Gambia: Economic Outline

Economic Indicators

Between 1990 and 2022, the Gambia's real GDP growth averaged 3.1%, equating to less than 0.5% growth in per capita terms. However, there was a notable acceleration in economic growth to 5.3% in 2023 (2.7% per capita), primarily propelled by agriculture and industry sectors. Agriculture saw benefits from favorable rainfall and increased fertilizer subsidies. Despite a rise in tourism activity, the services sector experienced a slowdown due to contractions in various subsectors such as information and communication, and entertainment. Growth on the demand side was primarily driven by private investment, supported by remittances and public investment. Growth is projected to average 5.6% in 2024-26 (3.1% per capita), driven by increased activity in all sectors. Agriculture and services are expected to sustain growth, assuming favorable rainfall and continued recovery in tourism. Robust remittances, which represented 32.1% of GDP in 2023, will support the recovery in private sector demand, which, together with infrastructure programs, are expected to drive growth (data World Bank).

The fiscal deficit halved to 2.6% of GDP in 2023, driven by increased tax revenues and grants. Public expenditure remained high due to increased spending on road infrastructure. With lower net domestic borrowing, public debt declined to 75.8% of GDP in 2023. Nevertheless, the Gambia remains at high risk of debt distress. The current account deficit was estimated at 4.5% of GDP in 2023, almost comparable to the 4.2% in 2022, driven by a recovery in tourism and increased imports related to ongoing infrastructure projects.  The fiscal deficit is projected to narrow to 1.5% of GDP over 2024-26, supported by the completion of major infrastructure projects and domestic revenue mobilization efforts. These efforts include the digitization of tax administration and customs, the implementation of digital excise stamps for excisable products, the introduction of fuel marking, and reforms to broaden the tax base. Public debt is projected to decrease to 68.9% of GDP in 2024, supported by the fiscal path. Nevertheless, The Gambia is expected to remain at high risk of debt distress, and the end of the debt-service deferrals in 2024 could weigh on debt sustainability and economic growth. Inflation averaged 16.9% in 2023, marking the highest level in decades, attributed to factors like imported food inflation, utility tariff increases, and currency depreciation, which in turn affected private consumption negatively. Inflationary pressures are predicted to persist in 2024 and gradually ease, with CPI inflation reaching 6.5% in 2026, close to the Central Bank’s 5% target, reflecting the restrictive monetary policy and easing global supply conditions (data World Bank). The Gambia is in the process of consolidating its democratic transition while simultaneously implementing reforms aimed at transforming the economy. Despite these efforts, several structural factors persistently hinder growth, such as low productivity growth, insufficient structural change, limited fiscal space for infrastructure investments, a challenging business environment for private sector development, restricted economic diversification, and human capital challenges.

The Gambia has a young population with a fast growing working age population, yet low labour force participation rates and high unemployment undermine this demographic distribution. In addition, there are major geographical and gender differences. The World Bank estimated unemployment at 4.1% in 2023, while the international extreme poverty rate is expected to increase to 17.2% in 2024 before declining in 2025 and 2026.

Monetary Indicators	2015	2016	2018	2019	2020
Gambian Dalasi (GMD) - Average Annual Exchange Rate For 1 GBP	64.00	60.08	64.24	62.88	66.03

Source: World Bank - Latest available data.

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Latest Update: May 2024