The Gambia: Stimulating sustained and all-encompassing growth 2023-2027

By Ben Eguzozie

Though recovering from tourism, its economic mainstay, The Gambia needs urgent policy paradigm shift from low value-added tourism to a dynamic private sector model, offering more economic opportunities for citizens

The Gambia is making slow recovery from tourism, which is by far, its economic mainstay, contributing more than 20% of its GDP. Tourism is a growing source of employment for the nation. The West African country, with a population of 2.7 million (World Bank, 2022), and a growth rate of 2.5%, has been making sluggish progress in pursuing inclusive and sustained economic growth. This, however, requires a policy drive that will engender a dynamic private sector that will offer more economic opportunities to the citizens, especially the youths, according to the World Bank’s latest economic update. The government will further need to strengthen macroeconomic stabilization, and fast-track structural reforms required to support productivity, and initiate transformative structural change, the global lender said in its latest 2024 economic update.

To promote sustained and all-encompassing growth, the Gambian authorities (present and future) will have to transform the growth model away from over-reliance on low-value-added tourism and engender a vibrant private sector, which will in turn, provide more economic opportunities for the people. This is quite important for a nation with some of the highest emigration rates in the world, according to a report by the United Nations Conference on Trade and Development (UNCTAD).

Macroeconomic Outlook 2023-2027

The macroeconomic outlook, according to the World Bank, foresees The Gambia consolidating the recovery in the medium term supported by the implementation of the Recovery-Focused National Development Plan (RF-NDP) 2023–2027. However, this centers on the country’s continuous commitment to macro-fiscal stability. 

In 2024-2026, the country’s real GDP growth is projected to strengthen to around 5.6% and around 3.2% in per capita terms, driven by increased activity across the economy. Agriculture will continue to grow, assuming favorable rainfall continues alongside an efficient use of fertilizers, continued seed improvements, and support from development partners. Industry growth will be boosted by ongoing large infrastructure projects, sustained public and private construction, and improvements in the business environment.

Also, services are expected to continue to grow assuming higher tourist arrivals as global economic recovery and trade resume while regional and global geopolitical tensions tame.

Lopsided Tourism and Catching the African Tourist’s Eye

Tourism in The Gambia is not an inclusive economic activity. Only a handful of the population engage in this. For example, the majority of Gambians, especially those in rural areas are poorer and hardly reap from tourism. In addition, the country faces high underemployment at 41.5% in 2022, while 63% of employment is informal. The World Bank says poverty is mainly a rural phenomenon, with 7 out of 10 people being poor in rural areas compared to 3 out of 10 people in urban areas.

In particular, UNCTAD says Gambia’s tourism recovery does not mean much money ending up in the pockets of Gambians. Additionally, UNCTAD said the majority of the tourists visiting the West African country are mainly Europeans and non-Africans, and non-regional neighbors, who booked trips with tour operators. This translates to non-patronage of Gambian local products and services, “meaning much of the money doesn’t end up in the pockets of Gambians”.

The government hopes to change this by attracting more African tourists and has enlisted UNCTAD and the UN Economic Commission for Africa (UNECA) to help kickstart the initiative.  

UNCTAD economist Claudia Roethlisberger said, “attracting more regional tourists is important because they buy more local products and services than non-African visitors”.

Roethlisberger further said, African tourists are a less-seasonal and volatile source of revenue. Globally, 80% of tourists travel within their region — Europeans head to Paris or the French Rivera, for example; while North Americans prefer the lights of New York City or the allures of the Californian coast. But for Africa, the regional travel share is just 40%. This is expected to increase, according to strong economic growth on the continent and an expanding middle class.