By Omar Bah
A recent UN report assessment has revealed that The Gambia, one of the smallest African states with a population of under 3 million, has made significant reforms in recent years. This progress has been driven, in part, by the country’s investment policy review led by UN Trade and Development (UNCTAD) in 2017.
In response to the Gambian government’s request, UN Trade and Development has produced a new report assessing the country’s progress in implementing recommendations from the 2017 review. The report also proposes additional measures to improve further the West African nation’s investment and business environment.
The report highlights a substantial surge in foreign investments. From 2017 to 2021, foreign direct investment (FDI) flows to The Gambia increased approximately 14-fold, reaching an all-time high of $249 million. Currently, FDI inflows account for about 10% of the country’s GDP, up from just 1% in 2017.
Furthermore, the report states that The Gambia outperforms its neighboring larger economies, with FDI per $1,000 of GDP nearly seven times the average of the Economic Community of West African States (Ecowas) and four times higher than other African least developed countries. By the end of 2023, The Gambia’s FDI stock stood at nearly $1.4 billion, the largest among regional peers relative to GDP, excluding Mauritania.
The report also mentions that despite facing multiple global crises since 2017, The Gambia has implemented reforms to update its investment legislation and regional investment agreements. It has also made progress in rolling out e-government tools and fostering dialogue between the public and private sectors. Several laws are under review for improvement, leading to more robust regulation, better infrastructure, greater access to international markets, and growing interest from foreign investors in the country’s manufacturing, agriculture, tourism, and energy sectors.
Looking ahead, UN Trade and Development proposes several new recommendations to enhance The Gambia’s investment and development potential. These include the need for more explicit investment-specific legislation aligned with best practices, a more targeted investment promotion strategy, and the inclusion of more sustainable development features in investment treaties. The report also recommends expanding e-government initiatives, which are vital for improving governance, transparency, ease of doing business, and more capacity building to strengthen competition and consumer protection.
Finally, the report mentions that since 1999, UN Trade and Development’s Investment Policy Review program has covered 60 economies worldwide. The program offers objective assessments of a country’s legal, regulatory, and institutional framework and tailored recommendations on leveraging investment for development benefits. Key areas of evaluation include FDI-specific frameworks, business creation, taxation, labor, competition, the environment, governance, and sectoral regulations.
