The explanation offered by the Central Bank—that the depreciation reflects broader structural economic factors rather than a single transaction channel—is both accurate and instructive. It reminds us that the value of a nation’s currency is ultimately a reflection of the strength and structure of its economy.
Mr President, the fundamental reality is that The Gambia, like many small open economies, imports far more than it exports. From food items and petroleum products to construction materials, machinery, pharmaceuticals, and consumer goods, the country relies heavily on imports to sustain daily economic activity. Every time these goods are purchased from abroad, foreign currency is required. The cumulative demand for foreign exchange therefore remains consistently high.
On the other hand, the sources through which the country earns foreign currency remain relatively narrow. Tourism continues to play a major role, generating foreign exchange through the services sector. Private remittances from Gambians in the Diaspora have also become a major pillar of the economy, reaching significant levels in recent years. Agriculture contributes through exports of products such as groundnuts and fish. However, when compared with the scale of imports, these sources are still insufficient to fully balance the country’s foreign exchange needs.
This structural imbalance is at the heart of the Dalasi’s depreciation. When the demand for foreign currency exceeds the supply generated through exports, tourism receipts, and investment inflows, the natural outcome is pressure on the domestic currency.
Mr President, the Central Bank’s explanation should therefore be understood not as a cause for alarm, but as a reminder that currency stability is closely tied to economic transformation. Monetary policy alone cannot permanently stabilise a currency if the underlying structure of the economy continues to generate persistent trade imbalances.
The real solution lies in expanding the country’s productive base. The Gambia must move steadily from being primarily an import-consuming economy to becoming a more productive and export-oriented one. This transformation requires deliberate policy focus in several key areas.
First, agriculture must evolve from subsistence production to value-added agribusiness. Rather than exporting raw commodities, the country should invest in processing industries that transform groundnuts, horticultural crops, and fisheries into higher-value export products.
Second, the development of manufacturing and light industry is essential. Local production of goods that are currently imported—such as construction materials, processed foods, packaging materials, and household goods—would significantly reduce the demand for foreign exchange while simultaneously creating jobs.
Third, the country must leverage its strategic geographic location and tourism potential to expand services exports. Tourism, logistics, and financial services can generate valuable foreign exchange if properly supported by modern infrastructure and investment-friendly policies.
Fourth, the strength of the Gambian Diaspora should be harnessed not only through remittances but through structured investment opportunities. Diaspora capital, if channeled into productive sectors such as housing, agriculture, and manufacturing, could become a powerful engine for economic transformation.The operations of The Gambia Stock Exchange and the Gambia Development Bank would be a step in the right direction.
Finally, energy diversification through renewable sources such as solar power can reduce the heavy foreign exchange burden associated with petroleum imports.
Mr President, the strength of a nation’s currency ultimately mirrors the strength of its productive capacity. A country that produces and exports more than it imports will naturally see its currency stabilise over time. Conversely, an economy that relies heavily on imports without corresponding export growth will always face pressure on its currency.
The message for policymakers is therefore clear: currency stability must be pursued through structural reforms that expand production, diversify exports, and strengthen domestic industries.
Encouragingly, the Gambian economy has continued to demonstrate resilience, with steady growth in recent years and improving macroeconomic indicators. The challenge now is to convert this growth into structural transformation that enhances the country’s capacity to sustainably generate foreign exchange.
If the necessary reforms are pursued with determination, the Dalasi will not merely stabilise; it will become a symbol of a stronger and more productive Gambian economy.
Good day!