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- GDP (PPP):
- $3.4 billion
- 3.9% growth
- 3.6% 5-year compound annual growth
- $1,864 per capita
- Inflation (CPI):
- FDI Inflow:
The Gambia’s economic freedom score is 59.5, making its economy the 92nd freest in the 2014 Index. Its overall score is 0.7 point higher than last year, reflecting gains in trade freedom, labor freedom, and fiscal freedom offset partially by declines in business freedom, control of government spending, and freedom from corruption. The Gambia is ranked 11th out of out of 46 countries in the Sub-Saharan Africa region, and its overall score is just below the world average.
The Gambia was first graded in the 1997 Index, and its economic freedom has advanced since then by over 6 points. Scores for seven of the 10 economic freedoms, including trade freedom, investment freedom, and financial freedom categories that account for market openness, have improved. A large decline in property rights has held back overall progress. The Gambia has been rated a “mostly unfree” economy throughout its history in the Index but has achieved its highest score ever in the 2014 Index.
Although progress has been made in streamlining bankruptcy procedures, establishing and running a business still requires overcoming numerous bureaucratic hurdles. The application of commercial law is non-transparent and not always consistent. The judiciary is subject to pervasive political interference, and there is corruption in many parts of the economy.
Yahya Jammeh ousted President Sir Dawda Kairaba Jawara in a military coup in 1994 and won flawed multi-party presidential elections in 1996, 2001, 2006, and 2011. Jammeh’s Alliance for Patriotic Reorientation and Construction won a major victory in the 2012 legislative elections, which were boycotted by opposition parties. Government restraints on civil liberties and political opponents remain problematic. The Gambia has few natural resources. Agriculture employs 75 percent of the labor force and accounts for 22 percent of GDP. Groundnuts are a major export. Unfavorable weather patterns caused the agriculture sector to shrink in 2012. Industry and services account for approximately 12 percent and 59 percent of GDP, respectively. Tourism is an important source of foreign exchange.
President Jammeh retains a firm grip on power through a combination of patronage and repression. Although the constitution provides for an independent judiciary, the president has the authority to select and dismiss judges. The judicial system recognizes customary law and Sharia law, primarily with regard to personal status and family matters. Impunity for members of the country’s security forces is a serious problem.
The top individual income tax rate has dropped to 30 percent, and the top corporate tax rate is 32 percent. Other taxes include a capital gains tax and a sales tax. The overall tax burden accounts for 13.2 percent of the domestic economy. Government spending is 26 percent of GDP, and government debt is equivalent to nearly 80 percent of the economy. Drought-induced crop failures have affected revenue collection in the past year.
There is no minimum capital requirement for incorporating a company, but business start-up costs exceed the level of average annual income. Obtaining necessary permits takes over 100 days. The labor market remains inefficient. Although the government heavily subsidizes the parastatal water and electricity companies, they are among the least efficient operators on the African continent.
The Gambia’s average tariff rate is 12.5 percent. In general, foreign and domestic investors are treated equally under the law. The financial sector has gradually expanded and benefited from increased competition. Almost all commercial banks are majority-owned by foreign banks, and credit to the private sector has been rising. Capital markets remain underdeveloped, and there is no stock exchange.