The International Monetary Fund (IMF) has identified the high cost of doing business as a major constraint on private investment in The Gambia, warning that expensive electricity and other structural challenges continue to undermine the country’s attractiveness to investors despite progress under its economic reform programme.
Eva Jenkner, who led the IMF mission to The Gambia, said the team held extensive consultations with foreign investors and members of the international community to assess the country’s investment climate. She noted that high operating costs, particularly electricity tariffs, remain among the major concerns facing potential investors.
Ms. Jenkner stressed that improving governance, transparency and the overall business environment would be critical to attracting private investment, stimulating economic growth and creating employment opportunities, particularly for young people.
Despite these challenges, she reported strong performance under the IMF-supported programme, with all eight quantitative performance criteria for end-June 2026 met and three of the four indicative targets achieved. The tax revenue target was missed by a small margin, she said, warning that sustained fiscal discipline would be necessary to meet the targets set for the end of December.
She also highlighted progress in structural reforms, including improvements in cash management and the partial privatisation of Gambia Telecommunications Cellular Company Limited (GAMCEL). However, she said further reforms were needed in public financial management and governance.
On fiscal policy, Ms. Jenkner said the government must continue reducing debt vulnerabilities while responding to pressing social needs. She noted that spending priorities had been adjusted in response to the electricity crisis, with the 2027 budget targeting an overall fiscal deficit of approximately one per cent of gross domestic product (GDP).
She emphasised the importance of strengthening domestic revenue mobilisation, controlling expenditure, improving cash management and clearing outstanding arrears, while protecting essential social spending to address persistent poverty.
The recent electricity crisis, she said, had further exposed the need to improve the operational efficiency and financial sustainability of the National Water and Electricity Company (NAWEC).
Although the government had provided emergency assistance to settle arrears owed to regional electricity suppliers and restore generation capacity, Ms. Jenkner said additional measures were necessary to reduce operational losses, improve revenue collection and gradually introduce cost-recovery tariffs without placing an excessive burden on vulnerable households.
On monetary policy, she called on the Central Bank of The Gambia (CBG) to be prudent and data-driven in its endeavour to bring inflation sustainably to its medium-term target. She stressed the need for exchange rate flexibility and adequate international reserves for external stability.
The banking sector is resilient, but banks’ exposure to government debt and concentration risks must be closely monitored, she said. She also asked for better governance and more autonomy for the Central Bank by amending the CBG Act and stopping its quasi fiscal activities.
Ms Jenkner welcomed improvements in public accountability, particularly the National Audit Office’s work in clearing long-standing audit backlogs. But she said more progress is needed to make the Anti-Corruption Commission fully functional and to bolster transparency and governance.
She also noted ongoing progress under the reform agenda backed by the IMF’s Resilience and Sustainability Facility (RSF), including efforts to improve groundwater management and integrate climate resilience into coastal zoning regulations.
She said sustained implementation of these measures would help The Gambia reduce its vulnerability to climate shocks, manage fiscal risks and attract climate financing.
Ms Jenkner reiterated the IMF’s commitment to supporting The Gambia’s reform programme through financial assistance, policy advice and technical support.
