The Gambia’s economy relies primarily on tourism, agriculture and remittances inflows. The economic performance has been affected by a series of external shocks. The impact of the regional Ebola outbreak on tourism and delayed summer rains in 2014, together with weak economic policy implementation, led to a contraction in real gross domestic product (GDP).
The real GDP growth rate declined to 1.5% in 2014 from 4.8% in 2013 and 5.9% in 2012. However the economy projected to grow by 5.6% in 2015. The Gambian economy has enjoyed an average growth rate of 4.1% in the past six consecutive years. Trade, Tourism, transport and communication sector contributes 62%, agriculture sector 23% and industry sector 15% to the GDP. The agriculture sector employs 78.6% of labour force.
The country has maintained a low inflation rate averaging 5% for the past 3 years. Inflation was 6.5% at the end of 2015 up from around 5.3% in 2013.
Why invest in Gambia?
- The country is peaceful country and has a stable economy;
- Gambia offers tax incentives, transparent and simple procedures and a strong potential in the tourism and re-export sectors;
- Improved infrastructure, including the notably expansion of the road network, telecommunication system, seaport and airport and the electricity system;
- Availability of abundant semi-skilled and unskilled labour force hence lower operational costs;
- The Gambia’s membership to the Economic Community of West African States (ECOWAS) trading bloc ensures easy market access to over 300 million people;
- Business Friendly Environment;
- Well-functioning customs and port services.
- Low import duties with duty waiver incentive scheme for GIEPA SIC and EPZL holders.
- Simplified administrative and business registration and custom procedures.
Presidential elections on December 1, 2017 resulted in a political transition after the incumbent President Yahya A.J.J. Jammeh was defeated by Adama Barrow who garnered 43.3% of the vote over the 39.6% received by Jammeh. He however rejected results after initially accepting the election outcome and called for fresh election. Jammeh led the country for 22 years after a military coup in 1994, followed by four presidential elections in 1996, 2001, 2006, and 2011.For security reasons, Adama Barrow left the country for Dakar, Senegal, while ECOWAS members mobilized military troops and gave an ultimatum to Jammeh calling for a transfer of power by the constitutional due date of January 19, 2017. Presidents Mohamed Ould Abdel Aziz of Mauritania and Alpha Condé of Guinea negotiated Jammeh’s terms of exile to Equatorial Guinea on January 21, 2017. Meanwhile, Adama Barrow was sworn in as President of The Gambia at the Gambian embassy in Dakar on January 19, 2017. He returned to Banjul a week later. President Adama Barrow has subsequently put the political situation under control.
The country has a population of 2 million with average rate of growth of 2.8% per year over the last decade. The country has a population density of 177 people per square kilometre making Gambia to fall among the most densely populated countries in Africa.
About 57% of the population live in and around the urban and peri-urban centres.
Doing business in Gambia
The highlights of World Bank score of doing business in Gambia are summarised as follows;
|Topics||World Bank 2017 Rank||World Bank 2016 Rank||Change in Rank|
|Starting a Business||168||169||
|Dealing with Construction Permits||122||123||
|Protecting Minority Investors||165||166||
|Trading across Borders||112||109||
There are no restrictions on the conversion of funds associated with an investment. Investors can repatriate profits and dividends through commercial banks or licensed money transfer agencies at prevailing exchange rates. There is no limit on the inflow or outflow of funds for remittances of profits, debt service, capital, capital gains, return on intellectual property, or imported inputs.
The Gambia Investment and Export Promotion Act 2010 and the Gambian legal code provide the mechanisms and legal framework for dispute settlement, either through negotiation or arbitration.
There are also domestic commercial courts presided over by high court judges that have the competence to arbitrate commercial and investment disputes.
The Gambia is a member of the International Centre for the Settlement of Investment Disputes (ICSID), but there is no specific legislation providing for enforcement of ICSID awards. The Gambia is a member of the International Centre for Settlement of Investment Disputes (ICSID).
Key development challenges
Drought has contributed to about 30% drop in annual rainfall within the last 30 years which has affected agricultural production, and caused scarcity of water for domestic purposes in several areas across the country. Deforestation which leads to soil erosion and desertification worsens the problem in most areas. Corruption and poor governance continue to tear Gambia apart. Despite the numerous challenges, many Gambians remain optimistic especially with Adama Barrow as President.
Gambia is the 145 least corrupt nations out of 175 countries and scored 26 points out of 100, according to the 2016 Corruption Perceptions Index reported by Transparency International.
Gambia is politically stable following transfer of power from President Yahya Jammeh to President Adama Barrow. President Adama Barrow has promised to address the security of the country that lived under authoritarian rule for more than 22 years.
Unemployment and skilled labour
The Gambia suffers from high unemployment and underemployment, compounded by a shortage of skilled workers and trained professionals. About 59% of the individuals in the labor force have no education. The Gambia’s total economically active population is estimated at 400,000. About 75 percent are engaged in agriculture; 18 percent in industry, commerce, and services; and 7 percent in government. The labour force participation rate is about 74%
Attitude to Foreign Direct Investment
The government is committed to a liberal, open economic environment and free-market pricing to enhance private sector participation in all sectors of the economy.
The government recognizes the potential of the private sector as an engine of growth. However the buying and processing of groundnuts, principal cash crop and sensitive areas like television and radio broadcasting are still under government control. There is no legal distinction between the treatment of foreign and domestic investors.
Gambia Investment and Export Promotion Agency (GIEPA) is the national agency established by an Act of Parliament in July 2010 responsible for the promotion and facilitation of private sector investments, exports and entrepreneurship development into The Gambia.
Restrictions on Foreign investment
There are no limits on foreign ownership or control of businesses except in the operations of foreign exchange bureaus, groundnuts, television broadcasting, and defence industries are not open to all local and foreign private sector participants. An embargo on the establishment of private security companies imposed in previous years was lifted. However, security firms are required to pay the sum of GMD 1,000 (USD 21.27) for every new guard who receives induction training at the Police Training Academy.
Screening of FDI
There is no mandatory screening of foreign direct investment, but such screening may be conducted if there is suspicion of money laundering or terrorism financing.
Intellectual Property (IP) Rights
The Gambia is a signatory to both the Paris Convention for the Protection of Industrial Property and the Bern Convention for the Protection of Literary and Artistic Works. In 2003, the country enacted its own Copyright Act. This law provides adequate protection for intellectual property, patents, copyrights and trademarks.
The Government has also signed and ratified both the WIPO Copyrights Treaty and WTO TRIPS agreement. However, enforcement of these regulations and treaties is sometimes inadequate due to a lack of resources and expertise. The Gambia has not yet ratified the WIPO Internet Treaties.
Gambia has seven National Parks which include; Abuko National Park, Wetland National Park, Kiang West National Park, Niumi National Park, River Gambia National Park, Tanbi Wetland Complex and Tanji Bird National Park
The country is blessed with abundance of natural resources including silica sand, titanium, tin, zircon, clay, and fish.
Investment climate in Gambia has been summarized to include the following;