Gambia’s Economy Recovery over the past 2 Years Impressive, Says Outgoing IMF Banjul Chief
As she bids farewell to a country she helped since the dawn of new democratic dispensation, International Monetary Fund’s outgoing Resident Representative to The Gambia, Dr. Ruby Randall, has said The Gambia’s economic recovery over the past two years has clearly been impressive.
Madam Ruby, a key member of the IMF’s Gambia Country Team, made these comments in an exclusive one-on-one interview with Sainey MK Marenah, 2018 IMF Journalism fellow as she comes to the end of her tour of duty in The Gambia.
“I personally feel very privileged to have served in The Gambia at such a pivotal time in the country’s history. The Gambia’s economic recovery over the past two years has clearly been impressive and it is my considered hope that we are now witnessing what might someday be known as the beginning of The Gambia’s economic transformation!” she said.
But she warned that in order to preserve the hard-won gains, the country need to sustain its economic recovery efforts. “It is clear that with the continued support of its international partners and if followed and sustained The Gambia’s current reform path will lead to enhanced productivity, export diversification, more-inclusive growth and greater prosperity for The Gambian people.”
Here is the Interview in Verbatim:
- Good Morning Dr. Randall, please kindly tells us a little bit about yourself, Education and professional background?
Thank you Sainey. I have: a B.A. in Economics and Political Science from McGill University in Montreal, Canada; an M.Phil. in Economic Development from the University of Cambridge, in Cambridge England; an M.Sc. in Economics from the London School of Economics and Political Science in the U.K., and a Ph.D. in Economics from the University of Maryland, in College Park, Maryland, USA. Professionally, I was a Brookings Research Fellow at the Brookings Institution, a notable Washington-based think-tank and I have also worked for the McKenzie Global Institute in Washington D.C. However, the bulk of my professional career has been spent at the International Monetary Fund where I joined the Economist Program in May 1993 as a young Economist. At the Fund, over 26 years I have held a number of different positions in several departments, including serving as IMF Resident Representative previously in Malawi and now as Res. Rep. in The Gambia. Before my current tour of duty as Res. Rep., I worked on The Gambia (from IMF Headquarters) both as a participant in the Economist Program in 1994 and as a Senior Economist in 2004. I have also authored and co-authored a number of IMF publications, including on financial inclusion and development, the determinants of interest rate spreads, and tourism in the Caribbean.
- You are at the end of your tour of duty in the Gambia, what would you describe as your biggest achievement? And how do you come to achieve great things for the Gambia?
That’s an excellent question.
I think I would have to respond by saying that everything that has been achieved in The Gambia during my tenure as Res. Rep. has been a collective team effort—on the part of the Gambian authorities, the IMF Mission Chief and Team, development and diplomatic partners, the private sector, banking community, legislators, the Diaspora as well as the staff of our IMF Resident Representative Office in The Gambia. I think that together we can all take great pride in the dramatic improvement of the economy and achievement of macroeconomic stability since the outset of the administration of President Adama Barrow in January 2017.
By macroeconomic stability, we mean first and foremost the reduction of inflation from its peak of 8.8 percent in January 2017 to an average of 6.7 percent through June in 2019; the stabilization of the exchange rate; the accumulation of international reserves supported by the restoration of business and investor confidence; a pickup in private investment and concomitantly an acceleration of economic growth. The improved inflationary outlook also paved the way for the Central Bank of The Gambia to ease its monetary stance, successively lowering its policy rate from a peak of 23 Percent in December 2016 to the current rate of 12.5 percent. This policy rate has successfully transmitted through to commercial bank lending rates, which have successively declined. However, to sustain the recovery, it will be important to maintain the reform momentum.
Underpinning this recovery first and foremost is the Gambian authorities’ commitment to the pursuit of fiscal discipline to help curb fiscal excesses and reduce the government’s domestic borrowing requirement, which helped to create a more enabling environment and space for banks to resume lending to the private sector, for productive purposes. As a result, we have seen private sector credit rebound from its previous declining trend to a 12-month change of 33 percent in April 2019!
The authorities as you know received a disbursement under the IMF’s Rapid Credit Facility in early 2017 equivalent to US$16.1 million to enable The Gambian authorities to meet the country’s urgent balance of payment needs. In June 2017, the Gambian authorities reached agreement with the IMF on a Staff Monitored Program (SMP), which is the shadow program that is providing the Gambia with the opportunity to demonstrate its commitment to structural reforms that will facilitate access to a financial arrangement under the IMF’s concessional Extended Credit Facility (ECF). An agreement with the IMF is also catalytic, as it helps to pave the way for other development partners to provide much-needed budget support, mostly as grants, to help the government to finance its budgetary priorities, which are determined by the National Development Plan (NDP).
It is important to note that most donors rely on the IMF’s macroeconomic assessment to unlock disbursements of budget support, so the IMF has an important fiduciary responsibility to other international partners to ensure that the government’s macroeconomic policies are internally consistent and sound. This is a big responsibility that the IMF does not take lightly. Since money is fungible, development partners want to ensure that the taxpayer funds that they are providing in the form of budget support will be well spent. So, in keeping with this mandate, the IMF tries to strengthen public financial management in The Gambia and other member countries to ensure that public resources are well managed and put to good use.
In order to help carry out this responsibility, the IMF provides extensive technical assistance to help The Gambian authorities and other member countries to help mobilize adequate domestic revenues and strengthen economic governance and transparency, including through improved public financial management.
Lastly, I am also very proud of the IMF Regional Media Training Course for Anglophone West Africa that we hosted here in The Gambia in February, and of our successful sponsorship of two Gambian Journalists to participate in the Media Training Program during the Spring Meetings of the IMF and World Bank in Washington D.C.
- Many Gambians hailed you for your commitment to Gambia since the dawn of new democratic change, what profound memories are taking home?
I would like to stress once again that this is really not about me. As Fund staff, we are here in an advisory role, and it is up to the authorities to act on that advice, and so far, we have had an excellent working relationship with The Gambian authorities. In fact, there is a painting hanging in our office created by a local artist that summarizes the IMF’s role as: “a Coach (referring to our function as an economic advisor), a Doctor(through our economic surveillance), a Firefighter (referencing our program work), and an Architect (helping to strengthen the global financial system)”, and I think this caption best describes our role.
During my tenure as IMF Res. Rep. we had a historic visit by IMF Deputy Managing Director Tao Zhang, which was truly memorable. During the course of his visit, DMD Zhang had a wonderful visit with His Excellency President Adama Barrow, during which President Barrow expressed his appreciation for the role of the IMF and his administration’s personal commitment to working with the IMF to ensure a continued satisfactory program engagement and a successful transition to a financial arrangement under IMF’s Extended Credit facility (ECF). These assurances really resonated extremely well with DMD Zhang and was also extremely encouraging to the Gambian Team.
I am also heartened by the memorial service at The SOS Children’s Village in honor of former IMF Mission Chief Ulrich Jacoby. The staff and students at SOS Children’s Village put together an AMAZING program of eloquent speeches, song, dance and poetry recitation that helped to truly honor the memory of our former Mission Chief.
- Tell us about the IMF’s areas of support to The Gambia? And how did this help the country in its economic recovery efforts?
As I mentioned before, the IMF Executive Board’s approval of the disbursement under the Rapid Credit Facility in 2017 helped to catalyze additional financial assistance in the form of budget support (of just under US$100 million, equivalent to about D5 billion) from development partners to help meet the country’s remaining financing needs.
In addition, as you know the current administration inherited a sizable debt overhang—so this is largely a legacy issue. However, regardless of its origin, the Gambia’s high and unsustainable public debt exposes the country to significant vulnerabilities, and the IMF is working with the Gambian government to help restore debt sustainability. For instance, it is helping the government to address fiscal risks and reduce debt vulnerabilities by providing technical assistance to refine the Gambia’s medium-term debt management strategy and lengthen the maturity of domestic debt.
The IMF is also supporting The Gambia’s efforts to make room for priority pro-poor and infrastructure spending by obtaining a five-year deferral from its external creditors of debt service payments and supporting the mobilization of highly concessional financing to help achieve and foster debt sustainability over the medium term. The government is represented by very skillful debt advisors, and I am pleased to report that the talks with The Gambia’s external creditors are now well-advanced. Indeed, President Barrow’s announcement last week of India’s debt restructuring is tangible evidence of this! However, until debt sustainability is actually restored through the finalization of the ongoing external debt restructuring talks with all external creditor, the authorities have agreed to prioritize grants, and borrow externally only on highly concessional terms (i.e. a grant element of 50 percent or more).
Finally, the IMF is assisting with technical assistance and capacity development in The Gambia in several areas that are important for promoting macroeconomic stability, inclusive growth, and financial stability. Key areas of focus include: national accounts and price statistics; public financial management—including establishment of a Treasury Single Account; cash management and public expenditure controls; public investment management; debt management; fiscal reporting; SOE performance contracting; and taxation administration and policy. On the financial side, TA is being provided on monetary policy and operations; risk-based financial supervision; and payments systems operations and oversight.
- Randall, what are your impression about the Gambia’s journey towards recovery?
I personally feel very privileged to have served in The Gambia at such a pivotal time in the country’s history. The Gambia’s economic recovery over the past two years has clearly been impressive and it is my considered hope that we are now witnessing what might someday be known as the beginning of The Gambia’s economic transformation! It is clear that with the continued support of its international partners and if followed and sustained The Gambia’s current reform path will lead to enhanced productivity, export diversification, more-inclusive growth and greater prosperity for The Gambian people.
Although it is important to acknowledge the tremendous progress to date, it is also important to emphasize that further progress will require perseverance and policy consistency. And so, there is an urgent need to stay the course with the reform agenda. Hence, notwithstanding the macroeconomic gains earlier referenced, it is important to note that there is still work to be done to help the country to achieve the objectives that it has set for itself in its National Development Plan.
Looking ahead, critical reform priorities include: the restoration of debt sustainability through debt restructuring and fiscal prudence; civil service and security sector reform to improve public sector accountability, efficiency and productivity; reform of State-Owned Enterprises (SoEs) to enhance their accountability, profitability and transparency, with a view to enhancing their value addition and reducing their financial dependency on the government; and the establishment of an Anti-Corruption Commission to strengthen economic governance. Finally, the much-anticipated release of the Janneh Commission Report and accompanying White Paper is expected to launch a very important process of stolen asset recovery. This has the potential for much-needed windfall gains to the budget where it can be put to good use to finance critically-important social and development spending.
With respect to the financial sector there is a need to continue to maintain exchange rate stability and soundness of the financial sector through strengthened regulatory and supervisory oversight and advance economic growth through financial inclusion and development (including capital market development and access to finance).
Lastly, as DMD Zhang pointed out in his public lecture, regional integration can serve as an important driver for transformational change in The Gambia by: (I) facilitating enhanced trade in goods and services, such as tourism, as well as increased private capital inflows, and remittances from Gambians working abroad; (ii) providing the scope for regional infrastructure development, such as with the Senegambia Bridge; and (iii) providing avenues for enhanced competitiveness.
- And any final word?
The Gambia is known to be the “Smiling Coast” and is a highly tolerant and accepting society. In my view, this is one of the Gambia’s greatest assets, as this openness makes it a wonderful place to live in and serves to underpin the strong tourism demand and investor confidence that is helping to fuel the economic recovery. Suffice it to say that it is my considered hope that this will never change.
I also wanted to take a minute to thank my staff—we are a very small office with a very big mandate—and I am proud of the work that we have done together.
I would also like to thank His Excellency President Adama Barrow and his economic team at the Office of the President who have given us important access and allowed us to engage with them, as well as our erstwhile principal counterparts in the Ministry of Finance and Economic Affairs (MoFEA) and at the Central Bank of the Gambia, headed by Honorable Mambury Njie and Governor Bakary Jammeh, respectively. They have both been extremely accessible and engaged with me and my office openly and forthrightly.
I would be remiss if I did not thank my Mission Chief Jaroslaw Wieczorek, our IMF Reviewer Annalisa Fedelino, and my colleagues on the Gambia Team, and our TA providers who are all extremely talented Economists, hard-working, and passionate about their work on The Gambia.
Finally, I hope that the current IMF Staff Monitored Program will stay on track, and that I can look forward to celebrating with all of you when The Gambia successfully transitions to a financial program under Extended Credit Facility.
Thanks Sainey! As always, it’s been a real pleasure speaking with you.
The Author Sainey MK Marenah is the first Gambian IMF Journalism Fellow (2018) and currently head of Media and Communications at The Constitutional Review Commission. He also works with Gambia Radio and Television Service as Social Media Strategist and Editor.