The Gambia has quite fragile and undiversified economy as it notably remains largely a tax-based economy. Domestic financing has not enjoyed diversity before given that tax revenue continues to be heavily relied on to finance Government spending.

While tax revenue is not sustainable and faces a lot of fluctuations because of blur business outcomes, specifically, it does not even suffice up to half of Government expenditure despite government’s effort to generate as much revenue as possible through tax means and forming one of the three key financing strategies of the NDP 2018-2021. In addition, tax is largely a victim of embezzlement as a gap in the mode of collection still lingers.

With a GDP of $1.76B, the Country is also highly dependent on Tourism which is a very vulnerable sector. Given that it contributes about 18-20% of our GDP, this sector is not reliable and in this Pandemic and lockdown, our dependence on it is likely going to cost us significant economic lost, ranging from job loses as it directly and indirectly employs about 70,000 people, foreign exchange earning loses, and tax revenue loses.

According to the Head of Public and Corporate Affairs in a story published by the Chronicle Newspaper, Gambia Revenue Authority projects a potential tax revenue loss of GMD Two Billion which represents about 2% of our GDP. Similarly, according to the Minister of Finance and Economic Affairs, the economic impact of the COVID-19 outbreak would be a loss of GMD 2.5 Billion, and that the economy will shrink to by 3 percentage points to 3.3 percent from a projected growth rate Of 6.3 percent in 2020 (UNDP, 2020).

This Pandemic has apparently revealed that in order to sustain and maintain a considerably stable economic, macroeconomic stability especially, we need a diversified resource mobilization. This, therefore, calls for diversifying our economy, making all sectors viable and lucrative to significantly contributing to our GDP. Even whereas a wider diversification is impossible, prioritization is always an effective mechanism to ameliorate the economic conditions.

Therefore, to strengthen our revenue mobilization as a country, we can begin by looking at sectors that we have comparative advantage. To begin, we can leverage on Agriculture and Aquaculture. Same way the Gambia is blessed with a fertile land, the River Gambia is also a reservoir of national wealth if harnessed in the best interest of the citizenry.

Central River Region has proven to be a very arable region for rice cultivation; similarly, our land supports horticulture as well as animal husbandry. If Government leverages on these, in addition to Fish and Fish Products, Agricultural Value Addition, we can build a very robust revenue mobilization.

Equally, Concessionary Financing as stated in the NDP as a financing strategy is another means; however, it should not be highly depended on. This will require the Government to maintain and build cordial relationship with partners, local and international, to support their development agenda. This could be through friendly loans and grants that serve the interest of the citizenry.

It is important to note that no one county can develop in isolation, thus needs the support of others. Similarly, loans are not actually a threat to our development if they are used effectively and geared towards development which will even in turn be able to cover for the loan. Grants too will require the Government to negotiate the terms to the interest of the Country. However, this calls for Governments transparency and accountability in order to maintain the confidence of both partners and the citizenry.

Inter alia, these are employable mechanisms to strengthen the country’s financial muscles and fiscal space and to ameliorate debt stress. When we are able to maximize Government revenue earnings, it assures for lesser loans to be taken and thus translates to lesser trade deficit. Therefore, vibrant domestic revenue generation/mobilization is a necessary condition for economic advancement.

Reference Materials

National Development Plan 2018-2021
The Chronicle Newspaper, Aug 28th 2020