A trade fair held at the Independence Stadium in December 2011 and meant to showcase products ‘made-in-The Gambia’ has ended up exhibiting more foreign products than those made locally.
Over twenty out of the 200 stalls erected at the trade fair were occupied by businesses from the sub region. They include Mali, Senegal, Burkina Faso and Ghana. Five stalls were occupied by a Taiwanese business conglomerate, and the rest were occupied by Gambian businesses. However, almost two thirds of the stalls were occupied by products made from outside The Gambia.
According to the GCCI Chief Executive Almami Taal, it is because of this culture of foreign products’ domination of The Gambian market that the chamber decided into stage such trade fairs. “The trade fair has become an annual event for Gambian businesses to showcase products and services. It is borne out of the realization to encourage ‘made-in-The Gambia’ products on a scale that is appreciable and interesting. We have also come to the realization that The Gambia cannot produce everything it needs or consumes. That is why the fair has expended scope to include goods made from outside,” Taal explains.
He admits that even though government has a policy to encourage investors into the manufacturing industry, it has not succeeded in reversing the trend.
Key among Gambia Investment and Export Promotions Agency’s promotional strategies is the value-added strategy through “niche manufacturing”. This means focusing on areas where The Gambia has comparative advantages over its immediate competitors in the sub-region. This strategy focuses on the selective clustering of a number of manufacturing options in sectors such as agriculture, food processing, fisheries and horticulture.
“Newly established investment enterprise that falls within any priority investment sector shall be granted a tax holiday in respect of its corporate or turnover tax, depreciation allowance, withholding tax on dividends. In the case of a priority sector within the Greater Banjul Area, this package covers a period of five years, while in the case of a priority area outside the Greater Banjul area (within other geographic regions except the town of Brikama), it is for a maximum period of eight years,” says the agency on its official website.
Under-exploited manufacturing sector
The Gambia’s investment and export promotions agency says The Gambia’s manufacturing sector continues to be under exploited with limited concentration of inter-connected manufacturing companies.
As the government agency responsible for promoting investment and exports, GIEPA says the sector’s share of Gross Domestic Product continues to be low thus forming the basis of increased Government efforts to expand industrial production and development. The sector consists mainly of medium-sized enterprises located primarily in the urban and peri-urban area.
The manufacturing value added percentage of GDP in The Gambia was last reported at 4.96 in 2010, according to a World Bank report released in 2011… 4.97 in 2009, 4.94 in 2008, according to the World Bank. The country has limited natural resources relying in part on remittances from workers overseas. About three-quarters of the population depend on the agricultural sector for its livelihood.
In recent years, Gambia’s growth has been driven by expanding tourism sector and banking. Tourism is the country’s main foreign exchange earner. Tourism contributed 14.7 percent of GDP in 2009, 12 percent of real GDP in 2010, and it is projected at 14 per cent by end 2011. Close to 20 percent of the GDP comes from tax revenue. However, there has been a decline from 17.5 percent in 2007 to 14.5 percent in 2011, says the minister of Finance and Economic Affairs in 2012 Budget Speech.
New financing scheme needed to boost local manufactures
Financing investment is big challenge for investors
By Sanna Camara
Despite the existing investment-incentive packages available to investors in The Gambia, a new financing scheme for investment is needed if the country wants to boost local manufactures, says Mr. Almami Taal, Chief Executive of the Gambia Chamber of Commerce and Industry.
Mr. Taal said financing investment is one of the biggest challenges investors and other businesses face in The Gambia. Unfortunately, the dominant financial services providers do not have the right solutions for investment financing. This has left a huge gap for investment financing in the country as businesses shy away from the lending terms and conditions of commercial banks.
According to Mr. Taal, high costs of financing, energy, logistics, and other inputs like raw materials needed for production add-up to the price, quality and competitiveness of Gambian products. In a country where prices and costs are high, he says it makes Gambian goods less competitive than others made from outside.
The investment packages offered by government helped businesses to manufacture to a certain level. Duty waivers and special investment certificates prevents investors from paying corporate tax, and they can import inputs and primary products into the country duty-free. This has given investors advantage and enables them to work effectively with less hurdles, Taal explains.
“However, government should establish new and different financing mechanism and framework or instruments. For example, a lot of people consider that Islamic banking has greater potential for investment financing than conventional banking,” Taal says.
Over-bearing interest rates
“In the conventional banking environment, it is a fact that borrowers are sometimes rendered miserable and frustrated, leading to failure as a result of over-bearing interest rates. The irony is that while lending rates are always in an upward course, deposit rates are very low,” Professor Ekpo stated.
Professor Ekpo is the Director General of the West African Institute for Financial and Economic Management (WAIFEM). The institute was established in July 1996 by the Central Banks of The Gambia, Ghana, Liberia, Nigeria and Sierra Leone with the purpose of building sustainable capacity for improved macro-economic and financial management in the constituent countries. In mid-October 2011, the institute brought together financial executives from member countries to Banjul in a bid to look into the potential of Islamic banking to the development aspirations of member countries.
He defined Islamic banking as non-interest banking: “It is a banking model which is based on a profit and loss sharing system. It rests on the Islamic doctrine of ‘universal permissibility’ in business dealings, which states that everything is permissible unless it is clearly prohibited,” he stated.