Economy - overview: The government has invested in the agriculture sector because three-quarters of the population depends on the sector for its livelihood and agriculture provides for about one-third of GDP, making The Gambia largely reliant on sufficient rainfall. The agricultural sector has untapped potential - less than half of arable land is cultivated and agricultural productivity is low. Small-scale manufacturing activity features the processing of cashews, groundnuts, fish, and hides. The Gambia's re-export trade accounts for almost 80% of goods exports and China has been its largest trade partner for both exports and imports for several years.
The Gambia has sparse natural resource deposits. It relies heavily on remittances from workers overseas and tourist receipts. Remittance inflows to The Gambia amount to about one-fifth of the country’s GDP. The Gambia's location on the ocean and proximity to Europe has made it one of the most frequented tourist destinations in West Africa, boosted by private sector investments in eco-tourism and facilities. Tourism normally brings in about 20% of GDP, but it suffered in 2014 from tourists’ fears of Ebola virus in neighboring West African countries. Unemployment and underemployment remain high.
Economic progress depends on sustained bilateral and multilateral aid, on responsible government economic management, and on continued technical assistance from multilateral and bilateral donors. International donors and lenders were concerned about the quality of fiscal management under the administration of former President Yahya Jammeh, who reportedly stole hundreds of millions of dollars of the country’s funds during his 22 years in power, but anticipate significant improvements under the new administration of President Adama BARROW, who assumed power on January 19, 2017. As of April 2017, the IMF, the World Bank, the European Union, and the African Development Bank were all negotiating with the new government of The Gambia to provide financial support in the coming months to ease the country’s financial crisis.
The country’s GDP contracted in 2016 largely as a result of the limited availability of foreign exchange, weak agricultural output, the border closure with Senegal during the first half of the year, and a slowdown in tourism during the political impasse that occurred at the height of the tourist season. The country faces a large fiscal deficit and a high domestic debt burden that has crowded out private sector investment and driven interest rates to new highs. The new government has committed to taking steps to reduce the deficit, including through expenditure caps, debt consolidation, and reform of state-owned enterprises.
Definition: This entry briefly describes the type of economy, including the degree of market orientation, the level of economic development, the most important natural resources, and the unique areas of specialization. It also characterizes major economic events and policy changes in the most recent 12 months and may include a statement about one or two key future macroeconomic trends.
Source: CIA World Factbook - This page was last updated on July 9, 2017