Government Targets D2.1 Billion Budget Deficit for 2026, Prioritizes Debt Reduction

By Fatou Sillah

The Gambia has set its overall budget deficit for 2026 at D2.1 billion—roughly 1 percent of GDP—as the government moves to tighten fiscal discipline while maintaining essential development spending. Finance Minister Seedy Keita announced the target on Friday during his presentation of the 2026 national budget before the National Assembly.

“In 2026, the government targets an overall deficit of D2.1 billion (1 percent of GDP). The lower deficit target than previously envisaged arises from the need to contain domestic borrowing,” Keita said.

He underscored that the revised deficit goal is central to the administration’s broader efforts to curb domestic borrowing and reduce debt vulnerabilities. “This consolidation path strikes a balance between still high debt vulnerabilities and needed development spending,” he added.

According to Keita, the government plans to meet its gross financing needs by issuing long-term debt instruments, rolling over short-term obligations, tapping into the Resilience and Sustainability Facility (RSF) on-lent resources, and relying on concessional external borrowing.

“To reduce debt vulnerabilities, the Government will ensure debt to GDP is on a downward trend in the short to medium term,” he said. Achieving this, he noted, will require stronger domestic revenue mobilization, strict adherence to the external borrowing plan, and safeguards to ensure state-owned enterprises and public-private partnerships do not generate additional fiscal risks.

Public and publicly guaranteed debt is projected to reach 68.8 percent of GDP in 2026 and is expected to decline to 58.4 percent by 2028.

Keita also cautioned that both global and domestic conditions could threaten the government’s fiscal trajectory. Rising geopolitical tensions and commodity price volatility could disrupt forecasts, while at home, fiscal slippages, growing SOE liabilities, and higher debt-servicing costs could squeeze priority spending. Natural disasters, he added, remain a persistent threat to infrastructure and livelihoods.

“On the upside, the possibility of a quicker pace of disinflation and interest rate reductions than assumed may boost demand. In addition, faster progress on reforms could boost revenue collection,” he said.