Gambian businesses reported a plunge as tensions in The Gambia deepens. The continued weakness it is causing the economy signals investor pessimism that could force the country into a recession if President Yahya Jammeh refuses to leave power.
Fear of a violent end to Jammeh’s rule, who refuses to hand over to businessman Adama Barrow, could be felt immediately by tourism and real estate business owners.
The Association of Real Estate Companies reported that Mr. Jammeh’s refusal to leave at the peak of the tourist season has negatively impacted their business. Most of their customers they say are now afraid to visit the tiny silver of a country out of fear that they may be caught in the potential conflict.
Gambian hoteliers do not know yet what the magnitude of the shock will be due to Jammeh’s refusal to allow a peaceful transfer of power but are already seeing a steady decline in sales. The number of tourist arrivals has plunged and hotels already have problems reaching their sales goals.
For The Gambia, this creates an enormous uncertainty for its clouded economy. Hoteliers and realtors do not see how they will make up for the loss.
Hotels and real estate companies play key roles to bring in foreign exchange. The country’s foreign exchange reserve has declined by more than 65%. Realtors may suffer the biggest shock as many of their homes are put out for rent targeting tourists.
It will take some time for The Gambia to establish new relationships with Europe and the rest of the world. Some market and economic volatility can be expected after Jammeh oversaw a foreign policy that strained relations between The Gambia and Europe.
Many Gambians are hoping that President-elect Adama Barrow, a real estate developer can make fisheries and tourism The Gambia’s competitive advantage and build a stable and resilient economy that will address the country’s large unemployment problem.