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Arlington, Virginia, John Snow, Inc. [JSI], Resources for Child Health Project [REACH], 1986 Jun. , 31,  p. (USAID Contract No. DPE-5927-C-00-5068-00)In the mid 1980s, the Government of The Gambia (GOTG) sought funds from the World Bank and other donors to restructure and strengthen its health system. Since the World Bank thought that recurrent cost obligations that the GOTG would find unacceptable should accompany the implementation of the National Health Project (NHP), this study was undertaken. The Italian Government agreed to fund US $9.8 million to NHP, most of the funds going to renovating and refurbishing the pediatric ward and central laboratory at Royal Victoria Hospital in Banjul. Trends in health sector expenditures showed that the devaluation of the dalasi continued to bring about shortfalls in nonsalary costs, especially in drugs and dressings. Therefore the GOTG must address the shortfalls before even considering expansion of the already inefficient health delivery system. It also needs to develop a cost recovery system for drugs which maintains a reliable source and adequate supplies of drugs in the proper amounts, effectively distributes the drugs, and manages the finances effectively. The GOTG should also develop the Ministry of Health's ability to coordinate donor support and to develop a process of budgeting, spending, and planning. The study team also recommended consolidating staff rather than expand staff in light of financial constraints. A flotation policy and exchange rates less favorable to the dalasi may grant the GOTG more access to exchange within the banking system.