Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.

The business climate presents several market challenges for investors considering The Gambia as a potential investment destination:

Policy: One of the primary challenges in The Gambia has been the lack of predictable and coordinated economic policies.  On June 29, 2018, President Barrow announced a major cabinent reshuffle that included both the Minister of Finance and Economic Affairs and the Minster of Trade.  Despite that change, the macroeconmic and fiscal consolidation plans already introduced by the government are expected to continue.   The government of The Gambia participates in many sectors including public utilties and port management.  Taxes levid on SMEs are especially high and have thus stifled growth prospects.   Despite a change in regime and adjustments by the government, banks have yet to commence lending to boost activity in the private sector.  Therefore access to credit is a major market challenge as a result of poor fiscal policies.  There are few to no known regulatory barries to U.S. trade and investment.  The Gambia is ranked 146 out of 190 countries in the 2017 World Bank's Doing Business Report. 

Obtaining construction permits, securing electricity connections, and registering property are fairly simple processes in The Gambia.  During the former regime, there were reports of coercion towards private companies, which were forced to agree to business partnerships with then-President Jammeh or his associates as a condition to continuing their business activities in The Gambia. However, the new government has stated that it supports a market-driven economy and will not intervene in the foreign exchange market. 

Market size: The Gambia's small market can be a hindrance to large investments.  The low per capita income (PPP) of $1,600 and GDP (PPP) of $3.4 billion 2016 indicators characterize the small market size.  However the economy is beginning to grow, with GDP growth forecasted at five percent in 2018. Limited integration with other major economies could make it difficult to serve other markets through a Gambia-based operation.  The poverty rate is also high at 50%, and average public sector incomes are very low at $50 to $100 per month. Ninety percent of the economy is made up of SMEs, and there are only seven large firms considered to be active in The Gambian economy.

Infrastructure: The main market challenge in The Gambia is poor infrastructure.  The Gambia's low Doing Business ranking is driven partly by this problem.  The Gambia does not boast of any major freeways or highways, but the road network does spread over several hundred kilometers. There are no major bridges in the country, with only one African Development Bank (AfDB) sponsored bridge currently under construction that will connect the north and south banks of the country, which is disected by the River Gambia.  Any opportunities to explore and invest in river transport systems are limited by a general lack of investments in infrastructure.  

Energy: The current electricity penetration rate is 35 percent in a sector characterized by frequent blackouts despite the high cost of energy.  Energy costs in The Gambia are among the highest in the sub-region at approximately 25 cents per kilowatt hour (kWh).  The blackouts are largely due to transmission losses as a result of dilapitated equipment. Despite some major constraints, there have been investments and restructuring in the energy sector, which should result in improved electricity supply in the short to medium term.   The GOTG has also explored interim solutions to the energy crisis as it seeks to build a more long term solution to electricity generation, including a powership to  provide 33 percent of The Gambia’s energy, a source that has proved unreliable.  (High waves disrupted transmission on at least one occasion.)  The need to improve the power generation infrastructure remains a challenge despite the current government’s 2018 Electricity Roadmap.

Human Capital / Labor: The Gambia has a labor force participation rate (people employed and unemployed but looking for a job) of 79.4% which is made up of mainly young people between the ages of 15 to 35. Agriculture is the main source of employment in the economy, providing jobs to 60 percent of the population. However, the lack of diversification and modernization, combined with a youth exodus to Europe through clandestine migration, has greatly affected productivity.  The low literacy rate, which stands at less than 60 percent, limits the amount of skilled labor that is accessible in the economy, despite the proliferation of skills training centers and academies in the market.
 

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