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- GDP (PPP):
- $3.7 billion
- 6.3% growth
- 4.0% 5-year compound annual growth
- $1,962 per capita
- Inflation (CPI):
- FDI Inflow:
The Gambia’s economic freedom score is 57.5, making its economy the 113th freest in the 2015 Index. Its overall score is 2.0 points worse than last year, with especially notable declines in the management of government spending, property rights, freedom from corruption, and fiscal freedom. The Gambia is ranked 19th out of 46 countries in the Sub-Saharan Africa region, and its overall score is below the world average.
With few natural resources and high rates of poverty, The Gambia has been behind many developing countries in implementing policies that advance economic freedom. Over the past five years, improvements to open the economy to greater trade and investment have been offset by declines in six of the 10 economic freedoms including the control of government spending and property rights. The Gambia’s overall score decline is the fifth-largest in the 2015 Index.
Investments in the institutions vital to growth and prosperity are stagnant. Despite small improvements, high tariffs and relatively closed domestic markets limit investment in promising sectors like agriculture and tourism. Rampant government corruption and patronage are exacerbated by the judiciary’s lack of independence. Despite recent reform efforts, inefficiency in business and labor regulations continues to inhibit entrepreneurial growth.
Yahya Jammeh, who came to power in a bloodless coup in 1994, won his fourth term in 2011 in flawed elections. Jammeh’s Alliance for Patriotic Reorientation and Construction won a major victory in the 2012 legislative elections, which were boycotted by opposition parties. The government restrains civil liberties and harasses political opponents. In 2013, President Jammeh withdrew The Gambia from the Commonwealth. The Gambia has few natural resources. Government revenue depends heavily on peanut exports, leaving the state vulnerable to price fluctuations and market shocks. Due to its unique location along the Gambia River, the country is also a natural hub for tourism and trade.
President Jammeh retains an increasingly erratic but firm grip on power with a combination of patronage and repression. Although the judiciary is constitutionally independent, the president fired the chief justice and his own justice minister early in 2014. The judicial system recognizes customary law and Sharia (Islamic) law in family matters. Impunity for members of the security forces remains a serious problem.
The top individual income tax rate is 35 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 equals 14.4 percent of the domestic economy. Government spending is equivalent to 29.8 percent of total domestic output, and government debt equals about 82 percent of GDP.
The overall regulatory framework remains hampered by red tape and a lack of transparency. Inconsistent application of commercial regulations remains a considerable impediment to business. The stagnant labor market perpetuates high unemployment and underemployment. The government heavily subsidizes the parastatal water and electricity companies, which are among the least efficient operators on the African continent.
The Gambia’s average tariff rate is 12.5 percent. Foreign and domestic investors are generally treated equally under the law. The banking sector has gradually expanded and benefits from increased competition. Almost all of the 13 commercial banks are majority-owned by foreign banks. Credit to the private sector has been increasing, and nonperforming loans are less than 10 percent of total loans. There is no stock exchange.