The Gambia, a semi-landlocked country bordered almost completely except for its coastline on the Atlantic Ocean at its western end by the Republic of Senegal, is by a mile the smallest country in West Africa and one of the smallest countries on the African continent. Its landmass covers an area of 10,689 square kilometres with a population of 1,882,450, according to the country’s last census in 2013.
To put this in context, a population size of 1.8 million people is less than 10 percent of the population of Lagos, Nigeria’s largest city, only mildly above 3 percent of South Africa’s total population, and less than one percent of Egypt’s population.
Economically, a number of factors emphasize the relatively small size of the country. Its GDP currently stands at $3.582 billion, smaller than most of Africa’s biggest cities, including Nairobi, Cape Town, Addis Ababa and Cairo. However, its per capita GDP, currently at $1,686, would rival that of many top economies across the continent, a show of economic strength for a relatively small nation.
So Why Invest in The Gambia?
Opportunities for growth exist in abundance for those looking towards The Gambia. These opportunities are driven largely by a relatively stable political environment, albeit a tense period after the December 2016 elections where long-standing ruler Yahya Jammeh initially refused to hand over to Adama Barrow before eventually agreeing to step down and go on exile after a military intervention by the Economic Community of West African States (ECOWAS).
Stability: Unlike many of its West Africa neighbours—including Cameroun, Nigeria, and Ivory Coast—The Gambia has enjoyed long spells of political and economic stability since independence in 1965, an attractive indicator for investors looking to establish long-term businesses in the country. A stable political scene ensures policies remain largely unchanged and allows business owners plan for the short and long term, which enhances growth and expansion and ultimately improves the well-being of the local community and the aggregate economic outlook of the country.
Favourable Policies: The Gambia has also embarked on a number of economic recovery and stabilization plans, which has resulted in positive outcomes, not only for the economy but for investors as well. Starting from as far back as 1985, in an endeavor to reverse a decline in the economy, the government put in place an Economic Recovery Program(ERP)—one of the first countries in West Africa to initiate such a programme. The programme laid emphasis on major policy reforms in key economic agents as well as sectors including Liberalization of foreign exchange, divestiture and privatization of parastatals and government shares in other enterprises, reforms in key institutions providing support services to tile private sector, and liberalization of business activities with less interference by the government in the interactions of various economic agents in the country.
The results of these initiatives were a resounding success as the country recorded an average annual growth of about five percent, registered during the period 1985 to 1990. Till date, foreign exchange is no longer a major constraint. Re-export trade due to the proximity of the Gambia to major European destinations and the sub-region, has also remained on the increase as well as other economic sectors registering growth with the multiplier effects on the growth in the Gross Domestic Products and reduction in the government Budget deficits.
The ERP was succeeded by another highly successful economy-enhancing programme—the Program for Sustained Development (PSD). This initiative also placed emphasis on consolidating the achievements made under the ERP with the major policy thrust of private sector led-growth through further diversification of economic activity and provision of more incentives to enhance private sector participation in the country’s economic development process.
Market Access: The Gambia is considered an open market and very investor friendly, with market forces rather than government influence or regulations allowed to drive several sectors of the economy. But the Gambia is considered largely an attractive market by the UNDP because of its market access and proximity to West Africa.
The West African market, with its largest population Nigeria boasting a consumer base of 180 million people, means investors can take advantage of The Gambia’s free market—given the numerous free trade agreements to which the country is a party—to establish production base for a region market and possibly grow beyond into an African production hub. The potential for attracting foreign direct investment (FDI) in the country is significant when you look at the export-potential of setting up a business in a free economy that has access to the Economic Community of West African States (ECOWAS) market of 350 million people.
According to the Gambia’s Investment and Export Promotion Agency (GIEPA), businesses in The Gambia have benefited from the country’s unwavering macroeconomic strategy, liberal trade policies and market-based economy. The real GDP growth rate declined to 0.5% in 2016 from 4.7% in 2015. Also, thanks to prudent macroeconomic policies, monetary policies and a tight fiscal policy, the country has maintained a low inflation rate hovering around 8% for the past 3 years and sustained economic growth. The Gambia has also developed into a sub-regional re-export hub as industries profit from the country’s liberal trade policies and efficient port infrastructure. It is considered one of the safest markets for establishing a business in West Africa.
These indicators, coupled with some attractive investment sectors showcase a solid argument for investing in The Gambia.
Where to Invest?
The country also boasts a number of promising economic sectors that are considered ripe for investment, including farming, agro-processing, mining, manufacturing, financial services and most especially tourism.
Tourism: The Gambia’s tourism sector has already contributed significantly to the country. Tourists are said to enjoy not only sun, sand and beaches but also experience the excitement of a real African holiday. Gambia also offers new opening for an affordable holiday to increasing numbers of traveling Europeans. With a host of tropical resorts and beautiful beach fronts, the tourism industry attracts a significant number of foreigners—largely from Europe and America—has become a mainstay of the economy, an important source of foreign exchange for the country and major source of employment for its locals.
The sector, which attracts over 100,000 visitors into the country annually, accounts for a significant portion of total jobs in Gambia. It employs one in seven Gambians, according to the CEO of The Gambian Chamber of Commerce, Alieu Secka.
Tourism is said to be the fastest growing sector in the Gambian economy. It is also the biggest foreign exchange earner, a major source of employment and accounts for about 16 percent of the country’s GDP.
There are great opportunities in the tourism sector for investors to exploit. Hospitality is an obvious one, given the number of tourist flock in every year. The number of hotels has increased from a couple when the industry began in the 1960’s to almost 40. These are mostly dotted along the country’s palm-fringed beaches. There are also vast stretches of beautiful coastline available for the building of hotels and other tropical resorts, which could easily rival global tourism hubs like The Caribbean Islands. In the Tourism Development Area of The Gambia, hotels of four and five-star class are to be given preference and would be given construction concession in bid to encourage local employment, the GIEPA confirmed on its official online page. The River Gambia is also open for the development cruising, sport fishing and eco-tourism resorts, according to the investment promotion agency.
Agriculture is also an important aspect of the economic make up of Gambia. The Gambia has 558,000 hectares of very good quality arable land, of which only 200,000 hectares are currently under sustainable agricultural production schemes. This means over 50 percent of arable land is still available for agric-related investments.
The Gambia has great potential for irrigated agriculture, with fresh water from the River Gambia, rain water if harvested, and fossil water that can be drilled, according to GIEPA. Gambia also has production-friendly weather pattern, which is suitable for almost all types of crops.
The West African nation is known for certain cash crops, which are significant sources of foreign exchange. They are cashew and groundnut. Groundnut and cashew contribute significantly to the Gambian economy. Though considered a relatively small player in the global scale of production, these two crops are critical and of great importance to the Gambian economy. According to the UNDP, groundnut production alone takes up 45 percent of the agricultural land, employs about 70 percent of the total workforce in the agricultural sector, and account for about 66 percent of all exports of agricultural products.
Cashew is also a significant foreign income earner. In 2015 alone, the Gambia produced and exported 8,000 tons of cashews, less than only Nigeria, Ghana and Senegal.
Asides Cashew and Groundnut, Gambia is well known for other food crops and agricultural produce including mangoes, citrus, bananas, avocadoes, guava, cashews, oil palm, coconuts, oil palm, coconuts, rice, maize, sorghum, wheat and so much more.
Beyond crop cultivation, animal farming is also growing with rapid pace. Cattle rearing has become a commercial mainstay, ensuring that a viable dairy and meat market is now a realistic possibility. Today, over 400,000 cattle are reared across the country. This, however, still requires a significant inflow from foreign and local investors into the sector, particularly in the processing dairy produce, as 80 percent of milk and dairy products are still imported.
Poultry requires even more investments, given the regulatory framework surrounding the subsector. The Gambian government has placed a complete ban on the importation of eggs from countries, and such there is a significant shortage as local poultry farmers struggle to meet local demand. Investments geared towards setting up local farms and processing plants are always encouraged by the government.
Given that the country has a liberalised economy and a unique geographical location, these agricultural products could easily be made accessible to markets in Europe, USA, Africa and Asia easy and faster by air and sea.
Agro-processing: The lack of industrialization, especially in the agricultural sector presents a host of opportunities for investment seekers. There are enormous shortages in animal feeds and animal pharmaceuticals. Viable abattoirs are, therefore, needed to propel the country from a raw-material-export-driven nation to an industrialized agric-powered economy. According to the UNDP, there is an acute need for poultry and fish feeds which would go a long way to sustain a beaming fishing industry.
Fishery is a big and popular business for many Gambians. Gambia’s fisheries sector is said to be internationally competitive. However, with an estimated fish yield of around 75,000 tonnes per annum and a current annual off-take of around 29,000 tonnes, it is considered far less than the potential of the sector, meaning investments in improving mechanisation of fish farming is needed to further grow output.
Agro pharmaceuticals is also in critical need of investments as there is an urgent need for veterinary drugs for the animal industry. There is the need for an increase in the manufacturing or fabrication of pre and post-harvest pesticides. The fertilizer requirement of the country is enormous to satisfy the national need of over 20,000MT, according to the country’s Chamber of Commerce. The Chamber notes that organic fertilizers could be manufactured as a result of the large quantity of vegetative plant material available free of charge all year round.
Energy: Similar to many African countries, adequate energy supply seems an unreachable reality. The Gambian government, therefore, seeks the provision of efficient, reliable and affordable energy that is sustainable and environmentally sound, and is keen to partner willing investors in the quest to achieving sustainable and efficient energy.
In particular, the government is seeking to collaborate with partners looking to invest in alternative green energy sources, especially through the use of Solar Energy and windmills. The government is also looking towards improving the poor state of the transmission and distribution system which result in high technical losses and un-metered consumption, which it estimates to be at about 40 percent.
Improving the country’s grossly inadequate generation capacity as well as innovative solutions geared towards improving efficiencies so as to reduce the extremely high cost of energy (currently placed at an average of $0.18) also remains top investment priorities for the government and thus lucrative business opportunities for investors.
How to Get Started?
It is always important to have a sound knowledge of the industry and market you plan on making investments. Having a local partner such as Footprint to Africa—a pan-African business news platform and investment firm with expert knowledge of African economies, industries and businesses—are ideal to partner with on market analyses and business entry strategies.
It is also important to visit the export.gov page on The Gambia to get an overview of economic conditions and opportunities.