THE GAMBIA

COUNTRY OVERVIEW

LOCATION AND SIZE.

The Republic of The Gambia measures 11,295 square kilometers (4,361 square miles) and consists of a long narrow ribbon of land sitting astride the river Gambia, one of the major waterways in West Africa. Apart from the 50-kilometer (31-mile) stretch of coastline on the Atlantic ocean, it is entirely surrounded by Senegal. At the estuary of the river Gambia, the northern and southern boundaries are only 45 kilometers (28 miles) apart and the belt of land narrows to about 20 kilometers (13 miles) inland. Banjul is the coastal capital located on the southern side of the estuary.

POPULATION.

The population of The Gambia was estimated at 1.026 million in the 1993 census and 1.169 million in 1997. The estimated population in 2000 was 1.367 million, growing at a rate of 3.2 percent a year with a fertility rate of 5.2 children per woman. It is a young population with about 45 percent under 14 years of age, 52 percent between 15 and 64 years, and 3 percent 65 and over. Population density is 117 per square kilometer (1997) with 30 percent of the people living in urban areas. Life expectancy was estimated at 47 years in 1997, up from 36 years in 1970.

The Mandinka people constitute 42 percent of the total population, followed (in descending order of population) by the Fula, Wollof, Jola, and Savaluli. There is also a community of Akus (Creoles) descended mainly from African slaves freed in the 19th century. About 90 percent of the population is Muslim and the rest are mostly Christians. There are also traditional religions practiced. English is the official language with Mandinka extensively used in the provinces while Wollof is widely spoken in Banjul.

OVERVIEW OF ECONOMY

The Gambia's economy is closely tied to its command of the Gambia river system, which gives it considerable potential in trade, depending on the level of development in the hinterland. At present, it is an economically disadvantaged country, hampered by its small size, geographical and climatic difficulties, lack of mineral or other natural resources, and rudimentary infrastructure. The economy is driven by agriculture (especially groundnut production) and tourism. Agriculture production suffered during the droughts of the last 2 decades, although the Gambia is less vulnerable than its Sahel (a semi-arid region just south of the Sahara desert) neighbors.

Tourism is the most important source of foreign exchange revenue. It suffered in the wake of an abortive coup in 1981 and again after the successful coup of 1994. It has since recovered and in 1996 and 1998 the number of tourist arrivals had overtaken pre-coup levels.

Foreign aid has been key to the development of infrastructure as well as general budgetary support. An economic recovery program, launched in August 1985, later renamed the Programme for Sustained Development, introduced austerity measures which controlled inflation and produced significant real GDP growth in the latter part of the 1980s. Real GDP grew at 3.6 percent annually between 1980 and 1990 and 2.2 percent annually between 1990 and 1997. The economy grew in real terms by 5.3 percent in 1996, 4.9 percent in 1997, and 4.7 percent in 1998. The Gambia has continued to implement market-oriented reforms which won it praise from the International Monetary Fund (IMF) in 1992, and its policies have been broadly continued by the post-1994 government.

The Gambian economy is strongly affected by the health of CFA franc because of its close relationship with Senegal. The Gambia has enjoyed a successful re-export trade, and the success of Banjul port has been the result of its ability to undercut the port charges of Dakar in Senegal . When the CFA franc was devalued by 50 percent in 1994, the position changed abruptly, affecting the Gambia-Senegal cross-border trade in groundnuts. Nuts grown in the Gambia were sold in Senegal because of the higher prices there, with Gambia losing on the processing and shipping revenues.

The Gambia had US$37.8 million of international debt in 1998, and this was 9.1 percent of GDP, and US$31 per head. Debt service took up 9.7 percent of the export earnings on goods and services. The levels of debt in relation to GDP and per person are significantly higher than the African average, but the debt servicing requirement from export earnings is lower.

POLITICS, GOVERNMENT, AND TAXATION

Gambia did not receive administrative autonomy from the British until 1963. Two years later, on 18 February 1965, they achieved full independence and joined the British Commonwealth. Until the military coup of 1994, the Gambia had been governed under a republican constitution by an executive president and a unicameral legislature, with the House of Representatives elected for 5-year terms. Until 1996, the House of Representatives had 36 members elected by universal adult suffrage, 5 chief's representative members elected by head-chiefs, plus the attorney general and 8 non-voting nominated members.

A new constitution was approved by referendum on 7 August 1996. It provides for a unitary republican democracy with a president, vice-president, and secretaries of state responsible to parliament. Five members are nominated by the president, and 45 elected. There is an ombudsman and an independent judiciary. The constitution allows for declaration of a state of emergency and convening of special courts to try cases of corruption. A two-thirds majority in parliament is required to change the constitution.

Dawda Jawara, founder of the Peoples Progressive Party (PPP) who dominated Gambian politics from the 1960s, won the election in 1970 when the country was proclaimed a republic. In 1994, a military coup led by Yahaya Jammeh overthrew president Dawda Jawara, ending his long political leadership of the country. In September 1996, Jammeh—up to then chief of the Armed Forces Government Junta—became the Gambia's second elected president. Since August 1997, the government has lifted restrictions which limited political activity.

In 1995, central government revenue was 20 percent of GDP. The most recent year for which data is available is 1987, when taxes in income, profits, and capital gains generated 16 percent of government revenue, domestic taxes on goods and services 10 percent, export levies and import duties 66 percent, other taxes 1 percent, and nontax revenue 7 percent.

Corporation tax is 25 percent, or 2 percent of turnover, whichever is the greater. Many charities and non-government organizations are exempt from tax, and the Ministry of Finance has considerable discretionary powers to grant tax relief to new investors.

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

There are over 2,700 kilometers (1,678 miles) of road in the Gambia, 35 percent of which are paved. Roads in and around Banjul are mostly sealed. Unsealed roads are impassible in the rainy season. The road network is being improved, particularly north of the river with a view to linking up with routes in Senegal. There are plans to build more roads and bridges across the river, replacing the ferry crossings for freight at Banjul and Fawafeni. In 1996 there were 15 motor vehicles, including 8 passenger cars, per 1,000 people, and 7 motor vehicles per 1 kilometer of road.

The Gambia river runs the entire length of the country east to west, providing a vital communications link for cargo and passengers. It is navigable by ocean-going vessels up to Kuntaar (240 kilometers—149 miles—upstream) and by shallow draught vessels up to Basse Santa Su (418 kilometers or 260 miles). The principal sea port is Banjul, serving the international and river trade, and Gambia's exports, mainly groundnuts, are shipped from there.

Banjul International Airport is situated at Yundum, 29 kilometers (18 miles) southwest of Banjul, and has a new terminal. Gambia Airways is jointly owned by the government and British Airways. Several international airlines provide air links to the country.

There are 2 English daily newspapers: The Gambia and The Daily Observer. There is also a weekly, The Point. There are 3 radio stations (2 of which are private). A national television service (Gambia TV) became operational in 1995. There were 164 radios, 4 TV sets and 2.6 PCs per 1,000 people in 1996-97. The country has an automatic telephone system and a good international connection in the Banjul area via satellite pick-up at Abuko. Telecommunications are run by Gambia Telecom (Gamtel), a private sector company. Fax facilities are available at Gamtel offices in Banjul, some open 24 hours a day. There were 21 main telephone lines and 4 mobile phones per 1,000 people in 1997.

Resources for energy production are extremely limited. Electricity supply is entirely reliant on diesel generators. All petroleum products are imported. Wood is used for domestic fuel supplies, but government policy emphasizes conservation of the forest reserves. Alternative energy sources are being developed. The use of groundnut shells for fuel and solar energy output is expanding. Various donors are assisting with the rehabilitation of electricity-generating stations, and a program of rural electrification began in 1998. Prospecting for offshore oil was active in the early 1990s, and although the exploration is continuing off-shore in Gambian waters, no exploitable oil reserves have yet been found.

ECONOMIC SECTORS

Without minerals or other natural resources, and economically small in size with an under-developed

infrastructure, the Gambia's economy depends heavily on agriculture, tourism, and the re-export of imported goods to neighboring countries through the port at Banjul. The 1998 estimates for the contributions of each sector to GDP were: agriculture 22 percent, industry 14 percent, and services 64 percent.

AGRICULTURE

Agriculture (including forestry and fishing), acounted for 22 percent of GDP and employed 75 percent of the labor force in 1998. Agriculture grew annually at 0.9 percent from 1980-90 and 0.6 percent from 1990-97, a particularly disappointing performance as the population was increasing at 3.2 percent a year. It is the mainstay of the economy, directly supporting about three-quarters of the population, with production mostly undertaken by small-scale farmers, but generating very low incomes.

The main crop and export is groundnuts which takes up 45 percent of the total planting area. Production has generally remained at 80,000 metric tons annually in the 1990s (83,700 in 1998). Exports of groundnuts and related products accounted for an estimated 63 percent of domestic export earnings in 1998. However, a significant proportion of the crop is frequently smuggled for sale in Senegal. Cotton, citrus fruits, mangoes, avocados, and sesame seed are also cultivated for export.

Other crops are sorghum, millet, maize, rice, cotton, and palm kernels. Rice is the staple food, and is cultivated under 3 systems—swamp, upland, and irrigated— but the country is not self-sufficient in food, and large quantities of rice are imported. Livestock production is an important contributor to GDP and includes sheep, cattle, goats, and pigs. Cattle are exported to other West African countries.

The fishing industry has been developed with the assistance of the EU and the African Development Bank and other donors. It has 8 factories and some 15 Gambia-registered vessels. Fish is exported to other West African countries, and the Gambia has agreements with Guinea, Guinea-Bissau, Cape Verde, Senegal, and Mauritania on fisheries protection and management, including protection of the ecosystem. A program for updating fishing facilities and equipment, supported by the African Development Bank, is running during 2000-05.

INDUSTRY

Industry (including manufacturing, construction, mining, and power) in the Gambia is quite limited. It contributed an estimated 14 percent of GDP in 1998 and about 10 percent of the total labor force was employed in the industry at the 1993 census. Industrial GDP increased at an annual average rate of 1.0 percent a year in 1990-98, with growth estimated at 5.2 percent in 1998.

Manufacturing is a significant sub-sector of industry. It contributed an estimated 6 percent of GDP in 1998 and employed about 6 percent of the labor force at the 1993 census. It is dominated by agro-industrial activities, most importantly the processing of groundnuts and fish. Manufacturing GDP increased at an annual average rate of 1.1 percent between 1990-98, and the sector's GDP increased by an estimated 2.4 percent in 1998. Beverages and construction materials are also produced for the domestic market. Although seismic surveys have suggested existence of petroleum deposits, the Gambia's mineral resource base is economically unviable and deposits of kaolin and salt are to date unexploited.

SERVICES

The services sector is very important to the Gambia's economy. It contributed about 64 percent of GDP in 1998, but engaged only 15 percent of the labor force. The tourist sector is second only to the groundnut industry as the most important source of foreign exchange. Tourism contributed about 10 percent of annual GDP in the early 1990s and employed about one-third of the workers in the formal sector at the same time.

The tourist industry took off in the 1970s and focused mainly on the promotion of beach holidays. The highest levels of growth were recorded in the 1980s and 1990s when the number of visitors rose to 100,000 a year. The international response to the coup of 1994 and its aftermath had a severe impact on the sector, although it recovered strongly from 1996 onwards. The industry registered 80,000 tourists and generated US$22 million (9.6 percent of exports of goods and services) in 1997, and 92,000 tourists in 1998. The industry is centered in Banjul where there is a 5-star hotel with conference facilities, and several other high-quality hotels. The majority of the tourists are from Northern Europe.

The government has expressed intentions of further exploiting the country's potential as a transit point for regional trade and also as a center for regional finance and telecommunications. According to IMF figures, re-exports contributed about 84 percent of the value of total merchandise exports in 1998. The GDP of the services sector increased at an annual average rate of 3.7 percent between 1990-98 and growth in 1998 was estimated at 5.8 percent.

INTERNATIONAL TRADE

The main export of the Gambia is groundnuts. Other exports include fish (and its products) and some cotton. The largest international trade activity by far is the import of food, machinery, transport equipment, manufactured goods, and fuels—some of which are re-exported to the neighboring countries. The chief export partners are Belgium-Luxembourg, Japan, the UK, Germany, and France, and the chief import partners are Côte d'Ivoire, China, the United Kingdom, and the Netherlands.

The CFA devaluation of 1994 resulted in a reduction in regional re-exports, export earnings, and import expenditures. While exports have recovered slowly, imports have risen more quickly to pre-1994 levels. In 1998 total exports were worth US$132 million and imports US$201 million.

MONEY

The dalasi (D), the unit of account, was pegged to the pound sterling until 1984, when the peg was relaxed. The currency was floated in 1986, depreciating steadily against the dollar during the 1990s. It exchanged at D9.64=US__BODY__ in 1995, D11.8=US__BODY__ in 1999, and in mid-2001, D16.3=US__BODY__. This depreciation of the Gambian currency increases the prices of imported products, encouraging the use of locally-produced substitutes when these are available. It also reduces the prices of Gambian goods and services to foreigners, particularly visitors, making Gambian holidays cheaper and increasing tourism.

POVERTY AND WEALTH

The Gambia is classified as one of the least developed countries and is a low-income country. Real GNP per capita growth in the 1990-97 period averaged-0.6 percent a year, so average living standards were falling.

In 1999 it was estimated that 57 percent of the population were below the US__BODY__ per day poverty line. The families in poverty do not have enough income to provide the barest minimum of food, shelter, and clothing. Most of those in poverty are rural families relying on small-scale family farms for their livelihoods, and unable to increase their incomes as they are unable to afford investments in mechanization, fertilizers, insecticides, and

improved seeds that would boost their output. In the main towns, electricity and the piped water supply is generally available, but in the rural areas it is rare, and lighting is by small paraffin lamps with wicks, and water is from wells. Some mains and septic tank sewage disposal are available in the capital, but in the rural areas people rely mainly on pit latrines.

The UN's Human Development Index, which combines income, health, and education indicators, places the Gambia at 161 out of 174 countries in 1998, putting Gambia firmly in the low development category.

WORKING CONDITIONS

The labor force was estimated to comprise of some 500,000 people in 1997, of which 45 percent were female and 36 percent aged between 10 and 14 years (an improvement compared with 1980, when 44 percent were estimated to be in this category). The labor force was estimated to have grown at an annual average rate of 3.6 percent in the period 1980-97. Agriculture is significant to the Gambian economy; about 75 percent of the people work on small farms for a livelihood, with a relatively small number employed in the manufacturing, tourism, and fishing industries. In agriculture, incomes are very low, and there is no regulation of working conditions.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

1200. The Ghana empire establishes its authority over the area.

1400. Europeans begin to explore and settle on the coast and river areas.

1588. The Portuguese sell rights to the Gambia River to British merchants.

1783. Treaty of Versailles gives the British possession of the Gambia, with the French retaining a small enclave on the north bank at Albreda.

1816. The British establish a military post on Banjul Island (then called Bathurst) to suppress the slave trade on the River Gambia.

1857. The French cede Albreda to the British.

1888. Downstream Gambia becomes a colony and the upstream section becomes a protectorate.

1889. Britain and France reach agreement as to the boundaries of their respective colonies.

1906. Slave trade outlawed in the Gambia and other surrounding areas.

1962. Dawda Jawara and the Peoples Progressive Party (PPP) win elections but fail to assume office due to a vote of no confidence by the opposition.

1963. After further constitutional changes, the country obtains administrative autonomy from British, Jawara becomes the prime minister, and the PPP forms government.

1965. On February 18, Gambia achieves full independence.

1970. Gambia proclaimed a republic with a presidential system of government. Dawda Jawara wins election again.

1972. The dalasi is introduced as the Gambia's national currency.

1973. In national elections, the ruling PPP wins 28 of the 32 seats in the House of Representatives and Jawara is re-elected president.

1975. The success of Alex Haley's book Roots turns Gambia into an important tourism center.

1981. Muslim dissidents attempt to overthrow Jawara but are foiled with the help of Senegalese troops.

1982. The Senegambian federation established, a loose arrangement to benefit both countries, with Abdion Diouf of Senegal as its first president.

1989. The confederation of Senegambia is dissolved after Gambian resistance to closer union.

1994. A military coup overthrows Jawara. Captain Yahya Jammeh assumes presidency.

1996. Elections return Yahya Jammeh as president.

1998. IMF approves 3-year Enhanced Structural Adjustment Facility of US$27 million.

1999. Poverty Reduction and Growth Facility US$4.5 million loan from IMF is approved.

2000. Gambia receives US$91 million in debt relief under the Highly Indebted Poor Countries scheme.

FUTURE TRENDS

The Gambia's overriding dependence on the ground-nut sector, which lags behind other sectors in terms of modernization and productivity, remains an obstacle to growth. International debt and poor infrastructure are among the factors limiting Gambia's progress. It is hoped that the IMF-supported Enhanced Structural Adjustment Facility (ESAF) for 1998-2000 will reduce fiscal deficits, encourage further private sector development, and form the basis for future development.

DEPENDENCIES

The Gambia has no territories or colonies.

BIBLIOGRAPHY

The Commonwealth Secretariat. "Gambia." The Commonwealth Yearbook 2000. Birmingham: Stationery Office, 2000.

Economist Intelligence Unit. Country Profile: Gambia. London: EIU, 2000.

"Gambia." Africa South of the Sahara. London: Europa Publications, 2000.

Hodd, M. "Gambia." The Economies of Africa. Aldershot:Dartmouth, 1991.

U.S. Central Intelligence Agency. CIA World Factbook 2000. <http://www.cia.gov/cia/publications/factbook/geos/ga.html>. Accessed July 2001.

U.S. Central Intelligence Agency. CIA World Factbook 2001. <http://www.cia.gov/cia/publications/factbook/geos/ga.html>. Accessed September 2001.

World Bank. World Bank Africa Database 2000. WashingtonD.C., 2000.

Allan C. K. Mukungu

CAPITAL:

Banjul.

MONETARY UNIT:

Dalasi (D). One dalasi equals 100 bututs. Dalasi notes come in denominations of 5, 10, 25, and 50, and coins are in denominations of D1 and 1, 5, 10, 25, and 50 bututs.

CHIEF EXPORTS:

Ground nuts, fish and fish products, palm kernels, cotton.

CHIEF IMPORTS:

Food, machinery, transport equipment, manufactured goods, fuels.

GROSS DOMESTIC PRODUCT:

US__BODY__.5 billion (purchasing power parity, 2000 est.).

BALANCE OF TRADE:

Exports: US$125.8 million (f.o.b., 1999). Imports: US$202.5 million (f.o.b., 1999).