The Gambia - Public Expenditure Review (Vol. 2 of 2) - Key Messages

Jul 19, 2026

Upload by Aurelia

The Gambia faces elevated debt distress risk alongside major infrastructure and social investment needs. The analysis outlines three medium-term channels to sustain fiscal stability: raising tax revenues, pursuing fiscal consolidation through more efficient spending, and strengthening public financial management. It also highlights sector response priorities, including reinvesting efficiency gains in education, security, and health, improving intra- and inter-sector spending composition, and redirecting resources from interest and transfers toward social sectors and public investment.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages22

Reading Time55 min

AccessFree to download

Key messages

Macro-fiscal context

Revenue mobilization

Expenditure trends

Education

Security

Health

Public investment management

Public procurement

Treasury Single Account

Conclusion

Knowledge gaps

Authorized Pub lic Disclosure Authorized Public Mehwish Ashraf & Susana Sanchez EA2M1 June 2020 Motivation The Gambia is at high risk of debt distress and has huge infrastructure and social investment needs. A) 2 channels to maintain debt sustainability: • Higher growth • Fiscal consolidation through: - Increased revenues - More efficient spending B) 2 ways to respond to growing demands for better public services: • Reinvest efficiency gains towards better social outcomes • Improve the composition of intra-and inter-sector spending Choice of sectors/themes defined by: • Budget size • Recent PERs • Scope for efficiency gains & fiscal savings PER Coverage: 2/3 of total expenditure Public Expenditure (2018,% of GDP) Key messages Public debt could fall to 58% of GDP by 2024 if GoTG pursues 3.7% of GDP over 2020-2024 or 0.74% per year… Key of fiscal consolidation: • Higher tax revenues • SOE reforms • Better public investment management • Consolidated and competitive procurement of standardized goods & services • Fully functional TSA …while by: • tackling spending inefficiencies in education, security and health, • reinvesting gains achieved in social sectors, • improving sector spending composition to meet priority needs, and • redirecting spending away from interest and transfers to social sectors and public investment. 4.87% of GDP. Of these: • 1.57% could be reinvested in education and health. • Rest could almost cover the required fiscal consolidation. The COVID-19 pandemic has highlighted the need to build during good times . OUTLINE 1 Macro-fiscal context 2 Revenue mobilization 3 Expenditure trends 4 Education 5 Security 6 Health 7 Public investment management 8 Public procurement 9 Treasury Single Account 10 Conclusion 11 Knowledge gaps Macro-fiscal context 1 • Macroeconomic stability has been preserved since 2017. • However, structural fiscal deficit and public debt remain high. • Over-reliance on domestic debt translates to higher interest-rate andrefinancing risks. • Reversing the chronic fiscal imbalances and debt vulnerabilities are the main medium-term economic challenges. Fiscal and Primary Balances (% of GDP), 2006-2019 Fiscal Sustainability Analysis: 2016-2024 * All scenarios include debt restructuring. 1 Policy Recommendations The Gambia could simultaneously use three channels to maintain fiscal sustainability over the medium-term: • Increase tax revenues • Implement the approved debt strategy • Enhance SOE governance • Improve public financial management Revenue mobilization • Tax revenue is 11% of GDP and lags behind its peers. • The Gambia depends increasingly on VAT in line with peers. • However, it collects just 0.25% of GDP for every 1 percentage point of the VAT rate. Peers are at 0.4% . • Corporate Income Tax and Personal Income Tax collections are lowest among most peers. • Key drivers of low tax collection: (i) Low tax rates and thresholds, (ii) Significant exemptions (≈ 2.8% of GDP at the border),(iii) Extremely low policy and administrative capacity. • Structural tax gap is estimated at 4–6% of GDP. 2 The Gambia and Peers: Tax Revenue, 2016 or Latest Available 2 Policy Recommendations (= 3.3% of GDP) • Rationalize corporate tax incentives and enchance efficieny of tax exemptions at the border and domestically (= 0 .8% of GDP) . • Revert the rate structure on PIT to earlier practice (= 0 .4% of GDP) . • Adjust key excise rates and expand the domestic excise base (= 0 .6% of GDP) . • Improve institutional capacity by creating a tax policy unit in the MOFEA. • Enhance tax administration capacity by modernizing business processes and IT systems (= 1.5% of GDP) . • Elaborate a Medium-Term Revenue Strategy. Expenditure trends • Government size is lower than peers. • Three main patterns emerge: - Capital spending is higher than stru

FAQs

What are the main channels proposed to maintain debt sustainability in The Gambia?

The document proposes two channels: higher growth and fiscal consolidation through increased revenues and more efficient spending.

How does the report describe the role of fiscal consolidation and sector spending priorities?

It emphasizes consolidating fiscal finances while redirecting spending from interest and transfers toward social sectors and public investment, supported by tackling spending inefficiencies and improving spending composition.

What policy recommendations are highlighted for revenue mobilization?

Key recommendations include rationalizing corporate tax incentives and improving tax exemption efficiency, adjusting personal income tax and excise rates, creating a tax policy unit, modernizing tax administration with IT systems, and developing a medium-term revenue strategy.

Jul 19, 2026

Upload by Aurelia