By Bai Madi Ceesay
Introduction
The Gambian experience in SOE Reform presents a particularly compelling case study. The country has witnessed both extremes of SOE performance: a memorable period during the 1980s and early 1990s when Gambian SOEs were regionally respected for efficiency and profitability, followed by a prolonged period of deterioration spanning nearly three decades, where many SOEs became synonymous with financial distress and governance failures. Yet, within a short period between 2023 and 2025, The Gambia has again begun to witness a gradual resurgence in SOE performance. At the center of this transformation lies one critical reform instrument: the re-introduction of Performance Contracts (PCs).
The resurgence of Performance Contracts in The Gambia represents far more than a mere administrative exercise. It signifies a fundamental shift in public sector governance philosophy, from a culture where institutions operated with minimal oversight and weak accountability mechanisms, to one where measurable results, strategic targets, and institutional responsibility are central pillars of SOE management.
Indeed, the evidence emerging from our recent SOE reform journey strongly suggests that Performance Contracts have become one of the most impactful governance tools in transforming SOEs from fiscal liabilities into increasingly profitable and accountable national assets. The rapid improvement in financial performance, governance compliance, and dividend payments to government within only three years offers one of the clearest demonstrations that what gets measured gets done.
The historical foundations of soe oversight in The Gambia: The National Investment Board (NIB):
To fully appreciate the significance of Performance Contracts in modern-day SOE reform, one must revisit the institutional architecture that once governed SOEs in The Gambia.
The National Investment Board (NIB), established in 1977, remains one of the most influential and respected public institutions in the country’s post-independence history. Reporting directly to the Office of The President, the NIB was entrusted with the responsibility of monitoring the performance of SOEs while simultaneously providing strategic policy guidance to government.
The institution quickly gained a reputation for professionalism, technical competence, and institutional discipline. Indeed, the NIB was widely regarded as a center of excellence within the Gambian public sector, attracting some of the country’s brightest professionals and technocrats. The institution also benefitted significantly from donor support and technical assistance from organizations such as the World Bank, USAID, and KFW of Germany, which further strengthened its monitoring and analytical capabilities.
Under the NIB’s oversight, several strategic SOEs flourished, including: GAMTEL, GPA, SSHFC, GPTC, Gambia Airways, GPMB, NTC etc. This period, particularly during the 1980s and early 90s, is widely regarded as the pinnacle of Gambian SOEs.
During this era, theGPAfunctioned as the primary catalyst for the regional economy. Recognised as anefficient and profitable maritime gateways in West Africa, the GPA served as a vital hub for the re-export trade, effectively positioning the country as a central nervous system for regional commerce.
Simultaneously, GAMTEL emerged as a continental vanguard in telecommunications. Ranked second only to South Africa’s Telkom, it was widely celebrated for its commitment to innovation and technological efficiency, setting a standard for national carriers across Africa.
The aviation sector, led by Gambia Airways, mirrored this high-performance culture. Regarded as a premier carrier within the sub-region, the airline was instrumental in catalyzing the domestic tourism industry. This success was underpinned by an industrious joint venture with British Airways, which facilitated a consistent (three times a week) Banjul–London corridor. Beyond flight frequency, this partnership served as a conduit for world-class expertise, fundamentally elevating the airline’s operational, financial, and governance frameworks to international standards.
Meanwhile, The Gambia Produce Marketing Board (GPMB) stood as a testament to the nation’s agricultural and industrial potential. At its peak, the GPMB managed volumes up to 300,000 tonnes of groundnuts annually, a stark contrast to the contemporary average of approximately 40,000 tonnesin recent years. This scale allowed for the production of high-quality vegetable oils for both domestic security and international export.
Perhaps most revolutionary was the GPMB’s financial sophistication. The introduction of the “Groundnut Bill”, a precedent-setting bond mechanism akin to sovereign Treasury Bills, demonstrated a level of fiscal maturity rarely seen in SOEs. During this era, the GPMB was not merely self-sustaining but was a reliable contributor to the national treasury, consistently delivering dividends to the government.
At the core of this golden age was the Performance Contract, introduced by the NIB in 1990. These contracts established measurable KPIs across quantitative and qualitative dimensions, and created a coherent framework of consequences: salary bonuses of six to twelve months for high performers; frozen increments, demotions, formal warnings, and executive redeployments for those who failed. Performance was made visible, measurable, and consequential. The results spoke for themselves.
The long decline: 1994 -2022
The military takeover of 1994 brought the NIB’s dissolution, and with it, the abrupt collapse of nearly two decades of carefully constructed SOE oversight architecture. The institutional memory, monitoring frameworks, and accountability culture that the NIB had built were extinguished almost overnight. Without structured oversight, SOE governance steadily eroded, strategic direction became diffuse, and financial discipline weakened across the sector.
Government’s subsequent attempt to restore direction through the Gambia Divestiture Agency (GDA), established in 2001, produced limited results. Only two transactions were concluded; the partial sale of GPA’s Banjul Shipyard stake in 2005, and a 50% share in Gamtelto Spectrum, a Lebanese company. However, the Spectrum deal was later revoked in 2008, and broader divestiture efforts failed to gain traction. Consequently, the GDA Act itself was repealed in 2009, leaving The Gambia, for the first time since 1977, entirely without a dedicated institution responsible for SOE oversight.
The absence of institutional oversight between 2009 and 2022 had devastating consequences for SOE performance and national fiscal stability.
During this period, weak governance practices became entrenched across many SOEs. Audit reports consistently highlighted serious governance deficiencies, financial irregularities, procurement weaknesses, and non-compliance with regulatory requirements. Some SOEs repeatedly received qualified audit opinions, reflecting pervasive weaknesses in financial management and internal controls.
Critically, the absence of Performance Contracts meant that Boards and Management teams operated with limited accountability. There were few mechanisms to systematically measure institutional results or enforce consequences for poor performance.
The consequences were severe and cumulative. By 2014, the fiscal damage was quantifiable: tax obligations of 0.6% of GDP went uncollected from SOEs; government spent 4.5% of GDP servicing external debt on behalf of three SOEs alone; and a further 0.6% of GDP subsidised the fuel requirements of energy sector SOEs. By end 2018, energy sector SOE debts had reached 5.8% of GDP, while telecommunications sector SOE debts stood at 3.8% of GDP. By end 2022, SOEs recorded an aggregate net loss of D3.5 billion, and total liabilities of D25 billion (21% of GDP).
These mounting liabilities transformed SOEs from engines of economic growth into major fiscal risks for the state.Rather than paying dividends to government, SOEs increasingly relied on direct bailouts, debt servicing support, and emergency financial interventions from the Ministry of Finance.The situation was fiscally and institutionally unsustainable.
SOE Act 2023 and the return of performance contracts
The enactment of the SOE Act in 2023 was a watershed moment, a deliberate legislative assertion that SOE Oversight is paramount. The Act established the SOE Commission, mandated to oversee and monitor SOE performance with particular emphasis on governance, fiscal prudency, and operational efficiency. In spirit and in function, the Commission carries strong echoes of the NIB, not as nostalgic imitation, but as a conscious effort to recapture the institutional discipline that made Gambian SOEs so effective in their prime.
One of the Commission’s first and most strategically decisive actions was the signing of Performance Contracts with the country’s largest SOEs. Six SOEs are currently enrolled. The KPIs are structured across three dimensions, financial performance, operational efficiency, and governance. This three-dimensional framework ensures that financial improvements are built on durable governance foundations, not achieved at their expense.
The incentive and sanction architecture are clear and consistently enforced. SOEs that meet their targets receive a maximum of three months’ salary bonus. Those that fail face consequences ranging from board dissolution and management termination, to top management salary reductions. Crucially, the Commission has the backing of the relevant stakeholders, including the Executive, to implement these consequences, a commitment that has proven to be a crucial driver of the Performance Contract’s effectiveness. Where sanctions have been applied, the results have been striking: the Commission has observed SOEs sanctioned in one year make a complete turnaround the following year.
The results: 6 billion turnaround in three years
The financial transformation achieved since 2023 is, by any reasonable measure, encouraging. From an aggregate net loss of D3.5 billion in 2022, SOEs recorded an aggregate net profit of D2.5 billion in 2025, a turnaround of D6 billion, representing a growth of 171%, within just three years. Of this D6 billion turnaround in profitability, 70% (D4.2 billion) came from SOEs under Performance Contracts. Also, out of the D2.5 billion aggregate SOE net profit, D2.1 billion (84%) came from Performance Contract enrolled SOEs. Meanwhile, total SOE revenues grew from D12 billion in 2022 to D17.5 billion in 2025. Of this D17.5 billion total revenue, D14.8 billion (85%) was generated by the six SOEs under Performance Contracts. The relationship between Performance Contract participation and improved financial performance is unambiguous.
Also, for the first time in recent history, five SOEs have paid dividends to government based on their 2025 performance, of which three are enrolled in Performance Contracts, a symbolically and fiscally significant reversal of the subsidy-dependence dynamic that defined the SOE-government relationship for nearly three decades.
On the governance front, qualified audit opinions, although still a challenge, are declining in frequency, audit recommendation implementation has improved markedly, and timely submission of audited accounts is also improving. These developments are critically important because governance failures were historically among the principal drivers of SOE deterioration.
Challenges and lessons learned
Despite the encouraging progress, challenges remain. One of the most persistent obstacles continues to be the backlog of audited accounts. Since final Performance Contract assessments depend primarily on audited financial statements, delays in audits often delay performance evaluations.
To partly address this issue, the SOE Commission has now incorporated timely submission of audited accounts and the clearing of audit backlogs as specific KPIs within the Performance Contract framework itself.
Another important lesson concerns KPI rationalization. Initially, Performance Contracts included between 15 and 18 KPIs. However, experience demonstrated that excessive indicators diluted strategic focus. Consequently, the Commission reduced the number of KPIs to approximately nine or ten highly strategic indicators capable of driving meaningful institutional impact.
Conclusion
The history of SOE governance in The Gambia is, at its deepest level, a story about accountability, its presence, its absence, and the transformative difference between the two. When accountability was institutionally embedded and performance was measured with consequences, Gambian SOEs were thriving. When that framework was dismantled, those same institutions entered a prolonged and costly decline that exacted billions of dalasi from the public purse and undermined service delivery for millions of citizens.
The reintroduction of Performance Contracts through the SOE Commission has not conjured resources from nowhere. What it has done is something more fundamental: it has created the conditions under which the latent capabilities of these institutions can be activated, directed, and sustained. By making performance visible, by attaching real consequences to outcomes, and by maintaining consistent accountability backed by political will, the Performance Contract has unlocked a transformation that is already encouraging in its early results and promises to deepen further.
A D6 billion improvement in SOE profitability within three years is not incremental progress, it is structural transformation, achieved through the application of accountability principles that are conceptually simple but institutionally demanding. For SOEs across The Gambia and the wider developing world that seek to shift from being fiscal liabilities to genuine engines of national development, the Performance Contract offers a proven, adaptable, and powerful instrument. The Gambia’s experience demonstrates conclusively that the revival of rigorous, accountable, performance-driven SOEmanagement is not merely aspirational. It is underway. And the numbers prove it.
