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The Gambia - Economy

KEY FACTS 2006

  • GNI: US$488m
  • GNI p c: US$310
  • GDP growth: 4.4% p.a. 2002–06
  • Inflation: 8.7% p.a. 2002–06
  • Aid: 13.2% of GNI (2005)
  • External debt PV: US$386m (2005)

Overview: The Gambia, with its command of an important river system, has considerable potential in trade – depending on development of the hinterland. It is an economically disadvantaged country, hampered by its small size, lack of mineral or other natural resources, and rudimentary infrastructure. The economy rests on agriculture (especially on groundnut production) and tourism, though there is a small-scale processing industry.

Agricultural production suffered during the droughts of the last two decades, although The Gambia is less vulnerable than its Sahel neighbours. Tourism, the most important source of foreign exchange revenue, flagged in the wake of an abortive coup in 1981 and again after the successful coup of 1994. However, tourism revenue recovered in 1996, and by 1998 the number of tourist arrivals had overtaken pre-coup levels.

Foreign aid has been vital in developing the infrastructure. From 1985, policy was focused on economic reforms backed by the IMF, leading to a long period of sustained growth with relatively low inflation. The reforms were continued after the 1994 coup, including some privatisation. In 2000, South African electricity company Eskom purchased a 50% stake in electricity and water utility NAWEC.

The good growth continued into the 2000s and was interrupted only by a dip into recession in 2002, continuing at over 6% p.a. in 2003–05. However, the strong growth was accompanied by inflation of 17% in 2003 and 14% in 2004, moderating to 3% in 2005.

Trade: Exports of goods and services account for 42% of GDP and manufactured exports for around 27% of total merchandise exports (2004). Exports other than re-exports are groundnuts and groundnut products, fruit, vegetables, and fish and fish products, but the largest trading activity by far has been the re-export of imported goods to neighbouring countries (Guinea, Guinea–Bissau, Liberia, Mali, Mauritania and Senegal), worth some US$80 million p.a. The main imports are food, machinery, transport equipment, manufactured goods and fuels. Chief export partners are France and the UK. Chief import partners are China, Senegal, Brazil and the UK.