Gambia’s economy is gently taking a U-turn from its clouded prospects and taking off with an expected three percent increase after months of political turmoil threatened prospects.
The economic outlook of the country appears favorable and the country is foreseen to recover from the 2016 slowdown as tourism and agriculture register a modest growth from the year earlier.
“The economic outlook looks favorable. The tourism sector is rebounding and the agriculture has recovered, reasonably,” said IMF representative, Ruby Randall.
“This lean season is actually the most favorable lean season in five years… So already, we have seen that tourism is rebounding… We also have evidence talking to some key players in the private sector, we are hearing that the bookings for the peak season are very encouraging.”
The IMF and other donor partners jumped in to help revive The Gambian economy after the former regime allegedly mismanaged billions, and emptied the state treasury and reserves bank.
At least $120 million has been given in aid and more than $100 million in loans to the new government of President Adama Barrow.
The reserves bank directors say since then, the foreign exchange reserve as increased more than five-fold from $19 million, an indication of remarkable economic stabilization.
IMF projection has shown that the political turmoil following the elections in December 2016 is expected to reduce tourism receipts in the first quarter of 2017 by about one third, and higher fuel and commodity prices put further strain on the balance of payments.
“While the Gambia has experienced growth episodes of 6-7 percent over the past 20 years, growth has been volatile due to weather-related shocks, economic mismanagement, and corruption of the previous regime, with average growth of 3.6 percent over that period.”
Gambia is characterized by high debt and high-interest rates, facing a huge debt distress at 120 percent, way higher than Senegal 57 percent, Guinea Bissau 46 percent, Mali 31 percent, and ECOWAS’s benchmark 29 percent.
The country relies on remittances from abroad, agriculture and tourism and remains highly vulnerable to climate change and external shocks.
Policy inconsistencies, high spending and unfavorable weather conditions in recent years have negatively affected economic potential and fiscal performance.