
satisfaction over the IMF's move, issuing a statement that
contained excerpts from the IMF press release and that ran as
the lead item in two dailies on February 23. In past
discussions with us, the two leading architects of the GOTG's
normalization of ties with the IMF -- Finance and Economy
Minister Musa Bala Gaye and Central Bank Governor Famara
Jatta -- indicated awareness of the need for the GOTG to
continue economic reforms following anticipated approval of
the PRGF so as to achieve their top priority -- reaching HIPC
completion point and qualifying for debt relief under MDRI by
mid-2007. At the same time, these two officials acknowledged
a key economic "challenge" cited by IMF offical Portugal --
keeping spending and borrowing under control -- that the
GOTG had to face in order to help ensure performance under
the new PRGF that would earn debt relief. END COMMENT
STAFFORD