IMF Flags High Cost of Doing Business in The Gambia Despite Strong Reform Performance

By Makutu Manneh

The International Monetary Fund (IMF) has identified the high cost of doing business in The Gambia as a major obstacle to attracting private investment, even as the country records strong performance under its reform programme.

Eva Jenkner, who led the IMF mission to The Gambia, said her team held extensive discussions on the investment climate with foreign investors and members of the international community interested in investing in the country. She noted that investors continue to face high operating costs, including electricity tariffs, as well as other structural barriers. Improving governance and transparency, she said, will be essential to attracting the private investment needed to drive private sector-led growth and create jobs, particularly for young people.

“Program performance remains strong, with all eight quantitative performance criteria for end-June 2026 met and three of four indicative targets observed,” Ms. Jenkner said. She added that the tax revenue target was missed by a modest margin, and that continued fiscal discipline will be required to meet the end-December targets.

She cited progress on structural reforms, including improved cash management and the partial privatisation of Gambia Telecommunications Cellular Company Limited (GAMCEL), but stressed that more work is needed on public financial management and governance reforms.

On fiscal policy, Ms. Jenkner said the focus should remain on reducing debt vulnerabilities while addressing pressing social needs. She noted that the authorities have reprioritized spending in response to the electricity crisis, with the 2027 budget targeting an overall deficit of about 1 percent of GDP. She emphasised that sustained revenue mobilisation, expenditure control, better cash management, and timely clearance of arrears remain essential, while priority social spending must be protected to tackle persistent poverty.

The recent electricity crisis, she said, underscores the urgency of strengthening the operational efficiency and financial sustainability of NAWEC. The government has provided emergency support to clear arrears owed to regional electricity suppliers and restore generation capacity, but Ms. Jenkner said further efforts are needed to reduce operational losses, improve revenue collection, and move toward cost-recovery tariffs, while shielding vulnerable households.

On monetary policy, she said the Central Bank of The Gambia should maintain a prudent, data-driven approach to bring inflation sustainably toward its medium-term target. “Exchange rate flexibility and adequate international reserves remain important for external stability,” she said.

She described the banking sector as resilient, but cautioned that banks’ exposure to government debt and concentration risks require close monitoring. She called for stronger governance and autonomy at the Central Bank, through amendments to the CBG Act and an end to its quasi-fiscal activities.

Ms. Jenkner welcomed progress in strengthening public accountability, including the National Audit Office’s clearance of long-standing audit backlogs. She noted, however, that more must be done to make the Anti-Corruption Commission operational, strengthen governance and transparency, and improve the business environment.

She added that progress continues under the reform agenda supported by the Resilience and Sustainability Facility (RSF), including measures to strengthen groundwater management and integrate climate resilience into coastal zoning regulations. Sustained implementation, she said, will help reduce vulnerability to climate shocks, contain fiscal risks and mobilise climate financing.

Ms. Jenkner reaffirmed the IMF’s commitment to supporting The Gambia’s reform efforts through financing, policy advice and technical assistance.