Flashmag Digizine Edition Issue 107 July 2020 - Page 130

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Flashmag July 2020 www.flashmag.net

The Gambia’s economic freedom score is 56.3, making its economy the 123rd freest in the 2020 Index. Its overall score has increased by 3.9 points, reflecting a large improvement in fiscal health. The Gambia is ranked 18th among 47 countries in the Sub-Saharan Africa region, and its overall score is approximately equal to the regional average and well below the world average.

The Gambian economy has been mostly unfree since the beginning of its Index scoring in 1997. GDP growth has been stronger, aided by rebounding tourism, a recovery in private-sector credit, and increased investment in public infrastructure funded by foreign aid.

The new government has been pursuing policy initiatives (such as simplifying regulatory complexities, reducing corporate taxes, and easing access to land) that are intended to rebuild investors’ confidence. These would improve business freedom and perhaps financial freedom. To expand economic freedom, however, the government would have to focus intensively on measures to strengthen the rule of law.

In 2019, The Guardian reported official estimates that Jammeh’s regime looted nearly $1 billion of public funds. The new government is courting Chinese investment and has signed a duty-free trade agreement with China. The Gambia’s eponymous river is surrounded geographically by Senegal, and revenue depends heavily on peanut exports, leaving the economy vulnerable to price fluctuations and market shocks.

Regulatory transparency needs improvement. Private business activity has recently been on the rise, but an efficient labor market has not developed. Chronic unemployment persists. The large financial deficits of the highly indebted state-owned National Water and Electricity Company and other public enterprises are a particularly acute problem.

The total value of exports and imports of goods and services equals 62.1 percent of GDP. The average applied tariff rate is 12.7 percent, and one nontariff measure is in force. Foreign and domestic investments generally receive equal treatment, but the overall investment environment remains poor. The banking sector has expanded and benefited from increased competition. Credit to the private sector has gradually increased. The country faces a limited availability of foreign exchange, weak agricultural output, a border closure with Senegal, a slowdown in tourism, high inflation, a large fiscal deficit, and a high domestic debt burden that has

Bungalow on the Gambia River