Assan Faal, CEO of Gambia investment agency, GIEPA, has argued that dependency
on public sector does not help economic growth. Rather, targeting direct
investments has the potential to create 80% employment for the country and
create even higher tax corporations.
Despite the economic challenges facing the country, Mr Faal said the public sector cannot do everything. “For many years, many governments especially in this region have been carrying notions that government should create employment as a way of eradicating poverty,” he quizzed: “That turns out to be wrong”
Faal said such beliefs in post-colonial Africa has only succeeded in bringing high debt ratio for the country because government then has to tax people, take more loans to make sure they can facilitate and pay for these salaries.
GIEPA wishes to change that notion, as it engages in rebranding the country in partnership with the Chamber of Commerce and Industry (GCCI) as investor haven.
“We want to help promote private sector to take that responsibility. That way, we can lower our debt-to-GDP ratio and lower other economic challenges that we have,” he opined.
For example, CPI (consumer purchasing Index) in The Gambia is very low due to what Faal said was “the lack of right structures to help promote private sector involvement in economy.” GIEPA is engaged in promoting investment through entrepreneurship, investments, especially those that will not add difficulties in the economy instead create opportunities and possibilities.
A market of 300 million people
Faal made these remarks with journalists recently at their offices. He said now that Gambia has a political environment with fundamental principles of democracy institutionalised, this has created a favourable environment for investors by reducing political uncertainties in the minds of many investors willing to bring businesses to The Gambia.
CEO Faal said the country is already a hub, based on the design of its boundaries and geography. “Gambia should be seen not just as a market of two million people but a bigger market for 300 million people,” he said.
If Europeans carve out the land and gave South to the Portuguese and later to the French, and north to Senegal, it was because they focused on the river which is strategic.
“They used to bring goods and services from the ocean to the river travel down to its end and off to Mali and Guinea. On their return, they grab slaves and bring them down to the Atlantic Ocean (to James Island) and ship off to Europe. This is a hub. We do not want to do the immoral way of doing trade. We want to use the right way to trade in the 21st century,” he explained.
Gambia servicing other countries
Smaller nations have a strategic interest and higher advantages in terms of servicing other nations as seen in Dubai, Mauritius and Singapore. These countries became what they are today because they realised they were small and would not be able to compete with bigger countries in terms of manufacturing, Faal explained.
“Singapore today has 98% employment rate. Mauritius is moving in similar direction, and Dubai has no drop of oil but reached such a level by servicing Arab states that have huge oil reserves. Cape Verde has no natural resources and cannot even grow vegetables but is today lifted out of Least Development Country (LDC) status due to servicing its neighbours.
“If we act like these countries, we will be servicing them instead of competing with them,” Faal argued. “We will be a service country, a re-export country and a transit country. We will not be going for the big manufacturing countries but servicing them instead and there are ECOWAS laws that allow us to do that,” he added.
But how does government create this entrepreneurship environment for private businesses to excel, is a question put to Mr. Alieu Jallow, founder of Start-up Incubator Gambia, at another meeting with journalists recently.
Entrepreneurship like ecosystem
According to Mr. Jallow, who recently participated in a leadership programme in Brussels called “voice of the youth and the future of development”, entrepreneurship is like an ecosystem with different players.
“It is a combination of different factors. Key among them is the policy environment for entrepreneurship and young people to start up. You give me a tax break but I need a D100,000 to start a business. How many Gambians can really afford that?” he quizzed
He said tax break for start-up is good, especially if it allows businesses to stand on strong footing to be able to pay good taxes… That will be a double win for the government: higher revenues for government because the entity has grown to be able to create jobs.
“Entrepreneurs are problem solvers. Gambia has numerous problems that can be solved by entrepreneurship but it needs the right ecosystem to support; a financial system that does not detour you with 360% interest rates or collaterals as land or car,” he argued.
Jallow said 90% of young people who come to the incubator have personal finances and family as sources of start-ups, and not banks’ financing.
Education system has also failed the country, Jallow argued:“Not just in Gambia but a lot of African countries because we are trained to seek jobs not create them. You get trained to be the lawyer, the accountant, or doctor. Each of these professions has entrepreneurship aspects and if explored, countless opportunities can be created in the country.”
“Education systems need to inculcate entrepreneurships into the minds of the young ones from secondary to high schools up. Even if they do not finish school, they are already growing with the entrepreneurship mindsets,” he opined.
If government creates the right ecosystem that enables the youths to be entrepreneurial, it will greatly facilitate job creation, bring high tax revenue for government and reduce the backway migration to Europe, Jallow said.