The Gambia’s trade policies and practices have been reviewed in reports by the World Trade Organisation Secretariat and the Government of Gambia on January 23 and 25, 2018
The Gambia’s trade policies and practices have been reviewed in reports by the World Trade Organisation Secretariat and the Government of Gambia on January 23 and 25, 2018.
Trade policy reviews are a mandatory exercise within WTO agreements, where member countries’ trade and related policies are evaluated regularly, alongside monitoring significant developments impacting on the global trading system.
According to the review, The Gambia has maintained its generally open trade and investment regime since its last evaluation in 2010, with the main reform to trade policy being the adoption of the five-band Economic Community of West African States (ECOWAS) Common External Tariff (CET) in January 2017.
The review notes that the country is the smallest on the African mainland and ranks among the poorest in the world, with an income per capita of less than US$500 and approximately half the population living below the poverty line of $1.25 a day.
The Gambia was considered to have weathered the global financial crisis relatively well, with social economic growth 2007-10, though its real GDP growth, averaging 2.9% 2010-16, is significantly weaker owing to the mismanagement of public finances, rising public debt, and external shocks.
Its new government is facing a number of economic challenges, with almost all state-owned enterprises in financial distress.
High government borrowing and tight monetary policy conditions has resulted in high interest rates, crowding out the private sector.
Foreign investment is welcomed in the country, but weaknesses in the business environment such as a complex tax system and infrastructure bottlenecks have hampered economic growth.
This has led to unreliable flows of foreign direct investment to The Gambia, which also remain much lower than the levels preceding the global financial crisis.
In addition, the review notes that the economy relies mainly on the services and drought-prone agriculture sectors as the main drivers of growth, at 66% and 21% of GDP respectively.
Tourism and wholesale and retail trade are also major contributors to the economy, whilst manufacturing and the fisheries sector cater for smaller markets.
Overall, merchandise imports far outstrip exports for the country, with main trading partners the European Union, Vietnam, India and China, Brazil and West Africa.
The Gambia’s trade policies are mainly formulated from the parameters set out by the WTO and ECOWAS.
Its implementation of the ECOWAS CET, affecting a large variety of commodities and goods, means a small tariff cut for the economy.
Furthermore, The Gambia has asserted that its laws, regulations and administrative procedures are in line with the WTO Agreement on Customs Valuation.
Most goods are traded in and out of the country without any restrictions, though some import prohibitions and restrictions remain, mainly for reasons of national security, to protect public morals, and to ensure compliance with international commitments.
Customs duties, excises, and VAT have been named as the Government's principal sources of revenue, falling mainly on imported goods since the domestic industrial base is very small.
The Gambia has also updated its standards and technical requirements. The Gambia Standards Bureau (TGSB) became operational in 2011 and has since circulated 33 standards, most of them directly adopted from international standards, including a new Food Safety and Quality Act.
Conversely, the animal health and plant protection regimes appear to be highly ineffective and require international assistance to modernize, says the review.
Competition rules are governed by the Competition Act of 2007, with The Gambia Competition and Consumer Protection Commission (GCCPC) investigating and enforcing regulations, most notably in the rice and sugar markets.
With regard to the services sector, banking is being reported as profitable by authorities, though banks, mostly foreign-owned, tend to be overly exposed to government debt.
Infrastructure in the payments system has been technically improved and modernised, as has the telecom infrastructure, with the establishment of the African Coast to Europe submarine cable landing station in 2012 and the nationwide fibre-optic backbone network in 2015.
Developing a technology neutral regulatory environment and more affordable broadband access across the country are the aims of the National Information and Communication Infrastructure Policy 2017-2025.
Finally, the review reports that around half of the population relies on subsistence farming and a few cash crops, such as groundnuts, for their livelihood.
However the country is a big net food importer as it is vulnerable to drought and other natural disasters – most of the country’s rice needs, the main staple, are imported, though governmental plans are in place to increase production to achieve self-sufficiency in this product.
