Economy of Gambia

The economy of the Gambia is heavily reliant on agriculture. The Gambia has no significant mineral or other natural resources, and has a limited agricultural base. About 75% of the population depends on crops and livestock for its livelihood. Small-scale manufacturing activity features the processing of peanuts, fish, and animal hides. Short-run economic progress remains highly dependent on foreign aid, and on responsible government economic management as forwarded by International Monetary Fund technical help and advice.

Top Sectors in Gambia

Agriculture in Gambia

Agriculture accounts for 23% of gross domestic product (GDP) and employs 75% of the labor force. Within agriculture, peanut production accounts for 5.3% of GDP, other crops 8.3%, livestock 4.4%, fishing 1.8%, and forestry 0.5%.

Industry in Gambia

Industry accounts for 12% of GDP. Manufacturing accounts for 6% of GDP. The limited amount of manufacturing is primarily agriculturally based (e.g., peanut processing, bakeries, a brewery, and a tannery). Other manufacturing activities include soap, soft drinks, and clothing. Services account for 19% of GDP.

Tourism in Gambia

Tourism in Gambia has three major strands. There is the traditional sun-seeking holiday making use of the hot climate and wonderful beaches. The Gambia is also usually the first African destination for many European birders, due to its easily accessed and spectacular avian fauna. There are also a significant number of African Americans tracing their roots in this country, from which many Africans were taken during the slave trade. While not that many American slaves came from Gambia it was made popular by Alex Haley's historic novel and TV miniseries Roots: The Saga of an American Family.

Gambia - Key Economic Indicators

Exports and Imports

The Gambia's economy relies heavily on agriculture, with exports primarily consisting of agricultural products such as peanuts, fish, and hides. Import items include machinery, fuel, food products, and consumer goods. Agricultural exports play a significant role in the country's economy, while imports fulfill domestic consumption needs and support various industries.

Infrastructure

The Gambia has invested in developing its infrastructure, including roads, bridges, ports, and airports. However, infrastructure development may face challenges due to limited resources and geographical constraints. Efforts to improve infrastructure are crucial for facilitating domestic and international trade and enhancing economic growth.

Balance of Trade

The Gambia's balance of trade is influenced by its reliance on agricultural exports and imports of various goods. The value of agricultural exports often determines the country's trade balance, with fluctuations in commodity prices impacting trade dynamics. Efforts to diversify exports and reduce import dependency may help improve the balance of trade over time.

Fiscal Policy

The Gambia's fiscal policy involves government spending in sectors such as education, healthcare, infrastructure, and social welfare programs. Taxation policies aim to generate revenue for public services and investment. While specific tax rates and government spending allocations may vary, fiscal policy plays a crucial role in supporting economic development and social welfare.

Monetary Policy

The Central Bank of the Gambia implements monetary policy to regulate the country's money supply, interest rates, and inflation. Central bank actions aim to maintain price stability, support economic growth, and ensure the stability of the Gambian currency. Monetary policy tools are utilized to manage inflation and maintain financial stability.

Trade Agreements

The Gambia may engage in trade agreements with regional and international partners to promote economic cooperation and expand market access for its exports. While not a participant in major trade agreements like NAFTA, bilateral and regional trade agreements play a role in facilitating trade relations and enhancing economic integration.

Environmental Regulations

The Gambia has implemented environmental regulations to address pollution, waste management, and conservation efforts. These regulations aim to mitigate environmental degradation and promote sustainable development. Efforts to enforce environmental laws and promote conservation initiatives are essential for protecting the country's natural resources and biodiversity.

Tax System in Gambia

Capital Gains Tax: Gambia imposes a capital gains tax on profits earned from the sale of assets such as stocks, bonds, real estate, and other investments. The exact rate can vary, typically ranging from 5% to 15%.
Corporate Tax Rate: The corporate tax rate in Gambia is progressive, with rates ranging from 15% to 30% depending on the annual taxable income of the corporation.
Sales Tax: Gambia applies a value-added tax (VAT) system to goods and services consumed within the country. The standard VAT rate is 15%.
Property Tax: Property tax in Gambia is levied on the ownership of real estate, including land, buildings, and other immovable property. The tax rate can vary, typically ranging from 0.5% to 1.5% of the property's assessed value.
Payroll Tax: Gambia imposes a payroll tax on wages and salaries earned by employees. The tax rate is typically around 20% of the employee's salary.
Tax Deductions and Credits: Gambia may offer certain tax deductions and credits to individuals and businesses to reduce their overall tax liability. The availability and amount of deductions and credits can vary based on specific circumstances and government policies.
Tax Compliance: The efficiency of tax collection in Gambia refers to the government's ability to enforce tax laws and collect taxes owed by individuals and businesses. Effective tax compliance measures are essential for ensuring sufficient revenue collection to fund public services and government programs.
Tax Burden: The tax burden in Gambia represents the total amount of taxes paid by individuals and businesses relative to their income or profits. It varies depending on factors such as tax rates, income levels, and types of taxes paid, but it typically ranges from 20% to 30% of GDP.