The Board of Directors of the World Bank, on Tuesday, May 10, 2022, approved the second Development Policy Financing of Fiscal Management Reform, Energy, and Telecommunications (DPF). The DPF will support The Gambia’s efforts to improve debt and public investment management, financial sustainability and service delivery in the energy and telecommunications sectors while strengthening the corporate transparency and governance framework. (SOE).
This funding, in the amount of $20 million in IDA (International Development Association) Development Policy Grants, for the second and final operation in the programmatic series, will support the government’s inclusive growth agenda by contributing to its efforts to create fiscal space as well as improve service delivery in key infrastructure sectors.
“The reforms that will be addressed under the DPF are very important to support the country’s economic recovery and address macroeconomic vulnerabilities amid the COVID-19 pandemic and global instability,” said Feyi Boroffice, Representative resident of the World Bank. “When addressed, they will help diversify economic growth and generate fiscal space for investments in human capital and physical infrastructure to boost growth and accelerate poverty reduction over the medium term.”
The priorities of the DPF are linked to the country’s National Development Plan (NDP) for 2018-2022, which emphasizes economic stabilisation, boosting growth and structural transformation as key priorities for The Gambia, and the three pillars of the DPF series support these goals.
The DPF supports other NDP strategic priorities and cross-cutting enablers, including restoring good governance, building infrastructure and restoring energy services, promoting environmental sustainability and climate-resilient communities, making private sector the main driver of growth, improving the efficiency of the public sector and strengthening evidence-based policies, planning and decision-making.
The DPF will support a series of measures to improve and strengthen fiscal risks and debt management by introducing a management framework for government loan guarantees and publishing an annual borrowing plan (PBA), strengthening public investment management by improving project selection and appraisal and supporting procurement. reforms to ensure consistent use of tenders and oversight of the procurement process.
The DPF will also support financial sustainability and service delivery in the energy and telecommunications sectors by strengthening the overall financial position and governance framework of the National Water and Electricity Corporation (NAWEC) through a new tariff compensation mechanism and the introduction of performance contracts and quarterly performance monitoring framework and the creation of a Directorate for the supervision of public enterprises within the Ministry of Finance and Economic Affairs.
The DPF will support further liberalization of the telecommunications sector, which will encourage greater private sector participation in the sector, enhance competition, improve service delivery and ultimately reduce costs for both businesses only for consumers.
“As the economy has begun to recover from the pandemic, this operation is supporting reforms in line with Pillar 4 – Strengthening Policies, Institutions and Investments to Build Back Better – of the COVID Crisis Response Approach Paper- 19 to strengthen the fiscal resilience of the economy which can increase fiscal space and improve the management of public resources.This improvement will spur sustainable growth and job creation, and enhance private sector engagement over the medium term said Mehwish Ashraf, World Bank Country Economist and Team Leader.
The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and loans at low or no interest rates for projects and programs that stimulate economic growth, reduce poverty and improve the lives of the poor. IDA is one of the largest sources of aid to the world’s 74 poorest countries, 39 of them in Africa. IDA resources bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has provided $458 billion to 114 countries. Annual commitments averaged around $29 billion over the past three years (FY19-FY21), of which around 70% went to Africa.