Economywatch - With Osman Kargbo & Tedla E. Khan : Gambia treads vulnerable economic path

While  the national budget presents a picture of a bolstering agricultural sector, a vibrant trade pursuit, and a resilient economy, the fact remains that the country’s rice importation level continues to go into the stratosphere.

“We consumed 275,000 metric tonnes of rice and we only produced 29,000 metric tonnes. This is not ideal for any country,” the Central Bank Governor said few weeks ago. “That is why the government is making all efforts to ensure that we are able to produce 275,000 metric tonnes of rice and feed ourselves. The ADB has pledged to support The Gambia to become self-sufficient in rice by 2027. And they have assigned AfricaRice to lead the process.” The CBG Governor was speaking at the Bank’s Monetary Policy Committee press briefing in Banjul on 27 February this year.

Rice is just one very important food commodity that the nation consumes at this level or more in a year. Almost all other essential commodities people of this country consume are imported at very high level, thereby creating the need for enormous amounts of volumes of international trading currencies like dollar, pound sterling, EURO and CFA, and putting serious burden or pressure on the country’s local currency the Dalasi.

According to the 2024 National Budget, in the 2023 fiscal year, the agriculture sector witnessed substantial growth in the scale and number of agricultural projects, underscoring “the government's unequivocal commitment to and prioritisation of this sector”.

The budget further states: “The Ministry of Agriculture (MOA) has made commendable progress toward its objectives and continues to engage in partnerships aimed at implementing initiatives aligned with the Recovery Focus National Development Plan, further advancing the sector's transformation.

“While food availability in the market remains generally robust across the country, there was  a notable increase in the prices of cereal crops in 2023 compared to the preceding year. This price surge is primarily attributed to global inflation and the ongoing conflict in Ukraine. The Gambia's dependence on food imports has amplified the impact on the prices of basic commodities, further exacerbated by the continuous rise in fuel prices, which has subsequently led to elevated transportation costs.

“The National Agricultural Research Institute (NARI) and the Food and Agriculture Organization (FAO) have achieved significant milestones in agriculture research. This includes the final screening and availability of five groundnut varieties, five new findi varieties, and three cassava varieties to benefit local farmers. The Institute has also pioneered the development of innovative technologies for livestock feed and soil fertility enhancement, leveraging indigenous multipurpose shrubs and tree species pruning.

“To support these developments, the 2024 Budget allocation to agriculture increased by 17 percent, with about D500 million budgeted for Input Subsidy, including support for organic fertilisers and seeds for farmers. In addition to Government’s budgetary contribution to the sector, project loans and grants directed to the agriculture sector is in excess of D2 billion for 2024. Donor funding continues to be relevant for the sector, supplementing government’s effort to transform the agriculture sector.

“The Ministry of Agriculture is expected to receive D661.4 million from the African Development Bank for the implementation of the Building Resilience Against Food and Nutrition Insecurity Project, The Gambia Agriculture and Food Security Project, The Gambia Incentive-Based Risk Sharing system for Agricultural Lending Project (GAMIRSAL), and The Africa Emergency Facility Project Fund. The Ministry will also receive D231 million from the World Bank Group for the Gambia Inclusive Agriculture Value Chain Project (GIRAV) and another D686.75 million for the Small Ruminant, the Rice Value Chain and Regional Soil Mapping projects. Furthermore, IFAD is expected to provide the Ministry of Agriculture with D140 million for the Roots Project.”

These efforts by the  Agriculture ministry are seemingly good, to improve agriculture and make it work for the nation, so that we actually liberate ourselves from high level of dependence on food imports. Not that we should not import, or utilise foreign goods, stuffs or foods - no, especially since we are living in an interdependent world - but we should not always be at the receiving end and should be able to really grow what we eat, at least.

Moreover, much of our economic woes is derived from the fact that we are heavily importing the most essential thing(s) we need for our existence: food.

The high dependence on food imports in this country renders our lives and economy vulnerable  to many things, such as external shocks, budget deficit, food shortage, health risks, penal rising prices of essential commodities (or inflation), the Dalasi depreciation,  hardship, poverty, and underdevelopment.

There is serious and urgent need for this age-old problem of heavy dependence on food imports to be solved or continually curbed if we should be able to attain the status of lower-middle income country, or achieve a better economy that can take us to another level. And some of the solutions to this problem can be found within the realm of domestic-led agricultural initiatives, as stated by Gambian economists Ousman Gajigo and Mamour Jagne, who have wealth of knowledge and experience in the economic and financial landscape of the country.

“Structurally, the major sectors through which we experience frequent shocks to the economy are the agriculture and tourism sectors,” Mr Gajigo comments in an article he titled: ‘The Reality versus the Central Bank’s Press Release’ (TheVoice - March 12, 2024).

He says: “Because our agriculture is rainfall dependent, anytime rainfall shocks happen through droughts, our economy takes a big hit. Similarly, anytime the tourism sector feels a shock through falls in tourist arrivals, our economy takes a dive. 

“Just because rainfall is a natural phenomenon does not mean that our economy’s extreme vulnerability to its shocks is pre-ordained. Far from it. Our economy is vulnerable to its shocks simply due to the lack of investments in irrigation infrastructure.

“One of the obstacles underlying the lack of development in agriculture is the failure of policymakers in appreciating the fact that development of a critical sector has to be domestic-led. It is impossible to truly develop a major sector if the sole source of financing is from projects as is the norm in the management of the agricultural sector by our policymakers. These donor-funded projects only last for a few years, and arrive with no inherent sustainability features. For a sector as central to the Gambian economy as agriculture, funds from donor-funded projects should be complementary to resources that our own government allocates to the sector. More importantly, these limited-duration projects should have goals that are situated within a broader and more long-term but nationally-determined strategies.”

In the same vein, Mr Jagne has highlighted utilising the water source of the country to aid agriculture.

“The idea is not repeat what is well known, but to introduce some thinking, on the possible ways forward,” he writes in a local publication Soffia (Jan/Feb 2024). “As a country, we must face these challenges head on.

“In his Independence Day speech on the 18th February, 1965, the late Sir Dawda Jawara stated amongst other things that: ‘Independence is not a magical formula that would transform our groundnut into gold.’

“Since then, successive governments have invested massively in the agricultural sector. In spite of the billions of dalasis in the Agricultural sector, 60% of the rural population is still very poor. There seem to be no light at the end of this tunnel.

“What has The Gambia got wrong? The answer to this question points to the most essential elements of life. ‘Where there is water, there is life’. The investments in agriculture did not target the availability of water for agricultural purposes, all the year around. We are locked in a mindset of dependence on rain-fed agriculture. Over the years, the rainy season has been erratic and shorter. This has forced the farmers to work only three to four months of the year. Who on earth works for only three to four months a year and not get poor?

“The Gambia should therefore shift from rain-fed agriculture to the irrigation of upland crops that can grow all year round…”

Thus, it is essential that cogent plans are put in place, implemented and monitored to achieve the desired result of transforming the productive base of the economy, particularly the agricultural and tourism sectors.