The Gambia: US$ 6 Million for Poverty Reduction Budget Support Program

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Tunis, 8 February 2009 -  The Gambia government will benefit from a grant of 4 million Units of Account (UA*), equivalent to US$ 6 million, for the implementation of its Poverty Reduction Budget Support (PRBS) program, following an agreement signed by the African Development Bank Group and the government on Friday, 6 February 2009, in Tunis.

The agreement was signed by the Bank Group’s Vice President for operations, Ms. Zeinab El-Bakri, and the Permanent Secretary in The Gambian Department of State for Finance and Economic Affairs, Mr. Mod K. Secka,  in the presence of the Executive Director for Gambia, Mr. Francis Karpeh.

The grant comprises two tranches of UA 1.0 million for meeting the increased cost of food imports and a second tranche of UA 3.0 million in support of financial management and civil service reforms.

The PRBS is a component of the Gambia General Budget Support Program (GBSP) which was jointly conceived by the AfDB, the World Bank and the European Union. Its overarching objective is to contribute to the country’s economic growth and poverty reduction efforts through policy and institutional reforms.

It is consistent with the goals of the country’s Poverty Reduction Strategy Paper (2007-2011) and, in particular, focuses on “strengthening economic management and public service delivery”. The objectives of the program are to promote efficiency, transparency and accountability in the use of public resources through effective budget planning, auditing and increased revenue mobilization. It is also designed to improve public service delivery through civil service reforms as well as provide budget support to absorb the fiscal and balance of payments impact of the prevailing global economic crisis which has resulted in escalating food and fuel prices.

The increased tax revenue will enable the government to maintain macroeconomic stability in the face of rising public expenditure to meet current budget expenses such as the anticipated increase in the civil service pay bill as well as increased food and fuel prices, among others.

Programs to be funded from the grant are expected to help alleviate poverty and improve service delivery systems in education, health and agriculture, through improved access to education, basic health services and increased output in the agricultural sector.

The budget support component of the grant will offset the customs and sales waiver on rice and contribute to poverty reduction while the grant from he Bank Group’s Africa Food Security Framework would help reduce fiduciary risks arising from subsidies on food imports and contribute to macroeconomic stability.

*1 UA = US$ 1.49192 as at 08/02/2009

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