• Debt service could cut Gambia’s growth by 1.2 GDP points between 2025 and 2028.

• Public debt fell to 71.2% of GDP in 2024 but still poses high sustainability risks.

• Reforms aim to strengthen debt management and maintain budget discipline.

The World Bank projects that external debt service will reduce Gambia’s economic growth by about 1.2 percentage points of GDP between 2025 and 2028, according to its latest report, “The Gambia’s Public Debt: An Achilles Heel?” In 2024, debt service already accounted for 6.5% of GDP, or more than one-third of public spending, significantly limiting budget allocations for key sectors such as health and education.

For 2025, the Bank expects debt service to absorb 29% of the national budget, well above the 20.8% forecast by the Gambian government. Annual interest payments are projected to rise from $54.8 million in 2024 to about $90.6 million between 2025 and 2028, further straining public finances, the institution added.

Despite a relative decline in total public debt—from 83.2% of GDP in 2022 to 71.2% in 2024—Gambia remains at high risk of debt distress. External debt still dominates, accounting for 64.5% of the total, mostly multilateral, while domestic debt is mainly held by commercial banks.

As part of its debt management strategy, Gambia has launched significant reforms to reduce risks and strengthen fiscal sustainability. The country has adopted a medium-term debt management strategy covering 2023–2027 and an annual borrowing plan aligned with this roadmap.

Capacity-building and legal reforms are also underway. In July 2025, over 40 Gambian officials received training from the African Legal Support Facility (ALSF) and the West African Institute for Financial and Economic Management (WAIFEM) on technical and legal aspects of debt negotiation and restructuring.

Cautious Economic Outlook

The World Bank expects Gambia’s public debt to stabilize around 60% of GDP between 2025 and 2027, supported by growth and fiscal discipline.

On the economic front, the Bank forecasts average growth of 5.6% from 2025 to 2027, driven by stronger activity across all sectors. “A continued growth momentum is expected in agriculture and services assuming favorable rainfall and increased use of high-yield seeds, and continued recovery of tourism, respectively.,” the report stated.

However, the institution warned that several risks could weigh on these prospects, including debt vulnerability, climate shocks, regional tensions, balance-of-payments pressures, and political uncertainty.