Over the last ten years, economic activity again renewed its buoyancy in a context of a global slowdown. Nominal GDP grew at an average of 10.2%, with a marked acceleration from 1998 to 2002. A changing structure of the Gambian economy appears notably with the Service Sector being the main driver and accounting for nearly 50% of GDP, whilst Agriculture maintained its contribution at over one-fifth.

Over the last ten years, Agriculture contributed an average of 20.1% to GDP and grew by an average 7% per annum, with the year 1999 marking a major recovery. Agricultural output increased by a staggering 39% between 1999 and 2000, propelled by an excellent crop production.

The Gambia’s main trading partners are the European Union and the ECOWAS Sub-region. Other Trading Partners include China, Brazil, the United States, Hong Kong, Japan and India.

Re-exports played a dominant role in export earnings through-out the period under review, confirming the Gambia’s role as a major trading country. Re-exports comprise of basic commodities that are not produced in country; hence, the re-export trade has a very low value-added content, and a low contribution to investments and employment.

The improved macro-economic environment had a positive impact on Government Fiscal Operations: on the revenue side, average monthly revenue was situated between GMD 60-70 Million, with a peak of over GMD 100 Million since 2004. The Department of Customs and Excise saw a number of interesting developments, affecting both its infrastructure profile and its poise for future improved performance. The Automated System of Customs Data, (ASYCUDA) was overhauled and up-graded in May 2001, increasing the rate of data processing and facilitating clearance of goods for importers. Considering the importance of Regional integration, the Government has contracted the services of the Computer Community Centre (CCC) to assist in the integration of Seaport and Provincial Customs check-points into the ASYCUDA system. These developments follow in the wake of the construction of the Container Freight Station in Banjul, and the planned installation at the Sea Port and Airport of Mobile Ex Ray Machines for screening imported goods and passenger items.

Investments in infrastructure were also supported by efforts to develop the human resources base: a fully equipped training block has been completed and inaugurated for the Department, whilst the future headquarters of the Revenue Authority has now been identified and construction started. Since 1994, over 150 Customs Officials have benefited from training, whilst the largest number of staff promotions in the nations history took place during this period.

Fiscal policy is not complete without economic principles guiding allocation of resources to the key priority areas for development. Government’s stated priority since 1994 is the reduction of poverty within the context of a growing economy. The Gambia is resolutely engaged in the HIPC Process, and has a firm commitment to spend a third of its own fiscal resources on programs relating to poverty reduction. A second Strategy for Poverty Alleviation was successfully formulated, shared with and endorsed by our development partners in 2002. Through extensive consultations with Gambians, our new poverty reduction strategy is now an integral part of our macro-economic growth strategy. The policy is anchored on the principles of engaging the citizenry in wealth creation as well as availing them of the benefits of growth.

In the drive to ensure consistency of policy direction, the DOSFEA is currently engaged in the process of improving public sector financial management and accountability, by among other things, reviewing and improving budget preparation, execution and reporting. It is envisaged to launch a Medium Term Expenditure Planning program in the not too distant future.

Expenditure in the Social sectors of Education and Health has grown alongside great efforts to improve the infrastructure profile of The Gambia. We will highlight these developments in the sections to follow. Despite targeting spending for poverty reduction, the Fiscal deficit has been maintained at reasonable levels, below a 10% threshold throughout the period.

In a modern economy, fiscal policies must be co-ordinated in line with Monetary policies. In this endeavour, the Central Bank of The Gambia has been instrumental in the pursuit of macro-economic stability during the last ten years. A stable economy is indispensable in Government’s quest for sustained economic growth and poverty
reduction. The Bank’s policies have been designed and implemented within the framework of the Poverty Reduction and Growth Facility (PRGF), a collaborative effort between The Government of The Gambia and the International Monetary Fund. Inspite of intermittent domestic and external shocks, low inflation, stable exchange rates and modest economic growth were maintained for the greater part of the ten years.

To address the intermittent shocks during the last ten years, monetary policy has been considerably tightened. This policy stance has started to yield results; during the first four months of 2004, the domestic currency has stabilised and even appreciated against some of the major international currencies and inflationary pressures have started abating. To further decelerate inflation and lock in macro-economic stability, the Central Bank has established a Monetary Policy Committee (MPC). The MPC is the highest monetary policy making body whose sole remit is to ensure price stability. Accordingly, the Central Bank Act is being revised to further enhance the ability of the Bank to conduct monetary policy in an accountable and transparent manner.

An efficient and vibrant financial system is crucial for economic growth and development. During the period under review, three new Commercial banks were issued operating licences, increasing their number to six. Additionally, a revised Financial Institutions and Insurance Acts and a new Money Laundering Act, were enacted to further develop the financial system as well as enhance the powers of the Central Bank as the sole regulator and licensor of Financial Institutions in The Gambia.

The Gambia is also working assiduously with Ghana, Nigeria, Sierra Leone and Guinea to establish a monetary union dubbed the second West African Monetary Zone (WAMZ), with a common Central Bank and a single currency starting in July 2005. It is envisaged that the establishment of a monetary union would lead to the creation of a larger regional market, increased cross-border trade and investment, and a low and stable price level in the West African Region.

Government’s Fiscal and Monetary Policies have been adequately completed by a determined gesture to improve the performance of public assets. As part of the Public Enterprise Reform Measures under the framework of the PRGF, Government has concluded a Memorandum of Understanding with Public Enterprises for a period of 10 years. The purpose of the MOU is to clarify mutual relationships and obligations between Central Government and Parastatals. The MOU exemplifies Government’s drive to inculcate commercial enterprise culture and management systems, which require strict financial discipline, the timely settlement of debts, payment of taxes and dividends, capital investment decisions and employment incentive structures.

The New Divestiture Strategy and Regulatory Framework for The Gambia was adopted by Cabinet in 1999. In 2001, The National Assembly enacted the Gambia Divestiture Agency Act, establishing the Gambia Divestiture Agency (GDA), which is mandated with the responsibility of implementing the divestiture program and serving as the secretariat for the High Level Economic Committee. Under the new Divestiture program, different methods of introducing private sector participation will be considered. These include outright sale, private placement, share issue, strategic alliances, concessions and management contracts. These methods involve different degrees of Public-Private Partnerships. A two track privatisation system has been adopted for Government properties. Those properties that could be sold outright are in the Track II and those for which a study on options is required are in Track I group.

The progressive implementation of the Public Enterprise Reform Program, including the sale of Atlantic Hotel and Trust Bank is a clear manifestation of Government’s policy aspirations of promoting private participation in the operations and ownership of Public Enterprises. In the New Divestiture Strategy and Regulatory Framework for The Gambia, a multi-sector institutional regulatory framework was adopted given the size of the economy and the need to conserve limited financial and human resource capacity. In 2001, the Gambia Public Utilities Regulatory Authority Act was passed by the National Assembly to serve as the legal framework for the regulation of utilities in Telecommunications, Electricity, Water and Transport.

The Gambia Public Utilities Regulatory Authority has been set-up and is mandated to promote competition, while ensuring that monopoly service providers do not mis-use their positions to the detriment of consumer welfare.

With this review of the generic policy areas of Government, we now present the specific programs undertaken by respective Government Agencies. The process of development involves significant transformations of structure, which urgently call for prudent investments in both economic and social infrastructure. The investment component of the Government of The Gambia is discernable through the activities of its public enterprises which undertake these initiatives under commercial arrangements.

1. Generation, Transmission and Distribution of Electricity.

Since 1994, Government has pursued a policy of increasing installed capacity of the National Water and Electricity Company. In 2001, three Six Mega-Watts generators were installed, almost doubling total capacity available for the Greater Banjul Area at the time. In a similar drive, six sub-systems with power station components and their related transmission and distribution networks are to be funded under the Rural Electrification initiative.

In order to address the shortcomings of the Transmission and Distribution System in the GBA, Government through NAWEC has signed a contract with GOTG to embark on a comprehensive and effective rehabilitation, expansion and enhancement of the T&D network.

2. Up-grading and Improving Water Supply and Sewage Systems.

Recognising the acute emerging problems from rapid urbanisation, Government has, through NAWEC spent substantial resources in facilitating a constant maintenance and upgrading culture to ensure that the existing water facilities are utilised effectively. Funding has been obtained for a Water Supply and Sanitation Study, in order to assess the medium and long term water and sanitation requirements of The Gambia over the next 25 years. Prominent projects in this area include the Kotu Ring Water Supply Project and the Gunjur Water Supply Project.

3. Transforming and Expanding Telecommunications Services

Good quality and relatively cheap telecommunications services are vital in today’s economic and social life. The Government of The Gambia has been quite alert to the need to bring information closer to homes, and to facilitate connectivity between homes and offices with the rest of the World. From 1994 to date, the size of the telecommunications network has increased by 250%, from 17,774 to 45,124. This process has been completed alongside a full digitalization of switches and the transmission backbone. With this investment, an internet gateway is now fully available to Gambians and nation-wide internet access has become a reality. Direct dialling services to anywhere in the World is today possible thanks to the 1,574 international circuits operating through 14 carriers.

Perhaps the most poignant break-through has come as a result of the digital GSM mobile phone service commissioned in 2001, which has decisively put the Gambia on the cutting edge of modern mobile communications. In all, Government has now increased Gamtel’s fixed asset base to D1, 111 Million as at end 2002.

Developments in telecommunications have also been supported by the financing and management of The Gambia’s first nation-wide Television Service, and the provision of state of the art technology to Radio Gambia. These developments now allow Gambians to access information from different sources and enrich their knowledge base of events and happenings world-wide.

4. Providing effective Transport Infrastructure and Services

The Government of The Gambia has invested in air transport facilities in order to consolidate tourism and development future air cargo export potentials. A new Passenger Terminal Building and Control Tower were installed in 1995/1996, and major improvement projects undertaken since then:

A review of and up-dating of the Banjul International Airport
Master Plan the construction of two new taxiways and the expansion and extension of the aircraft parking apron are currently underway. Overall, Government expenditure in infrastructure at the Airport will reach a total amount of US$43 Million, during the next 16 months. This comes in the wake of the Gambia’s accession to LPD status for air carriers operating in the United States. Improved infrastructure and improved security will, with the promulgation of the revised Civil Aviation Act will pave the way for Banjul International Airport to become a Category I State, allowing Gambian registered airlines to apply for approval to operate into the United States, after a satisfactory audit by Fed Aviation Administration Authorities.

Meanwhile, facilitating public transport has seen Government commit resources to the procurement of buses for safe public transport in both Urban and Rural areas. Since 1994, a number of buses have been put on the road for the average Gambian commuter, and plans are underway for further expansion of the GPTC fleet to run an integrated school and public transport service country-wide.

5. Supporting Social Protection

Total net assets of the SSHFC grew from D296.4 Million in 1994/95 to D1.5 Billion in 2003. This development represents a significant improvement in the wealth of scheme members, whilst providing a large investment base for Government.

Provision of shelter is one of the basic human needs provided under the scheme, in addition to income at the end of one’s active life. Two housing projects have been completed, benefiting some 2500 families, mainly low-income earners. The execution of the projects also brought about significant employment opportunities for ordinary Gambians, on an investment project that was in excess of D800 Million.