The Gambia

Main Sectors in the Gambian Economy

The Gambia is heavily dependent upon agriculture, which in the late 1990's accounted for a quarter of the GDP. This dependency becomes even clearer when we look at the labour force, where three quarters are engaged in agriculture. Further, agriculture mostly consists of subsistence farming, livestock raising and cultivation of groundnuts for export.

The Gambia has no important mineral or other natural resources and has a limited agricultural base. Small-scale manufacturing activity features the processing of peanuts, fish, and hides. Re-export trade normally constitutes a major segment of economic activity, but the 50% devaluation of the CFA franc in January 1994 together with the closure of the Senegalese border made Senegalese goods more competitive and hurt the re-export trade. The private sector, led by tourism, trading, and fisheries, is experiencing modest growth. However, a high population growth rate has diluted the positive effects of economic expansion. Per capita gross domestic product is estimated to be $360.

GDP
GDP: $360 million 
GDP per capita: $300
purchasing power parity* per capita: $1,000 (1998 est.) 

GDP composition by sector (1997 est.)
agriculture: 23%, industry: 13%, services: 64%  

Labour force - by occupation
agriculture 75%, industry, commerce, and services 19%, government 6%

Export commodities
peanuts and peanut products, fish, cotton lint, palm kernels 

Agricultural production
groundnuts (85.000 tons), millet, sorghum, rice, cotton, palm kernels.

Livestock
cattle (340.000), sheep (167.000), goats 191.000), horses (17.000), donkeys (43.000), poultry (550.000). Numbers are from 1991, and are lower than usual due to a drought season.

Fisheries
21.000 tons

Mining
none

Industry
oils (local basis)

Tourism
80.000-100.000 visitors annually

Service sector
It might seem contradictory that the service sector contributes to some 64% of the Gambian GDP. It must, however, be remembered that the service sector is one of the few were the monetary system in fact works and were most of the sector is within the formal, countable economy. Government expenditure, government employees, trade (including re-export), banking and finance, the tourism industry, telecom, transports, etc. are to be found within this sector. And most of the money in action in this sector is accounted for, unlike the majority of agricultural production, which is mainly subsistence. The service sector employs some 25% of the Gambian labour force. The government alone, 6%. Below, we will take a closer look at the tourism industry.

Tourism
Even though tourism does not account for more than 10 and 15% of GNP, it is one of the The Gambia's most highly profiled sectors, attracting very much of foreign and domestic investments. It is also one of the main sources of foreign currency. Despite the relatively high numbers of visitors, its significance for the GDP remains rather modest, very much due to that a high percentage of the tourist are on package tours, paying their trip in their home countries. Thus, much of the revenue of the industry never arrives to The Gambia. The Gambian government, though, keeps focusing on the tourism sector to decrease its dependency on agricultural products. Investments in tourism related projects remain substantial, when including infrastructure projects like the new airport.

While the number of tourists (mainly European, from Germany, Britain and Scandinavia) grew considerably in the 1980's (to a peak of some 110.000 visitors in the 1988/89 season), it was consolidated around 90.000 annually in the early 1990's. The coup d'état in 1994 gave a serious flaw to tourism, following travel warnings from several Western countries. After the 1997/98 season, however, numbers again have reached the level of the early 1990's, again consolidating itself at some 80.000 visitors annually. 

Around 10.000 Gambians are employed directly or indirectly in the tourism industry, being a modest part of the labour force. Most of these only are engaged in seasonal contracts, following the 6 months tourist season. Having in mind that these employees support a large number of family members, as the tourist industry constitutes one of the few accesses to wage employment in The Gambia, it has been estimated that the industry might be the main cash income for some 5-10% of the Gambian population.

Tourism has provided increased employment opportunities, but the net foreign exchange earned from this sector is considerably lower than gross earnings. This is because an estimated 50% of gross receipts are used to finance imported goods, including those used by the hotels. 

Industry and manufacture
The industry sector in The Gambia is very underdeveloped. Unlike neighbouring Senegal, the government has never gone for an Import Substitute Program. On the contrary, it  has been focusing on low trade obstacles, making The Gambia a major regional centre of trade, import and re-export. Thus, local industry has not been favoured.

Agriculture
Agriculture (including livestock and forestry) is the dominant sector in The Gambia when counting the people involved. Some 75% of the labour force is involved in the sector. The main crops are peanuts, millet, sorghum, rice, corn, cassava (tapioca) and palm kernels. In the agricultural sector as a whole are also included livestock, forestry and fisheries, but first we will have a look at the crop subsector.

Crops
Groundnut is the main export source and essential to gain foreign currency in The Gambia. In the national budget for 2000, groundnuts are expected to constitute 58% of national exports. High prices offered for groundnut and easy access to cheap import rice has favoured groundnut production since colonial years. This in turn led to reliance on imports and food aid and undermined the country's derive towards self-sufficiency in food.

However, becoming self sufficient on food is not the only scope of the agricultural sector in The Gambia. Even if the agricultural sector of The Gambia is mainly subsistence oriented, it is of important value for the national economy. It is, however problematic to account the exact share of agriculture to GDP. There are large variations within the data and the different ways of accounting the share. Jabara (1990) operates with a share of the GDP of 34.6 % in 1974/75 and 34.1 in 1988/89. These numbers include livestock, fisheries, and forestry. If we subtract these sub-sectors and only account crop production, including subsistence farming, there has been a decrease from 28.4% in 1974/75 to 22.3 in 1988/89. Growth in the livestock and fishery sub-sectors has kept the share of GDP steady during this era. The agricultural sector's share of total GDP has dropped in the 1990's, due to the growth of the service sector.

The conclusion is obvious. Agriculture and especially crop production is important to Gambian economy. However, the importance of this sub sector is declining. The Gambia's economic dependence on export of the staple groundnut has created problems related to both market and climatic vulnerability. Lower world market prices and variations in climatic conditions have made the export income more insecure. Further, in the 1990's farmers have been turning from cash crops such as groundnuts to food staples for local consume, thus securing their diet. Crops for auto-consumption have increasingly been grown, such as maize (89% auto-consumed), millet (90%), sorghum (91%) and rice (84%). Rural cash income has slowly been redirected from the production of cash crops to wage earning in the service sector, partly as seasonal labour in the tourism industry, but also in other industries and services.

There is a disparity between the share of agriculture to the national income and household income. About three quarters of the population lives in rural areas. Most of the rural population is engaged in the agricultural sector. The 1983 census calculated the agricultural sector to absorb 73.6% of the total labour force. However, Gambian agriculture is labour intensive and the output per worker is low. 

Livestock
The livestock sector in The Gambia is of ever-increasing importance for the rural population. While the crops and fishing agriculture subsectors have received their parts of investment capital resources to raise their contribution economically and socially, the livestock sector has received comparatively very little injection. The situation has been aggravated by considerable leakages from the sector in the form of high incidence of diseases, high mortality and inadequate nutrition. Still, it remains a field of great attention by the rural population, not the least due to the cultural value of livestock, but also due to its economic importance. Livestock populations, thus, have generally undergone a remarkable increase from their initial low numbers recorded in the beginnings of the last century.

The livestock production system in The Gambia, with the exception of the Greater Banjul Area and Western Division, is predominantly traditional, and production is aimed at a local (or family) market. The traditional livestock production system is extensive and subsistence in nature, with its socio-cultural attributes outweighing the economic aspects. This system has for decades concentrated on cattle development and is characterized by transhumance, which has evolved over the years of adaptation, in search of food and water and the evasion of diseases. The system mainly concentrates on increasing numbers. This, coupled with the rapid increase of the human population, has resulted in excessive pressures on the rangeland.

Processing of livestock products hitherto is done on a very local scale. The products in question are meat, milk, eggs, hides and skins. Processing techniques used have so far prevented exports and a successful link to the tourism industry. The current production of meat and milk is generally considered low, and potentials for an increased meat production high. 

Credit continues to be a problem to livestock operators, such as to the traditional agricultural sector as a whole. Most farmers do not have access to credits from formal institutions and thus have to fall on non-institutional sources for their credit needs

Forestry

Forestry in the Gambia is of great domestic and local significance. The forested area covers some 10-12% of the country, but also the savanna area (covering some 40%) is used as a forestry resource. The forestry sector's contribution to GDP has yet to be adequately ascertained. In the mid 1980s the sector's contribution to the GDP was pegged at about 1%. However, this estimate did not take into consideration the very significant informal sector, such as local trade in non-wood forest products, the illegal trade in the timber industry as well the general contribution that forestry makes towards rural income through informal forest related activities.

Being more than 90% dependent on wood as a source of domestic energy and having an agricultural economy (85% of the population are farmers), the pressure placed on the limited forest resources by the increasing population has been very high. The pressure is likely to continue increasing as The Gambia still has to identify an alternative and viable source of energy and as forest clearing for agricultural expansion and establishment of new settlements will continue into the future.

Ownership of the forest resource is mostly collective. The 1991 State Lands Act made all lands in The Gambia state property, although provisions of this law recognize the individual or community usufruct right over the land. Traditionally people own trees that they have planted, and therefore tree planting is done on customary lands to secure ownership of this land. In 1995, 72,5% of the forested area was state owned, open access forest. 13,3% of the forest were unproductive mangroves, 13,8% protected areas and forest parks, while only 0,5% were community owned forest reserves. There is an ongoing process to change the ownership and tenure of the forest resources, and some 40% of the forests are planned to be transferred into community forest reserves. 

Fisheries
The fisheries sector contributes significantly to the national economy. In spite of its relatively small size, The Gambia is endowed with considerable marine and riverine resources with rich fishing grounds. The Gambian fisheries were of some 20.000 tons annually in the 1990's, and the sector is considered to have a potential for further development. It has, though, risen its share of GDP the last decades, from very low numbers in the 1970's, surpassing forestry in the 1980's and consolidating its share of 4% of GDP in the 1990's. The fisheries production traditionally was riverine, with stable catches until today of some 2.500 years annually. The last decades, there has been an emphasis on developing and increasing the marine fisheries, which reached catches of some 20.000 tons in the early 1990's - a number which has remained more or less stable since.

The fisheries have become an essential source of foreign currency, contributing to 12,6% of Gambian projected exports in year 2000, according to the national budget. The government has invested heavily in the fisheries over the years, fish products being a more secure income source than other agricultural products such as groundnuts (fish prices generally keep rising due to global scarcity).

Investments, thus, keep flowing. This year, Taiwan is to fund $3 million ice plant at Banjul beach, a five year ADB/FAO fisheries development project ($12 million) is to start in 2000 and Japan is to fund a fisheries ice plant and cold room at Tanji. The potential of the riverine and marine fisheries are believed to be higher than the actual exploitation of the resource.

Consulted bibliography

Carney (1986), The social history of Gambian rice production: an analysis of food security strategies, PhD thesis, Michigan State University, Ann Arbour.

FAO (1995), Statistical Country Profile. Gambia 1984-95, Accra.

FERAP (1996), Study on agro-food sectors in the Sahel, Banjul.

FJP (1999), Summary Data: Government of The Gambia’s Budget for the year ending 31 December 2000, Banjul.

Fyhri (1998), The Gambia: The complexity of modernizing the agricultural Sector in Africa, thesis in geography, University of Oslo. Available in our library!

Gambia, The (1991), Livestock Sector Review, Banjul.

 

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