Gambia

Economic Overview

The Republic of The Gambia is a small West African nation known for its unique geography as a narrow strip of land surrounding the Gambia River, almost entirely enveloped by Senegal. Its economy is characterized by a heavy reliance on tourism, agriculture (particularly groundnuts), and remittances from its diaspora. Following a peaceful democratic transition in 2017, the country has been on a path of reform and recovery, supported by international partners. The 2025-2026 outlook is for continued steady growth, contingent on a stable tourism sector, favorable weather for agriculture, and sustained progress on governance reforms.

GDP Size & Growth Trajectory

The Gambian economy is small but has shown resilience. Real GDP growth was estimated at 5.3% in 2023. The IMF projects this positive trend to continue, with growth forecast at 5.6% in 2025. This growth is driven by a strong rebound in tourism, increased construction activity, and solid performance in the services sector.

Sector Composition

• Services: This is the dominant sector, contributing over 60% of GDP. The sector is led by tourism, which is a primary source of foreign exchange and employment, particularly along the country's Atlantic coastline. Wholesale and retail trade and telecommunications are also significant contributors.

• Agriculture: This sector accounts for about 20% of GDP but employs a large majority of the population. It is dominated by the cultivation of groundnuts (peanuts), which are the main agricultural export. The sector is highly vulnerable to climate change and variable rainfall.

• Industry: The industrial sector is small, contributing around 15% of GDP, and is mainly focused on construction and light manufacturing related to processing agricultural products.

Inflation Trends

Inflation has been a challenge, driven by high global food and fuel prices, which heavily impact the import-dependent nation. The Central Bank of The Gambia (CBG) has tightened monetary policy to combat these pressures. Inflation is expected to moderate in 2025 as global price pressures ease.

Fiscal & Monetary Policy Stance

• Monetary Policy: The CBG is focused on maintaining price stability. The currency is the Gambian Dalasi (GMD).
• Fiscal Policy: The government is working with the IMF to improve fiscal discipline, enhance domestic revenue collection, and manage public debt.

Debt Sustainability Indicators

Public debt is high, and the country is considered to be at a high risk of debt distress. A significant portion of the budget is allocated to debt service, which limits fiscal space for development spending. Prudent debt management is a critical policy priority.

Table 1: Key Macroeconomic Indicators (2023-2026F)

Market Size & Demand Potential

The domestic market is small, but the country serves as a popular and accessible tourist destination.

Population Size and Demographics

With a population of around 2.9 million, The Gambia is one of the smallest countries in mainland Africa. The population is young and growing.

Urbanization and Consumer Hubs

Economic activity and the population are concentrated along the coast, particularly in the Greater Banjul Area, which includes the capital, Banjul, and the largest city, Serekunda.

Business Environment

The post-2017 government has made improving the business environment and attracting investment a priority.

Ease of Doing Business & Regulatory Reforms

The Gambia Investment and Export Promotion Agency (GIEPA) is the national body responsible for facilitating investment. While progress has been made, investors can still face bureaucratic challenges.

Political Stability & Governance

The Gambia's peaceful democratic transition in 2017 has been a major success story for West Africa.

Political Environment

After over two decades of authoritarian rule, a peaceful transfer of power following the 2016 presidential election ushered in a new democratic era. The political environment is now stable, with democratic institutions being rebuilt and strengthened. This newfound stability is a key asset for restoring investor and tourist confidence.

Rule of Law & Investor Protection

The legal system is based on English Common Law. The new government is working to strengthen the rule of law, improve governance, and combat corruption.

Infrastructure Readiness

Infrastructure is a key focus for development, particularly to support tourism and trade.

Transport and Logistics

• Port of Banjul: The port is a vital asset, serving as the main gateway for the country's trade. It also has potential as a transit hub for southern Senegal.
• Gambia River: The river itself is a navigable waterway, offering potential for improved transport and logistics into the interior.

Energy Sector

Access to electricity is limited and unreliable. The country is heavily dependent on imported fossil fuels for power generation, resulting in high electricity costs. There is significant, untapped potential for solar energy, which the government is keen to develop to improve energy security.

Sector-Specific Opportunities

1. Tourism

This is the most important sector of the economy. The country is a popular package holiday destination for European tourists, attracted by its beaches, birdwatching, and culture. Opportunities exist in upgrading existing hotels, developing eco-tourism lodges upriver, and diversifying the tourism product beyond the coast.

2. Agriculture and Agribusiness

There is potential to diversify the agricultural sector beyond groundnuts and into horticulture and poultry to supply the domestic market and the tourism industry, thereby reducing import dependency.

3. Renewable Energy

With its abundant sunshine, solar power is a major opportunity. This includes utility-scale projects to supply the national grid and smaller, off-grid solutions to increase energy access in rural areas.

4. Fisheries

The Gambia's coastline and river have rich fishing resources. There are opportunities in developing the industrial fishing and fish processing sectors for both local consumption and export.