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The Gambian economy is a highly open type as measured by export and import ratios to GDP, however, as much as 80 percent of exports consist of re-exports. The main domestically-originating exports are groundnuts and tourism.
The Gambia has recently run substantial trade and current-account deficits financed largely by official grants and loans, and increasingly foreign direct investment inflows.
Foreign direct investment in 2003-2005 averaged more than 10 percent of GDP. 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."
Products: groundnuts (140,000 tonnes - 2005), rice, millet, sorghum, corn, sesame, cassava, palm kernels; livestock: cattle, sheep, goats
revenues: $181.1 million
expenditures: $163.4 million (2007 est.)
Current Account Balance:
-$70 million (2007 est.)
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)
$111 million f.o.b. (2008 est.)
$628.8 million (2003 est.)
Foreign Exchange Reserves:
$142.8 million (31 December 2007 est.)
Gross Domestic Product (Estimates - 2008):
GDP (Official Exchange Rate)
GDP Real Growth Rate
GDP Per Capita (PPP)
Purchasing Power Parity
GDP Composition by Sector
Processing peanuts, fish, and hides; tourism; beverages; agricultural machinery assembly, woodworking, metalworking & clothing
Commodities: foodstuffs incl. rice, flour, sugar, manufactured goods, petroleum, heavy fuel oil, cement bulk & bags, auto vehicles, machinery equipment .
China 23.7%, Senegal 11.5%, Cote d'Ivoire 8.3%, Brazil 8%, Netherlands 5.2% (2007)
$301 million f.o.b. (2008 est.)
Inflation - Annual:
(consumer price index)
7.0 % per cent 2008
Labour Force by Occupation:
agriculture 75%, industry, commerce, and services 19%, government 6%
The Gambia's unemployment rate is very high though no exact figures are available.
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