Gambia’s economy registers fundamental change -Central Bank 2nd Deputy Governor

Mrs Oumie Samba, the second deputy governor of The Central Bank of The Gambia, has said that The Gambian economy has undergone a fundamental change since the reform process began in 1986, from complete reliance on state-owned enterprises to a mixed economy where private enterprises play an increasing role.

Mrs Samba made these remarks, yesterday, during the opening ceremony of a one-day workshop at the Paradise Suites Hotel in Kololi, organized by The Balance of Payments Technical Committee (BOPTC), comprising of  the Central Bank of The Gambia, the Gambia Bureau of Statistics and The Gambia Investment Promotion and Free Zones Agency.

“The country has enjoyed broad macro economic stability, characterised by low inflation and healthy reserve cover.  After a lull in 2002/03, there was a surge in productivity growth with rising consumer confidence and investment, supported by prudent monetary and fiscal policies,” she said.

Mrs Samba described the Capacity Building Program in The Gambia as the third Foreign Private Capital (FPC) Survey, conducted by The Gambia’s Balance of Payments Technical Committee (BOPTC) under the Foreign Private Capital Capacity Building Programme (FPC CBP).

She recalled that the first and second FPC surveys were conducted in 2002 and 2006 respectively to collect data on foreign assets and liabilities (FAL) and investor perceptions on the Gambia’s investment climate.

According to her, the results of the survey would help government formulate appropriate macroeconomic policies to sustain the momentum of good economic performance and also help to improve the investment climate in areas such as Infrastructural development, creating critical mass of skilled workforce, efficiency in public service delivery, enforcement of contracts and promotion of property rights and a free, fair and prompt justice delivery system.

 “Real GDP growth averaged 6.0 percent between 2003 and 2006.  Growth in 2007 was estimated at 6.3 percent and was broad-based with increased value-added of all major sectors of the economy, mirroring the implementation of sound macroeconomic policies, structural reforms and the efforts by the Government to diversify the economy.  

For 2008, GDP growth is projected at 6.1 percent, due largely to the contraction in the services sector which reflects the unsettled conditions in the global financial markets, resulting in tighter credit conditions, exacerbated by higher fuel and food prices. These unfavourable global development would lead to reduced exports, tourism receipts, remittances and foreign direct investment flows, all of which will restrain growth over the near term,” Mrs Samba told the gathering.

As was the case with the Private Capital Flows (PCF) 2002, she went on to say that this survey (PCF 2006) was conducted having noted that, since the removal of exchange controls in the 1980s, private investment had increased substantially to the benefit of the country and its development. “As a result, data collection and monitoring of these flows has lagged behind, thus limiting the availability of accurate and up-to-date data on capital flows into the country for informed policy making,” she remarked.

“The Gambia’s investment promotion strategy dubbed the Gateway Project, aims to make The Gambia a gateway to West Africa and beyond, by becoming a globally competitive export processing centre and promoting private investment in export-oriented industries.  In pursuance of these objectives, Government introduced supporting measures in 2005 to address the legal system and bring the business regulatory framework in line with international standards.  

These measures include the establishment of a Commercial Court to accelerate dispute resolution, passing the Alternative Dispute Resolution (ADR) Act in 2005 to ease pressure on the commercial courts; and commencing a review of the Companies Act to widen coverage and strengthen provisions on financial statements and audits including incorporating International Financial Reporting Standards.  

In addition, Government passed the Energy Act in 2006 and has prepared a Telecoms Bill aimed at opening the energy and telecoms sectors to private participation,” the Central Bank second deputy governor underscored.

She said that The Gambia Government is committed to improving economic governance and reforms in the financial sector so as to attract more foreign direct investment as evidenced by the increase in the number of banks from seven to eleven in the last three years.  “This resulted to large foreign direct investment inflows in The Gambia with increased financing opportunities for businesses,” she added.

“The results of the investor perception survey, particularly views on the critical barriers to investment would help Government and other key stakeholders assess how perceptions have changed over time, review the success of current initiatives, and come up with solutions to overcome the impediments,” she noted.

Mrs Samba also used the opportunity to call on the private sector to continue to complement Government efforts by increasing investment and teaming up with foreign investors in areas such as manufacturing, agriculture and export promotion industries to position The Gambia to increase its share of global trade whilst at the same time creating employment to help reduce poverty, sustain growth and achieve the Millennium Development Goals (MDGs).

Other speakers include Ada Gaye, who spoke on behalf of the secretary of state for Finance and Economic Affairs and Mam Cherno Jallow, the CEO of GCCI.