Will the Gambia sustain economic growth?

The Gambia is on a path of economic growth and sustainability, with the International Monetary Fund (IMF) highlighting the country's fiscal trajectory for the current year and the next year. The IMF notes that economic activity in The Gambia is strengthening, with growth estimates at 5.8 percent for the year. Alieu Secka, a Transformation Specialist at ABSS Consulting, shed more light on the near-term outlook and the impact of the current IMF Extended Credit Facility arrangement during an interview with CNBC Africa. Reflecting on the economic performance of The Gambia, Secka mentioned that the country has maintained a growth rate well above 5 percent, attributing this success to various sectors. Public expenditure, especially in infrastructure, has been a significant driver of GDP growth, alongside growth in the private construction sector and improvements in agriculture. The services sector, including telecom, hotels, and tourism, has also made notable contributions to economic growth. Despite the positive indicators, Secka emphasized that there is still work to be done to further bolster the economy. A key highlight of the interview was the discussion around the impact of the IMF Extended Credit Facility arrangement on The Gambia. The country is anticipating the next disbursement under the program, which is crucial for sustaining its growth momentum. Secka highlighted several risks that could potentially affect the trajectory of economic growth, such as geopolitical instability in the region and global price fluctuations. He underscored the importance of local businesses investing in agriculture to mitigate food insecurity and reduce reliance on imports. Another significant aspect of The Gambia's economic landscape is inflation targeting, with the country aiming to achieve a medium-term target of around 5 percent. Secka expressed cautious optimism about the potential for inflation slowdown, citing the upcoming surge in tourism as a contributing factor. He acknowledged the challenges posed by global inflation on imported consumer goods but indicated a positive trend towards maintaining lower inflation rates. The conversation also touched on the strength of the Gambian currency, the Dalasi. Secka noted that the country's relatively small economy has managed to maintain robust fiscal and monetary policies, resulting in a stable exchange rate. As tourism picks up and external support continues, there is optimism for the Dalasi to strengthen further. The resilience of the currency against devaluation shocks in the region is seen as a positive sign for economic stability. Looking ahead, Secka discussed the investment landscape in The Gambia, both for foreign and domestic investors. The upcoming transition period leading into the 2026 elections presents a critical juncture for the country. The ongoing discussions around a new constitution and political stability will influence investor confidence. Secka highlighted the importance of maintaining good policies to attract investors and sustain economic growth. In conclusion, The Gambia is poised for continued economic growth, supported by prudent fiscal and monetary policies, strategic investments in key sectors, and a positive outlook for tourism and inflation management. As the country navigates challenges and opportunities on its path to prosperity, maintaining investor confidence and policy consistency will be crucial for long-term sustainability.