THE GAMBIA
Table 1

Key conditions andchallenges
2023

Population, million

2.8GDP, current US$ billion

2.3

GDP per capita, current US$845.8

International poverty rate ($2.15)

a17.2
a47.0

a80.6

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a38.8

School enrollment, primary (% gross)

b92.3

b62.1

Total GHG emissions (mtCO2e)

3.3Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2020), 2017 PPPs.
b/ WDI for School enrollment (2022); Life expectancy(2021).

Economic growth accelerated to 5.3 percent in 2023 as favorable rainfall led to agood harvest while investment supported
growth in the industry sector. Inflation
averaged 16.9 percent, eroding the purchasing power of households and increasing poverty. The fiscal deficit halved to2.6 percent of GDP, driven by strong tax
collection and higher grants. High inflation, debt vulnerabilities, foreign exchange pressures, and regional and global
geopolitical tensions cloud the outlook.

The Gambia is consolidating its democratic transition and implementing reforms
to transform the economy. However,structural factors continue to hamper
growth, including low productivity
growth, lack of structural change, constrained fiscal space for infrastructure investments, a constraining business environment for private sector development,
limited economic diversification, and human capital challenges. This has resulted
in limited job creation and economic opportunities, limited access to essential
public services, and high poverty.
Real GDP growth averaged 3.1 percent in
1990–2022—less than 0.5 percent in percapita terms. The labor market faces alow labor force participation rate (43.6percent), significant underutilization (41.5percent), predominance of informal (62.8percent) and unwaged employment (72percent), and more significant gender
gaps. Poverty rates are higher, with anestimated 17.2 percent of the population
living in poverty in 2020, using the international poverty line of $2.15 (in 2017
PPPs). Social disparities prevail in accessto essential services, and most of thecountry still needs better connections toroads, schools, and health facilities.
These weaknesses are coupled withdownside risks such as reemerging foreign exchange pressures, high dependence on imports of essential goods andservices, putting persistent pressure on
the balance of payments and forex market and exacerbating the vulnerability
to global shocks in commodity markets.
Fiscal risks remain substantial given
State-Owned Enterprises (SOEs) contingent liabilities and the high dependence
on external grant financing due to low
tax collection. High domestic debt also
crowds out private credit.
Against this backdrop, the Government isimplementing the National Development
Plan (NDP) 2023-2027 to consolidate democratic governance, accelerate growth,and build resilience to shocks. Implementing this agenda poses significant financing
needs, with US$0.7 billion of available
funding as of December 2023 out of total
cost estimated at US$3.5 billion.

Recent developments
Economic growth accelerated to 5.3 percent in 2023 (2.7 percent per capita), mainly driven by agriculture and industry.
Agriculture benefited from favorable rainfall and increased fertilizer subsidies. Despite increased tourism activity, services
decelerated as many subsectors contracted(information and communication, entertainment, etc.). Private investment, supported by remittances and public investment, drove growth on the demand side.
Inflation averaged 16.9 percent in 2023 –the highest level in decades – caused byimported food inflation, utility tariffs increases, and currency depreciation, dragging down private consumption.

FIGURE 1 The Gambia / Real GDP growth and sectoral
contributions to real GDP growth

FIGURE 2 The Gambia / Actual and projected poverty rates
and real GDP per capita

Percent, percentage points
8Poverty rate (%)

Real GDP per capita (constant LCU)

100

30000

90

62500080704200006025015000

400

10000

30
20-25000

10-4
2019

2020

Agriculture
Net taxes

2021

2022

2023

2024Industry
Real GDP growth

2025

02026

02010 2012 2014 2016 2018 2020 2022 2024 2026

Services

Sources: The Gambian authorities and World Bank estimates.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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1Apr 24

Rising food prices are expected to haveincreased poverty to 16.9 percent in 2023,
from 16.4 percent in 2022 - an increase ofover 25,000 people, using the international poverty line of $2.15 (in 2017 PPPs).
The increase in poverty is mainly due
to food price inflation which rose to 22
percent in 2023, eroding the purchasing
power of households.
The fiscal deficit halved to 2.6 percent of
GDP in 2023, driven by increased tax revenues and grants. Public expenditure remained high owing to increased spendingon road infrastructure. With lower net domestic borrowing, public debt declined to75.8 percent of GDP in 2023. Nevertheless,the Gambia remains at high risk of debt
distress. The current account deficit (CAD)
is estimated at 4.5 percent of GDP in 2023, almost comparable to the 4.2 percent in 2022,
on the back of a recovery in tourism and increased imports related to ongoing infrastructure projects. The monetary stance wasfurther tightened, with the policy rate increasing to 17 percent in August 2023 from
10 percent in April 2022. However, the effectof monetary tightening seems limited, asinflation is essentially imported. Due toimport pressures, international reserves

declined to 4.2 months of imports in 2023
from 5.1 months in 2022, alongside a depreciation of the nominal exchange rateof 4.6 percent.

Outlook
Growth is projected to average 5.6 percent
in 2024-26 (3.1 percent per capita), driven
by increased activity in all sectors. Agriculture and services are expected to sustain
growth, assuming favorable rainfall andcontinued recovery in tourism. Robust remittances, which represented 32.1 percent
of GDP in 2023, will support the recovery
in private sector demand, which, together
with infrastructure programs, are expected to drive growth. Inflationary pressures
are predicted to persist in 2024 and gradually ease, with CPI inflation reaching
6.5 percent in 2026, close to the Central
Bank’s 5 percent target, reflecting the
restrictive monetary policy and easing
global supply conditions.
Agriculture growth, recovery of the
tourism sector, and robust remittances are
expected to positively affect household

TABLE 2 The Gambia / Macro poverty outlook indicators

well-being. However, sustained increases
in food prices will continue to undermine
such gains in 2024, given poor households
spend 65 percent on food. Consequently,
the international extreme poverty rate isexpected to increase to 17.2 percent in 2024
before declining in 2025 and 2026.
The CAD is expected to remain contained,
averaging 3.8 percent in 2024-26, reflecting
robust remittances, a decrease in investment-related imports, and strong export
growth. The monetary policy is set to remain tight as inflation persists. The fiscal
deficit is projected to narrow to 1.5 percent
of GDP over 2024-26, supported by thecompletion of major infrastructure projects
and domestic revenue mobilization efforts,
including the digitization of tax administration and customs, the implementationof digital excise stamps for excisable products, the introduction of fuel marking, andreforms to broaden the tax base. Public
debt is projected to decrease to 68.9 percent of GDP in 2024, supported by the fiscal path. Nevertheless, The Gambia is expected to remain at high risk of debt distress, and the end of the debt-service deferrals in 2024 could weigh on debt sustainability and economic growth.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
5.3
7.2
-7.9
-8.7
-27.2
-15.2

2022
4.9
3.4
2.3
15.1
8.5
16.2

2023e
5.3
3.3
2.4
13.7
18.9
11.0

2024f
5.5
3.7
2.5
14.1
18.0
12.0

2025f
5.8
4.1
2.6
11.8
20.1
11.0

2026f
5.4
4.1
2.7
9.1
22.0
10.0

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

5.3
13.7
2.9
2.8

4.9
3.6
3.1
6.0

5.3
7.2
6.5
4.1

5.5
6.6
6.4
4.8

5.8
6.2
6.1
5.65.4
5.1
6.1
5.4

Inflation (consumer price index)
Current account balance (% of GDP)

7.4
-4.3

11.5
-4.2

16.9
-4.5

15.9
-5.1

10.5
-3.2

6.5
-2.3

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-4.8
16.8
83.9
-1.8

-5.0
17.7
83.4
-2.9

-2.6
20.6
75.8
-0.4

-2.1
21.8
68.9
1.0

-1.3
20.4
64.6
1.4

-1.0
20.2
59.5
1.5

16.1
45.4
80.3

16.4
45.9
81.5

16.9
47.0
82.3

17.2
47.683.2

16.5
46.7
82.9

15.9
45.8
81.8

4.2
20.7

3.4
21.0

2.9
21.4

2.5
21.7

2.5
22.0

2.5
22.3

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2020-IHS. Actual data: 2020. Nowcast: 2021-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

MPO2Apr 24