The Business Environment in the Gambia

  1. Country Background

 1.1 Location

The Gambia is a small country in West Africa with a population of 1.7 Million. It is surrounded by Senegal, apart from a short strip of Atlantic coastline at its western end. The capital city of the Gambia is Banjul, whilst Serekunda and Brikama are its largest cities.

1.2 History

The Gambia shares historical roots with many other West African nations in the slave trade, which was the key factor in the placing and keeping of a colony on the Gambia River, first by the Portuguese and later by the British. On 18 February 1965, the Gambia gained independence from the United Kingdom and joined the Commonwealth of Nations. The official language of the Gambia is English.

1.3 Political Context

The Gambia has enjoyed relative political stability since independence. The current President Yahya Jammeh, came to power in a bloodless coup in 1994. Jammeh won the last elections held in November 2011 with about 72% of the vote. The last parliamentary elections were held in March 2012 for 48 of 53 seats, with five seats being appointed by the President. The National Assembly of the Gambia continues to play an important role but it is affected by the dominance of a single party. While there are six other political parties, the opposition remains fragmented and unable to affect policy decisions or foment an uprising. The media is not free and censorship is common, especially for those who criticise the government.

1.4 Socio-Economic context

The Gambia has a liberal, market-based economy characterised by traditional subsistence agriculture, a historic reliance on groundnuts (peanuts) for export earnings, a re-export trade built up around its ocean port, low import duties, minimal administrative procedures, a fluctuating exchange rate with no exchange controls, and a significant tourism industry.

The World Bank pegs Gambian GDP for 2011 at US$898M while the International Monetary Fund puts it at US$977M for 2011.From 2006 to 2012; the Gambian economy grew annually at a pace of 5–6% of GDP

2.      Investment Incentives

To develop the private sector, the Gambian government offers facilities such as

i)             Fiscal incentives offered to investors that target priority sectors (agriculture, tourism and manufacturing); investing in these sectors will give access to attractive and special investment incentives.

ii)           Free Zones License- As a strategy for developing the export potential of the country, the Government is also developing Free Zones in specially selected locations to enable investors to operate in an environment that has the ideal set of infrastructure and special tax incentive regime.

2.2  The Gambia’s Comparative Advantage

The Gambia is a choice for foreign investors for the following reasons: Peace and political stability, Liberal and free market economy, Lack of foreign control restrictions, Abundant and easily adaptable labour force, Proximity to Europe and the USA, One stop shop (GIPFZA)

 3.      Investment Opportunities in the Gambia

 3.1 Private Sector

The private sector participates extensively in economic activity. The sector is liberalised, as there is little outright intervention in goods markets; labour and capital regulations are also flexible. However, the Labour Act imposes restrictions on the right to organise and strike. Except for utilities, most sectors are open to competition. Land tenure comprises both modern/statutory codes and customary tenure administered by traditional rulers. No restrictions are imposed on market entry and exit for foreign investors and profit repatriation.

3.2 Natural Resource Mining

The Gambia has no major mineral and hydrocarbon deposits to exploit. However, deposits of lower value minerals such as silica, titanium (rutile and ilmenite), tin and zircon have been identified in certain areas. There has also been limited exploitation of quartz (silica) in some parts of the country. Successful mining of sand for valuable minerals is taking place near the coast South of Banjul, in a high amenity area under strict environmental control. The country’s other major natural resource is the River Gambia, which has been exploited to a limited extent.

Opportunities exist initially in exploration for minerals and oil and gas, and the Government of The Gambia is very supportive of these efforts.

3.3 Agriculture

Agriculture is considered one of the major sectors of the Gambian Economy. It is a sole means of income generation for the majority of rural households.  Gambia has over 480,000 hectares of good quality arable land, of which an estimated 180,000 hectares is currently under cultivation. With abundant land, favourable climate, rich soils, relatively low labour cost and close proximity to Western markets, The Gambia offers good opportunities for investment in the agricultural sector. These are complemented by the availability of outlets in the expanding tourism industry, the large concentration of consumers in the urban areas and the ever growing export markets, which provide ample opportunities for investment in the sector.

Agriculture Investment Opportunities can be found in the following areas:

  • Crop production and processing (Rice, Maize, Millet, Sorghum, Groundnuts, Sesame, and Cashew)
  •  Horticulture production and processing (fruits and vegetables)
  • Floriculture
  • Poultry production
  • Livestock production and processing
  • Animal feed production
  • Agro-processing and packaging
  •  Machinery manufacturing and servicing
  • Provision of cold storage and silos facilities for horticulture and livestock products
  • Fisheries

While agriculture and fishing employ 75% of the population, account for 70% of domestic exports and contribute substantially to the country’s foreign exchange earnings, their contribution to GDP has stagnated around 25% for the last decade.

3.4 Tourism

Tourism is one of The Gambia’s fastest growing industries, constituting the largest source of formal non-farm employment. Every year tens of thousands of holidaymakers visit The Gambia from various parts of the world. Tourism, which is a high-potential sector, has increased its contribution to the GDP from 2.5% in 2004 to 3.8% in 2007 to decelerate to 3.0% in 2012 as a result of the economic slowdown, especially in Europe. Tourism became an important source of foreign earnings and improved the country’s competitiveness. The sector has grown by over 7% in 2012 as compared to 2011, and employment in tourism is expected to increase by 2.5% per year over the next few years.

Present policy focus in the industry emphasizes the up-market approach, which seeks increased investor participation in five-star hotel projects and quality service apartments. Consolidating and refurbishing the Tourism Development Area (TDA) along the wide Atlantic coast especially reserved for top-of-the market hotel projects, continues to be a major policy thrust to develop tourism in The Gambia. The ease of transportation on the recently completed Kombo coastal road covering the entire TDA, the continuous enhancement of electricity supply and telecommunication extensions in the TDA, and the setting up of the Gambia Tourism Authority (GTA) as an independent body to coordinate all aspects of project implementation in, and development of the tourism industry, including, importantly, the grading and classifying of hotels and related resorts, all represent a systematic effort at improving the enabling environment for increased private sector investment in the industry.

3.5 Manufacturing

The Gambia’s manufacturing sector continues to be under developed with a limited manufacturing base focused mainly at the domestic market, and utilizing a limited range of skills and technology. The Government’s strategy is to build on the small domestic base to encourage companies to supply the Gambian and regional markets, and subsequently develop products which can be exported to the EU and the US.

Particular opportunities exist in the following areas:  Food and drink processing and packaging, Machinery manufacturing and servicing (particularly for the agriculture, food and fisheries industries), Plastics for the consumer market, and for the construction industry, Stainless steel fabrication, basic electronics assembly, pharmaceutical manufacturing/packaging, Healthcare products (complimentary medicines, medical devices etc.)

The contribution of the sector to the GDP of the Gambia has accelerated slightly from 5.6% in 2004 to 6.1% in 2011. It decelerated to 4.9% in 2012, however, and is expected to continue this downward trend to reach 4.4% in 2018 according to IMF projections.

3.6 Transport and Telecommunications

Transport and telecommunication have also improved and their contribution to GDP has grown from 11.1% in 2004 to 13.9% in 2012 as a consequence of international technological developments.

3.7 Service Sector

The service sector has flourished and become the main driver of GDP. Its contribution has grown from 53% of GDP in 2004 to over 60% in 2012 where it is expected to stabilise for the next few years.

4.      Ease of Doing Business

4.1  Doing Business Ranking

In the World Bank report, Doing Business 2013,Gambia’s ranking dropped from 143rd in 2012 to 147th in 2013. Private sector development is hindered by the high cost of starting a business, high effective tax rates and limited access to credit. Only two areas related to contract enforcement and access to electricity have achieved progress in 2013.

4.2  Legal Requirements

4.2.1 Investment Laws and Regulations

The Gambia Investment Promotion Act 2001 and Free Zones Act 2001 are the main laws governing investment in The Gambia. These Acts provide guidance on investing in The Gambia and clearly indicate the priority sectors for the country, guarantees to investors, investment incentives eligibility criteria, procedures, the institutional framework and answers to questions that investors usually consider in making an investment decision.

4.2.2 Business Registration

Businesses in The Gambia may be registered as a company, a sole proprietorship, a partnership, or other forms of business (namely co-operatives, subsidiaries of other companies).

The process of registering a business in The Gambia has been simplified and requires the submission of the following documents with the Registrar of Companies:  Memorandum of Association, Articles of Association and Receipts of payment of Stamp Duty & Business Registration fees- from the Income Tax Department.

4.2.3 Safeguards against Double Taxation

There is relief from double taxation of any person resident in The Gambia who pays or is liable to pay taxes in any year of assessment in a Commonwealth country. There are also double taxation agreements entered into between the Government of The Gambia and other countries, including United Kingdom, Norway, Sweden and Taiwan

4.2.4 Risk Management and Dispute Resolution

The Constitution of The Gambia guarantees and provides safeguards against nationalization and expropriation of investments. The Investment Promotion Act and Free Zones Act 2001 also contain provisions against expropriation of properties of investors. The Gambia is also a member of the International Centre for the Settlement of Investment Disputes (ICSID) and the Multilateral Investment Guarantee Agency (MIGA) of the World Bank Group.

 5.    Public Sector Management, Institutions & Reform

Governance remains a major issue in the Gambia despite the public generally having access to laws and regulations. The court system is relatively inefficient in enforcing contracts and resolving disputes but some progress has been recorded according to the World Bank report doing Business 2013.

Corruption remains a challenge. According to Transparency International, the Gambia’s ranking deteriorated from 77th in 2011 to 105th in 2012. Further, according to the World Bank Worldwide Governance Indicator, the country’s percentile ranking of government effectiveness has deteriorated significantly from 52 in 2000 to 26 in 2006 to 22 in 2011.


 1.      African Economic Outlook-Gambia Country Notes

  1. 2.      An Introduction to Doing Business in the Gambia- A publication by the embassy of the Gambia and permanent mission to the EU (2009)

  1. 3.      Wikipedia- The Gambia


Chioma Okwudiafor holds a Masters degree in Development Management from the Turin School of Development and a bachelor’s degree in Law from the University of London. She is a budding development consultant with five years of diverse work experience across the legal, bilateral trade and investment, not-for-profit and communications sectors. Chioma is passionate about empowering young people through the promotion of youth entrepreneurship and mentoring. She volunteers regularly at youth advocacy forums. An avid reader and writer, she has 3 award winning essays on issues of social change to her credit. In her free time, she enjoys travelling, photography and music.

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