|TI Corruption Index||2.9||2009|
|Heritage Economic Freedom||55.8||2009|
|World Bank Doing Business||140||2009|
|MCC Government Effectiveness||61%||2009|
|MCC Rule of Law||92%||2009|
|MCC Control of Corruption||49%||2009|
|MCC Fiscal Policy||12%||2009|
|MCC Trade Policy||23%||2009|
|MCC Regulatory Quality||76%||2009|
|MCC Business Start Up||7%||2009|
|MCC Land Rights Access||33%||2009|
|MCC Natural Resource Mgmt||30%||2009|
Investments must fulfill the following criteria to qualify for special investment status:
The Act requires special investment status be conferred on approved investment proposals. Such investments will be awarded special investment certificates (SIC) and will be entitled to the following incentives:
The Act provides for additional incentives above those specified for S.I.C. package for strategic investments. The Act makes no discrimination between foreign and local investors and there are no requirements that nationals own shares or that the share of foreign equity be reduced over time.
The incentives offered by GIPFZA will be enhanced under the proposed structuring to establish the Gambia Investment and Export Promotion Agency (GIEPA). There will be new packages for investment as well as for export and SME promotion.
There are no visa, residence, or work permit requirements that inhibit the activities or mobility of foreign investors.
The Gambian Government does not maintain any measures that it has notified the WTO to be inconsistent with TRIMs or that violate the TRIMs text.
Right to Private Ownership and Establishment
The Gambian Constitution guarantees the right of private ownership. Under the Company Act of 1955, there are no restrictions on the minimum or maximum share capital of a business venture, nor is there any compulsory requirement for equity participation by Gambian nationals in foreign-owned enterprises, except as described in Paragraph 9 in relation to
privatization programs. Businesses may be wholly owned by foreigners or jointly owned with participation by local investors. Organizational forms include:
In those sectors where private businesses are in competition with public enterprises, there is no undue discrimination with regard to access to markets, credit, and other business facilities, such as licenses and supplies.
Private entities are free to establish, acquire and dispose of interests in business enterprises.
Protection of Property Rights
Property rights are protected by the Constitution and secured interests in property, both movable and real, are recognized and enforced. The concept of a mortgage does exist and the banks execute it, and there is a recognized and reliable system of recording such security interests. The legal system fully protects and facilitates acquisition and disposition of all property rights including land, buildings and mortgages.
The Gambia is a signatory to both the Paris Convention for the Protection of Industrial Property and the Berne Convention for the Protection of Literary and Artistic Works. In 2003, the country enacted its own Copyright Act. This law provides adequate protection for intellectual property, patents, copyrights and trademarks. The Government has also signed and ratified both the WIPO Copyrights Treaty and WTO TRIPS agreement. However, enforcement of these regulations and treaties is sometimes inadequate due to a lack of resources and expertise. The Gambia has not yet ratified the WIPO Internet Treaties.
Transparency of the Regulatory System
A Fair Competition Law was enacted in 2007 and a Fair Competition commissioned by established in 2009. None of the existing laws and policies relating to tax, labor, environment, health, and safety are known to impede investment. Bureaucratic procedures, including those for obtaining licenses and permits are streamlined and could be significantly reduced with the One-Stop-Shop being promised under the new GIEPA law.
Proposed laws and regulations are made available to all the relevant stakeholders for their review and discussion at validation workshops. During the process of enactment in the National Assembly, deputies are free to suggest changes.
In 2001, The Gambia established the Public Utilities Regulatory Authority, a multi-sector regulatory authority that regulates the activities of providers of certain public utilities amongst them energy services (electricity, petroleum and gas), communications services (telecommunications, broadcasting and postal services), water and sewerage services and transport services (on land, water and in the air). PURA has been very successful in regulating service providers and ensuring transparency. PURA is responsible for providing licensing permits and acts as an advocate for the consumer. In a landmark case, PURA was recently able to demand compliance from the national electricity and water company and enforced a tariff reduction on prices. Lead by a group of young attorneys, PURA’s future in regulation is quite promising for the growing investment climate.
Efficient Capital Markets and Portfolio Investment
There are no policies in place that impede the free flow of financial resources in the product and factor markets. On the contrary the authorities facilitate the free flow of resources to support the government’s growth agenda.
Foreign investors can acquire credit on the local market at prevailing interest rates if they are able to provide the requisite collateral or guarantee. There are limited credit instruments available to the private sector because the only money market instruments available are the government treasury bills.
Portfolio investment is also very low because, among other reasons, there is no formal stock market such as a stock exchange for trading equity securities. Only one Gambian bank, Trust Bank Limited, is listed on the Ghana Stock Exchange.
The estimated total assets of the country’s 11 commercial banks are $11.4 billion. There is a sound banking system sound and only seven per cent of loans are non-performing.
There is limited "cross-shareholding" and no incidents of hostile takeovers.
Competition from State-Owned Enterprises (SOEs)
Private enterprises are allowed to compete with public enterprises under the same terms and conditions with respect to access to markets, credit, and other business operations, such as licenses and supplies. However, public enterprises often have material advantages. State-owned enterprises are active in aviation, maritime services, public transport, power generation, telecommunications, road building and housing.
All SOEs have a Board of Directors which is appointed by their line ministry. Members of the Board usually comprise key stakeholders in the sector and some government officials who serve as ex-officio members. Management reports to the line ministry which has final responsible to approve Board decisions.
All SOEs are required to submit their annual report and audited accounts to the National Assembly. There is no Sovereign Wealth Fund in the country.
Corporate Social Responsibility (CSR)
Generally speaking, the notion of corporate social responsibility is not well known in The Gambia and only some state-owned enterprises and some private companies such as banks and mobile phone companies adopt CSR as a policy. In most cases, their understanding of CSR is allocating funds to support various charitable causes such as supporting schools and health projects, disaster relief and environment enhancement. However, the banks and GSM companies often use such donations as publicity and marketing stunts. These firms are often viewed favorably.
Both foreign and local enterprises do little in terms of adhering to the voluntary principles and standards for responsible business in areas such as employment and industrial relations, human rights, information disclosure, combating bribery, science and technology, competition, and taxation.
The Gambia has generally benefited from a peaceful political climate since independence in 1965. The country's only successful coup d'etat occurred in July 1994 and was accompanied by minimal violence. The military officer who took power in 1994 was elected president in October 2001 through elections, which foreign observers (Commonwealth, EU, U.S., etc.) deemed generally free, fair, and transparent, albeit with some shortcomings. As a result, the U.S. Government lifted section 508 sanctions shortly thereafter in April 2002. In September 2006, the country held a presidential election that was judged to be partially free and fair and in which the incumbent, President Yahya Jammeh, was returned to office for a further term of five years. National Assembly elections were in held in January 2007 and local government elections were scheduled for late January 2008.
There have been no incidents of politically motivated damage to projects or installations. Various political parties are active, but there is no indication that civil disturbances are likely because of this. There are no nascent insurrections and relations with the country’s neighbors are generally peaceful.
Corruption exists, and the government continues its efforts to combat it. The Criminal Code provides the legal platform for combating corruption and this is occasionally buttressed by regulations and directives from government. For example, in 2007, two permanent secretaries at the Department of State
Agriculture were dismissed, arrested and charged with economic crimes relating to the sale of fertilizer which was said to have caused the government a loss of more than 6.3 million dalasi (about 274,000 dollars). A former permanent secretary at the Department of State for Foreign Affairs is also facing corruption charges over allegations of receiving money and cars
from foreign businessmen on the promise of having them appointed honorary consuls for The Gambia.
In 2004 the President established a commission of inquiry to look into suspected cases of corruption as well as investigate ill-gotten wealth acquired by government officials. A number of civil servants and senior officials indicted by the commission's report lost their jobs and, in some cases, property that they were suspected to have acquired illegally. Many more
had to pay back varying sums of money to the state.
Also in 2004, the President set up a commission of inquiry to investigate mismanagement and corruption in connection with the collapse of a $3 million fiber-optic cable project by the national telecommunications company, GAMTEL. Two senior officials who were involved in the projects were later dismissed from their jobs.
In 2003, the government's anti-corruption campaign, "Operation No Compromise" resulted in the imprisonment of a key figure in the government, the deportation of others and the dismissal of senior officials of the Central Bank who had used their positions to defraud the state. However, the deported
businessman was later allowed back into the country.
U.S. firms have not identified corruption as a serious obstacle to foreign direct investment in The Gambia. The most recently reported case of corruption occurred in the collection of fees for government services. Traffic police and other junior police and immigration officers are often accused of corruption and solicitation of bribes. Accepting a bribe, irrespective of source, is a criminal act and the penalties are fines and imprisonment depend on the magnitude of the amount. Senior government officials take anti-corruption efforts seriously, even though some of them have been investigated for corruption.
The police, the National Intelligence Agency and the Department of State for Justice are responsible for combating corruption. Transparency International has a local representative in the country, and The Gambia was ranked 106 with a score of 2.9 in the 2009 Corruption Perceptions Index. The Gambia has signed and ratified the African Union Convention on Preventing and Combating Corruption and Related Offences, but has ratified neither the UN Convention Against Corruption nor the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
Bilateral Investment Agreements
The Gambia has bilateral investment agreements with Mauritania, Morocco, the Netherlands, Switzerland, and the United Kingdom; however, only the agreement with Switzerland has come into force.
The Gambia does not have a bilateral investment treaty or a bilateral taxation treaty with the U.S.
OPIC and other investment insurance programs
The Gambia is a member of the Multilateral Investment Guarantee Agency (MIGA). The Overseas Private Investment Corporation (OPIC) was not opened for business in The Gambia until the lifting of restrictions on bilateral assistance in April 2002. In 2003, OPIC conducted a study of The Gambia and listed it as having significant potential for investment.
The Gambian currency, the dalasi, is generally stable against all currencies. However, in the second half of 2007, the dalasi rapidly appreciated by 30 per cent against most other currencies including the dollar, the pound, the Euro and the CFA Franc. Various reasons were given for the unexpected rise, including reports of large inflows of foreign currency. By end 2007, the currency had begun to gradually return to its normal exchange rate level against all currencies. The current exchange rate used by the Embassy is 27 dalasi to the dollar and is unlikely to be devalued or to depreciate significantly.
It is unlikely that the local currency will depreciate significantly or be devalued in the coming year. However, the country is likely to adopt the proposed common currency of the five-nation West African Monetary Zone (WAMZ), the ECO, which it plans to launch in the near future despite several postponements.
The Gambia's total economically active population is estimated at 400,000. About 75 percent are engaged in agriculture; 19 percent in industry, commerce and services; and 7 percent in government. The Gambia suffers from high unemployment and underemployment, compounded by a shortage of skilled workers and trained professionals. Many of the skilled workers in the construction and mechanical industries are
foreigners from neighboring countries. These workers are required by law to pay an annual registration fee of about $54 and a work permit fee of about $11.
The Labor Act of 1990, the 2007 amendments to the act, and its regulations, provide the legal framework for labor relations in The Gambia. The Department of State for Trade, Industry and Employment enforces the act. It covers most conditions of employment, including dismissals, recruitment and hiring,registration and training, protection of wages, registration of trade unions and employees' organizations, and industrial relations in general. The Act also contains procedures for the settlement of disputes, including an industrial tribunal. Minimum wages and working hours are established through six joint industrial councils: commerce, artisans, transport, port operations, agriculture and fisheries. Private-sector employees receive between 14 and 30 days of paid annual leave, depending on length of service.
Labor and trade unions exist but are not very active. Most workers are not unionized. The most active unions are for dock workers and workers in the transport sector. The Gambia Workers Confederation, formed in 1985, coordinates union activities. The confederation is a member of the International Labor
Organization (ILO). The confederation is not political but is increasingly active in negotiations on pay and employment conditions.
After being criticized for not implementing the ILO conventions banning the worst forms of child labor, the Gambian government took steps to pass new legislation updating the labor code to conform to the signed agreements. The Children's Act of 2005 raised the minimum labor age from 14 to 16 and holds corporate entities accountable for exploitative labor practices involving children on their premises with executive officers of these entities subject to fines and criminal liability for violations of the Act.
A regulation that set up the Expatriate Quota Board is intended to encourage businesses to hire qualified Gambian staff. For hiring an expatriate for a job that can be done by a Gambian, they are required to pay the equivalent of $345 in tax annually. An amendment to the Payroll Tax Act approved by the National Assembly in April 2008 set the limit of non-Gambians that businesses can employ to 20 per cent, except in the case of specialized professionals. A police regulation in 2005 banned all non-Gambians from driving taxis in the country.
Foreign Trade Zones/Free Ports
The establishment of free zones is an integral part of the Gambia Gateway Project, and the 2001 Free Zones Act provides the necessary legal framework. The Act provides for free zones to be established in separate selected areas to which special customs territory status shall be conferred. The Act also
provides for the establishment of single factory free zones for which GIPFZA will be the regulator. Such free zone status was granted to two companies dealing in the important groundnut (peanut) sector: Gambia Agricultural Marketing Company (GAMCO) and Premier Agro, which has now closed down.
The main objective of the project is to transform The Gambia into a major gateway to the West African coast through significant improvements of its port and airport, and through onshore facilities to support export-related manufacturing. An area measuring 164 hectares at Banjul International Airport has been designated a Free Economic Zone (FEZ). The first phase of this $6 million project was completed in December 2005. An area of almost 9 hectares has been fully developed with factory space, access roads and electricity. It is now designated as a mixed–use business park instead of a FEZ to allow for non FEZ operations and is currently occupied by a garment, diaper and tissue manufacturing company. There are also some bonded warehouses at the Banjul port which have not yet been designated as FEZs.
The following concessions are extended to investors in the FEZs:
Foreign-owned firms have the same investment opportunities as local companies.
Foreign Direct Investment Statistics
Foreign investment is present and visible in all sectors of the economy. Almost all the commercial banks operating in The Gambia have majority foreign ownership. Out of the 14 commercial banks, eight are Nigerian-owned, two are regional, one is British, one is Malaysian, one is Lebanese-owned and only one has majority Gambian shares. The telecommunications industry has also considerable Lebanese presence with two of the four cellular phone companies owned by Lebanese interests. The national electricity and water company, NAWEC, is also managed by a company with Lebanese interests, Global Electrical Group (GEG). The same group has also invested millions of dollars to build a large fuel storage depot which holds the country’s supplies. The tourism sector is dominated by Scandinavian, British, French, Spanish, Italian, German, Dutch and Lebanese investments. A Kuwaiti firm, M.A. Kharafi & Sons, also has significant investments in the tourism sector having bought the Kairaba Beach Hotel and built the country's first Sheraton-flagged hotel and conference center. This was the venue of the African Union Heads of State Summit in June/July 2006. There is also significant Libyan investment in the tourism sector in the form of hotels and amusement centers.
The trading sector has a heavy presence of Lebanese, Mauritanian, Senegalese and Nigerian businesses. Kuwaiti-owned M.A. Kharafi is the biggest foreign investor in The Gambia at the moment. It has invested heavily in agriculture and has also secured contracts for extending the runway and refurbishing the terminal building at Banjul International Airport as well as upgrading most of The Gambia's trunk roads network.
A small number of U.S. firms have invested in The Gambia, and most projects are still in their early stages. A private U.S. investor has opened a casino and hotel in the tourism area and is continuing to finance a cattle cross-breeding project. The American corporation Seaboard is pursuing its plans to build a flourmill in The Gambia in partnership with a Gambian businessman. Also in 2005, a Maryland-based firm, BTI Holdings, launched a scheme to promote a prefab-housing development project in collaboration with the Gambian Social Security Housing and Finance Corporation.
Since the establishment of GIPFZA in 2002, 50 of the companies awarded the Special Investment Certificate by the agency have become fully established and operational. They operate in various sectors such as agriculture, fisheries, manufacturing, ICT, tourism and services. They have created nearly 3000 direct jobs. By the end of 2008, total actual investment of all projects registered with GIPFZA is estimated at about $130 million.
LIST OF OPERATIONAL PROJECTS WITH INVESTMENTS OF $0.5 MILLION AND ABOVE REGISTERED WITH GIPFZA (as of end December 2008)
|Name of Company||Country of Origin||Sector|
|West African Resort & Casino||US/Gambia||Tourism|
|West Africa Cattle Company||US||Livestock|
|Sheraton Resort & Spa||Kuwait||Tourism|
|West African Aquaculture||Sweden||Fisheries|
|International Commercial Bank||Malaysia||Financial Services|
|Jerma Company Ltd.||Libya||Tourism|
|Gam-Petroleum Storage Depot||Lebanon/Gambia||Services|
|Gamwater Company Ltd||Gambia||Manufacturing|
|TAF Holding Company||Gambia||Housing|
|Access Bank (Gambia) Ltd||Nigeria||Financial Services|
|Atlantic Seafood Company||Netherlands||Fisheries|
|Walo Development Enterprises||Gambia/UK||Agriculture|
|Comfort Quality Services||Gambian||Manufacturing|
|Kafuta Fresh Produce Limited||Kuwait||Agriculture|
|Golden Beach Hotel||Gambia||Tourism|
|Fine Beverage Company Limited||Gambia||Manufacturing|
|Cosmos Industrial Company Ltd.||China||Manufacturing|
|African Safari Company||Libya||Tourism|
|West African Pearl||China/Gambia||Manufacturing|
|Salam Company Limited||Gambia||Manufacturing|
|Swami India International Ltd.||India||sand mining|
|Global Electrical Group Ltd.||Lebanon/Gambia||Energy|
|Gamveg Oil Ltd.||Gambia/Lebanon||Manufacturing|
|Reliance Financial Services||Gambia||Financial Services|
|Nice Gambia Ltd||Netherlands||IT|
|Lemon Creek Company Ltd.||Denmark||Tourism|
|Radville Farms Ltd.||UK||Agriculture|
|Basma Industrial Ltd.||Gambia||Manufacturing|
|Hydara Foam Manufacturing Co.||Gambia||Manufacturing|
|Royal Enterprise Ltd.||India||Manufacturing|
|Kombo Farms Company Ltd.||Gambia||Agriculture|
|AHS Holding Ltd.||China||Manufacturing|
|Rue Chicken Company Ltd.||Gambia||Poultry|
|A & A Industries Ltd.||Pakistan||Fisheries|
|Takaful Gambia Ltd.||Gambia||Services|