Mr President, The Gambia’s trade performance, particularly its trade balance, has over the years been deteriorating. Imports continue to increase both in volumes and value, reflecting the increased reliance on the importation of essential commodities such as petroleum products, food items (mainly rice) and manufactured goods (textiles, vehicles, electronics, etc. to meet domestic demand.
On the other hand, exports, of which re-exports used to dominate, remain low despite its crawling-like increase over the years. This has resulted in a chronic trade deficit over the years, causing significant challenges for the Gambian economy particularly in the areas of exchange rate stabilisation.
Mr President, as of December 2024, total exports (FOB) staggered around US$363.3 million of which about 90 percent is re-exports. However, imports (FOB) amounted to US$1.4 billion during the same period. Exports (mainly re-exported products) include mineral fuels & oils, sugar &sugar confectionary, essential oils & resinoids, iron & steel, dairy produces, etc.
In most cases, these re-exports are meant for neighbouring countries including Mali (47 percent of total exports), Guinea-Bissau (28.1 percent of total exports) and Senegal (22.1 percent of total exports), while importing mainly from Senegal (70.7 percent of total imports), Nigeria (12.8 percent of total imports), Ivory Coast (10.6 percent of total imports), and Togo (4.7 percent of total imports).
Furthermore, the Gambia’s manufacturing sector has a very small base, focused mainly on production for the domestic market, and utilising a limited range of skills and technology. Although the Gambian market is small, there are significant opportunities which could be exploited in the manufacturing sector, based on the import substitution opportunities which are clear from the substantial imports of manufactured goods and processed foods for the tourist and national populations and on the regional market. The country needs to establish strong distribution channels through the existing re-export business.
Mr President, according to the recent Monetary Policy Committee (MPC) Press Release of 27th February 2025, Preliminary balance of payments estimates indicate a modest improvement in the current account balance in 2024; supported by a rebound in tourism, private remittances, and official inflows.
The current account balance, according to the same report, moderated to a deficit of US$74.4 million (3.2 percent of GDP) in 2024, from a deficit of US$120.1 million (5.5 percent of GDP) in 2023. However, the deficit in the goods account continues to widen, from US$877.4 million (40.3 percent of GDP) in 2023, to US$1.0 billion (44.6 percent of GDP) in 2024.
The growing deficit in the trade balance continues to be driven by increasing imports of food items, electricity and fuel, on the back of a low export base.
Mr President, whilst we applaud the authorities (both fiscal and monetary) for the gains registered in these areas, we must be cognizant of the increasing demand for imports as the population increases and low export base (due to low manufacturing and production base)that continues to put enormous pressure on the Gambian Dalasi and domestic inflationary pressures. This calls for concerted efforts to comprehensively address going forward if we want to stay relevant in international trade.
The MPC is doing its best to anchor inflationary pressures. However, one must admit that the structural rigidities in the domestic economy continue to limit the efficacy of monetary policy. One must therefore revisit the Supply Chain and Logistical Challenges the country is facing. Poor infrastructure and inefficient logistics are known to have contributed significantly to high inflation. The cost of transporting goods within the country remains elevated due to poor road networks and high fuel costs.
Additionally and most importantly, the issue of low re-export trade volumes. The loss of competitiveness of the Banjul Port to Senegal has exacerbated logistics and supply chain challenges. With most goods now being imported through Senegal and then transported to The Gambia, businesses face higher logistical costs, customs inefficiencies and delays, all of which further inflate consumer prices. These structural inefficiencies create bottlenecks that drive up costs across the economy. Addressing these challenges requires strategic investment in infrastructure and trade facilitation measures.
Mr President, in conclusion, it is important for government to revisit and rethink the trade and re-export trade to ensure a sustainable external position for the country which will improve foreign exchange supply and help stabilise the exchange rate and inflation.
This must include and not limited to possibly establishing a dry ports at Basse to target, regain and increase access to the Malian markets as we have lost them to Senegal despite the geographical proximity.
We must also invite Senegal to the negotiation table on cross border customs tariffs. It costs on average CFA50, 000 (GMD5,800) to escort a truck of goods from Dakar to Mali whilst the same truck of goods will pay more than CFA630,000 (GMD73,080) from Gambia through the Vellingara Border to get to Mali. Most of these payments are unreceipted. This discouraged regional businessmen to export goods to the sub-region through the Gambia and this is exacerbated by the continuous delay of cargo arrival to the Gambia.
The structural problems at the Banjul Ports continue to post significant challenges to businesses and businesspeople who in most cases pay heavy demurrage due to congestion at the Ports and lack of access to the congested jetty. This also causes flash shortages in basic commodities such as cement as the major importers scramble for limited access to the jetty in turns. Something must be done to address this major bottleneck.
We therefore need to revisit and rethink our re-export trade to boost foreign exchange supply.
Good day!