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Wednesday, June 12, 2024

Gambia among few Ecowas countries maintaining GDP growth – report

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By Omar Bah

According to the West Africa Economic Outlook report 2023, GDP growth dropped in all countries in the region, except The Gambia, Cabo Verde, Guinea, Mali, and Niger.

The report said the growth reduction is attributable, among other causes, to the resurgence of Covid-19 in China, West Africa’s major trade partner; Russia’s invasion of Ukraine, which is causing inflationary pressures in net food, fuel, and fertiliser prices in importing countries.

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The report added that the fiscal deficit is projected to narrow in all the countries in the region, with the exception of Guinea.

It stated that average regional inflation is projected to stabilise at 17.5 percent in 2023 and decline to 11.1 percent in 2024 and will stay higher than the continental average both in 2022, 2023, and 2024.

In terms of country groupings, the report added, regional growth is projected to be driven by the non-resource-intensive economies (The Gambia, Cabo Verde, Togo, Senegal, Guinea-Bissau, Benin, and Côte d’Ivoire) and a few other resource-intensive countries.

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The report added that the region’s average GDP growth decelerated to 3.8 percent in 2022 from 4.4 percent in 2021, implying that growth recovery from the 2020 downturn has slowed. According to the report, growth is driven, on the demand side, by household consumption and investment, and on the supply side by the services sector.

According to the IMF/WB DSA, 10 countries in the region were assessed to be facing a moderate risk of debt distress situations. “These countries are expected to utilise the available fiscal policy spaces with care; they need to strike a balance between growth and debt sustainability,” it added.


Reacting to the report, a former director of budge and member of the opposition UDP Momodou Sabally, said: “Generalised GDP growth discussions of this nature could be misleading sometimes. Therefore, one should be skeptical about the insinuations of a terse statement about rising growth in countries like Gambia. To start with, this publication seems to have the wrong data for GDP growth in The Gambia’s economy.”

 He said according to the latest report published by The Central Bank of The Gambia’s Monetary Policy Committee, dated May 31, 2023, “The Gambian economy grew by 4.9 percent in 2022 compared to the revised growth of 5.3 percent in 2021”.

“So clearly, and contrary to what this report is stating, the Gambian economy is not different from the majority of West African economies being analysed. Growth dropped in Gambia in 2022 rather than accelerate. At any rate, even if we took the thesis of the report as right, a growth rate below 5 percent has no real practical meaning for a country battling with double-digit inflation and youth unemployment of above 30 percent.

“Moreover, the generalised growth statistics for the groups of West African countries touted for good performance cited sectors like agriculture, industry, and services. We clearly know that agriculture has not been doing well in this country of late as farmers battle high production costs like fertiliser and poor buying arrangements for our main cash crop, groundnuts,” Sabally said.

In the area of services, Sabally added, the high outrun of sectors like telecoms could also be misleading as key shareholders are foreign investors with a great appetite for instant repatriation of not only profits but sometimes income.

“How would high growth in such a sector positively impact the lives of average citizens when the price of data is still prohibitively high?

Growth in tourism suffers a similar fate as policies like all-inclusive deprive local residents of the benefits of the sector. Therefore, proclaimed growth in the services sector may not be reflected in the lives of average citizens, despite any soothing rhetoric from technicians,” he added.

He said growth in industry in The Gambia is soon going to be a thing of the past with the recent skyrocketing of energy prices, especially electricity.

“High costs added to an unreliable supply of electricity is a recipe for poor performance in the sector. In view of the foregoing, the stated numbers for Gambia’s GDP growth in 2022 may be giving false signals of better sociology-economic welfare given the sparse distribution realities of GDP growth added to prohibitive cost challenges for producers in terms of energy costs and the infamous Securiport airport levy, which are driving investors and tourists away,” he concluded.

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