Overview:
The Gambian economy is a highly open type as measured
by export and import ratios to GDP, however, as much
as 70 percent of exports consist of re-exports. The
main domestically-originating exports are groundnuts
and tourism.
The country's economy is mainly reliant mainly agricultural
exports as a foreign currency earner.
Entrepot (re-export) trade from Banjul
Ports makes up a significant portion of economic
activity though the devaluation of the CFA Franc in
1994 reduced it somewhat.
Tourism, which mostly takes the form of sun seekers,
birdwatchers and African-Americans, makes up about about
18% of the Gambia's GDP.
Economic development is very reliant on continued multilateral
and bilateral aid and on prudent economic management
by the government as espoused by the International
Monetary Fund's fiscal help and advice.
The Gambia is among the poorest countries of the world,
ranking 155th out of 177 countries in the 2007/2008
UNDP Human Development Index rankings (HDI). According
to the UNDP's Human Poverty
Index (HPI-1) of 2004 poverty is was at 40.9 percent,
with rural poverty slightly exceeding urban poverty
rates, except in Banjul where the rate is much lower.
The Gambia’s per capita GDP measured at PPP is higher
than Benin, Senegal or Togo, but literacy is low by
regional standards.
Services account for over 50 percent of GDP, reflecting
the importance of re-export trade and tourism. Agriculture
accounts for about a third of GDP but more than 70 percent
of employment. The manufacturing sector is undeveloped
even by West African standards, providing only 5 percent
of GDP and displaying little dynamism.
Macroeconomic performance deteriorated in 2002–03, reflecting
the impact of loose fiscal policy, accommodating monetary
policy and a drought.
Inflation rose from an average of less than 5 percent
in 2001 to 17 percent in 2003, the highest level in
nearly two decades. The dalasi depreciated by 55 percent
in nominal effective terms between end-2001 and end-2003.
The seeds for the poor performance were sown in 2001
when a combination of significant unbudgeted expenditures
and a fall in tax revenues led to a large increase in
government borrowing from the Central
Bank of The Gambia (CBG) and a sharp rise in domestic
debt. Real GDP declined by 3 percent in 2002 because
of a drought, but recovered in 2003.
The 2002 IMF Poverty
Reduction and Growth Facility (PRGF) loan was cut off
in 2002 following spending overruns and irregularities
at the CBG. The Gambian government has sought to re-establish
a program with the Fund through a Staff-Monitored Program
(SMP) as an interim step towards re-establishing a PRGF.
The IMF notes that fiscal and monetary policies have
been tightened lately, contributing the sharp decline
in inflation, from double digits in 2003-2004 to 4.5
percent in 2005. Nevertheless, the IMF expresses continued
concerns about slippages in fiscal discipline, extra-budgetary
expenditures, and inadequate auditing of both fiscal
and monetary accounts. The Gambia’s fiscal policy is
also constrained by a large domestic debt and high real
interest rates, such that a substantial primary surplus
is required to cover interest payments.
As at 2008 The Gambia currently had a Staff Monitored
Programme with the IMF, as part of a Medium Term Economic
Framework Plan. The agency has reported some modest
progress on fiscal balance and some improvements in
financial management.
A tightening of fiscal and monetary policies from late-2003
restored macroeconomic stability and contributed to
sustained growth. The basic primary fiscal balance moved
from a deficit of over 1 percent of GDP in 2001 to an
average surplus of nearly 9 percent of GDP during 2004–07.
Yields on treasury bills rose from 15 percent at end-2001
to 31 percent at end-2003 before declining to 10–15
percent from mid-2005. Inflation fell to less than 1
percent at end-2006 before a spike in the prices of
some imported food items pushed it to around 6 percent
during most of 2007. Real GDP expanded at a robust average
annual rate of 6.5 percent, led by the tourism, telecommunication,
and construction sectors. Tourism infrastructure has
been a major beneficiary of foreign direct investment
(FDI).
Gambia’s longer term policy objectives are sketched
in the ambitious Vision 2020 document which aims to
turn Gambia into a diversified middle income economy
with the private sector as "a serious partner in
national development and the very engine of growth."
Selected Indicators:
Agriculture:
Products: groundnuts
(140,000 tonnes - 2005), rice,
millet, sorghum, corn, sesame, cassava, palm kernels;
livestock: cattle, sheep, goats
Budget:
revenues: $181.1 million
expenditures: $163.4 million (2007 est.)
Current Account Balance:
-$70 million (2007 est.)
Export Commodities:
Groundnut products, fish,
raw cotton, palm kernels, hides & entrepot trade
Export Partners (Principle):
India 37.7%, China 17.5%, UK 8.7%, France 5.1%, Belgium
4.2% (2007)
Exports:
$111 million f.o.b. (2008 est.)
External Debt:
$628.8 million (2003 est.)
Foreign Exchange Reserves:
$142.8 million (31 December 2007 est.)
Gross Domestic Product (Estimates - 2008):
GDP (Official Exchange Rate)
$653 million
GDP (PPP)
$2.044 billion
GDP Real Growth Rate
4.5%
GDP Per Capita (PPP)
Purchasing Power Parity
$1,200
GDP Composition by Sector
agriculture: 33%
industry: 8.7%
services: 58.3%
Industries:
Processing peanuts, fish, and hides; tourism; beverages;
agricultural machinery assembly, woodworking, metalworking
& clothing
Imports:
Commodities: foodstuffs incl. rice, flour, sugar, manufactured
goods, petroleum, heavy fuel oil, cement bulk &
bags, auto vehicles, machinery equipment .
Import Partners:
China 23.7%, Senegal 11.5%, Cote d'Ivoire 8.3%, Brazil
8%, Netherlands 5.2% (2007)
Imports:
$301 million f.o.b. (2008 est.)
Inflation - Annual:
Average inflation 5.6 percent - 12-month moving
average (31 December 2014)
Labour Force:
400,000
Labour Force by Occupation:
agriculture 75%, industry, commerce, and services 19%,
government 6%
Unemployment Rate:
The Gambia's unemployment rate is very high though no
exact figures are available. |
