Banjul, May 24, 2024 – The Gambia's economy has shown a remarkable resilience in the face of heightened global and regional uncertainties, according to The Gambia’s Fourth Economic Update – Spring 2024. Despite a sluggish global environment, the country's real GDP grew by 5.3% in 2023, signaling a continued recovery from the COVID-19 pandemic and persistent external headwinds.
"We are pleased to see the Gambia’s economic activity improved”, said Feyi Boroffice, World Bank Resident Representative. "The improved agricultural production and increased public consumption as well as private and public investment drove this positive growth. However, challenges such as higher inflation, monetary tightening and economic slowdown in advanced economies disrupted the tertiary sectors and slowed private consumption, all of which tempered the country's overall performance”.
Inflation pursued its uptrend throughout 2023 to reach even higher levels in decades, mainly due to global price of commodities. The Central Bank of The Gambia has responded by further tightening monetary policy to curb inflation, raising the policy rate to 17% in December 2023 from 13% a year before.
Looking ahead, the economic outlook for The Gambia remains favorable, with GDP projected to grow by 5.6% over the period of 2024-2026. Growth will be driven by increased economic activity in all sectors, while hinging on a continuous commitment to macro-fiscal stability. However, the prolonged regional and global geopolitical tensions, debt vulnerabilities, reemerging forex pressures, extreme weather events, fiscal slippage, and continued financial tightening, poses downside risks to the country's economic prospects.
From the long-term perspective, the pace of economic growth has been declining and volatile since independence, due to the occurrence of droughts, economic mismanagement, and weak governance, combined with poor infrastructure and other structural constraints, all of which resulted in negative long-term productivity growth.
Following its democratic transition in 2017, The Gambia recorded resilient growth and positive productivity growth, thanks to relative improvements in macroeconomic and fiscal management and stability. Poverty and inequality remain high, while disparities prevail in access to essential service. Also, The Gambia’s labor market suffers from significant underutilization, low labor force participation, and high informal employment, with large gender disparities. The Gambia’s economy suffers from a lack of structural change, despite an increase in productivity following the country’s transition to democracy, with a room for maneuver to improve inclusive growth.
"The Gambia's economic recovery is encouraging, but there is need to address structural constraints hampering faster growth," emphasized Ephrem Niyongabo, World Bank Economist for The Gambia and Author of report. "It is crucial for the government to implement policies that enhance transformative structural changes, needed to sustain productivity and productivity and support the country's inclusive economic growth agenda."
The World Bank stands ready to continue supporting The Gambia in its efforts to strengthen the economy, reduce poverty, and achieve sustainable and inclusive growth.
