THE GAMBIA - JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS - High External and Overall Debt Distress Risk

Jul 19, 2026

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The Gambia’s overall and external debt distress risk ratings remain high, while public debt is assessed as sustainable. Under the updated macroeconomic framework, breaches persist against indicative thresholds for the present value of external debt-to-exports, external debt service-to-exports, and external debt service-to-revenue. The gaps largely stem from weaker projected exports in the early years and higher medium-term debt service commitments. The overall public debt-to-GDP path trends downward, supported by fiscal consolidation and reliance on grants and concessional borrowing.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages20

Reading Time50 min

Risk ratings and overall assessment

External debt distress risk

Public debt sustainability and granularity

Threshold breaches under the updated macro framework

Debt-to-exports and debt service indicators

Drivers of breaches: exports and debt service

Debt outlook and downside risks

Public debt-to-GDP dynamics

Vulnerabilities linked to geopolitical and pandemic shocks

Public Disclosure Pub lic Disc losure Authorized Approved by: Abebe Adugna and Manuela Francisco (IDA) and Montfort Mlachila and Geremia Palomba (IMF) Prepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF) . | THE GAMBIA: JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS | | | --- | --- | | Risk of external debt distress | High | | Overall risk of debt distress | High | | Granularity in the risk rating | Sustainable | | Application of judgment | No | The Gambia’s overall and external debt distress risk ratings remain high and public debt continues to be deemed sustainable,1 similar to the previous DSA. Under the updated macro framework, there remain breaches of the indicative thresholds for the PV of external debt-to-exports, external debt service-to-exports and external debt serviceto-revenue. These breaches primarily reflect continued weaknesses in projected exports in the early years and rising debt service commitments in the medium term. Similar to that estimated in the previous DSA, the PV of overall debtto-GDP ratio remains on a downward sloping path and drops below its benchmark of 55 percent of GDP in 2024, underpinned by fiscal consolidation, reliance on grants and concessional loans, and support from development partners. This path indicates that the public debt outlook remains sustainable. Downside risks are linked to the protracted Russia’s invasion of Ukraine and the path of the COVID-19 pandemic that could weaken economic recovery, intensify fiscal pressures, and adversely affect the debt profile. 1 The Gambia’s Composite Index is estimated at 2.99 and is based on October 2023 WEO update and 2022 WB CPIA that was published in July 2023; the debt carrying capacity remains medium. 1. Similar to the previous DSA in June 2023 (sixth ECF review), the current DSA uses end- 2022 data as a starting point. The DSA uses a broader coverage of the public sector, which includes the central government, central bank and government-contracted debt pertaining to State-owned enterprises (SOEs) (Text Table 1) 2 ,3. SOE debt linked to trade credit from the Islamic Trade Finance Corporation (ITFC) is accounted for in the government debt. This includes short-term external financing to the large SOEs, namely, the National Water and Electric Company (NAWEC) and the Gambia National Petroleum Company (GNPC) .4 Additionally, the coverage for the contingent liabilities test uses default settings for financial markets (at the minimum of 5 percent of GDP), representing the average cost to the government from a potential financial crisis in a low-income country, and SOE debt (at 2.0 percent of GDP for debt not explicitly guaranteed by the government) .5 Exposures to PPPs are set at zero, as PPPs in The Gambia are estimated to be marginal as a proportion of GDP. The DSA uses a currency-based definition of external debt. There is no significant difference between a currency-based and residency-based definition of external debt.6 | | Subsectors of the public sector Check box Central government X State and local government Other elements in the general government o/w: Social security fund o/w: Extra budgetary funds (EBFs) Guarantees (to other entities in the public and private sector, including to SOEs) X Central bank (borrowed on behalf of the government) X Non-guaranteed SOE debt | | --- | --- | | 1 2 3 4 5 6 7 8 | | | 1 | The country's coverage of public debt The central government, central bank, government-guaranteed debt | | | | | | --- | --- | --- | --- | --- | --- | | | | | Default | Used for the analysis | Reasons for deviations from the default settings | | 2 | Other elements of the general government not captured in 1. | 0 | percent of GDP | 0 | | | 3 | SoE's debt (guaranteed and not guaranteed by the government) 1/ | 2 | percent of GDP | 2.0 | | | 4 | PPP | 35 | percent of PPP stock | 0.00 | PPPs are estimated t

FAQs

What are the Gambia’s overall and external debt distress risk ratings?

Both the overall risk of debt distress and the risk of external debt distress remain High. Granularity in the risk rating is marked as Sustainable.

Which debt indicators breach the indicative thresholds under the updated macro framework?

Breaches occur for the PV of external debt-to-exports, external debt service-to-exports, and external debt service-to-revenue.

Why do these threshold breaches persist?

They primarily reflect continued weaknesses in projected exports in the early years and rising debt service commitments in the medium term.

Jul 19, 2026

Upload by Patrick