Almost 10 months after the unexpected defeat of erratic president Yahya Jammeh, cover for short-term transactions is resumed. Indeed, Gambia’s short-term political risk was upgraded to category 6 (from off-cover category 7). The foremost reason is the apparent gradual recovery in foreign exchange reserves. Nevertheless, the current account deficit remains wide and is even projected to grow somewhat. Yet it is likely to be financed by recovering donor support and higher FDI inflows. Nonetheless, Credendo will remain off cover for public buyers. The new government inherited dire public finances that are currently still under great pressure. Public interest payments are expected to absorb more than 30% of general government revenues this year. In fact, the Gambian government is still in debt distress according to the IMF. Consequently, the non-payment risk for public debtors remains elevated.
18 Sep 2018
Gambie: In external debt distress despite impressive stabilisation
Event Gambia’s external and public debt position is unsustainable and according to the IMF’s last ‘Debt Sustainability Analysis’, the country ...