National Trade Policy & Strategy

The Direction of the Trade Policy

Until 1985, The Gambia had pursued a protective trade policy regime with price controls, import restrictions and licensing, quota and selective quantitative restrictions. This regime had a framework that took into consideration the system of macroeconomic policy characterized by fixed exchange rate system and allocation of foreign exchange for imports on a case by case basis. In 1986, the Government abolished the fixed parity between the Dalasi and the Pound Sterling and left the exchange rate of the Dalasi to be determined by the free interaction of the factors of demand and supply. Moreover, all restrictions on current and capital transactions were lifted. Consistent with the trade liberalization policy, commercial banks were not required under the floating exchange regime to obtain the approval of the Central Bank to sell foreign exchange to their customers for all current transactions.
 
This chapter identifies key institutional and policy bottlenecks and proposes key reforms for trade policy and institutional building, domestic trade policy and international trade negotiations. This is to promote economic development using trade as a stimulus to export led growth and integrate it in the Poverty Reduction Strategy Paper.

The Vision

Trade policy in the Gambia is not much oriented by the usual protectionist or infant-industry motive. Instead customs duties and other trade taxes are mainly used as instruments to generate government revenues because imported goods generally pay full duties when entering the country. Because of the importance government attaches to taxes from international trade to generate revenue there remains much to be done to promote domestic industry and export diversification. Concisely, the main consideration driving Gambian trade policy has been to maximize government revenue from trade taxes. In view of the introduction of regional initiatives such as the ECOWAS Common External Tariff (CET) and the proposed Economic Partnership Agreement (EPA) between the European Union and West Africa, it would be concluded that the dependence on taxes from international trade to generate revenue would not be sustainable in the long term. Instead, trade policy and its formulation and implementation in The Gambia needs a holistic approach through engagement, consultation and collaboration with trade-related public and private institutions to address structural and supply-side constraints.
 
In this connection, it is important to set a medium term vision and goal which the Government, the private sector and other stakeholders will be committed to. This means that The Gambia should focus on using international trade as an engine of economic revival, growth industrial transformation and export diversification. Therefore, MOTIE would “strive for and be dedicated to use trade as an engine of economic growth and take full advantage of Gambia’s potential in trade for greater integration into the global economy and create employment for poverty reduction”.

The Trade Policy Statement

The broad objectives of Gambia’s trade policy are sustainability, collaboration and coordination dependent on-export-driven economic growth; hence the urgent need for government to formulate a comprehensive export development strategy. The main areas of focus will therefore be agriculture, tourism, fisheries and manufacturing sectors, supported by the services sectors with an emphasis on value added production and exports. The promotion of value addition production for export in key sectors will no doubt encourage economic activities through backward and forward linkages so that The Gambia will achieve sustained economic growth for poverty reduction. To achieve this it requires trade policy management and coordination.

Objectives of the Trade Policy

The broad objectives of Gambia’s trade policy are sustainability, collaboration and coordination dependent on-export-driven economic growth; hence the urgent need for government to formulate a comprehensive export development strategy. The main areas of focus will therefore be agriculture, tourism, fisheries and manufacturing sectors, supported by the services sectors with an emphasis on value added production and exports. The promotion of value addition production for export in key sectors will no doubt encourage economic activities through backward and forward linkages so that The Gambia will achieve sustained economic growth for poverty reduction. To achieve this it requires trade policy management and coordination.

Domestic Trade

The most important factor in the domestic market is price. Government will continue to maintain a liberal market policy and, to the extent possible, will encourage free market forces to determine prices of goods and services. This will also apply to producer prices. Producers, especially the small scale ones will be encouraged through the right incentives and the development of infrastructures to support and promote local manufacturing and processing of goods.

Policies Related to Services

The Gambia has undertaken commitments under the GATS in 12 service subsectors. 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 service.
 
In the telecommunication sector, GSM and Independent Service Providers have been liberalized for investment subject to a license by the Public Utility Regulation Authority. Provision of landlines phone and international connectivity (gateway) services is currently limited GAMTEL.
 
In the financial sector, investments in the banking and insurances services have also been liberalized. The Banking sector requires a minimum capital of D60 million to open a bank. This minimum capital requirement will be increased to D100 million by end of 2010 and to D200 million by 2012.
 
In the Education sector, investment to establish private schools in the nursery, Lower and Upper Basic schools, Senior Secondary Schools as well as vocational Training Institutions is open, subject to registration with the Ministry of Basic and Secondary Education and the national Training Authority
 
The overall objective of the Trade Policy is to ensure enhance competitiveness of the services sector and ensure compliance of The Gambia to the WTO/GATS commitments.
 
1. Government will strengthen the coordination of national policies to ensure that they are compliant to The Gambia’s commitment at General Agreement on Trade in Services (GATS).
 
2. In the telecommunication sector, government will intensify efforts to expand the gateway to ensure effectiveness, efficiency and competitiveness in the provision of international connectivity services.
 
3. Government will also consider the possibility of a public private sector partnership in the provision of gateway services.
To access the complete Gambia Trade Policy 2011 document. Click Here..