Investment Opportunities in Gambia
Investment Opportunities in Gambia
The Gambia is one of the small countries in West Africa with a total area of about 10,600 square kilometers. It is bounded on the West by the Atlantic Ocean and on all other sides by the republic of Senegal. The country forms a narrow stretch of land from the coast to about 400 kilometers inland, varying in width from about 50 kilometers near the coast to less than 35 kilometers island. The River Gambia is by far the most important geographical feature and it divides the country into two equal parts. It provides excellent river transport and is rich in fish resources, both marine and fresh water fishes. Lying within the sahelian zone, the Gambian climate is characterized by a long dry season from November to June and a short rainy season extending from June to October. The current population is estimated at 1.5 Million (1994 projection) with an annual growth rate of 3.5 per cent. About 80 percent of the population live in the rural areas and are predominantly farmers.
Since independence in 1965, the Gambian economy is still dominated by Agriculture. with groundnut production as its principal cash crop. Due to vagaries of weather, this economic sector continues to be severely constrained in terms of output compared with production inputs and therefore resulting to continuous decline in our overall gross domestic products and foreign exchange earnings.
In an endeavor to reverse this decline in the economy, the government had put in place the Economic Recovery Program(ERP) in 1985 which placed emphasis on major policy reforms in key economic agents as well as sectors. These reforms include inter alia: Liberalization of foreign exchange, divestiture and privatization of parastatals and government shares in other enterprises, reforms in key institutions providing support services to tile private sector, and liberalization of business activities with less interference by the government in the interactions of various economic agents in the country.
The success of the Economic Recovery Program could be measured against the average annual growth of about 5% registered during the period 1985/90. Foreign exchange is no longer a major constraint and re-export trade due to the proximity of the Gambia to major European destinations and the sub-region, was on the increase and similarly, other economic sectors registered growth with the multiplier effects on the growth in the Gross Domestic Products and reduction in the government Budget deficits.
The ERP was succeeded by the Program for Sustained Development(PSD). This also placed emphasis on consolidating the achievements made under the ERP with the major policy thrust of private sector led-growth through further diversification of economic activity and provision of more incentives to enhance private sector participation in tile economic development process.
The government has set priorities to the following economic sectors considered having value-added contribution, foreign exchange-e earnings and employment creation potentials:
Projects in these sectors are awarded incentives in the form of duty waiver on capital equipment, spare parts, materials, and raw and/or semi-finished material inputs. Other incentives include preferential allocation of land to the project, on-the-job training and technical assistance, and identification of market opportunities for projects in the export sector. The government is committed to the development and expansion of export-led activities in the country. In this regard, investments in air cargo services and maritime shipping to enhance exports , are also considered for the award of investment incentives.
Investment opportunities are available in all economic sectors especially in fishing, tourism manufacturing, and horticultural sub-sector.
HORTICULTURE
This sub-sector is becoming a major economic activity in the Gambia due to its vast export market opportunities and conditions favoring its production in the country. There are a number of farms in this area with an average weekly export for 11 selected farms estimated at 120 tons of fruits and vegetables. Land can be obtained from traditional land owners through the Government. The process of land allocation for agriculture involves obtaining clearance from Ministry of Agriculture and Natural Resources before final approval is given by Ministry of Local Government and Lands.
The expansion in cold storage and dry cargo facilities at the Banjul International Airport compared with the demand in the export markets gives an added advantage to exporters. There are considerable investment opportunities in the sub-sector and the concept of centralized marketing that would ensure maximizing earning capacities of women and other small-scale growers, would be considered favorably. There are several large farm owners with significant investments in boreholes and equipment, seeking joint ventures.
AGRO PROCESSING INDUSTRIES
There are no significant investments in this area; however, given the size of annual imports of commodities such as fruit juice and sauces, roasted confectionery nuts, chicken feed , and dairy products, the sub-sector offers immense investment opportunities. There is a need for establishing a fruit juice processing industry to cater for the surplus on exports of fresh mangoes, oranges, tomatoes, and other fruits. Production of hot pepper sauce tomato paste and processing of wheat flour will go a long way towards reducing their annual import requirements. Similarly, establishment of a feed mill will complement investments in the livestock sector. These products have greater export opportunities to the sub-region as well as meeting demand due to expansion in our tourism industry.
FISHERIES
There are a number of enterprises in this sector seeking joint venture and/or financing for expansion and modernization of their plant to meet rapid increases in demand for Gambian fish products in the export markets. Investors in the fisheries sector are accorded development incentives and also assisted by identifying export markets. There are only three companies with processing facilities of which two are operating. Pelican Seafood Company and ScanGambia Shrimps Limited have very good infrastructure facilities but are currently under receivership. Potential buyers are welcome to make a turn-around of these companies.
According to the most recent resource survey conducted in 1992, the Biomas estimates of pelagic fish is as follows:
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Flat sardinella
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10,000 metric tons
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Round sardinella
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70,000 metric tons
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Horse mackerel
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80,000 metric tons
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The Biomas estimates for demersal fish is:
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Grouper
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130 metric tons
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Grunts
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9,600 metric tons
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Croakers
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400 metric tons
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Seabreams
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9,200 metric tons
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Carangids
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5,400 metric tons
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Dories
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250 metric tons
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Cephalopods
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940 metric tons
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LIVESTOCK
Livestock production accounts for about 6% of the GDP at current market prices (1991/92 preliminary estimates). The sector's activities are limited to rearing of cattle, pigs, small ruminants and poultry for the domestic market. In the absence of organized cattle ranching to cater for the demand for beef and dairy products in the domestic market as well as our growing tourism industry, the sector offers investment opportunities. Similarly, enterprises engaged in poultry production are constrained by high cost of imported feed, resulting to poor supply response in hotels and the local market.
MANUFACTURING
Manufacturing activities are limited to small and medium-scale enterprises producing mainly for the domestic market. There are large deposits of kaolin discovered in one of the provinces (URD), titaniferous beach sands, and salt which are currently unexploded. The demand for sanitary wares and quality ceramic tiles are currently met through imports. Investment in a foundry that uses scrap metals for the production of finished-iron and metal plates required in the construction industry and small-scale repair workshops, offers good opportunity. Similarly, light pharmaceutical industry and light engineering for manufacturing and assembling of electrical and mechanical components for domestic appliances and repair workshops, are considered to be potential areas of investment.
Due to its strategic location and competitive prices, manufacturing sector in the Gambia enjoys export opportunities to the sub-regional markets. Already, plans are under-way for the establishment of an industrial estate with factory cells and the Islamic Development Bank has been approached for financing, the project's feasibility study.
TOURISM
Tourism sector continues to play a dominant role in the Gambia's economic development process. The sector provides employment opportunities as well as enhances foreign exchange earnings for the country. The number of visitors to the country in 1991/92 was estimated at 109,164 of which Air Chartered Tourists accounted for 60% of the total. The estimated average daily expenditure for tourist for the period under review, was D300.00, and gross earnings was estimated at D432.00 million. The number of hotel beds was 5070 for 22 hotels operating- during this period.
The government is committed to an orderly development and expansion of the sector to include cultural and eco-tourism in order to maximize the benefits from tourism. In this regard, the expansion of infrastructures to designated tourism development areas including natural forest parks, land marks and monuments of cultural significance, are considered under the sector's development strategy. Effective marketing and promotional strategies for the U.S. markets and other European destinations is currently under review and it is anticipated that these strategies will take-off in mid 1994.
There are number of hotel development projects seeking for joint venture and/or financing including, construction of 5 Star hotels, bar and restaurants, and recreation facilities. However, the immediate investment priority for the sector is in tour operations targeting the Middle-East, U.S. and Europe. Investments in airline operations linking the Gambia and the targeted destinations have greater potentials and will give impetus to the growth and development of the Gambian tourism industry.
SERVICE SECTOR
The development of capital market and expansion of financial intermediaries to broaden and ease access to credit by investors in the productive sectors of the economy will enhance the production capacity of these enterprises with the multiplier effects on the growth of our economy. Government is committed to establishment of a capital market and other financial intermediaries. Private sector investments in this area are most welcome.
Investment opportunities are available in air and sea transport services linking the Gambia and the sub-region to enhance trade as well as facilitate supply sources of raw material inputs for the industries. Similarly, investment in river transportation linking, Banjul and up-country will facilitate movement of goods and people to urban centers.
Finally, the Gambia's open door policy, respect for human rights and rule of law, provides an ideal investment climate.