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Economic trends in LDCs not encouraging – report says

Nov 29, 2012, 8:40 AM | Article By: Yusuf Ceesay

The Least Developed Countries (LDCs) report 2012 was yesterday launched in The Gambia at a press conference held at the Ocean Bay Hotel at Cape Point Bakau, suggesting among others that economic trends in LDCs are not encouraging.

Noting that LDC economies continue to be extremely vulnerable to external stocks, the report revealed that many countries face large fiscal and current account deficits.

The report among others focused on the issue of remittances from a wider perspective, and also examines the potential role of migrants or diaspora at large from LDC as source of development finance, and also as channels of knowledge transfer.

It centered on “Harnessing remittances and diaspora knowledge to build productive capacities”, and identifies policies and actions where LDC can adopt to ensure that remittance contribute to building productive capacities in home countries.

In launching the report in the presence of senior government officials, diplomats, representatives of UN agencies among other stakeholders, Samba Sallah of the Ministry of Trade, Regional Integration and Employment, who gave a summary of the report, noted that the average GDP growth in LDCs was 4.2% in 2011, down from 5.6% in 2010 and way below the 7.9% in 2002-2008.

On the outlook for the LDCs, Sallah revealed that given the fragility of the global economy, the outlook for LDCs is subjected to a high degree of uncertainty.

“Unless the global downturn, which is also affecting large dynamic developing economies, reverses, LDCs have to prepare for a possibility of a lengthy period of stagnation and deflation,” he said, adding that of particular concern are external shocks from reversals of commodity prices and drying up of financing options.

According to him, evidence from many countries, both developed and developing, show that there are positive and negative impacts of remittance.

Remittance in LDCs, he went on, amounts to 4.4% GDP and 15% export compared to 1.6% and 4.5% for other developing countries.

“In The Gambia remittances were worth about 11.54% of GDP in 2010 and averaged 35% of exports of goods and services between 2006 and 2010,” Sallah stated.

Sallah revealed that the main flows of remittance in The Gambia are from Spain, which amounts to US$20.3M, USA $10.7M, UK $ 6.2.

Ismaila Jarju of the Central Bank of The Gambia described the initiative as a noble one, noting that there have been efforts in The Gambia to see how to harness remittance and other sectors of the economy.

“Significant contribution of remittances to the growth aspect of development of developing countries like The Gambia cannot be overemphasised,” Jarju added.

The Central Bank of the Gambia, he stated, is working to improve remittances by reducing costs.

Permanent Secretary, Ministry of Trade, Regional Integration and Employment, Naffie Barry, and Bai Ibrahim Jobe of the same ministry, both underscored the importance of the report.