Africa-Press – Gambia. The World Bank has issued a warning to The Gambia highlighting the urgent need for reforms in revenue spending and debt management to avoid crippling its economy.
The warning came in a report by the World Bank’s Economic Policy Global Department, working alongside the Gambia Bureau of Statistics, supported by international research teams. Called the Spring 2025 Gambia Economic Update under the title “Public Debt: An Achilles Heel, released yesterday.
The report captured The Gambia as a country experiencing a remarkable rebound in growth while simultaneously grappling with an unsustainable debt burden that threatens to undo its progress.
According to the report, despite the country’s recent economic rebound and a promising growth rate of 5.7% in 2024 driven by agriculture, services, remittances and tourism, the shadow of mounting public debt looms large as a critical vulnerability.
It concludes that without bold reforms in revenue, spending, and debt management, this “Achilles heel” could derail The Gambia’s fragile economic progress.
Debt
The centerpiece of the report is its stark warning on debt.
According to the World Bank, having received major relief under the Heavily Indebted Poor Countries initiative in 2007, The Gambia has since watched its debt stock swell again to unsustainable levels.
“Most of it is external, owed to powerful multilateral creditors such as the Islamic Development Bank, IMF, IDA, and BADEA, as well as bilateral partners including Saudi Arabia, Kuwait and India. On the domestic side, commercial banks remain the primary financiers.”
The report argued that debt service obligations are swallowing scarce resources and pushing the country into a cycle of borrowing to pay off past loans.
“The Gambia has moved far beyond the optimal threshold, with debt now acting as a brake on economic performance. Crowded-out investment, higher borrowing costs, and exchange rate stress are the most visible consequences,” the report said.
Good news
In 2024, the report added, The Gambia’s economy grew by 5.7 percent, up from 4.8 percent the previous year, with per capita growth climbing to 3.4 percent.
It added that agriculture and services were the twin engines of this recovery, supported by fertiliser subsidies, improved seed distribution, and a near-full revival of the tourism industry.
“Demand was equally robust, powered by remittance-driven consumption and government spending related to preparations for the Organisation of Islamic Cooperation summit. For the first time in years, The Gambia outpaced both Sub-Saharan Africa and Ecowas averages, a reversal of its long-standing underperformance.”
The report further stated that the banking system remains dominated by government securities, yet it is described as sound and adequately capitalised.
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