Overview
As of May 21, The Gambia has registered 24 confirmed cases of COVID-19. One infected person died, 13 recovered, and ten are still undergoing treatment. Of the 24 confirmed cases, 15 were imported, while the remaining 9 cases were through local contagion. 108 people are currently under quarantine. A large operation of voluntary testing at community level was conducted around Bakau (Greater Banjul area) a fortnight ago, after detecting a few cases there. The President declared a state of emergency starting March 27 including closing all non-essential public and private businesses following the earlier order to close the airspace and land borders for 21 days. On April 4, the National Assembly approved the extension of the state of emergency for 45 days. Emergency powers were used to freeze prices of essential commodities, such as rice, meat, fish, cooking oil soap, sanitizers and cement. To enforce social distancing, all commercial vehicles are only allowed to carry half of their licensed passengers. All public gatherings including funerals are limited to a maximum of 10 people. Tourism—a key driver of foreign exchange and trade has halted and is experiencing difficulties. Interest rate on T-bills has increased. Remittances have fallen due to the stoppage of private transfers through informal channels outweighing the increase in private transfers through formal channels (banks, money transfer operators).
The National Assembly declined to approve a second 45-day extension of the state of emergency early this week. However, based on the role played by the emergency measures in containing the spread of the disease, the President used the executive power to proceed with the extension by the maximum 21 days period effective May 19 (which is allowed under the Constitution as the National Assembly is now not in session). Meanwhile, a supplementary appropriation bill is being prepared, among others, to seek NA approval for the revision of spending plans in response to the pandemic and to ensure accountability for COVID-19 related expenditures.
Travel Restrictions
- Flights to Gambia are suspended.
Source : IATA Timatic
Economic Measures
Reopening of the economy. The emergency powers were recently eased to allow partial reopening of businesses. Buses are being provided and fuel prices were reduced to prevent transport price hikes and help ease the burden on commercial vehicles which are required to carry only half of their capacity. The ease of the lockdown measures in Senegal including the reopening of mosques is creating pressure for the authorities in The Gambia, who have hitherto remained firm, to follow suit.
Key Policy Responses
FISCAL
-
In mid-March, the authorities prepared a US$9 million (0.5 percent of GDP) COVID-19 action plan, for which they have already obtained grant financing. The government has reallocated 500 million dalasi (0.6 percent of GDP) from the current budget to the Ministry of Health and other relevant public entities for containment measures to prevent and control the spread of the COVID-19 outbreak. The government has also launched a student relief fund to support Gambian students abroad and a GMD 800 million (US$15.8 million) nation-wide food distribution program to benefit 84 percent of the households. In addition, 2000 tons of fertilizer will be distributed to support the needs of farmers. These actions that benefit from the technical support of partners including WFP and FAO, are subject to enhanced oversight by the National Assembly. The authorities are working on a relief package for the municipal councils and the tourism sector. RCF and CCRT financing from the IMF (see below) could be used to cover these additional costs.
Donor agencies, including the UNDP, WFP, WHO, FAO, UNICEF, UNFP and UNICEF, have focused financial assistance (about $1.5 million cumulatively, so far) to strengthen social assistance support for programs aimed at vulnerable groups impacted by COVID-19 by improving communication, safeguarding nutrition and ensuring food security. The WFP provided technical support and training on targeting, design and distribution of the government food relief program, and it is also working on a food distribution program. On April 2, The World Bank (WB) approved a US$10 million grant for the COVID-19 Response and Preparedness Project to enhance case detection, tracing, prevention, and social distancing communication as well as the provision of equipment to isolation and treatment centers. The WB is accelerating the rollout of its Social Safety Net project to help mitigate the impact of COVID-19 on the most vulnerable population. The European commission provided at end-April a Euro 9 million COVID-19 support to Gambia. Many of the other donors will also be expanding their social assistance support through cash transfers using mobile money and direct payments targeted to poor households, new mothers and farmers using existing databases of past recipients, village lists and voter rolls.
The Gambia Revenue Authority has extended, by two months, the filing of the 2019 annual tax return and the payment of final 2019 tax, as well as for the filing of the first quarter 2020 declaration and the payment of the first quarter installment. It has also revised down its annual revenue target by about 2.2 percent of GDP.
MONETARY AND FINANCIAL
-
Domestic financial conditions have tightened with the average yield on the most utilized 364-day T-bills increasing to 11.84 percent (444 bps higher in late-May than at end-December 2019). To ease liquidity conditions, the central bank (CBG) reduced the monetary policy rate by 50 basis points at end-February 2020 to 12 percent and increased the standing deposit facility rate by the same margin to 3 percent. The CBG is also actively monitoring the situation, remains in close communication with the commercial banks, and stands ready to respond to the situation as inflationary pressures warrant. Further measures are under consideration to provide emergency liquidity support, together with increased intensity and frequency of supervision to address any financial stability concerns. The CBG successfully completed a remote IMF safeguard assessment mission, which found good progress made by the CBG since the last assessment in 2017. The CBG in consultation with MoFEA will be looking to implement the recommendations in the near term.
EXCHANGE RATES AND BALANCE OF PAYMENTS
-
The CBG stepped up the monitoring of banks’ FX net open positions but has not imposed any specific exchange measures; the CBG is committed to maintaining a flexible exchange rate to absorb balance-of-payments (BOP) shocks.
On April 15, the Executive Board of the IMF approved a US$21.3 million for The Gambia under the Rapid Credit Facility (RCF), which could be on-lent to the Treasury. The RCF support supplements earlier financing from the IMF under a US$47.1 million Extended Credit Facility (ECF) arrangement approved on March 23, 2020. To accommodate the worsened BOP outlook, the IMF also agreed to modify the performance criteria on net usable international reserves and net domestic assets of the central bank under the ECF-supported program. The Gambia has also benefited from debt relief under the catastrophe containment window of the Catastrophe Containment and Relief Trust (CCRT) approved on April 13, 2020. The first tranche of US$2.9 million (corresponding to debt service due to the Fund in the first six months of 2020) has been already approved for delivery. The total debt relief can be extended up to US$10.8 million if resources are identified to extend the initiative for 24 months. The Gambia is also seeking debt service deferral under the G20 initiative that could provide between US$0.81 million from the creditors already endorsing the initiative to close to US$8.39 million if the plurilateral and private creditors endorse the initiative.
Source : IMF & WB
Civic Freedom Tracker
STATE OF EMERGENCY
The President declares a 21-day state of "public emergency" on account of the coronavirus pandemic. (See primary source or citation here)
Type: order
Date Introduced: 18 Mar 2020
Issue(s): Emergency
Source : ICNL
