NEWS IMF REPORT ON GAMBIA, UNVEILS A "TOTAL BREAKDOWN AT THE CENTRAL BANK" -TALES OF ECONOMIC MISMANGEMENT, DECEPTION, AND LACK OF TRANSPARENCY BY STAFF WRITER -------------------------------------------------------------------------------- September 8, 2005 A report issued by the International Monetary Fund IMF had indicted the Ruling APRC government for gross economic mismanagement, misrepresentation of financial figures, deception and lack of transparency, the ALLGAMBIAN online newspaper can reveal. In what was widely described as a shocking IMF report against the tiny West African country, the world monetary body hinted about a "total breakdown of internal controls" at the Central Bank of The Gambia, which was a subject of probe by a South African auditing firm. The IMF Executive board report dated July 18, 2005 on Gambia says "It was discovered in 2003 that The Gambia had misreported to the Fund net international reserves by US$38.8 million at end-December 2001 and failed to record US$28.5 million in government expenditures. The Executive Board concluded that The Gambia had received two noncomplying disbursements, equivalent to SDR 3.435 million each in July and December 2001 (See Press Release No. 04/49). The authorities repaid these disbursements in 2004 in four equal installments, with the last payment made ahead of schedule." The IMF report also says "The Gambia's economic performance since the mid-1980s has been uneven owing to exogenous shocks, macroeconomic and structural policy slippage, poor governance, and weak institutions. The economy's vulnerability to shocks stems from a lack of economic diversification. In addition, economic performance has been constrained by policy distortions and by recurrent weaknesses in fiscal policy." The report also went further to state that expansionary policies have increased the government's recourse to domestic bank financing, which, in turn, has raised real interest rates, increased the domestic debt burden, and tended to crowd out private investment. According to the IMF Executive board in 1998, Gambia's authorities entered into a three-year program under the Enhanced Structural Adjustment Facility (ESAF), which was converted into a Poverty Reduction and Growth Facility (PRGF) arrangement. In July 2002, the report went on the Board approved a new three-year PRGF arrangement (See News Brief No. 02/74 and Press Release No. 02/32), but the first review was not completed because of weak policy implementation and governance problems. "It was discovered in 2003 that The Gambia had misreported to the Fund net international reserves by US$38.8 million at end -December 2001 and failed to record US$28.5 million in government expenditures. The Executive Board concluded that The Gambia had received two noncomplying disbursements, equivalent to SDR 3.435 million each in July and December 2001 (See Press Release No. 04/49). The authorities repaid these disbursements in 2004 in four equal installments, with the last payment made ahead of schedule." said the IMF statement. Consequently said the report, "The Executive Directors urged the authorities, during the Article IV consultation in 2004, to commission a re-audit of the Central Bank of The Gambia's (CBG's) 2001 and 2002 financial statements on terms of reference agreed with Fund staff. The Directors also stressed the need for a special audit of foreign exchange transactions between 2000 and 2003. These audits have now been completed and confirm the breakdown of internal controls at the central bank that were observed during the IMF's Safeguard Assessment mission conducted in November 2003." According to the IMF report which was received by the ALLGAMBIAN, the audit reports restate general ledger balances for external reserves for various test dates between end -December 2000 and end -December 2003, which are significantly lower than the originally recorded balances. The auditors said the report, have issued a disclaimer indicating that they were unable to express an opinion on the 2001 and 2002 accounts largely because of the lack of documentation supporting several foreign exchange transactions. See the full text of the IMF financial report on Gambia Go To Top -------------------------------------------------------------------------------- Copyright © 2004 AllGambian.Net. 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