WT/TPR/S/127 Trade Policy Review
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IV. TRADE POLICIES BY SECTOR
(1) OVERVIEW
1. Agriculture plays a key role in The Gambian economy, with nearly three quarters of the
labour force employed in the sector.  The Gambia is a net food importer; the overarching objectives of
agricultural policy are to raise rural incomes, and to achieve food security.  Cash crops are dominated
by groundnuts, The Gambia's main merchandise export (excluding re-exports).  The Government hasprogressively liberalized commercialization of  all major crops, though a system of minimum
guaranteed prices, supported by a donor-financed stabilization fund, operates in the groundnut
subsector.  The focus of agriculture policy has shifted to research and dissemination of crop
techniques and the development of seed variety; the provision of extension services; and the
encouragement of rural and micro-credit programme s.  Subsector-specific financing schemes for the
acquisition of inputs have also been developed.  Fisheries also constitute a relatively large proportion
of total exports, though the development of this subsector is hampered by infrastructural constraints,
and concerns regarding the possible overfishing of demersal species.
2. The main trade policy instrument is the tariff, and agriculture has the highest simple average
applied rate (Table AIV.1).  Nominal tariff protection appears not to discriminate between traditionaland non-traditional crops, but the greater prevalence of subsidies in the former may hinder the
Government's intention to promote non-traditional agriculture.  Agricultural development is also
hindered by land tenure practices, which are a complex combination of traditional, Islamic, and
common law principles.
3. The Gambia has limited natural resources, though offshore exploration for hydrocarbon
deposits has commenced.  The manufacturing sector is underdeveloped;  The Gambia has yet to
exploit its potential in agri-processing activities.  The Gambia's current tariff structure does notencourage investment in certain industries, and displays significant anti-export bias.  Exports of
manufactures are negligible.  Linkages with the tourism industry are, with the exception of beverages,
underdeveloped.  The development of the manufacturing sector is also hampered by numerous
supply-side constraints, particularly the high cost  of finance, and erratic and costly power supply.
4. Services constitute the largest sector of the economy, accounting for over 60% of GDP.  The
sector is dominated by distribution services, which are closely linked to the re-export trade, and the
informal sector.  The tourism subsector is The Gambia's single largest gross foreign exchange earner.
The Government has significantly reduced its involv ement in tourism and in the financial subsector
through the sale of state-owned enterprises.  The Government has liberalized cellular telephony, but
retains a monopoly on fixed line telephony.  State-owned enterprises and government agencies alsohold dominant positions in transport (notably ports and air transport) and energy;  planned reforms in
the latter have not been executed.  Improved regulatory capacity is a critical need, both in subsectors
currently largely privately owned, such as insuran ce, and in subsectors in which liberalization and
privatization are envisioned (e.g. telecommunications and energy).  The Gambia has made
commitments in 12 services subsectors under the GATS, one of the highest levels of commitmentamongst least developed countries.  In certain subsectors, the current legal framework needs to be
brought up-to-date to be fully compatible with these commitments.
(2) A
GRICULTURE AND RELATED ACTIVITIES
(i) Introduction
5. Agriculture accounts for 29.4% of GDP (Table IV .1), but 70% of the labour force.  It also
generates, principally through the export of groundnuts, nearly 30% of foreign exchange earnings.The Gambia WT/TPR/S/127
Page 55
Owing to shortfalls in farming technology, notab ly irrigation methods, only about 40% (on average)
of the total arable land area of 550,000 hectares have been used for farming since 1997, though land
use has been increasing (Table IV.2).  The relatively low use of arable land is explained by low
fertility levels, aggravated by the rapid development of acid sulphate deposits, by bushfires, and by
the salt water infusion in swamp areas; a low usage of inputs; and unsatisfactory land tenure practices,
which render unused land unavailable to potential investors.
Table IV.1
Contribution of agriculture and various subsectors to GDP (at market prices), 1997-02
1997 1998 1999 2000 2001 2002
Agriculture 20.2 18.7 24.0 24.8 25.2 23.3
Crop production 13.2 12.5 17.0 18.1 20.0 18.1
Groundnuts 5.0 4.3 6.9 7.2 7.7 6.9
Other 8.2 8.2 10.1 10.9 12.3 11.2
Livestock 4.2 4.5 4.7 4.6 4.7 4.7
Forestry 0.5 0.5 0.5 0.4 0.5 0.5
Fishing 2.3 1.2 1.8 1.8 2.0 2.3
Source: Information provided by the Gambian authorities.
Table IV.2
Main crops: surface, production, and yield
(a) Surface devoted to production, 1997-02
(Thousand hectares)
1997 1998 1999 2000 2001 2002
Total 195.3 197.2 238.3 261.9 317 ..
Groundnuts 73.3 75.3 112.2 124.9 138.9 105.6
Cotton 2.5 2.4 0.8 0.8 0.7 0.7
Food crops 119.5 119.5 125.3 136.2 177.4 ..
Rice 16.9 18.3 15.7 16.7 18.2 ..
irrigated 1.3 .. 2.2 2.3 2.3 ..
rainfed 15.6 18.3 13.5 14.4 15.9 ..
Sorghum 14.6 14.2 18.5 24.4 26.2 18.3
Millet 78.2 75.3 76.3 80.3 97.4 96.9
Maize 9.8 11.7 14.8 14.8 17.2 18.4
(b) Production, 1997-02
(Thousand tonnes)
1997 1998 1999 2000 2001 2002
Total 194.4 189.1 274.2 313.8 341.3 ..
Groundnuts 78.1 73.5 123 138 151.1 71.2
Cotton 1.1 1.5 0.4 0.2 0.2 ..
Food crops 115.2 114.1 150.8 175.6 190 ..
Rice 24.2 26.5 31.5 34.1 32.6 ..
irrigated 7.5 7.8 13.2 13.4 13.4 ..
rainfed 16.7 18.7 18.3 20.7 19.2 ..
Sorghum 13 9.9 17.9 24.9 33.4 15.2
Millet 69.6 64.7 81 94.6 95 66.6
Maize 8.4 13 20.4 22 29 18.6WT/TPR/S/127 Trade Policy Review
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(c) Yield per hectare, 1997-02
(Tonne/ha)
1997 1998 1999 2000 2001 2002
Groundnuts 1.07 1.04 1.75 1.96 1.52 0.6
Cotton 0.44 .. 0.33 0.25 0.29 ..
Irrigated rice 5.55 .. .. 5.8 .. ..
Rainfed rice 2.23 2.3 3 1.55 1.2 ..
Sorghum 0.88 0.69 0.97 1.1 1.27 1.27
Millet .. 1.7 2.1 1.3 1.6 0.8
Maize 0.86 1.11 1.38 2.4 2.27 1.4
.. Not available.
Source: Information provided by the Gambian authorities.
6. About 43% of land under cultivation was devoted to groundnut cultivation between 1992 and
2000.  Cotton is a second exportable cash-crop, though both production and land devoted to cottoncultivation have been low and declining.  Horticultural production is an emerging export-oriented
activity, principally for the winter-market for vegetables and tropical fruit in Western Europe.  The
proportion of land used for non-exported food crops, which comprise cash crops sold on local markets
and crops grown for subsistence, accounted for slightly under 56% of total land use over the period
1992-00.  The main food crops are rice (irrigated and rain-fed varieties), sesame, sorghum, maize, andmillet.  The Gambia is a net food importer, and food imports account for between 30% and 40% of the
total value of imports.
7. Most farming activities are carried out on small-scale plots;  the average size of these plots
varies depending on the crop, but is at most 3 ha.  Farming methods are marked by a low level of
mechanization, with farmers reliant mainly on hand-held tools, and draught power provided by
animals.  Irrigation techniques have been developed for rice cultivation in some areas, but overall,
production is dependent on rainfall.
8. The livestock subsector involves almost all rural households, but is relatively underdeveloped.
Its share of total agricultural output has hovered around 20%, with little investment taking place in
food products derived from animals.  Rearing is mainly for the purposes of subsistence, draught
power, and trading on a small, local scale.  The fisheries subsector, based on both the resources of The
Gambia river and The Gambia's 200 nautical mile exclusive economic zone, accounts forapproximately 10% of total agricultural output.  It has a higher degree of commercialization than
livestock activities: fisheries exports accounted for just over 15% (on average) of total merchandise
exports, excluding re-exports, between 1997 and 2002, while total catches have averaged around
38,000 tonnes per year since 1997.
9. Land tenure practices and regulation in The Gambia are a combination of formal legislation
stemming from the common law tradition on one hand, and customary and religious practices and
principles on the other.  The latter category in cludes both private property and common ownership
regimes.  Under traditional arrangements, land may be acquired through rental or purchase.
Conditions of acquisition can vary greatly, and are usually controlled by the head of household.
The individual land rights of the acquirer may not be well defined, particularly if the land is borrowed.The complexity of land tenure practices in The Gambia arises out of a number of factors.
1  F i r s t ,
customary practices vary greatly from district to district, and sometimes from village to village.
Second, while the Government has sought to extend the jurisdiction of formal laws regarding land
tenure by recognizing customary principles and practices, as well as precepts of Islamic law, few of
                                                     
1 Freudenberger (2000).The Gambia WT/TPR/S/127
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the legal precepts emanating from traditional practices have been codified.  This creates uncertainty in
the interpretation of laws, and how authority, particularly in relation to the adjudication of disputes, is
to exercised over land tenure systems.2  Third, formal legislation has evolved in piecemeal fashion to
address specific problems, and suffers from an overall lack of integration.  The importance of reforms
to land tenure regimes is recognized in the Government's Agriculture Sector Policy (2001-2020), but
no concrete steps have been taken to date.  Empirical research carried out in The Gambia suggests thatincreasing the individualization of land rights stimulates agricultural production through increased
investment.
3
(ii) Evolution of agricultural policy
10. The Gambia's overriding objectives in agriculture are to achieve food security, in part by
stimulating domestic production of some staple crops, and to tackle rural poverty, which is currentlyhigher than overall average poverty levels in the country.  The broad orientation given to policy has
been to reduce the level of direct government intervention in factor and product markets in order to
increase income to producers, and their responsiveness to price signals.  The Government has thus
taken steps to liberalize marketing and distribution of a number of cash crops, including groundnuts
(section (iii)(a) below).  The dominant position of parastatal enterprises, such as The GambiaProduction and Marketing Board (GPMB), was phased out in the early 1990s.  Private-sector agents,
typically organized in cooperatives, were allowed to compete in the marketing of production, and in
the provision of inputs since centralized distribution systems had a poor record of delivering inputs to
farmers.
4 The Government has largely phased out input subsidies, though it supports the distribution
of inputs by using donor funds to acquire inputs, which it then sells to cooperatives5  The heavy
implicit taxation imposed on agriculture through an artificially high exchange rate was eliminated
through the exchange rate liberalization, including the suspension of surrender requirements, pursuedunder the Economic Recovery Programme.  The Government also abandoned its policy of subsidizing
rural credit from the central budget via The Gambia Commercial Development Bank and The Gambia
Cooperative Union (GCU).  Not only were subsidized  loans ineffective, and characterized by a low
rate of recovery, but they also severely distorted rural credit systems based on traditional
arrangements, with particularly negative effects on producers who did not have the benefit ofconnections to the Central Government.
11. Changes in tariff rates applied to agricultural products have occurred as part of general tariff
reforms.  As pointed out in Chapter III(2)(iii), the agriculture sector receives the highest level of
nominal tariff protection, the simple average of applied tariffs is 14.4%.  The fisheries subsector is
protected by tariffs averaging 17.6%.  Most of the main cash and food crops are protected by tariffs of18%, with the notable exception of rice, which is zero-rated, on account of its role as a staple food.
Nominal tariff protection does not discriminate between traditional agricultural products (groundnuts
and grains) and non-traditional ones (horticulture, fruits, flowers and vegetables).  The provision of
incentives, such as duty exemptions on inputs under the Investment Promotion Act, is liable to further
raise the level of effective protection.  While a combination of relatively high tariff protection andtargeted incentives might favour a shift in the allocation of resources towards agriculture, it is not
necessarily conducive to increased productive efficiency, nor to the stimulation of exports.  Non-tariff
                                                     
2 For example, under the States Lands Act, the government no longer recognizes customary rights to
land in certain designated areas, with ownership converted into ninety-nine year leases.  However, in those caseswhere land is loaned under customary tenure arrangements, ascertaining land rights, and thus the validity of
applications for leases, is liable to prove onerous.
3 Hayes et al. (1997).
4 McPherson (1995).
5 In response to the effects of the drought experienced in 2001 and 2002, the Government distributed
2,300 tonnes cereal and groundnut seeds free of charge.WT/TPR/S/127 Trade Policy Review
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measures applying to imports consist essentially of sanitary and phytosanitary measures (see
Chapter III(2)(vii)(b).
12. The Government  has prepared a draft policy for agriculture and natural resources for the
period 2001-20, which is intended to help meet the two overriding objectives described above.  The
policy aims to increase production through expansion of the total productive area (total hectorage),
and through increased productivity (yield per hectare) by encouraging modernization of productionpractices.  Therefore, the key requirement is access to technology, notably the use of efficient
irrigation systems.  Efficient distribution networks fo r seeds and fertilizers still need to be developed,
and to this end, the Government intends to support the creation of autonomous producer associations
and groupings, though no concrete measures have yet been identified as to how to do this.  At the
same time, access to inputs will be facilitated under different crop-specific programmes.  Theprovision of extension and research services is to be coordinated primarily via the National
Agricultural Research Institute (NARI).  The NARI's research programme is geared, inter alia , to
developing pest-control methods, resistant rice varieties, and to supporting the development of
groundnut cultivation and storage techniques that reduce aflatoxin levels.
13. The Government also seeks to give prominence to micro-finance institutions in the provision
of credit to the rural sector.  Such institutions include cooperative credit unions and informal
village-level institutions.  The latter consist of both rotating savings and credit associations (RoSCAs,
known in The Gambia as Osusus), and accumula ting savings and credit associations (ASCRAs,
known in The Gambia as Kafos).
6 Various forms of external support are provided to micro-finance
institutions.  In some instances, these institutions act as a conduit for the distribution of external funds.
For instance, certain non-governmental organizations have used Kafos for the distribution of
subsidized lending, while the main micro-finance institution, The Gambia's Women's FinanceAssociation (GAWFA), benefits from loans from the African Development Bank.
14. The Government is also implementing a programme supported by concessional lending from
the International Fund for Agricultural Development (IFAD) to expand the network of village banks,
known as village savings and credit associations (VISACAs).
7  In 2000, government counterpart
funding for this project amounted to D8.2 million – or 13% of government capital expenditure onagriculture and natural resources.  The aim of VISACAs is to complement traditional village-level
credit associations by, for instance, providing Kafos with an opportunity to earn interest by depositing
funds from their common pool, and by providing technical assistance to the Kafos.
8 Over
50 VISACAs are currently in operation in The Gambia. The Central Bank has drafted a Regulatory
Framework for Rural Financial Institutions, in order to avoid overlap and duplication in the provisionof rural financial services.
                                                     
6 Bouman (1992), and Schreiner and Nagarajan (1998).  An Osusu is a tontine.  It consists of groups of
10 to 30 members, with each member contributing a fixed amount of cash to a central pool.  The cash from the
central pool is then given, according to a determined rule of rotation, to a single member.  Meetings are held on
a regular basis so that each member has access to the pool once.  A Kafo consists of about 100 members, andoperates on the basis of a common fund financed through fees and/or by selling produce farmed collectively bythe group.  Proceeds from the savings pool are distributed to members at the end of a specific time, whilecontingency loans can be made to individuals at a grou p-determined interest rate (Schreiner and Nagarajan,
1998).
7 Under the Rural Finance and Community Initiatives Project.
8 Some types of support arrangements that complement the activities of village-level credit
associations, notably by providing technical assistance, are superior to support schemes that focus on subsidizedlending of external funds in a manner that may substitute for the services provided by traditional village-levelassociations and erode traditional safeguards fa vouring loan repayment (Nagarajan et al., 1993).The Gambia WT/TPR/S/127
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(iii) Main categories of products
(a) Groundnuts
15. Groundnuts constitute the single largest cash crop. They account for nearly a third of
agriculture's contribution to total GDP and on average nearly 32% of the value of total merchandise
exports (excluding re-exports) between 1995 and 2000, although a large share of the production is
locally consumed (Tables IV.2 and IV.3).  About 47% of land currently under cultivation in TheGambia is devoted to groundnuts.  Once harvested, groundnuts are decorticated and exported as nuts
ready for consumption, as confectionary, or for processing into oil and groundnut cake (the latter is
also used as livestock feed).
9 Groundnuts are grown on private plots, usually no larger than ten
hectares; there are no commercial plantations.  Production volumes were erratic through the nineties,
owing to climatic shocks, inconsistent supply of inputs, and unstable commercializationarrangements, stemming from the privatization of The Gambia Groundnut Corporation and
subsequent re-nationalization.  The implementation of a subsector strategy (see below) has helped to
increase production in recent years.  Productivity levels (measured by yield per hectare) are
comparable to or better than other West African producers, but compare unfavourably to dominant
producers in the world market.
10  The Gambia has only a very limited industrial capability that would
allow it to develop an export base in value-added processed groundnut products, such as
confectionary, oil, and cake.  At present, only one private company transforms nuts into groundnut
oil.  Market access issues have been a constraint on the export prospects of the groundnut subsector.
In relation to developed markets, the high aflatoxin content of Gambian groundnuts is the main
problem, rather than tariff measures, since The Gambia benefits from preferential treatment in major
markets.  The policies followed by a few major developing country producers, particularly the
combination of extensive domestic support and high tariffs, create severe distortions in the worldmarkets for groundnuts.
11
Table IV.3
Groundnut production and prices
(a)  Groundnut production indicators, 1995-01(Tonnes)
1995/96 1996/97 1997/1998 1999 2000 2001
Delivery purchases (undecorticated) 29,892 16,105 32,235 .. 41,912 64,000
Export sales of which: 20,533 10,516 32,235 .. 20,105 ..
   decorticated FAQ groundnuts 17,113 6,011 28,126 .. 15,204 ..
   decorticated HPS groundnuts 3,420 4,505 4,109 .. 672 ..
O i l . .. .. .. .. .. .
Cake .. .. .. .. .. ..
Local sales 24,214 31,743 11,715 .. 20,700 ..
Wastage (shelling/ processing) 9,565 5,154 10,315 .. 13,412 ..
.. Not available.
Source: Information provided by the Gambian authorities.
                                                     
9 Groundnuts come in two varieties:  fair and average quality (FAQ), used primarily for the production
of groundnut oil and groundnut cake; and hand-picked select (HPS), a higher quality of groundnut, used directlyfor human consumption or processed as confectionary.
10 ITC (2002a).
11 Diop, Beghin, and Sewadeh (2003).WT/TPR/S/127 Trade Policy Review
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(b)  Groundnut prices, 1998-02
1998 1999 2000 2001 2002
International market prices (dollars per tonne)a 988.8 834.7 843.9 833.2 753.3
International market prices (dalasis per tonne)b 10,480.8 9,516.1 10,802.3 13,080.6 14,990.5
Reference price (dalasis per tonne)2,790.0 2,700.0 2,600.0 2,650.0 4,250.0
Threshold price (dalasis per tonne)2,485 2,453 2,425 2,650 2,755/2,800/3,130
a Average of monthly prices for the year.
b Calculated on the basis of annual average exchange rate.
Source: Information provided by the Gambian authorities.
16. The groundnut subsector in The Gambia was for many years subject to state control through
The Gambia Produce Marketing Board (GPMB), which held a monopoly on groundnut trading,
processing, and marketing.  The State administered prices through the GPMB, and also dominated the
market for inputs through The Gambia Cooperatives  Union (GCU), which was also responsible for
the physical delivery of groundnuts to the GPMB.  The GCU received concessional loans from The
Gambia Commercial Development Bank (GCDB), which eventually became transfers from thetreasury owing to low repayment rates.  The GCU's operations were largely inefficient: input delivery
was erratic, and post harvest crop losses were high.
12  The GPMB became insolvent in the early
1980s, partly because of falling international groundnut prices, but also because of transfers it had
made to other parastatal enterprises.13
17. The crisis faced by the groundnut subsector prompted the Government to progressively
implement a series of reforms under the Economic Recovery Programme (1986-94).  These mirrored
the general thrust of agriculture reforms in that period.  The exchange rate regime was liberalized
(section (ii) above).  Marketing arrangements were liberalized, as the GPMB switched from setting
depot prices rather than farmgate prices, and instituted a system of allowances paid to the agents
(either the GCU or private traders) delivering unshelled groundnuts to the depots.  This allowed for
price competition between private traders and GCU operators, which was further enhanced by a
reduction in the loans extended to the GCU, and by allowing private traders to compete in the inputmarket as well.
14  In 1990, the GPMB's monopoly on groundnut exports was removed, allowing for
private sector involvement in the whole chain of groundnut activities.
18. The GPMB was privatized in 1993; became The Gambia Groundnut Corporation, owned by a
foreign investor.  The transformation of a public monopoly into a private one produced few benefits to
the sector.  Indeed, groundnut production suffered in the mid 1990s partly as a result of unfavourableclimatic conditions, but also owing to the lack of  support in terms of input availability for farmers.
Little investment had been undertaken in processing activities; the presence of processing facilities in
Senegal along with the operation of a price stabilizat ion fund in that country encouraged the diversion
of Gambian groundnuts to Senegal.
19. The current organization of the subsector, and the Government's policy towards it, are defined
in the Groundnut Sector Revitalization Strategy (GSRS).  It aims to increase groundnut production,
particularly of the higher quality HPS variety, and encourage processing activities.  In line with the
Government's intention to combat rural poverty, it also aims to increase and secure incomes of
groundnut farmers.  The management of the groundnut subsector comes under the competence of the
                                                     
12 Jones and Radelet (1995).
13 McNamara (1992).
14 The propensity of farmers to export groundnuts, eith er formally or informally, to Senegal acted as a
restraint against predatory behaviour by private traders.The Gambia WT/TPR/S/127
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Agri-Business Service Plan Association (ASPA), which brings together farmers and all operators or
groups of operators involved in groundnut activities,  including industrial operators.  The current
marketing system consists of a countrywide networ k of farmers' associations, known as cooperative
produce and marketing societies (CPMSs), as well as private buying points operated by private
traders.  Farmers can sell their produce through either of the two, and also contract credit for
production inputs.  The CPMSs and private traders are responsible for the storage of groundnuts, andtheir sale to industrial operators, who are involv ed primarily in decortication.  Only two industrial
facilities are currently in operation: the Denton Bridge and Buniadu decorticating plants, operated by
the Government.
20. Under the GSRS, a Memorandum of Agreement was concluded between the Government and
ASPA for the period 1999-03.  It sets out the cu rrent policy framework for the subsector.  The
framework consists of three distinct elements:  (i) a producer price determination mechanism coupled
with a price stabilization fund;  (ii) an Agricultural Credit Programme (ACP) to finance the
acquisition of inputs;  and (iii) an agronomic component focusing on the development of high-quality
seed varieties, known as the Seed Multiplication Programme.
21. The purpose of the price determination mechanism and stabilization fund is to guarantee a
floor price to farmers, calculated so as to pr ovide them with a minimum margin on their yearly
investment, plus, depending on the circumstances, an upward adjustment based on current market
values.  This is achieved first by the setting, through a process of negotiation involving all members of
ASPA, a "threshold price" defined as the minimum pr ice required for a farmer to invest in groundnut
cultivation.
 15  Second, a reference price is calculated at the start of the season, based on a weighted
average of past and current international market price data reflecting demand for the two varieties of
groundnut.  This is the actual price paid to groundnut farmers by traders or cooperatives for unshelledgroundnuts. To reflect the current structure of production, a greater weighting is given to prices
relating to the FAQ variety, but the weighting of the HPS variety has been increased to provide an
incentive for farmers to produce the higher quality groundnut.  A detailed description of the price-
setting mechanism is provided in Box IV.1.
22. If the reference price is lower than the threshold price, the difference is compensated for by
transfers out of the stabilization fund.  If the reverse is true, the farmers receive the reference price i.e.
an added return on their investment derived from world market conditions.  In cases where the actual
price prevailing at the time of the transaction is greater than the reference price, the operators
purchasing groundnuts at the reference price recei ve a windfall gain. The framework agreement
requires in principle that the operators transfer 50% of their windfall gain to the stabilization fund.  Ifthe reference price is greater than the actual price prevailing at the time of transaction, the operators
are in effect subject to a de facto tax;  in this case, the stabilization fund pays out 50% of the
difference to the operators.
23. The stabilization fund thus acts as an in surance mechanism, insulating groundnut farmers
against downside risk relative to a given threshold.  This insurance mechanism has essentially beenfinanced through donor funds earmarked for the purpose. Total disbursments through the stabilization
fund, as at end June 2003, amounted to D15.2 million.
16
                                                     
15 This price is set so as to cover the sum of total cash outlay for farm inputs, together with 100% of
labour costs, plus a guaranteed 5% of profit.
16 At the time of the launching of the fund, the Government transferred approximately D5.5 million
disbursed to The Gambia under STABEX.WT/TPR/S/127 Trade Policy Review
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Box IV.1:  The reference price for unshelled groundnuts
The reference price for unshelled groundnuts is calculated (at the start of a year t) as a weighted average of
price data for both types of groundnut variety, FAQ and HPS, derived from international markets price trends.
To calculate the reference price, unit prices must be derived for unshelled FAQ and HPS groundnuts.
(1) In the case of FAQ groundnuts, the prices considered are the international (Rotterdam) market prices for
groundnut oil and groundnut cake.  The historical price is itself a weight ed average of prices over the previous
five years, with a weight of 0.5 attached to the year t-1;  0.2 to the year t-2; 0.15 to the year t-3; 0.1 to the year
t-4; and 0.05 to the year t-5.  The price for the year t is an average of prices prevailing between January and
May of the year t in question.
(2) In the case of the HPS variety, the prices used are the international price quotations for HPS 60/70 of
Argentinian origin.  The historical price is a weighted av erage of prices over the previous three years, with a
weight of 0.5 for the year t-1; 0.35 for the year t-2; and 0.15 for the year t-3.  The price for the year t is theaverage of prices prevailing between January and May of the year t in question.
(3) In order to calculate the farmgate price for unshelled groundnuts, the international prices are adjusted
downward for various costs, including transport costs,  the costs faced by industrialists (that is, operators
engaged in decorticating groundnuts, and/or transforming  them into oil and cake), ocean freight and insurance
costs, decorticating costs, crushing and storage cost s for FAQ groundnuts, and quality control and aflatoxin
analysis costs for the HPS variety.
(4) Crushing and decortication ratios also need to be computed to derive the unit price of unshelled FAQ
groundnuts from the adjusted unit price of oil and cake;  in the case of the HPS variety, only decortication
ratios are required.
(5) The final step in the construction of a reference pr ice consists in calculating a weighted average of the
derived HPS and FAQ prices.  In the first year of operation of the agreement, the weights of 0.1 and 0.9 wereattached, respectively, to the HPS and FAQ prices; in the second year, the weights were changed to 0.2 and
0.8.
Source :  Government of The Gambia; and the Agri-Business Service Plan Association.
24. Under the ACP input credit scheme (the second component of the 1999-03 policy), inputs
imported by the Government through the use of donor funds, are sold on credit at terms negotiatedwith members of the CPMS.  The members of the CPMS sell the inputs to farmers on credit.  The
price charged for the inputs is determined by negotiations between the CPMS, farmers, and the
Government, and is uniform across the country.  The CPMS is responsible for collecting the price at
the time of harvesting from farmers, at which poin t the CPMS members settle their account with the
Government.
25. The third component of the subsector strategy, the seed multiplication programme (SMP), is
aimed at providing farmers with quality groundnut seeds.  Research into seed development is carried
out by the National Agriculture Research Institute (NARI).  Since its inception, the SMP has been
financed primarily by donor funding;  industrialists were required to provide 0.3% of their turnover to
finance research and development.  The acquisition of seeds by farmers, and of the fertilizers that gowith them, is financed through the ACP programme.  Farmers are selected to participate in the scheme
on the basis of their technical capacity, industriousness, good track record, and their ownership of
farm implements.  Under the SMP, groundnuts cultivated using higher quality seeds are purchased
with a premium of 7-15% relative to the announced producer price.The Gambia WT/TPR/S/127
Page 63
26. The implementation of the Groundnut Sector Revitalization Strategy has helped to increase
production from the low levels witnessed in the 1996/97 to 1998/99 seasons.  At the same time, a
number of challenges remain.  The first concerns increasing the production quality and efficiency in
the subsector.  The FAQ variety continues to dominate exports, relative to the HPS variety.  While
this can be addressed by increasing the availability of higher quality seeds, sufficient incentives need
to be in place for farmers to produce better quality groundnuts.  At present, the only real reward forquality accrues through the SMP's quality price premium.  The quoting of a single undifferentiated
reference price for unshelled groundnuts means that producers of lower quality groundnuts reap some
of the reward from increases in production of higher quality groundnuts.
17  The fact that the threshold
price is set to cover costs does not in itself act as incentive to farmers to reduce costs.  Furthermore,
the current system does not appear to contain penalties against farming practices that contribute tohigh aflatoxin content in groundnuts.
18  Indeed, the insurance provided by guaranteed prices creates an
adverse selection problem in that it keeps in business farmers who may perpetuate bad practices.
Since the farmgate reference price is adjusted downwards on the basis of costs incurred by industrial
operators, the latter have few incentives to lower their costs and increase efficiency.  While under the
terms of the framework agreement, they are required to help pick the highest number of HPSgroundnuts by helping farmers in post-harvest management techniques, there is little evidence that
this requirement is implemented or enforceable.  Furthermore, though the framework agreement
adopts a policy of "no credit buying" by operators, in practice this has not been fully enforced.
19
Finally, the question of investment in the development of groundnut oil and cake production facilitiesremains outstanding.
27. Groundnut cultivation benefits from the maximal level of tariff protection (18%), and from
various subsidies, including the guaranteed price regime.  While this may be conducive to stimulatingproduction levels, it also raises broader questions.  Apart from the fact alluded to earlier that it does
not directly address key issues of productive efficiency and quality, the overall structure of incentives
may not fit in harmoniously with the Government's intention to promote groundnut processing, nor
other forms of agricultural production notably non- traditional products, since marginal producers are
liable to remain in the sector instead of choosing other options.
(b) Other crops
Cereals
28. The main cereals produced in The Gambia are rice, millet, sorghum, and maize.  Both
production and area under cultivation have increased noticeably since the mid 1990s (Table IV.4).
The acquisition of inputs by farmers is financed in largely the same way as for groundnuts.  Inaddition, the Government periodically carries out field spraying, without charging farmers for this
service.
                                                     
17 The need for strong price signals to encourage di fferentiation by quality may arise because farmers
and operators may have an incentive to trade in FAQ varieties, on the basis that these can be sold for theproduction of groundnut oil in Senegal, where state subsidies generate higher-than-world-market prices (WTO,2003).
18 Amongst the farming practices that can contribute to high aflatoxin content in groundnuts are the
lack of sorting practices by farmers before marketing;  the use of damaged and loose shelled kernels as seed;
delayed harvesting following maturity; and exposure to rain, pest, and disease attacks resulting from the lack ofstructures or the inadequate or inappropriate use of fertilizers and pesticides.  See Mehnan et al. (1991); and
www.aflatoxin.com.
19 As alluded to in the Budget Speech, 2003.WT/TPR/S/127 Trade Policy Review
Page 64
Table IV.4
Cereals, 1998-02
1997/98 1998/99 1999/00 2000/01 2001/02
Ha Tonnes Ha Tonnes Ha Tonnes Ha Tonnes Ha Tonnes
Millet 73.5 66.4 67.3 67.3 72.2 80.9 85.8 94.6 97.4 104.9
Sorghum 13.4 12.9 12.2 9.9 16.2 18 19.7 24.9 26.2 33.4
Maize 7.2 8.5 9.1 13 12.8 20.4 13.7 22 17.2 29
Rice 15.5 24.1 17.3 26.7 14.5 28.1 15.2 34.4 18.1 19
Source: Information provided by the Gambian authorities.
29. Imports of cereals are subjected to the maximum duty rate of 18%;  the zero rate is imposed
on rice (the single most important staple food crop in The Gambia), reflecting the Government's
desire to avoid increasing households' food bills.  The internal market for coarse grains is liberalized.Price movements on the local market tend to be correlated with price movements in Senegal, owing to
the extensive cross-border informal trade in these products.
20
30. Rice is cultivated in upland rain-fed environments, and lowland environments, which include
deep-flooded swamps, mangrove, and irrigated systems. Rice production increased steadily from the
mid 1990s to 2000/01 (Table IV.4), owing to the implementation of several government programmesaimed at improving irrigation, soil management, and erosion control; providing tractors and power
tillers; and improving and reclaiming mangrove sw ampland.  Support to the rice subsector in recent
years has accounted for a substantial proportion of the Government's spending on agriculture.
31. Given the role of rice as a staple food crop, policies towards the subsector are an essential part
of the Government's strategy to increase food security by stimulating local production.  Nevertheless,despite the different programmes geared to increasing rice production, only 12% of The Gambia's
estimated annual total rice requirement of 157,600 tonnes is met from local production.
21
Furthermore, the 2001/02 season saw a dramatic fall in rice production, by about 44%, despite anincrease in land area devoted to rice cultivation, mainly on account of adverse climatic conditions.
Mangrove swamps, which have a comparatively low yield per hectare, account for 52% of total rice
land and about 54% of current total rice production.  Policy has therefore focused on the development
of irrigated rice farming in the central and upper rive districts, as this type of rice cultivation has beenshown to generate yields per hectare 4 to 6 times superior to the yields of other types.  One donor
supported project, designed with these objectives in mind, is the Lowland Agricultural Development
Project (LADEP).  Counterpart funding for the LADEP was 23% (D8.1 million) of the Government's
capital expenditure on agriculture and natural resources in 1998, 46% (D8.8 million) in 1999, and
21% in 2000 (D12.1 million).
32. Productivity increases are also sought through the development of higher yield seed varieties
thanks to the combined efforts of the NARI and a Seed Technology Unit (STU).  The NARI acquires
germplasm from neighbouring countries, while the STU is responsible for seed multiplication.  The
Government also provides extension services such as training on demonstration plots.  The
distribution system of higher yield seed varieties follows a pattern similar to the distribution of otherinputs.
33. Rice is acquired by wholesalers either from importers or local producers, and sold to retailers.
The market for rice is liberalized. There are four main importers of rice accounting for 95% of rice
                                                     
20 FAO/WFP (2002).
21 Bittaye, Jones, and Drammeh (2002).The Gambia WT/TPR/S/127
Page 65
imports.  The liberalization of the rice market in Senegal has led to a reduction in the level of rice
re-exportation through informal channels22; but re-export levels are still substantial, estimated at 30%
of total imports of rice to The Gambia.23
Cotton
34. Cotton is grown primarily on small household plots.  Production volumes have declined
almost continuously since the early 1990s, and land devoted to cotton currently accounts for less than0.3% of all arable land.  Exports of cotton and cotton products are negligible. The main reasons
behind these trends have been the subsector’s commercialization structure, featuring an inefficient
state-owned  monopsonist, GamCot, and centrally fixed producer prices.  Prices paid to the producer
have been on average 22% of the international producer price.  Liberalization of other subsectors
favoured the reallocation of factors of production away from cotton. Despite the initiation of sectoralreforms, notably the restructuring of GamCot as The Gambia Cotton Company, in which the State has
a 40% share (the other 60% is owned by a French pa rastatal), and through the introduction of a price
determination mechanism based on consultations between GamCot, the Government, and farmers,
there is little sign of recovery.  In view of the current situation of the world market for cotton,
investments to revitalize the sector are unlikely to be forthcoming.
Horticulture
35. Horticulture in The Gambia currently consists of cultivation of flowers, and fruit and
vegetables (onions, tomatoes, cabbages, legumes, mangoes, papayas and bananas).  Since the mid
1990s, horticulture has been identified as a potenti al growth subsector, geared to developed-country
markets, and the domestic tourist industry.  Traditionally, the subsector was dominated by small-scale
household production, but a few medium-scale (5-20 hectares) and large-scale (100 hectares and
more) producers have emerged, primarily to take advantage of export markets.  The main exportmarkets are the countries of the European Union, particularly the off-season market for vegetables, for
which The Gambia benefits from seasonal preferences.  The cut-flowers subsector has attracted some
foreign investment, though precise data on this and on export performance are not available.
Table IV.5
Horticultural sector production indicators, 2002
Tomatos Onions Okra Eggplant Hot
peppersSweet
peppersMelons Othera
Area under cultivation (ha) 94.5 166.8 30.9 25.4 64.7 10.1 6 33.9
Production in tonnes 25.9 48.3 12.4 13.8 6.4 8.6 .. ..
.. Not available.
a Includes cucumbers, leafy vegetables, radishes, carrots, cabbages, and maize.
Source : Information provided by the Gambian authorities.
36. The Government has concluded a technical cooperation programme with the Food and
Agriculture Organization; one component consists in the distribution of free equipment to groups of
farmers.  Phytosanitary inspections are carried out by the Plant Protection and Phytosanitary Unit.
Investment in the horticulture subsector is designated as eligible for incentives by the Investment
Promotion Act.  Likewise, activities in the subsector are targeted by the Free Zones Act.  Most
horticulture products are subjected to the highest rate of tariff protection (18%), a feature that may
create an anti-export bias.  As pointed out above, the bias of incentives in favour of the groundnutsubsector may also limit the extent to which farmers choose to invest in horticulture.
                                                     
22 WTO (2003).
23 FAO/WFP (2002).WT/TPR/S/127 Trade Policy Review
Page 66
(c) Fisheries
Main features
37. The fisheries subsector contributes approximately 2.5%  to GDP.  It is estimated that between
26,500 to 32,000 people are employed in fisheries activities, and that the livelihoods of 200,000
people are critically dependent on fisheries and related activities.  The Gambia's resource base
consists of The Gambia river, a continental shelf of 3,855 square kilometres, and a 200 nautical mileexclusive economic zone.  Under a reciprocal agreement with Senegal (see below), The Gambia's
fishing fleet also has access to Senegal's territorial waters.  Fish and fish products account for
approximately 15% of merchandise export earnings (excluding re-exports).  Roughly 80% of exports
are for the markets of European Union countries.  Though The Gambia's marine fish stocks are
dominated by pelagics (Bonga, Sardinellas, Carangids), exports are dominated by demersals, notablysole, and crustaceans.  Exports of smoked, dried, and frozen fish have increased noticeably.  Estimates
put the combined maximum sustainable yield for al l fisheries groups at 200,000 tonnes;  as average
catches have been around 39,000 tonnes per year since 1997, this suggests that The Gambia can
further exploit its fish resources.  However, under-exploitation relates mainly to the pelagic stock; it is
estimated that the demersal stock is at or near its maximum sustainable yield, and overfishing is acurrent policy concern.  No assessment has been made of The Gambia's riverine stocks.
Table IV.6
Fisheries
(a)  Catches and exports, 1997-02
Industrial catches
('000 tonnes)Artisanal catches
('000 tonnes)Export volumes
('000 tonnes)Export values
(Million dalasi)
1997 8 30.2 2 44.4
1998 7 26.5 1.7 33.3
1999 10.2 29.7 1.7 36.6
2000 9.2 26.9 0.9 31.1
2001 11.2 32 0.95 34.9
2002 .. .. .. 32.4
(b)  Composition of exports, 2000-02
(Million dalasi)
2000 2001 2002
Crustaceans 11.8 17.4 6.8
Frozen, dried or smoked fish 1.0 1.1 8.0
Cephalopods 1.5 1.1 3.5
Sole 16.4 14.4 13.6
Other demersals 0.2 0.5 0.2
Pelagics 0.07 0.01 0.05
Other (including parts of fish) 0.2 0.4 0.2
(c)  Costs of licences
Type of activity Foreign fishing vessels licence fees Local fishing vessels licence fees
Trawlers for fish and cephalopodsD1,000 per GRT per annum D300 per GRT per annum
Shrimp trawlersD1250 per GRT per annum D400 per GRT per annum
Seiners/ pelagic trawlersD500 per GRT per annum D150 per GRT per annum
Tuna vesselsD700 per tonne of tuna D200 per tonne of tuna
-   Purse seinersLump sum of D 70, 000 per annum D10,000 per annum
-   Long liners, pole and line vesselsLump sum of D35,000 per annum. D4,000 per annum
Source : Information provided by the Gambian authorities.The Gambia WT/TPR/S/127
Page 67
38. The Gambia's fisheries consist of industrial fisheries and artisanal fisheries, though the
development of linkages between private fishing companies and artisanal activities has led to a
blurring of this distinction.  Industrial fisheries account for roughly 25% of fish production
(Table IV.6(a)), and consist of 16 fishing companies registered with the Association of Gambian
Fishing Companies, nine of which have their own facilities for handling, preservation, and storage.
Foreign ownership in these companies is at 35% of aggregated capital.  Fishing operations make useof offshore trawlers.  Only three companies have their own trawlers;  nearly 90% of trawlers are
foreign vessels whose operators have concluded co ntractual arrangements with Gambian companies,
in order to satisfy licensing conditions (see below).  Given that The Gambia lacks a large-scale
dedicated fishing port, this situation in practice means that a significant proportion of catches made in
Gambian waters are landed outside The Gambia.  Nearly 95% of the industrial catch landed in TheGambia is directed towards export markets. Industrial catches have remained around 8,500 tonnes per
year since 1992, when there was a pronounced decline in catches (from a level of 23,000 tonnes),
owing to a reduction in the number of licensed fishing vessels.
39. Artisanal fisheries revolve around the use of small fishing craft, consisting mainly of a fleet of
nearly 1,800 canoes operating in marine and riverine fishing zones.  Traditional fishermen make useof gill nets, hook and line, traps, and seine nets.  Artisanal catches averaged approximately
29,000 tonnes per year between 1997 and 2001.  This represents a near-trebling of the volume
recorded in the early 1990s and reflects increased investment by private companies in artisanal
activities, as well as expanded credit facilities provided by the Government.  The increased
involvement of private companies is partly motivated by a desire to reduce dependency on foreign
trawlers; it may also be because the artisanal subsector is unregulated.  Nearly 70% of artisanal
landings consist of pelagic fish species. Fish catc hes are commercialized through a network of landing
points, mainly situated along the coast.  Fish ar e purchased by: small-scale traders who supply fish to
village markets in the immediate proximity of landing sites; by retailers who have access to insulated
vans and ice facilities, and who distribute fish to  inland or urban markets; and by wholesalers who
supply inland and urban retailers, and traders involved in fish processing.  The scarcity of storage and
cooling facilities means that post-harvest losses can be as high as 20% of the catch.  The mainprocessing activity is fish smoking, often using basic technology.
24  Industrial companies constitute a
lucrative market for artisanal fishermen dealing with crustaceans, cephalopods, and certain demersals.
Small-scale operators who are able to access certified fish processing establishments are also able to
export smoked varieties to European markets.
Policy objectives and framework40. The main objectives are: to increase foreign exchange earnings from the subsector,
particularly through the expansion of processing activities, and by increasing the proportion of catches
landed in The Gambia; to increase job creation; and the sustainable management of the fisheries
resource, with an emphasis on addressing the pr oblem of demersal stock depletion.  Government
policy is thus conditioned by the challenge to balance the first two objectives with the third.
41. The regulatory framework for the subsector is set out in the Fisheries Act of 1991 and
Fisheries Regulations of 1995;  implementation of these falls under the competence of the Fisheries
Department.  All industrial fishing activities require a licence, which is specific to the type of activity.
The general conditions for the granting of a licence are that catches be submitted for weighing and
inspection as required; that a certain percentage of catches be landed in The Gambia in designated
locations; that any trans-shipment of fish be done only following express permission; and that vessels
operate only within designated areas.  All licensed fishing vessels are required to take on board
                                                     
24 Njai (2000).WT/TPR/S/127 Trade Policy Review
Page 68
Department of Fisheries inspectors.  Licences need  to be renewed every six months, on application to
the Department of Fisheries.  Industrial operators who wish to open fish-processing facilities are
required to submit a project document detailing the technical and financial feasibility of their projects
before licence is granted, and those wishing to export to the European Union must demonstrate that
they are able to comply with EU sanitary regulations.  In a bid to boost conservation efforts, fishing
techniques deemed to be destructive, such as the use of explosives and beach seines, have beenprohibited. Artisanal fisheries are not regulated, operating under an "open-access" regime.  Under
current provisions, only artisanal fishermen are allowed to operate within the first seven miles of the
territorial waters.  Only fishing vessels of 250 gross registered tonnes or less may operate between the
7-mile limit and a 12-mile limit, while restrictions are lifted beyond the 12-mile limit.
42. Licence costs and conditions, differ between national and foreign applicants.  Foreign
industrial operators are required to land 10% of their catches on Gambian territory, or pay the
equivalent of 10% of the value of the catch to the Government.  At least 20% of the crew of foreign
operated trawlers must be of Gambian nationality.  The operator must be registered in The Gambia or
have concluded a contractual arrangement with a Gambian counterpart.  Operators belonging to
countries with which The Gambia has concluded a fisheries access agreement are exempted from thisrequirement. The State does not collect royalties from catches made by either foreign on local
operators. The costs of licences are considerably higher for foreign operators than Gambian operators
(Table IV.6 (c)).
43. The Gambia has concluded a reciprocal fishing agreement with Senegal, allowing operators
from either country to fish in each other's waters, and an agreement with Japan under which Japanese
trawlers are allowed access to Gambian territorial waters to fish for tuna, while Japan provides
assistance to The Gambia for the development of fish-processing capacity.  The access agreementwith the European Union was not renewed after it expired in 1996.  The Gambia participates in
regional efforts for the monitoring, control, and surveillance of industrial fisheries activities
undertaken under the auspices of the Sub-Regional Fisheries Commission (SRFC).
25  The SRFC aims
to foster marine conservation and reduce illegal industrial fishing, by harmonizing legislation (for
example, regulations concerning mesh size), and conducting joint surveillance inspections within thewaters of the sub-region.
44. The Fisheries Regulations also set out certification requirements for fish-processing and
handling establishments, in relation to hygiene, the de sign of facilities, storage, and transportation, the
implementation of quality management programmes based on Hazard Analysis and Critical Control
Points (HAACP) principles incorporating good hygiene practices, and the monitoring of productionconditions.   No costs are incurred by operators in the certification process.  Periodic inspections are
conducted by authorized officials
26, who have the authority to suspend or shut down the operations of
establishments not in compliance, and to board vessels and carry out inspections.  Violations of the
provisions in the Act and Regulations are liable to attract fines of up to D500,000 or five years
imprisonment.  The ability to meet internationally recognized standards of hygiene and quality is a
key condition in determining The Gambia's ability to e xport successfully to its major markets;  its fish
exports have by and large complied with the requirements of its major markets.27  The Regulations
also ban the export from The Gambia of lobster, sole and cephalopods, except with the written
permission of the Director of Fisheries.
                                                     
25 The other members of the SRFC are Cape Verde, Guinea, Guinea-Bissau, Mauritania, Senegal, and
Sierra Leone.
26 Typically, officers of the Fisheries Department, customs officers, police officers, or officers of The
Gambia Marine Unit.
27 ITC (2002b).The Gambia WT/TPR/S/127
Page 69
45. The fisheries subsector is one of the most tariff protected in The Gambia;  the average tariff
on fish and fish products is 17.6%, with the maximum rate of 18% applying to nearly all products.
Industrial fishing, fish-processing, and aquaculture are eligible for incentives under the Investment
Promotion Act. The Government also provides land on concessional terms to the fishing industry for
the construction of fish-processing establishments and facilities.  The Government supports artisanal
fishing through the provision of basic fishing gear.  It is also seeking to establish credit programmesgeared to artisanal fishing, financed by channelling concessional credit, primarily extended by
regional development banks, on terms yet to be decided.  It is as yet unclear how the various
incentives will be reconciled with the aim of managing the fish stock on a sustainable basis.
(d) Livestock
46. Livestock accounts for about one fifth of total agricultural output, and just under 5% of GDP.
The main animals raised are cattle, sheep, goats, pigs, and chickens.  Rearing is mainly for subsistence
purposes, draught power, and trading on a small scale. Livestock products are sold at village markets
to traders, who then take them to abattoirs for slau ghter; the principal abattoir is in Banjul. Abattoirs
are privately owned.  There are no facilities for producing processed meat products. The marketing of
livestock products is liberalized; the Government's  intervention is confined to the enforcement of
sanitary standards under the provisions of the legislation (Chapter III(2)(vii)(b)).
47. Given the importance of livestock products as a source of protein, and that the increase in
livestock numbers has been below the trend rate of population growth, the main policy objective for
the subsector is to increase productivity.  Major constraints are:  diseases, both endemic (particularly
trypanosomosis, notwithstanding the presence of trypanotolerant ruminants), and sporadic (an
outbreak of Rift Valley Fever was detected in late 2002); and the insufficient availability of water and
quality pastoral land in the dry season, a problem aggravated in years marked by drought or sporadicrainfall.
28  Internal trade in livestock products is hampered by underdeveloped commercialization and
marketing arrangements.  This constraint on the earning capacity of farmers in turn reduces their
inclination to invest in parasite-control schemes.29  The subsector would benefit from improved
linkages with the tourism and catering subsectors, which at present import most of their meat and
dairy products needs.  Though these different constraints have been identified by the Government,few concrete policy measures have been taken in response; the subsector, on the whole, receives less
attention than other agricultural subsectors.
48. Meat products are granted the maximal level of tariff protection of 18%, as are whey and
cheese.  Imports of milk, cream, and buttermilk are subject to the zero rate.
(e) Forestry
49. Approximately 9% of The Gambia's territory consists of forest, and a further 19% consists of
wooded land.  Wood sources meet some 85% of The Gambia's domestic energy requirements.  Most
forestry activities are carried out on a subsistence basis, and the subsector accounts for just 0.5% of
GDP.
30 An estimated 6% of the labour force is involved in forestry activities.  Forest production is
dominated by roundwood and wood fuel (Table IV.7(a)).  The Gambia exported aboutUS$0.25 million of forest products, mainly sawn-wood and wood-based panels in 2001. A major
factor conditioning government policy towards the subsector is the struggle against desertification.
Under the ten-year Forest Policy approved in 1995, th e objective has been set to increase the extent of
                                                     
28 See also Goosens et al. (2002), and FAO/WFP (2002).
29 See Mattioli (2000).
30 According to the authorities, this probably underestimates the true contribution of the subsector, as a
substantial informal rural and cross-border trade in forest products is not included.WT/TPR/S/127 Trade Policy Review
Page 70
forest cover to 30%.  The Government is also se eking to increase forest area placed under community
management.
Table IV.7
Forestry
(a)  Production, 1997-01('000cubic metres)
Product 1997 1998 1999 2000 2001
Roundwood 613 613 618 715 724
Industrial roundwood 113 113 113 113 113
  of which sawlogs and veneer logs 106 106 106 106 106
Wood fuel 500 500 505 603 611
Source: FAO/WFP (2002).
(b)  Costs of timber permits, 2002
Type of timber permit Cost
Cordyla africana D210
Erythropleum qinense D525
Borasus aethiopium D210
Elias guinense D157.50
Prosopis africana D210
Pterocarpus erinaceus D315
Bombax buonopozense D210
Daniella oliveri D840
Khaya senegalensis D525
Ceiba pentandra D105
Rhizophora spp.   (masts) D.15/M3
Rhizophora spp.   (roofing poles) D105
Fence posts D1.90/M3
Gmelina fence posts D1.90/M3
Source: Information provided by the Gambian authorities.
(c)  Cost of royalties, 2002
Type of wood Royalty
Firewood D10.50/ M3
Mats D.15
Kirinting D10.5
Palm beds D50
Fruit and nuts, 1 bag or container D10.5
Gmelina logs D157.50/ M3
(d)  Licence fees, 2002
Type of wood Annual licence fee
Firewood D525
Tapping palm wine D525
Palm kernel D105.00
Wood carvers D157.50
Fruit and nuts D210
Baobab D105
Mats D300
Fans and baskets D210
Kirintings D210
Rhun palms D1,050
Palm beds D300
Shrubs grasses D105
Pit sawers D1,050
Licenses for re-saw machines D1,575
License sawmills D10,500
Palm wine D420
Source: Information provided by the Gambian authorities.The Gambia WT/TPR/S/127
Page 71
50. Under the provisions of the  Forest Act of 1998, forested land is divided into three main
categories:  state forests; community-owned forests, and private forests, which include private
plantations.  State forest may be designated as such at any time by the Government, which is required
to appoint a Reserve Settlement Committee, the main function of which is to examine claims by
individuals or communities concerning rights to land designated as state forests.  If the claims are
shown to be founded, the State can either pay compensation or amend the boundaries proposed for thestate forest.  Community forests may be established on the basis of an application submitted by a
community, accompanied by a village resolution agreeing to the joint management of the forest
resource in question, and a letter from the district chief confirming that the land is under the authority
of the applicant community.  Community forests are owned and managed for the purpose of timber,
firewood, non-wood forest production, forest grazing, protection and conservation.  Any revenuesgenerated from community forests must be owned and managed on a communal basis through the
establishment of a special fund in the name of the community.
51. The private exploitation of forest resources requires a licence or timber permit, obtained from
the Department of Forestry, as prescribed in the Forest Regulations of 1978, as amended in 1996.
Licences and timber permits are specific to the type of activity envisioned and type of resource to beexploited.  They typically last from six months to one year, and can be renewed on application to the
Forestry Department.  The exact procedures for renewal are unclear.  Licence conditions establish the
royalties to be paid. Depending on the activity, royalties may be a specific rate, or a percentage of
total revenue (Tables IV.7(b), (c) and (d)).  The regulations also contain a list of protected tree species
that cannot be commercially exploited.
31
52. The average applied tariff on forestry and logging is 12.4%.  The tariff displays positive
escalation in the wood and wood products industry (C hapter III(2)(iii)(a)).  The Forestry Regulations
of 1978 require that a valid transit pass be obtained prior to the transport of imported forest produce in
The Gambia.  Exports of forest produce require the written permission of the Secretary of State for
Natural Resources.
(3) MINING AND QUARRYING , AND ENERGY
(i) Mining and quarrying
53. The current contribution of mining and quarrying activities to the GDP and exports is
virtually negligible. However, some potential fo r development does exist.  The Gambia's limited
mineral resources consist mainly of mineral-rich coastal sands, which tests have revealed to contain
concentrations of ilmenite (70%), zircon (15.9%), and rutile (3.3%).32  Deposits of quartz sand,
estimated at around 5 million tonnes, have been discovered in the Greater Banjul area.  A foreigninvestor, the Australian-based Carnegie Corporati on, concluded a joint venture with Atlantic Mines
to bring to production the 900,000 tonne high-grade zircon deposit at Brufut.
54. Offshore exploration for hydrocarbons has commenced; it is believed that Gambia has good
prospects for offshore hydrocarbons since it is part of the Casamance-Bissau sub-basin, which
contains proven petroleum systems.  Fusion Oil and Gas Plc signed a six-year petroleum production
                                                     
31 Acacia albida, Chlorophora regia, Ceiba pentandru,  Defarium senegalense, Elaeis gulnensis, Khaya
senegalensis, Mitrgynu stipulosa,  Parkia biglobosa,, Parinari excelsa,, Rhizophora mangle, Rhizophora
racemosa, Rhizophora harnisoni, Laguncularia racemosa, Tamarindus indica .
32 See online information, at: www.mbendi.co.za.WT/TPR/S/127 Trade Policy Review
Page 72
licence in 1999 for a 5,000 square kilometre offshore tract, allowing the company to undertake
exploration and to drill two wells.33
55. Mining and quarrying activities are governed by the provisions of the Minerals Act of 1954,
which is in the process of being revised and updated.  Under the Act, prospectors may apply for a one-
year prospecting right (licence), or for an exclusive prospecting licence, valid for one year but
renewable up to a maximum of six years.  Exclusive prospecting licences must cover an area of atleast 2.5 square kilometres, and no more than 20 square kilometres.  There is no minimum or
maximum area set for one-year prospecting rights.  Applications are made to the Secretary of State for
Natural Resources, and applicants must show that they have sufficient capacity to ensure proper
prospecting.
34  Exploitation and disposal of mineral resources are strictly contingent on the obtention
of either a mining right or a mining lease.  Mini ng rights are granted, on application, to holders of a
prospecting right or an exclusive prospecting licence;  they are valid for renewable terms of one year,
and the holder is required to pay an annual rent to the Government at a specified rate.35  Mining leases
are granted to holders of prospecting rights or exclusive prospecting licences, or to holders of a
mining right when the Government determines that the mineral properties of the land being mined
justify the revocation of the mining right and its replacement by a lease.  Holders of a mining rightwho have had their right revoked have a preferential claim, but not an automatic entitlement, to a
mining lease. Mining leases are granted for terms not exceeding 25 years, and the lessee is required to
pay an annual rent.
36
56. In order to trade in minerals, a licence to purchase minerals must be obtained from the
Secretary of State for Natural Resources.37 Licences expire at the end of the calendar year in which
they are issued. A seller of minerals is required to ensure that any purchaser of minerals has the
required licence.  Cross-border trade in rough and uncut diamonds is prohibited (Chapter III(2)(v)).At end 2003, The Gambia was not a participant in the Kimberley Process relating to trade in "conflict
diamonds".
57. Petroleum exploration and production activities are subject to the provisions of the Petroleum
(Exploration and production) Act of 1986, and require an appropriate licence.  There are two types of
licence:  a petroleum reconnaissance licence, and a petroleum production licence.  Foreign companiescan obtain licences provided they are registered in The Gambia as a foreign company under the
provisions of the Companies Act. Petroleum reconnaissance licences confer on the licencee exclusive
rights to prospect for petroleum in the area specified.  Petroleum production licences are required for
exploration and production operations, as well as fo r the disposal of petroleum obtained through such
activities.  In principle, the Act gives the Government wide discretion regarding the terms on which alicence of either type is granted, and conditions attached to it.  This is particularly the case for holders
of petroleum production licences, as the Government is able, in principle, to determine on a case by
case basis the extent of royalties and rental fees to be paid by the licensee, and the extent and nature of
incentives and concessions that may be granted to the licensee (see below).
58. As indicated in Chapter III, the mining and quarrying sector is the least protected, with a
simple average applied tariff rate of 7.6%.  Incentives are provided through sector-specific legislation
rather than through the Investment Code. The Petroleum Act allows for the provision of specific
                                                     
33 See online information, at: www.mbendi.co.za; and Szczesniak (2000).
34 No information was provided by the authorities on the costs of licences, or on the number of
prospecting rights or exclusive prospecting licences delivered since 1997.
35 No information was provided regarding the rate currently applicable.
36 The current rate has not been provided by the authorities.
37 No information was provided by the authorities on the costs and criteria attached to licences, nor on
the number of licences awarded or revenue generated from licences.The Gambia WT/TPR/S/127
Page 73
incentives to the holders of petroleum production licences.  In particular, licensees are eligible for a
petroleum capital expenditure allowance in their calculation of assessable income under the Income
Tax Act.  The actual magnitude of the allowance depends on the terms and conditions of the licence,
but is at most a quarter of annual petroleum capital expenditure.  The extent to which the licensee is
liable to pay import duties and indirect domestic taxes is dependent on the terms and conditions
attached to each individual licence, and is therefore the product of understandings reached betweenthe Government and the licensee.
(ii) Energy
(a) Electricity
59. The State controls the generation and distribut ion of energy through the National Water and
Electricity Company (NAWEC), in which it has a 54% stake.  Electricity generation is by thermalmeans, using petroleum; total generation capacity is 20MW. Roughly 30% of the total production of
1.3 million kilowatt hours is consumed by residential customers;  businesses account for about 28%;
and production losses and powerhouse consumption exceed a third of total output (Table IV.8),
indicating a lack of efficiency in production.  The erratic and unreliable nature of power supply,
stemming from low production capacity and efficiency, is frequently cited as one of the major supply-side constraints affecting The Gambia.  The supply problem is aggravated by NAWEC's pricing
structure, under which consumption by hotels and industries is 22% more expensive than residential
consumption.
38  Imports of electricity are duty free, though The Gambia does not at present import
any electricity.
Table IV.8
Electricity(a) Production and consumption, 1996-99
1996/97 1998 1999
Total production ('000 kWh) 96,361 122,187 126,196
Residential consumption 25,053 37,462 ..
Business consumption 25,496 33,405 ..
Street lighting 351 462 ..
Other consumption 3,248 7,274 ..
Losses 39,483 43,584 ..
(b) Retail prices per kWh, 1997-00
(dalasis per kh)
1997 1998 1999 2000
Residential 2.08 2.08 1.55-2.21 1.55-2.21
Commercial and local government 2.21 2.21 2.21 2.21
Hotels, clubs, and industries 2.54 2.54 2.54 2.54
.. Not available.
Source: Central Bank of The Gambia (2000), Annual Report 2000 .
60. NAWEC is listed as a "track I" public enterpri se (Chapter III(4)(ii)).  Annual losses were in
excess of D50 million in 2000, and close to D20 million in 2001 and 2002.  While this was partly
because the rising cost of electricity generation, owing to rising oil prices, was not fully
accommodated by a change in the retail cost of electricity, it is also a reflection of inefficiencies.  TheGovernment's medium-term strategy for NAWEC is to unbundle the various services provided, and to
                                                     
38 Central Bank of The Gambia (2000).WT/TPR/S/127 Trade Policy Review
Page 74
restructure the company.  Though consultants have produced various restructuring options based on
financial modelling, and have developed a 20-year infrastructure development plan, no concrete steps
have been taken, to date, to reform the operations of NAWEC.
(b) Petroleum products
61. The Gambia imports all of its petroleum and gas requirements.  The value of imported
petroleum products averages just over 12% of total imports into The Gambia.39  Domestic
consumption is estimated at between 50,000 to 80,000 tonnes.  Data for 1997 indicate that gasoline
and kerosene accounted for nearly 50% of domestic consumption of petroleum products, with other
distillates accounting for nearly all the remainder.
62. Distribution and marketing of petroleum products are carried out by private companies, which
must apply to the Government for a licence. Oil prices are set by the Government, with the emphasison keeping pump prices stable.  Since 1998, pump prices have changed on only two occasions.
40 In
2001, The Gambia concluded a one-off bilateral oil-purchase agreement with Libya, under which the
Government procured oil, and sold it to local oil companies for distribution; the price paid by the oil
companies was set in dalasis, while the Government paid in U.S. dollars. Approximately D320
million of petrol was procured in this manner.  The agreement was not renewed.
63. Customs duties on petroleum products are specific:  D63 per litre for kerosene, D 2.35 per
litre for gasoil, and D4.101 per litre for petrol.  The National Water and Electricity Company benefits
from a reduction of 80% on the standard customs duty applicable to petroleum products.  Import
duties on oil accounts for over 50% of total import duty collected since 1997.
(4) MANUFACTURING
64. The manufacturing sector in The Gambia is particularly under-developed, accounting for less
than 5% of GDP.  It is estimated that the sector employs fewer than 20,000 people. Manufacturingcentres around a few activities: groundnut processing, brewing and soft drinks, soaps, plastics, and
tanning.
41  Groundnut processing activities are limited to decortication, and by and large do not
involve the manufacture of higher-value-added products, such as oil.  Manufacturing activities
accounted for about 22% of the stock of foreign direct investment in 2000.  The divestiture of state
assets has helped to attract FDI in the sector:  a German investor owns 81% of Banjul Breweries,while a French investor has a stake of 60% in The Gambia Cotton Company.
65. Exports of products manufactured in The Gambia are negligible; apart from groundnut-related
activities, manufacturing is essentially oriented towards the domestic market.  The contrast between
the poor performance of Gambian manufactures, in terms of exports, and The Gambia's role as a re-
exporter of manufactures to the sub-region, illustrates sharply the lack of competitiveness of Gambianmanufactures.  Some subsectors that could have been viable sources of exports have not lived up to
their potential; this is notably the case with cotton products (section (2)(iii)(b) above).  The
Government has also identified activities with unexploited export potential.  These include:  food
processing, notably of fish and horticultural products; textiles and clothing; and ceramic tiles.
Manufacturing activities could also receive a stimulus through the creation of linkages with thetourism industry;  this would have the added benefit of increasing net foreign exchange earnings in
the tourism subsector.  However, apart from the br eweries and soft-drink subsectors, such linkages
have not been established.
                                                     
39 That is, excluding imports intended for re-export.
40 The authorities did not provide information on how prices are determined.
41 The authorities do not have data on production and sales in these subsectors.The Gambia WT/TPR/S/127
Page 75
0510152025Chart IV.1
The Gambia's tariff by ISIC classsification, 2003
Per cent
WTO Secretariat calculations, based on data provided by the Gambian authorities.AverageMaximum
Minimum
International Standard Industrial Classification (ISIC), Revision 2
Source :111 
121 
122130
210
220230
390
311312
313
314321
322
323
324
331332
341
342Description
Agricultural and livestock production
Forestry
LoggingFishing
Coal mining
Crude petroleum and natural gas productionMetal ore mining
Other mining
Food productionOther food products and animal feeds
Beverages
Tobacco manufacturingTextiles
Manufacture of wearing apparel, except footwear
Leather products, except footwear and wearing apparel
Footwear, except vulcanized rubber or plastic footwear
Wood and wood 
products, exce pt furniture
Manufacture of furniture and fixtures, except primarily of 
metal
Paper and paper productsPrinting, publishing and allied industriesDescription
Industrial chemicals
Other chemicals, including pharmaceutical
Petroleum refineriesManufacture of miscellaneous petroleum and coal
products
Manufacture of rubber products n.e.s.Manufacture of plastic products n.e.s.
Pottery, china and earthenware
Manufacture of glass and glass productsOther non-metallic mineral products
Iron and steel basic industries
Non-ferrous metal basic industriesFabricated metal products, except machinery and 
equipment
Non-electrical machinery including computersElectrical machinery apparatus, appliances and 
supplies
Transport equipmentProfessional and scientific equipment
Other manufacturing industries
Electrical energy351
352
353354
355
356
361
362369
371
372381
382
383
384
385
390
410WT/TPR/S/127 Trade Policy Review
Page 76
66. Government intervention in manufacturing is limited, and the continued implementation of
the privatization programme is set to reduce it furthe r (Chapter III(4)(ii)).  The Government intends to
sell its 19% share in Banjul Breweries and its 40% share in The Gambia Cotton Company.
67. As indicated in Chapter II(4), the Government  aims to attract investment in manufacturing
activities and to expand the manufacturing base through the use of various investment incentives.
However, the current mixed pattern of tariff escalation creates an anti-export bias in certain industries(Chapter III(2)(iii)).  Anti-export bias may also arise in industries (such as food products and soap),
that have received protection on infant industry grounds and where escalation is positive, but where
tariffs close to the maximal level introduce a wedge between domestic and world prices, creating a
disincentive to export; the maximum tariff rate applies to a large number of manufactured products
(Chart IV.1).  The recent creation of an export-oriented free zone may in part help to correct thisdistortion, but is not in itself a substitute for across-the-board tariff reform.  Investment in
manufacturing is also constrained by a number of su pply-side constraints, notably the high cost of
finance (section (5)(i) below), and deficiencies in infrastructure, particularly unreliable and relatively
expensive electricity (section (3)(ii)(a) above). If The Gambia is to make use of enhanced market
access initiatives, such as the EBA or AGOA, the an ti-export bias of the tariff regime needs to be
corrected and supply-side constraints addressed.
(5) S
ERVICES
68. Services account for around 65% of The Gambia's GDP. The single most important subsector
is distribution services, which have close connecti ons with re-exports, and are closely associated with
informal sector operations.
69. The Gambia has undertaken commitments under the GATS in 12 service subsectors, making
it one of the least-developed countries that have undertaken the highest number of commitments in thecontext of the Uruguay Round and subsequent nego tiations on services.  Commercial presence
(mode 3) is subject to one horizontal limitation, namely that companies and individuals satisfy certain
registration requirements, which include the payment of fees and deposits, prior to establishment.  No
binding commitments have been made on measures affecting market access or national treatment for
the presence of natural persons, with the exception of the entry and stay of natural persons employedin management and expert jobs for the implementation of foreign investment.  In these specific cases,
approval is needed from the office of the President and is subject to the satisfaction of a number of
criteria, including the payment of a payroll tax, and a minimum investment requirement.
70. Specific sectoral commitments cover business-related services, communication services,
construction and related engineering services, distribution services, educational services,environmental services, financial services, health and related social services, tourism and travel-
related services, recreational, cultural and sporting services, transport services, and other
miscellaneous services.  In almost all the subsectors involved, measures affecting market access and
national treatment have been bound, without limitation, for modes of supply 1 to 3.
42  Exceptions are
banking and other financial services, and health and other related social services.
                                                     
42 That is, cross-border supply, consum ption abroad, and commercial presence.The Gambia WT/TPR/S/127
Page 77
(i) Financial services
71. The Gambia's financial system consists of the Central Bank of The Gambia, six commercial
banks43, 11 foreign exchange bureaux, 11 insurance companies, the Social Security and Household
Financing Corporation (SSHFC – a state-owned social  security and contractual savings institution),
the Department of Posts (which manages savings accounts), 67 credit unions, 61 registered Village
Savings and Credit Associations, and a plethora of informal savings and credit associations (seesection (2(ii)) above for more details on these last two groups).  The banking system is dominated by
the Standard Chartered Bank of The Gambia (SCBG), which accounts for just over half of the value
of all deposits and loans.  The State, through the SSHFC, owns 29.3% of the Trust Bank of The
Gambia, and a 16.1% stake in the SCBG, and a 15% stake in the Arab Gambian Islamic Bank.  The
SSHFC is the most profitable state-owned enterp rise in The Gambia, recording profits of D128
million in 2002.  The International Bank for Commerce and the Guarantee Trust Bank are 100%
foreign owned, while the Standard Chartered Gr oup owns 75% of the SCGB.  Various foreign
investors and the Islamic Development Bank have stakes in the Arab Gambian Islamic Bank.
Commercial banks on the whole provide similar services and products:  current and savings accounts,
and term deposits of up to 12 months.  Lending is  mainly short-term.  The SCBG and the SSHFC are
the dominant players on the T-Bill market.  The Arab Gambian Islamic Bank specializes in the
financing of distributive trade, and construction and house finance.
72. The aggregate profits of the Gambian banking subsector have been increasing since 1996
(Table IV.9).  It is nevertheless small, highly segmented, and still relatively underdeveloped.  In
particular, growth in private sector credit as a proportion of GDP has been sluggish, especially
compared with growth in broad money relative to GDP (Chart IV.2), suggesting that financial
deepening has been reflected in increased financial intermediation only to a limited extent.  Asexplained in Chapter I(2), the crowding-out effect of government spending has inhibited the banking
sector's role in financial intermediation.  Weaknesses in the judicial framework, difficulties in
screening loan applicants and domestic banks' aversion to risk generate high transactions costs,
reflected in wide interest rate spreads, with nominal lending rates in excess of 20% (Table IV.10).
44
Faced with the high cost of local finance, tourism groups and larger traders tend to access credit
overseas, leaving domestic banks to compete for a smaller pool of clients.  As this smaller pool is
liable to contain a higher proportion of risky projects, upward pressure on interest rates is maintained,
as banks make provisions to cover potential losses.  In practice, commercial bank loans to the private
sector are concentrated in the trade subsector (Table IV.11), mainly at the short-term end of the
spectrum.  Banks have financed these loans by contracting short-term loans from overseas.  Personalloans, mainly bank overdrafts with no rollover, have grown very rapidly in recent years.
73. Under the terms of the Central Bank Act of 1992, the Central Bank of The Gambia is
mandated to supervise the banking subsector, to conduct monetary policy and to promote a "sound
financial structure and credit exchange conditions conducive to the orderly and balanced economic
development of the country".
                                                     
43 The Standard Chartered Bank of The Gambia, International Bank for Commerce, the Trust Bank of
The Gambia, the Arab Gambian Islamic Bank, and the Guarantee Trust Bank.  The operations of the ContinentBank were suspended in 2002.
44 One study (World Bank, 1999) highlighted the following problems: (i) biases in the legal and judicial
framework against the speedy recovery of debts.  For example, the 1992 Mortgage Act eliminated the right of
mortgagees to appoint the receiver of their choice and required that any receiver should be approved by the
court, increasing the costs and time required to enfor ce the right of mortgagees to the collateral securing a
defaulted mortgage; (ii)  delays in the administration of justice:  there were inordinate delays in the Sheriff'soffice, and  hindrances in the execution of judgements arising from willful delays and/or incompetence ofsheriffs and bailiffs in the servicing of writs and other processes.WT/TPR/S/127 Trade Policy Review
Page 78
74. Pursuant to the Financial Institutions Act, all financial institutions are required to obtain a
licence from the Central Bank prior to commencing operations.  As part of its approval process, the
Bank considers the following criteria: capital adequacy, and the source of the institutions' capital,
though no minimal capital requirement is formally specified, thus potentially giving the Central Bank
a wide degree of discretion on a fundamental prudential issue;  the character of directors and owners;
the address of the registered office; memoranda and articles of association; the certificate ofregistration and incorporation; medium-term (three-year) business plan; feasibility study; and any
other information the Central Bank deems, in the course of its enquiry, to be necessary. There are no
fees charged to banks for a licence.
75. There are no special conditions attached to th e establishment of foreign banks, or to the
opening by foreigners of bank accounts in The Gambia.  The hiring of foreign personnel is subject togeneral conditions applying to the hiring of expatriate staff in any industry or service subsector:
payment of a payroll tax of D10,000 per annum; a minimum investment of D1 million; and the
unavailability of a qualified Gambian national for the position.  No specific regulations apply to the
establishment of a Gambian bank overseas, though this situation has not occurred to date.  There are
no restrictions on Gambian residents contracting loans from an overseas bank.  However, Gambianresidents need written permission from the Central Bank before opening an account overseas.
Table IV.9
Banking sector deposits, assets, and aggregate profits, 1996-01
YearTotal deposits
(D million)Total assets
(D million)Aggregate profits
(D million)
1996 770.3 986.8 8.55
1997 916.8 1,207.7 32.3
1998 879.6 1,454.6 40.4
1999 1,091.2 1,622.4 83.7
2000 1,428.3 2,043.6 119.5
2001 1,747.7 2,478.5 128.7
Source: Central Bank of The Gambia (2000), Annual Report 2000 .
Table IV.10
Banking sector – key interest rates, 1996-02
1996 1997 1998 1999 2000 2001 2002
Lending rates
Manufacturing 19.0-23.5 19.0-23.5 19.0-24 18.0-22.5 18.0-22.5 19.0-23 22.0-24.0
   Other sectors 19.0-25.5 19.0-25.5 19.0-24 18.0-24 18.0-24 19.0-23 22.0-24.0
Treasury Bills 16 16 14 12.5 12 16 18
Deposit rates
S h o r t  t e r m  d e p o s i t 999778 1 0
Savings bank account 9.5-11.5 9.5-11.5 9.5-11.5 9-10 8-10 10 10-12
  Three months 11.5-12.5 11.5-12.5 11.5-12.5 9.5-12.5 9.5-12.5 10-11 11-12
  Six months 11.5-12.5 11.5-12.5 11.5-12.5 10.25-
12.510-12.5 12.5 12.5
  Nine months 12-13 12-13 12-13 11-12.5 10.75-
12.512.5 12.5
  Twelve months and more 12-15 12-15 12-15 12-12.5 11-12.5 12.5 12.5
Source: Central Bank of The Gambia (2000) and (2001), Annual Report 2000  and 2001 ; and information provided by the
Gambian authorities.The Gambia WT/TPR/S/127
Page 79
Table IV.11
Sectoral distribution of loans, 1997-02
(Million dalasi)
1997 1998 1999 2000 2001 2002
Agriculture 57.96 57.27 48.41 159.23 11.66 60
Fishing 8.62 10.68 2.27 6.84 5.43 5.96
Manufacturing 5.23 4.75 27.94 6.5 18.77 36.65
Construction 15.94 27.88 44.56 101.59 55.78 78.88
Transportation 90.68 11.66 49.68 56.31 42.69 93.65
Distributive trade 234.49 269.36 211.29 320.9 663.55 511.55
Tourism 18.81 20.79 25 47.94 33.32 21.33
Financial institutions 8.28 12.1 8.4 14.3 12 44.92
Other commercials 23 25.4 39.4 74.5 58.66 207.3
Personal loans 112.4 141.6 77.9 217.2 171.7 200.6
Source: Central Bank of The Gambia (2000), Annual Report 2000 ; and information provided by the Gambian authorities.
76. The Gambia's binding commitments under the GATS regarding the banking subsector are
somewhat less liberal than the actual regime.  They are without limitations on market access in respectof modes 1 and 2, and without limitations on national treatment in respect of modes 1 to 3,
concerning, inter alia , wholesale and non-bank deposit taking, financial leasing, and credit granting
services.
77. The Government is also drafting anti-money-laundering legislation (the 2003 Money
Laundering Bill).  This would require financial institutions to, inter alia,  establish the true identity of
customers and persons (including corporate entities) seeking to enter into a business relationship.0.05.010.015.020.025.030.035.040.045.0
1995 1996 1997 1998 1999 2000 2001Chart IV.2 
Growth in broad money and private sector credit, as a percentage of 
GDP
Central Bank of The Gambia (2000 and 2001 ), Annual Re port. Source:Percentage
Broad money/GDP
PSC/GDPWT/TPR/S/127 Trade Policy Review
Page 80
Where a financial institution has reason to suspect money laundering, it would be required to submit a
complete written report to the supervisory authority,  appointed by the Secretary of State for Finance
and Economic Affairs.  Under the Bill, anyone  leaving The Gambia with over D300,000, or its
equivalent in cash or negotiable bearer instruments,  would have to report to the supervisory authority.
Even though the Bill has yet to be enacted, this provision was invoked in October 2003 as the
Government attempted to clamp down on what it termed "speculative behaviour", which it heldresponsible for the continuing depreciation of the dalasi.
45
78. The insurance subsector comprises 11 companie s, all privately owned, with total combined
assets estimated at D73.5 million in 2001.  Thre e companies, Londongate, Global Security, and
International Trust insurance Company, have foreign shareholdings, of respectively 30% for the first,
and 50% for the two others.  The SSHFC also offers life insurance through its operation of a NationalProvident Fund. Companies tend to offer the same products, principally in the non-life branch: motor
vehicle insurance, fire, and accident insurance.  Motor insurance represented 53% of the market,
measured by gross premiums, in 2001.  Life insurance is, aside from one private company, largely left
to the SSHFC.
46 Information asymmetries, particularly difficulties in screening customers and
distinguishing between true and fictitious claims , have contributed to keeping insurance premiums
relatively high.  Companies are free to set premiums, and there are currently no specific regulatory
rules governing premiums setting.  In 1998 se veral major companies signed an agreement to
harmonize discounts offered on motor insurance products, in effect concluding a cartel-type
agreement.
79. The Gambia has considerably liberalized its insurance regime through its commitments under
the GATS: it has undertaken not to maintain any re strictions on market access or national treatment in
respect of modes 1 to 3 regarding all types of life and non-life insurance activities.  Marketconcentration has lessened: while three companies (Gamstar, the Gambian National Insurance
Corporation (GNIC), and Great Alliance) accounted for 78% of premiums and of assets in 1998, they
accounted for 50% of premiums and roughly 62% of assets in 2001 (Table IV.12).  While this
reduction in concentration through the establishment of new entrants could have beneficial welfare
effects, there is some concern that over-entry might have been encouraged by lax prudentialrequirements. The minimum capital requirement fo r establishing an insurance company is D400,000,
plus a deposit of D60,000 for each line of business.  These relatively low requirements may explain
why most companies are under-capitalized and under-reserved. Supervision is weak: for example,
most companies do not comply with regulations relating to reserves, and the submission of audited
accounts is erratic.
47  Strengthening the regulatory regime would enable The Gambia to draw benefits
from the liberalization of its policy framework.
80. Regulation of the insurance industry is the responsibility of the Central Bank.  The broad
criteria for establishing an insurance company are the same as those applying to banks and other
financial institutions.  In addition to satisfying the minimal capital and deposit requirements, insurers
are required to allocate 5% of the value of their reinsurance business to Africa-Re, a reinsurancegroup established by the former Organization of Af rican Unity (now the African Union).  Required
insurance reserves are set at 40% of retained premiums for all types of business, and own funds must
be at least 10% of gross premiums.  Under current rules, 75% of reserves must be invested in T-Bills.
                                                     
45 Daily Observer , 13 October 2003.
46 The SSHFC's National Provident Fund is a fully funded defined contribution scheme, with individual
accounts.  The fund pays retirement, invalidity, withdrawal, and survivor benefits.
47 World Bank (1999).The Gambia WT/TPR/S/127
Page 81
Table IV.12
Insurance companies, and value of premiums and assets, 1998-01
('000 dalasi)
Company Value of premiums Assets
1998 1999 2000 2001 2001
Gamstar Insurance Company Limited 9,906 10,062 7,674 7,976 18,360
Great Alliance Insurance Co. Ltd 10,339 10,927 11,309 10,371 19,458
Gambia National Insurance Co. Ltd 4,776 4,776 4,569 4,794 7,899
Capital insurance Co. Ltd. 1,273 1,589 1,362 1,334 3,239
New Vision Ins. Co. Ltd 3,183 4,005 4,815 2,946
Global insurance Co. Ltd. 2,588 3,322 4,338 4,638 4,589
Prime Ins Co. Ltd. 3,321 4,405 3,740 4,173 3,120
Gamstar Life and health Insurance Co. n.a. n.a. 1,828 3,542 2,694
Londongate Insurance n.a. n.a. 10,291 .. 6,402
Sunshine Insurance n.a. n.a. .. 1985 2,568
International Trust Insurance Co. n.a. n.a. .. 2,268 2,242
Total 32,203 38,264 49,116 45,896 73,517
n.a. Not applicable.
.. Not available.
Source: Information provided by the Gambian authorities.
(ii) Telecommunications and postal services
81. The Gambia's 1.3 million people shared 33,300 fixed telephone lines in 2000, i.e. a
teledensity of 2.56 (Table IV.13), which was above the African average of 2.48, and well above the
sub-Saharan Africa's average of 0.75.48  Fixed line telephony services are provided by GAMTEL, a
public monopolist, with a subscriber base of 38,359 at end 2002. 49  The Permanent Secretary of the
Department of State for Communication, Information and Technology (DOSCIT), and a
representative of DOSFEA, are members of the GAMTEL board of directors.  GAMTEL is also the
Government's vehicle for the maintenance and expansion of the telephone network system, and for the
development of fibre-optic cables and wireless telephone technology.  GAMTEL does not receivegovernment funding for its recurrent expenses.  Recent capital expenditure plans for the maintenance
and expansion of the telephone network is supported primarily by donor funds, and to a lesser extent
government counterpart funding, and own funds. GAMTEL has begun the implementation of an
expansion project, running from 2003 to 2007, and mainly financed by a grant of €15 million, which
aims to significantly increase the number of fixed-line phones.  GAMTEL currently pays an annualsubvention of D3 million to The Gambia Radio and Television Services.
Table IV.13
Telecommunications indicators, 1997-00
1997 1998 1999 2000
Main phone lines in operation 24,833 25,609 29,216 33,300
Main telephone lines per 100 inhabitants 2.08 2.13 2.30 2.56
Percentage of main lines connected to digital exchanges 100% 100% 100% 100%
Waiting list for main lines 21,997 24,000 16,883 ..
Cellular mobile telephone subscribers 3,096 4,734 5,048 5,307
Cellular subscribers per 100 inhabitants 0.27 0.41 0.41 0.42
Full time telecommunications staff 759 892 888 928
Main telephone lines per employee 28 28 29 31
Estimated internet users 600 2,500 3,000 4,000
.. Not available.
Source: ITU (2001), African Telecommunications Indicators .
                                                     
48 ITU (2001).
49 Strictly speaking, the Government's share in GAMTEL is 99%; while The Gambia National
Insurance Company has a 1% share.WT/TPR/S/127 Trade Policy Review
Page 82
82. GAMTEL recorded profits of above D70 million in 2001 and 2002 (Table III.4,
Chapter III(4)(ii)).  Its pricing structure (Table IV.14) emanates from the terms of its Memorandum of
Understanding with the Government.  This document does not set an explicit price cap, but rather sets
targets for, inter alia , minimum operating profits (currently a margin of 15%), a rate of return on total
assets (currently 5%), a rate of return on investments (6%), and maximum cost per subscriber
(D7,000).
Table IV.14
International tariffs applied by GAMTEL, 2002
Countries Peak rate Off-peak rate Weekend and public holidays
Senegal/ Guinea-Bissau 6.00 5.75 4.60
UK, France, USA, Spain, Canada, Germany,
Norway, France20.75 17.25 13.8
Other Countries 23 18.40 15.00
Source GAMTEL.
83. Cellular telephony was liberalized in 2001, and there are currently two service providers:
GAMCEL, and AFRICELL Gambia, with respectively 65,000 and 30,000 subscribers.  Both carriers
have concluded roaming agreements.  GAMCEL is a subsidiary of GAMTEL, and the latter invested
D71 million in GAMCEL in 2002 as part of a network expansion project.  There is at present nointerconnection agreement between AFRICELL and the GAMTEL group of companies, mainly
owing to disagreements regarding the methodology to be used for setting interconnection charges, and
a reluctance by operators to share information on costs in the absence of an independent regulatory
authority.  The absence of a negotiated interconnection agreement, together with the close relationship
between GAMCEL and GAMTEL, could be a source of significant distortion to competition in themarket for cellular telephony.
84. Regulation of the telecommunications subsector is entrusted to DOSCIT.  DOSCIT approves
the price schedule formulated by GAMTEL, and also approves licences for the mobile subsector.
Though there is no statutory limitation on the number of cellular operators, the Government currently
has no plans to auction a licence to a new entrant. A new telecommunications act is under preparation,along with a new telecommunications policy .  The Government intends to unbundle the different
services provided by GAMTEL, with a view to sel ling the provision of value-added services to the
private sector.  No date has yet been set for the liberalization of fixed line telephony.  The
establishment of an independent regulatory authority, with no operational links to GAMTEL, is an
essential preconditon to liberalization, but no action in this direction has been taken to date.  The
Government plans to introduce universal service obligations through the new legislation.  The Gambia
has undertaken certain binding commitments on telecommunications services under the GATS:  it hascommitted to maintaining no limitations on market access or national treatment for the supply, by
modes 1 to 3, of public telephone services, data and message transmission services, "other"
telecommunications services, and paging and telecasting services.
85. Postal services are operated by the Department of Posts of The Gambia, a government agency
that falls under the supervision of DOSCIT.  The Department manages a network of 12 post offices.Legislation governing the postal subsector dates from 1912.  It confers on the Department of Posts the
monopoly of collecting, sending, despatching, and distributing letters and parcels. At the same time,
The Gambia has undertaken binding commitments under the GATS not to maintain any limitations on
market access and national treatment for the supply, by modes 1 to 3, of postal and courier services.The Gambia WT/TPR/S/127
Page 83
In practice, express courier services are open to private competition, though other forms of postal
services have yet to be liberalized.50
86. The Department of Posts also offers certain financial services, namely the encashing of postal
orders, and savings accounts.  The minimum deposit required for savings accounts is D200; the
interest paid is 9.5%.51
(iii) Transport
(a) Road transport
87. The Gambia's road network consists of approximately 3,000 km of roads, about 450 km of
which are paved.  Total passenger traffic in 2002 for buses and minibuses was estimated at 980,000.
The Gambia has progressively liberalized its road transport services.  Private operators compete with
The Gambia Public Transport Company (GPTC), even though the latter still dominates transport onthe principal tarred road between Banjul and Basse, on the southern bank of The Gambia river.
Though route-licensing is not practised within The Gambia, private operators seeking to transport
freight or passengers on inter-state routes between The Gambia and Senegal are required to obtain a
permit, under the terms of the Road Transport Agreement signed by the two countries.  These permits
are delivered by the Minister responsible for transport in either country.  The cost of issuance in TheGambia is D500.
88. There is currently no regulatory authority for the subsector.  Private operators are free to set
prices as they see fit. Cabotage is allowed. The Gambia has made relatively liberal commitments
under the GATS in relation to non-rail land transport, with an undertaking to maintain no restrictions
on modes 1-3 in respect of market access and national treatment, concerning passenger transportation,
freight transportation, rental services of commercial freight vehicles with operators, and supporting
services for road transport (for example, bus station services, highway bridge and tunnel operationservices). Certain legislative changes need to be made to properly reflect The Gambia's liberal policy
orientation and GATS commitments.  For example, th e provisions of the GPTC Act of 1975 grant the
Government certain discretionary powers to approp riate any route for the use of the GPTC to the
exclusion of any other operator, though in practice this provision is no longer invoked.
(b) Maritime transport, river transport, and port operations
89. The regulation of maritime transport, river transport, and port operations falls under the
mandate of The Gambia Ports Authority (GPA), a public enterprise.  Banjul port is The Gambia's
main maritime commercial port, and serves as an entry point for goods to The Gambia, but also for re-
exportation to countries in the sub-region.  It is located at the mouth of the river Gambia, and has two
piers.  Quay length is 750 metres, and the maximum length of vessels allowed at wharves is182.9 metres. It offers approximately 38,000 square metres of uncovered storage area and 3,000
square metres of covered storage area.  Cargo throughput, measured in tonnes, was nearly 79% higher
in 2002 than in 1997, generally reflecting sustained growth in the volume of both imports and exports
over that period (Table IV.15).
                                                     
50 The authorities did not provide information on revenues earned by the Department of Posts, nor on
the volume of mail handled.
51 No data were available on the value of savings accounts managed by the Department of Posts.WT/TPR/S/127 Trade Policy Review
Page 84
Table IV.15
Banjul Port, cargo throughput, 1997-02
(Tonnes)
1997 1998 1999 2000 2001 2002
Imports 486,432 604,552 643,374 678,868 756,093 847,286
Exports 44,942 71,842 47,774 55,176 74,776 101,714
Total 531,374 676,394 691,148 734,044 830,869 949,000
Source: Information provided by the Gambian authorities.
90. The mandate and responsibilities of the Gambia Ports Authority are set out in the Ports Act of
1972.  The GPA determines berthing, mooring and anchoring locations, as well as approaches to the
port, and sets ship dues relating to these operations. The GPA sets and collects "harbour dues", a tax
based on the number of passengers and the volumes of freight (see Table IV.16).  The GPA also sets
rates for the provision of services and use of equipment relating notably to: the handling of goods; thecarriage of passengers; the use of any gear, tackle, tools, instruments or staging supplied by the GPA;
use of dockyard and dockyard services; and the use of ferries and river craft for the carriage of
passengers and goods.  Duties and charges are the same for imports and exports.  
Table IV.16
Charges and dues at Banjul Port
Description Amount
Port charges
Pilotage A composite charge based on the size of the vessel GRT1/NRT2
First 24 hours: £0.11 per GRT Berthing
Succeeding ½ days:  £0.06 per GRT
Berthing:  £34.00 Berthing party
Unberthing  £34.00
Buoys & lights £0.20 per NRT
Discharged:  £1.0 per tonne Harbour dues
Loaded:  £1.0 per tonne
Other charges Mooring: £88.00
Shore handling container handling: D504.00 for 20 foot container; D 1,008.00 for 40
foot container
Conventional cargo: (a) Direct delivery: €1.0 per ton; (b) Stacking: €2.0 per ton
Tariffs on empty containers and use of crane
(in euros)
Crane standby charge 1,200 for all vessels that call at the Port of Banjul (waived when the crane is in use)
User charge 10 per TEU moved for container vessels
Bulk cargo charge 0.45 per tonne
Hourly charge 150 for usage other than vessel operation
Empty container charges (in euros)a
Day 1-10 No charge
Day 11-20 0.75
Day 21-30 1.50
Day 31-40 3.00
From 41st day 6.00
a These are levied (in addition to a shore handling charge of  €12 per container) to enable the Authority to recover the costs 
incurred in handling empty containers.
Source: Information provided by the Gambian authorities.The Gambia WT/TPR/S/127
Page 85
91. Though the Ports Act countenances the possibility of certain services, notably pilotage, being
provided by operators other than the GPA, in practice the GPA maintains a monopoly on all port
services.  This contrasts with the more liberal stance set out in The Gambia's schedule of
commitments under the GATS, through which it comm itted itself to maintaining no limitations on
market access in respect of supply, by modes 1 to 3, of services such as:  pilotage and berthing
services, navigation aid services, vessel salvage and refloating services, and other supporting servicesfor water transport.  Private-sector entry into th ese markets could help to enhance the competitive
position of the Banjul port, which is crucial to it de veloping further into a regional entrepôt trading
hub.  However, no action has been taken to date to liberalize ports services.
92. The Ports (Ferries) Regulations of 1972 require all vessels operating in Gambian territorial
waters to obtain a licence from the GPA. No particular conditions are attached to the granting of thelicence, other than a demonstration of the seaworthiness of the vessel. The Gambia does not have its
own national carrier.  A number of  major cargo carriers, including both conference carriers and
independent carriers, make use of Banjul port; frequencies range from one call every week, to one call
every month.
52  Cabotage is authorized.  In the framework of its GATS commitments, The Gambia
has committed not to maintain limitations on market access or national treatment in respect of supply,by modes 1 to 3, of services related to the transportation of passengers by sea-going vessels .
93. Inland river transport is regulated by the Public Ferries Act of 1966, with the GPA as the
regulatory authority.  In practice, river transport is used mainly by government barges carrying
groundnuts from marketing points to processing plants.  Road transport is the preferred option for
most forms of freight and passenger transport.  River transport is, in principle, open to private-sector
entrants.  The Gambia's GATS schedule shows a commitment to no limitations on market access and
national treatment relating to passenger transport, and for the towing and pilotage of non-sea-going
vessels.
(c) Air transport
94. The national carrier is Gambia International Airlines (GIA), a state-owned enterprise.  It
operates scheduled services to Dakar (Senegal), Freetown (Sierra Leone), and Conakry (Guinea).  It
also provides a number of services at Banjul International Airport, notably ground-handlingoperations (both ramp handling and passenger handling, of which it is the principal provider),
ticketing, storage facilities for imports, and cargo-processing facilities for exports.  Eight other
carriers operate scheduled flights to and from Banjul, along with 13 charter-flight companies, which
operate flights of variable frequency.  Between 60% and 65% of passengers arrive on charter flights.
Destinations served include countries in the region, and major tourist source markets.  In its scheduleof commitments under the GATS, The Gambia has committed itself to maintaining no limitations on
market access or national treatment in respect of supply, by modes 1 to 3, of passenger air transport.
This (on paper at least) implies that The Gambia has adopted an open-skies policy.  It has made
similar commitments regarding rental and leasing services of freight and passenger aircraft, and
supporting services for air transport.  The Gambia is signatory to the Yamoussoukro Declaration,  andthe Banjul Accord for the accelerated implementation of the Yamoussoukro Declaration.  The latter
brings together seven West African states
53, and establishes a platform for negotiating traffic rights
and market access, as well for harmonizing air transport regulations.
95. Banjul International Airport is managed by the state-owned Gambia Civil Aviation Authority
(GCAA), and handles between 280,000 and 300,000 passenger movements per year, and 2,300 to
                                                     
52 The companies are: CMBT, DELMAS, J Line, MAERSK, OTAL,  and TORM.
53 Cape Verde, The Gambia, Ghana, Guinea, Liberia, Nigeria, and Sierra Leone.WT/TPR/S/127 Trade Policy Review
Page 86
3,000 tonnes of cargo (Table IV.17).  The GCAA collects landing fees and cargo handling fees, and
passenger taxes of D170 per passenger.54  The GCAA is a loss-making enterprise (Table III.4).55
Table IV.17
Passenger and cargo traffic through Banjul International Airport, 1997-02
1997 1998 1999 2000 2001 2002
Scheduled passengers 96,604 95,011 103,803 107,508 122,361 108,664
Non-scheduled passengers 178,967 186,135 194,485 194,248 160,993 166,761
Scheduled cargo (tonnes) 1,382.9 1,382.9 1,859 1,633 1,979 1,558
Non-scheduled cargo (tonnes) 1,638.6 1,673.5 1,243 678 804 802
Source: Information provided by the Gambian authorities.
(iv) Tourism
96. The tourism industry accounted for 12% of GDP in 2001 and, according to the authorities,
was the second largest employer.56  Aside from re-exports, it is the largest earner of gross foreign
exchange, generating some 60% of receipts in 2000.  The number of tourist arrivals increased steadily
from 1996 onwards (Table IV.18), before slumping in 2001 owing to a drop in arrivals from
Germany, which along with United Kingdom has been the largest source of tourists to The Gambia.
However, prospects for a recovery in tourist numbers have improved with the opening of new charter
connections with Switzerland and the Czech Republic, and an expansion of services provided by UK-based tour operators.   The total number of arrivals for 2003 is projected at a record 200,000.
Table IV.18
Tourism indicators, 1997-01
1997 1998 1999 2000 2001
Charter tourist arrivals 84,758 91,106 117,846 78,710 75,209
Average length of stay (days) 13.31 12.99 12.92 12.9 12.9
Average Daily Expenditure 289.5 432.4 .. .. ..
.. Not available.
Source: Information provided by the Gambian authorities.
97. Though The Gambia is not part of the top 20 tourist destinations in Africa, it has, according to
the World Tourism Organization, been able to position itself relatively successfully as a winter
tourism destination.57  However, it operates within the very competitive "sea-sun-sand" market, and
its ability to attract more tourists is contingent on its ability to keep pace with competing destinations
in terms of price and quality, and to provide access to a greater variety of tourist activities.  Besides its
Atlantic-coast beach resorts, The Gambia's main drawcards are its culture, and its variety of wildlife
and ecosystems, which make the development of eco-tourism a potential option.  Principal wildlife
and natural attractions include an abundant birdlife and natural reserves.  Tour operators and travelagencies serving The Gambia include larger charter groups that propose The Gambia as one out of
                                                     
54 The authorities did not provide data on landing fees and cargo handling fees.
55 The authorities did not provide information on the licensing system for air transport companies nor
on the system of allocation of traffic rights.
56 No precise data were provided.
57 That is, as a destination catering to holidaymakers during the northern hemisphere's winter season.The Gambia WT/TPR/S/127
Page 87
many possible destinations to source-market clients58, and a few independent operators focusing
almost exclusively on The Gambia.59
98. The policy framework for the tourism subsector is provided by the National Tourism Master
Plan, under which overall responsibility for the subsector has been allocated to The Gambia Tourist
Authority (GTA).  One of the GTA’s main functions has been human resource development in the
subsector, primarily through the delivery of training courses to personnel such as hotel managementand tourist guides.  The GTA is working with tourism operators to develop a rating system for hotels
and restaurants .  The GTA's ability to fulfil its functions is constrained by severe shortfalls in
capacity, as evidenced by its inability to compile basic information (such as the number of annual
arrivals) relating to the subsector. The State has been reducing its participation in tourism activities
through the divestiture programme, mainly through th e sale of hotels (Chapter III(4)(ii)). Operators in
the subsector are free to set prices.  There are no specific criteria for the practice of certain tourism-
related activities (guides, tour operators, restaurateurs).  Restaurateurs are subject to the provisions of
the Public Health Act  (Chapter III(2)(vii)(b)).  Th e Government sees its main role as implementing a
policy framework geared to improving the quality and predictability of The Gambia's tourist products,
ensuring that tourism is environmentally sustainable, and harnessing the economic potential of thetourism subsector to the goal of poverty alleviation.
99. The Government sees growth in the tourism subsector as playing a key role in its poverty
reduction strategy.  In this respect, the main challenges lie in increasing the level of spending by
tourists in The Gambia, and on deepening linkages between tourism operators and other sectors of the
economy, particularly the informal sector.  Survey results show that the average tourist spends about
£9 per day on the informal sector.
60  This is considered to be a relatively significant amount, which
could be increased, particularly as, on average, 14% of the tourists' budgeted expenditure remainsunspent, and that tourists responding to survey indicated a willingness to spend money on types of
activities that would involve the informal sector. 
61  One of the barriers inhibiting linkages between
formal and informal sector tourism activities is the formal sector's perception that the informal sector
is unreliable and untrustworthy.  The Government, supported by donors, has therefore sought to
encourage the development of codes of good conduct for informal sector operators, in order to enablereliable ones to signal their quality to the formal  sector.  For example, the code of conduct for juice
pressers and sellers sets standards of hygiene;  while the code of conduct for guides sets standards
regarding the behaviour of guides towards tourists.
100. Under the provisions of the Investment Promotion Act, certain investments are eligible for the
incentives associated with special investor status (Chapter II(4). These relate to  eco-tourism, thedevelopment of "up-country tourism" (motels, tourist camps, sport fishing, river cruising), and the
                                                     
58 For example, SPIES and Ving  (Scandinavia), Olympia International (Germany), the Thomson
Group and Airtours (UK).
59 Most notably, The Gambia Experience, based in London.
60 Department for International Development (2001).
61 For example, two thirds of surveyed customers said they would have paid to visit a traditional rural
or village setting – an activity that could involve informal-sector guides – but were not provided with an
opportunity.WT/TPR/S/127 Trade Policy Review
Page 88
development of four- or five-star hotels.  In a bi d to develop "summer tourism", the Government has
introduced seasonal incentives for tour operators, hotels, and ground handlers, applicable during the
months of  May to end October.  These are:  a 25% discount on aircraft handling charges for all tourist
charter flights; a 25% discount on landing and parking fees for all tourist flights; a 50% reduction in
sales tax for hotels and ground handlers.  Under its commitments under the GATS, The Gambia has
committed to maintaining no limitations on market access and national treatment in respect of supply,by modes 1 to 3, of hotel and lodging services, beverage serving services in relation to consumption
on premises, travel agents and tour operators, and travel guide services.The Gambia WT/TPR/S/127
Page 89
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