Under President Yahya Jammeh, the country has been tackling the problems linked to many other small countries--having an economy that is not diversified and limited by a tiny internal market. Then, in addition, there are the problems common to most countries in sub-Saharan Africa, such as, inadequate infrastructure, deficiencies in the business climate and constraints to institutional capacity. But Jammeh's government has taken great strides towards reducing these problems.
For instance, with regard to the overall economy, which is the driver of development, the government has focused on restoring macroeconomic stability over the last three years. As such, international financial institutions (IFIs) have acknowledged that the indicators are generally acceptable, a clear reflection of the government's prudent policies.
Nevertheless, the government acknowledges that a lot still needs to be done to better the living standards of the majority of Gambians. But as has been acknowledged by the IFIs, The Gambia has strengths on which it can capitalise. For example, decades of relatively open trade policies and limited administrative barriers reinforced the country's position as a trading centre.
But the attainment of a positive medium-term economic outlook will require the continued implementation of sound macroeconomic policies, market-oriented structural reforms, and an efficient government investment plan.
To help implement this agenda, the authorities intend to stabilise revenue through the introduction of a new formula for fuel price adjustments that would allow for greater pass-through of movements in import prices. The authorities are also taking steps to ensure a smooth introduction of value added tax (VAT) by January 2013. Key structural reforms will contribute to maintaining macroeconomic stability and strong growth. In particular, reforms in public financial management will enhance fiscal discipline and better control government expenditures.
Like many other developing countries, agriculture is significant to the Gambian economy. It is a crucial sector for shared growth, improved food security and poverty reduction. Agriculture has an estimated labour force of 75% of the population. The government estimates that the sector contributes between 25 and 30% to GDP and generates about 40% of total export earnings. The government has instituted many policy reforms aimed at ensuring sustainable food security and better...