1. travel
2. tourist destinations
3. africa

T h e date o f the last World B a n k Country Assistance Strategy w a s M a r c h 6,2003
T h e date o f t h e last African Development Bank Country Strategy Paper w a s July 2003
CURRENCY EQUIVALENTS
(As o f 28 January 2008)
Currency Unit: Dalasi
1 US$=22.39 GMD
1 UA = US$1.59
1 SDR = US$1.59
BUDGET YEAR
January 1- December 3 1
ABBREVIATIONS AND ACRONYMS
AAA
AfDB
ADF
APR
APRC
BADEA
CFAA
CPIP
CSD
cso
DFID
DOSFEA
DPL
DSA
DTIS
ECOWAS
EFA
EU
FDI
FIAS
GAMTEL
GBOS
GDA
GDM-PMF
GDP
GNI
GPOBA
GRA
HIPC
ICA
IDA
IEF
Analytical and Advisory Activities
African Development Bank
African Development Fund
Annual Progress Report
Alliance for Patriotic Reorientation and Construction
Banque Arable pour le Ddveloppement Economique de 1 'Afrique
(Arab Bank for Economic Development o f Africa)
Country Financial Accountability Assessment
Country Program Implementation Plan
Central Statistics Department
Civil Society Organization
Department for International Development (UK)
Department o f State for Finance and Economic Affairs
Development Policy Lending
Debt Sustainability Analysis
Diagnostic Trade Integration Study
Economic Community o f West African States
Education for All
European Union
Foreign Direct Investment
Foreign Investment Advisory Services
Gambia Telecommunications
Gambia Bureau o f Statistics
Gambia Divestiture Agency
Government Debt Management - Performance Management
Framework
Gross Domestic Product
Gross National Income
Global Program for Output-Based Aid
Gambia Revenue Authority
Highly Indebted Poor Country
Investment Climate Assessment
International Development Association
Index o f Economic Freedom
IFC
IFMIS
IMF
ISRT
JAS
JSAN
LIC
MMR
MCA
MDG
MDRI
M&E
MSME
MTEF
NAWEC
NGO
NPC
NASS
OMVG
OPEC
PBL
PER
PHRD
PPIAF
PPP
PRGF
PRSP
PSIP
PURA
SNFO
SPACO
UNDP
WAMZ
WAPP
WBI
WEF
Vice President:
Country Director:
Task Team Leader:
Vice President:
Regional Director:
Task Team Leader:
International Finance Corporation
Integrated Financial Management Information System
International Monetary Fund
Inter-State Road Transit
Joint Assistance Strategy
Joint Staff Assessment Note
L o w Income Country
Maternal Mortality Rate
Millennium Challenge Account
Millennium Development Goal
Multilateral Debt Reduction Initiative
Monitoring and Evaluation
Micro, Small and Medium Enterprises
Medium Term Expenditure Framework
National Water and Electricity Company
Non-governmental Organization
National Planning Commission
National Agricultural Sample Survey
Organisation Mise en Valeur Fleuve Gambie (Gambia River
Basin Development Organization)
Organization o f Petroleum Exporting Countries
Policy-based Lending
Public Expenditure Review
Policy and Human Resources Development
Public-Private Infrastructure Advisory Facility
People’s Progressive Party
Poverty Reduction and Growth Facility
Poverty Reduction Strategy Paper
Peri-Urban Smallholder Improvement Project
Public Utilities Regulatory Authority
Senegal Front Office (Regional Bureau for Senegal at AfDB)
Strategy for Poverty Alleviation Coordinating Office
United Nations Development Programme
West African Monetary Zone
West Africa Power Pool Project
W o r l d Bank Institute
W o r l d Economic Forum
World Bank
Obiageli Katryn Ezekwesili
Madani M. Tall
Francoise Perrot
African Development Bank
Joseph B. Eichenberger
Ellen Goldstein
Jamal Zayid
THE REPUBLIC OF THE GAMBIA
JOINT ASSISTANCE STRATEGY
TABLE OF CONTENTS
Page
EXECUTIVE SUMMARY
i
I
INTRODUCTION
1
I1
COUNTRY CONTEXT AND DEVELOPMENT CHALLENGES
2
A - Country Context
2
Political Context
Economic Context
Poverty and Status on Achieving the MDGs
Growth Dynamics
Impact o f Growth on Poverty Reduction
B - Development Challenges
Maintaining Macroeconomic Stability
Governance
Public Spending and Efficiency
Delivery o f Social Services
Gender
Infrastructure Bottlenecks and Regional Integration
Investment Climate
I11
IV
2
2
3
4
5
7
7
7
8
9
10
11
12
GOVERNMENT DEVELOPMENT PROGRAM
13
A - PRSP-I1
13
B - Macroeconomic Outlook
14
C - Debt Sustainability and Management
15
WORLD BANWAfDB STRATEGY F Y O S - 1 1
16
B - Framework for World BanWAfDB Engagement in The Gambia
17
C - ProposedWorld BanMAfDB Programs and Expected Outcomes
21
D - Estimated Resource Envelopes
29
V
RESULTS MONITORING AND EVALUATION
30
VI
PARTNERSHIPS and PARTICIPATION
31
VI1
MANAGING R I S K S
31
A Lessons from Past WB/AfDB Assistance
16
Page
Tables in Text
Table 1: PRSP Targets and Achievement o f MDGs
Table 2: Exports/GDP (2004-5)
Table 3: Main Exports o f The Gambia
Table 4: Poverty by Sector o f Employment o f Household Heads
Table 5: Additional Earnings from Potential Export Growth, 2005-20 15
Table 6: Projections o f Key Macroeconomic Indicators, 2006-201 1
Table 7: Ongoing and Proposed JAS Program o f Lending and Analytical
Work (2008-201 1)
Table 8: World Bank and AfDB Allocations (FY08-11)
3
4
5
6
7
15
22
29
Boxes
B o x 1: Country Profile
1
Figures
Figure 1: Contribution to GDP by Sector (200 1-2005)
Figure 2: Poverty-Reducing Expendituresand Interest Payments
4
8
Annexes
Annex 1:
Annex 2:
Annex 3 :
Annex 4:
Annex 5:
Annex 6:
Annex 7:
Annex 8:
Annex 9:
Annex 10:
Annex 11:
Annex 12:
Annex 13:
JAS Results Matrix for The Gambia
The Gambia at a Glance
The Gambia Poverty Indicators
Selected Economic and Financial Indicators
Trade Indicators
Governance Indicators
Growth and Competitiveness
Donor Interventions
IDA Portfolio
ADF Portfolio
Ongoing AfDB Rural Development Projects
Consultation Process
The Gambia CAS (FY03-07) Completion Report
33
37
40
41
42
43
44
54
56
57
58
59
60
Map
IBRD 33409R
Acknowledgements
This Joint Assistance Strategy benefited from contributions by various people from the
World Bank and the African Development Bank.
From the World Bank:
Massimiliano Paolucci, Brian Ngo, Iradj Alikhani, Hoon Soh, Badara Joof, Lily Mulatu, Aissatou
Diack, John May, Renato Nardello, Christian Diou, Michaela Weber, Gilbert0 de Barros, JeanMichel Marchat, Philip English, Ronnie Hammad, Dana Rysankova, Thor-Jurgen Greve Loberg,
Aida der Hovanessian, Margrit Nzuki.
From the African Development Bank:
Harouna Dosso, Abdul Nashiru Issahaku, Hemchand Heeroo, Lydie Ehouman, Clark
Arrington, and Rex Situmbeko.
i
EXECUTIVE SUMMARY
(i) This JAS was prepared jointly by the W o r l d Bank and the AfDB and represents the first
step o f an effort t o harmonize donor assistance in The Gambia in line with the Paris Declaration
on Aid Effectiveness.
(ii) The Gambia i s a small state in continental Africa. I t stretches 450 km along the Gambia
River and i s surrounded by Senegal, except for a 60 km Atlantic Ocean Front. The situation in
The Gambia exemplifies challenges faced by small states. The country’s economy i s
undiversified and limited by a tiny internal market. The Gambia also faces some o f the problems
confronting Sub-Saharan Africa: inadequate infrastructure, deficiencies in the business climate,
and institutional capacity constraints. As a result, living conditions for most Gambians are
difficult, with poverty estimated at 57.9 percent. The country i s o n target to reach the Millennium
Development Goal (MDG) on primary school enrollment, but most other MDGs could be missed,
unless major interventions are implemented.
(iii) Yet, The Gambia has strengths. For decades, relatively open trade policies and limited
administrative barriers reinforced the country’s position as a trading center. Tourism has been the
most dynamic sector and i s the country’s most significant foreign exchange earner. Fishing,
horticulture, sesame and cashew nuts are promising areas o f export diversification. The challenge
for The Gambia i s to consolidate i t s position as a gateway to the region on a more sustainable
basis, while strengthening and diversifying domestic production o f goods and services.
Attainment o f a positive medium-term economic outlook will require the continued
implementation o f sound macro-economic policies, market-oriented structural reforms, and an
efficient Government investment program.
The Gambia’s second PRSP i s based on five pillars: (a) improving the enabling policy
(iv)
environment to promote growth and poverty reduction; (b) enhancing the capacity and output o f
productive sectors; (c) improving coverage o f the basic social services and social protection needs
o f the poor and vulnerable; (iv) enhancing governance systems; and (v) mainstreaming crosscutting issues. The Government’s overarching objective i s to eradicate poverty. T o achieve this
goal, it i s committed t o continue macroeconomic reforms to facilitate private sector growth; to
improve public sector management; and to increase priority for human development.
(v)
This joint assistance strategy (JAS) has been prepared by the W o r l d Bank and the African
Development Bank, as a result o f consultations with the Government, as well as lessons learned
from previous strategies prepared by both institutions, and consultations with the civil society and
other partners. The approach emphasizes selectivity, takmg into account the comparative
advantage o f each institution and other donors. The JAS strategic objectives are in line with the
strengthening economic management and public service delivery,
PRSP. The JAS focuses on: (i)
and (ii)
enhancing productive capacity and accelerating growth and competitiveness.
(vi)
The International Development Association’s (IDA) indicative allocation during the JAS
period i s about US$15 million, and that o f the African Development Fund (ADF) i s expected to
be about UA 5.5 million ($10 million) under ADF 11 and the first year o f ADF 12.
Collaboration with IFC o n the W o r l d Bank Group side, and possible funding through the Private
Sector Window o n the AfDB side, will strengthen the impact o n private sector development and
support to MSMEs. The use o f trust funds and other co-financing will be vigorously pursued.
*.
- 11 The Government has also applied for continued financing under the EFA Catalytic Fund in the
education sector for the period 2008-2010. Finally, to the extent possible, the JAS will make
provisions for ensuring that conditions are put in place for financing regional programs under the
next IDA and ADF financing cycle.
(vii)
The results framework contained in Annex 1 shows the results chain for the JAS.
Outcome indicators will be used for monitoring and evaluation o f the implementation o f the Joint
Assistance Strategy, and both institutions will be held jointly accountable for these results. The
newly established National Planning Commission (NPC) will strengthen the monitoring and
evaluation system in The Gambia. Also, the active involvement o f Pro-PAG, an NGO, in the
monitoring and evaluation process, will bring in a civil-society dimension into the monitoring and
evaluation process.
(viii) There are more than 15 donors in the country providing assistance through a variety o f
governmental and non-governmental entities. Donor coordination i s weak, and while
development partners align their strategies with PRSP 11, they continue to prepare separate
strategies. This JAS i s an important step in the process o f harmonization. This JAS supports the
Government taking the lead in coordinating donor assistance, in particular through the newly
established Central Project Management and Aid Coordination Directorate. Progress in terms o f
donor coordination will be measured at the time o f the JAS Progress Report to see to what extent
a further consolidation o f strategic frameworks could be envisaged for the next cycle (20122015), notably with the U N D P and the EU.
This JAS carries significant risks. The country’s macroeconomic stability can come
(ix)
under pressure fi-om overly optimistic fiscal programs and continued high levels o f domestic and
external debt. The Gambia has a high risk o f external economic and natural shocks. One-party
dominance limits public accountability and could potentially increase political risks to the reform
momentum. Governance remains an important factor, with possible increasing levels o f
corruption and inadequate fiduciary controls. The capacity o f public institutions remains
extremely weak and sustained support to public sector reforms i s crucial. Among other measures,
the AfDB and the W o r l d Bank will continue to engage in policy and institutional reform and will
strengthen project and portfolio supervision efforts.
THE GAMBIA
WORLD BANK AND AFRICAN DEVELOPMENT BANK
JOINT ASSISTANCE STRATEGY 2008-2011
I- INTRODUCTION
1.
This Joint Assistance Strategy (JAS) lays out how the World Bank and the African
Development Bank intend to support the implementation o f the Gambia’s PRSP-I1 for the
next four years (FY08-11). On the World Bank side, the JAS follows a Country Assistance
Strategy (CAS) that was discussed by the Board o f Executive Directors in March 2003, and
on the AfDB side, a Country Strategy Paper discussed by the AfDB Board in July 2003
(ADB/BD/WP/2003/57-ADF/BD/WP/2003/53).
2.
This JAS was prepared jointly by the World Bank and AfDB and represents the
first step o f an effort t o harmonize donor assistance in The Gambia in line with the Paris
Declaration on Aid Effectiveness. It will allow the two institutions to align their development
programs, avoid duplication o f efforts, and combine their technical expertise. Under this joint
strategy, the World Bank and the AfDB have developed shared objectives and a common
platform for lending and non-lending services. These will include coordinated contributions
to budget support, complementary investments in growth and competitiveness, and joint
analytical work in the areas o f public finance, civil service reform and governance.
3.
The Gambian economy has been strong in recent years, with an average annual
real GDP growth rate o f about 6 percent during 2003-2006. The beginning o f a new
presidential and legislative cycle, the completion o f an MDG-based PRSP-II(2007-201 l),
the
completion point under HIPC in December 2007 and eligibility under MDRI in early 2008,
and indications o f increased project aid from development partners provide an opportunity for
the country to build on recent achievements and accelerate growth. The Government i s
committed to continuing economic improvements while creating space for finding o f poverty
reduction efforts.
Box 1: Country Profile
The Gambia i s the smallest country in continental Africa. I t stretches 450 km along the
Gambia River with an area o f 11,285 sq. kms. It i s surrounded by Senegal, except for a 60 km
Atlantic Ocean front. The current population o f 1.6 million has been growing at a fairly high rate
o f 2.8 percent per year over 1993-2006. The population i s concentrated around urban and periurban centers (57 percent). Sixty percent o f the population i s under 25 years of age.
The situation in The Gambia exemplifies challenges faced by small states. The country i s
faced with institutional capacity constraints. Due to a narrow resource base and small domestic
market, i t s production base and exports are undiversified. Like other small states, it tends to rely
heavily on external trade and foreign investment to overcome its scale and resource limitations.
The Gambia also faces some of the problems confronting Sub-Saharan Africa: inadequate
infrastructure (energy, transport, telecommunications), and deficiencies in the business climate. As
a result, living conditions for most Gambians are difficult, with poverty estimated at 57.9 percent.
Yet, The Gambia has strengths. For decades, relatively open trade policies and limited
administrative barriers reinforced the country’s position as a trading center. Recently, however,
this position has been challenged due to a combination o f tensions with Senegal, and improved
trade facilitation in neighboring countries. Tourism has been the most dynamic sector and i s the
country’s most significant foreign exchange earner. Fishing, horticulture, sesame and cashew nuts
are promising areas of export diversification. By improving its business climate and implementing
sector-specific reforms, The Gambia can strengthen and diversify its domestic production.
-2I1- COUNTRYCONTEXT
AND DEVELOPMENT CHALLENGES
-
A COUNTRYCONTEXT
Political Context
4.
The country benefits from a relatively stable political system. For three
decades following independence from the United Kingdom in 1965, The Gambia was led by
President Dawda Jawara and evolved as a multi-party democracy led by the People’s
Progressive Party (PPP). A military coup in 1994 by Yahya Jammeh brought about the
current regime. President Jammeh has since remained in power. In September 2006, he was
reelected as the candidate o f the ruling Alliance for Patriotic Reorientation and Construction
(APRC) with 67 percent o f the votes cast. International observers described the election as
fair. Legislative elections in January 2007, which were marked by splits in the opposition,
returned the APRC to power with 60 percent o f the votes. With a strong mandate, the
President retains firm control over government policy formulation.
5.
The country has made good progress in restoring its image of peace and stability
in the last decade, but concerns about governance remain’. Although the 1997
Constitution provides for separation o f powers, the system o f checks and balances on the
executive could be strengthened. The President closely oversees the public administration,
and the policy environment i s characterized by frequent changes in Cabinet assignments and
turnover o f personnel in the Government and the civil service. The National Assembly i s
financially dependent o n the Government and suffers from lack o f resources, which limits i t s
monitoring and accountability functions. International organizations have raised concerns
about intervention o f the executive in the judiciary. There i s a perception o f limited press
freedom which undermines transparency o f Government operations and has resulted in the
country’s ranking o f 130 out o f 169 countries in the Reporters Without Borders’ 2007 World
Press Freedom Index. In 2006, The Gambia’s suspension from the United States Millennium
Challenge Account (MCA) because o f human rights, political repression, and worsening
corruption, deprived the country o f much needed aid (see Sections 11-B and I V for more
details on governance).
Economic Context
6.
The country’s macroeconomic performance has passed through three phases in
the last decade:
- A period o f economic growth with stability during 1998-2001, reflecting strong agricultural
sector performance;
- A period o f fiscal slippages and monetary expansion during 2002-2003, resulting in
inflation reaching 17 percent in 2003, the dalasi depreciating sharply against the US. dollar,
the IMF program being off-track soon after it was negotiated in 2002, and The Gambia being
unable to reach HIPC completion point as originally envisaged; and
- A period o f policy adjustment and macroeconomic stability restored during 2004-2007, with
the approval o f a new PRGF program in February 2007 and progress in structural reforms.
7.
The Gambia’s PRSP stresses the Government’s interest in sustaining the macroeconomic gains o f the last few years. I t i s particularly interested in promoting a participatory
pro-poor growth strategy t o foster economic growth and to reduce the level o f poverty, which
’ See governance issues in paras 23-27 and paras 77-91.
-3continues to be a major challenge for the country. T h i s long-term goal i s t o be achieved by
promoting a conducive environment for private sector growth, improved public sector
management, and human development.
Poverty and Status on Achieving the MDGs
8.
The Gambia remains a poor country, with a GNI per capita of US$290 in 2005.
The country ranks 155 out o f 177 countries in the 2006 United Nations Human Development
Index and 81 out o f 95 developing countries. According to the 2003 National Integrated
Household Survey (NIHS) the overall poverty rate, or headcount ratio, i s 57.9 percent. The
Gini coefficient o f 0.484 i s relatively high.
9.
There are large geographical variations to poverty. Rising urbanization i s causing
stress o n social services provided in urban areas with consequences o f increasing urban
poverty. The poverty rate i s 39.6 percent in urban areas and 67.8 percent in rural areas. There
are wide regional variations in the headcount ratio, ranging from 8 percent for the capital
Banjul to 95 percent for the Kuntaur local government area (see Annex 3).
There i s a clear gender2 dimension to poverty as female-headed households are
10.
significantly poorer than male-headed households. The poverty head count ratio for femaleheaded households i s 60.5 percent while it i s 40.7 percent for male-headed households. Also,
the severity o f poverty has been observed to be greater for female-headed households.
Households that are larger and headed by individuals with n o education are much poorer (see
Annex 3).
11.
The Gambia i s on target to reach some MDGs by 2015, such as the goal to
increase primary school enrollment. However, given current improvements, i t i s unlikely that
health-related targets, such as reducing by two thirds the under-five mortality rate by 2015,
could be reached. As part o f PRSP-11, The Gambia has conducted an MDG Needs
Assessment for 2007-201 1 to assess requirements for keeping the country o n track. The
report notes that most MDGs could be missed, unless major interventions are implemented.
Table 1: PRSP Targets and Achievement o f MDGs3
Source: 1/ 2003 Household Survey data
31 Government MDGs Needs Assessment (November 2006)
5/ Update o f MDG Assessment (January 2008)
2
2/ 2004 data ,World Bank
4/ 2006 Nutrition Survey (preliminary)
Gender issues are also addressed in para. 35.
I t i s difficult to compare poverty indicators from the 2003 Household Survey to previous surveys, given the difference
in survey and estimationmethodologies.
-412.
The Government has set a target poverty index o f 40 percent for 2011 (from the
current 58 percent - see Table 1 below) which does not seem attainable given the historical
record. I t should be noted that under-five mortality has declined f r o m 129 per 1,000 in 1990
to 99 in 2006. The target for 2015 i s 43 which can be achieved i f the needed resources
materialize and are used effectively. The target for infant mortality o f 28 per 1,000 in 2015
seems very ambitious in view o f the modest decline f r o m 84 in 1990 to only 79 in 2006.
However, there are hopeful signs given that the country was recently declared polio free and
i s getting technical support and health services from a number o f bilateral donors. The same
argument holds for maternal mortality which declined from 1,050 per 100,000 in 1990 to 574
in 2006, with a target o f 150 for 2015.
Growth Dynamics
14.
The Gambia being a small country cannot rely o n i t s
internal market to create growth and wealth. I t must generate a
large share o f i t s GDP from external trade, and has therefore
maintained a relatively open economy. Exports o f goods and
services from The Gambia are equivalent to roughly 30 percent
o f GDP. In this regard, although The Gambia compares
favorably with countries in Sub-Saharan Africa, it compares less
favorably with other small state comparator countries outside the
Region (see Table 2). For decades, The Gambia has served as a
regional entrepat. Liberal trade policies and an efficient port
infrastructure have allowed the country to act as a re-export hub.
About 80 percent o f Gambian merchandise exports consist of re-
2001 2002 2003 2004 2005
Table2: Exports/GDP
2004-5 (Yo)
Barbados
Mauritius
CostaRita
CGte d’Ivoire
Ghana
WAEMU
The Gambia
Guinea
58
57
48
44
38
31
30
28
23
Source: DTIS
It
15.
Looking ahead, i t i s expected that The Gambia will develop ways to establish a
more sustainable foundation for the country’s position as a gateway to the Region by
-5improving the transport system and reinforcing i t s efficient trade facilitation services.
However, there are risks that re-exports may decline over time due to a number o f factors,
including harmonization o f taxes in the Region, and improved port and customs operations in
Senegal and other neighboring countries4.
16.
There i s good potential for sustained growth in other areas (see Table 3). Efforts are
being made to strengthen and diversify domestic production o f goods and services in the
areas of tourism, groundnuts, other agriculture, and fishing, by improving the business
climate as well as implementing sector-specific reforms. Significant investments are
expected to continue in the tourist sector, which i s the key driver o f the economy and has
become the country’s most significant foreign exchange earner. In addition to tourism,
sustained growth i s expected to come from: (i)
telecommunications, particularly the mobile
phone market which has three competitors5, (ii)
construction, financed by FDI in the hotel
sector and also remittances, which represent about 10 percent o f GDP, and (iii)
groundnuts
and the rest o f the agricultural sector. Groundnuts have been a traditional pillar o f the
economy, but the sector n o w confronts severe domestic and international challenges, and
exports have dropped sharply in recent decades. The success o f the pro-poor growth strategy
in the Gambia will depend on reforming this sector because groundnut constitute the
country’s most important crop and groundnut farmers are the poorest. The Government has
prepared a comprehensive groundnut reform roadmap. Fishing, horticulture, sesame and
cashew nuts are promising areas o f export diversification (see Annex 7 for more details).
Education attainment has risen and should have an impact o n growth in the long term.
Progress in developing infrastructure i s mixed, with the port and airport exhibiting good
results, but with less momentum in the roads and energy sectors. However, large investments
are expected from the EU and BADEA in the road sector, and progress has been made in the
energy sector, with NAWEC n o w under private management, and with the commissioning o f
rural electrification projects funded by AfDB.
Table 3: Main Exports of The Gambia (US% million.)
Source: OD1 Tourism Study, and DTIS Estimates
Impact of Growth on Poverty Reduction
17.
The above growth dynamics has a direct impact on poverty. A recent analysis6
shows that poverty i s substantially higher for households working in the agriculture and
fishing industries, with 76.4 percent classified as poor compared to 46.2 percent for other
households, and with over h a l f o f all those living in extreme poverty in The Gambia (see
World Bank, “The Gambia, From Entrepot to Exporter and Eco-Tourism,” Diagnostic Trade Integration
Study (DTIS), July 2007
A new competitor entered the mobile telephone market in 2007, increasing the total to three.
A Poverty Analysis o f the Integrated Household Survey was conducted in June 2006 (financed under
World-Bank fimded Capacity Building for Economic Management Project). The National Integrated
Household Survey was done in 2003. Other surveys are also conducted, such as annual National
Agricultural Sample Surveys (NASS), and qualitative surveys such as Participatory Poverty Assessments.
’
-6Table 4). I t i s lower among social and personal service workers, public and private financial
services, and trade, hotels, and restaurants. Therefore, it i s critical that the agriculture sector
be revitalized, including through the definition o f an overall strategic direction.
Table 4: Poverty by Sector o f Employment o f Household Heads
Industry
Agriculture and fishing
Manufacturing and energy
Construction
Trade, hotels and restaurants
Transport and communication
Private and Dublic financial admin.
Social and personal services
N o t stated
Overall Average
YObelow poverty line
76.4
50.0
63.6
48.8
52.4
49.2
45.4
53.5
57.9
18.
Tourism plays a major role in poverty reduction in The Gambia, both indirectly
through i t s contribution to growth, and directly through purchases o f labor and goods from
the poor7. The sector has attracted a l o t o f investment. I t s estimated net revenues - which
stay in the country - o f about US330 million far exceed those o f any other sector. O f this, i t
has been estimated that some US$14 million goes directly to the poor, or rather the poor and
some who would be poor if not for tourism'. This includes non-managerial hotel staff, local
wholesale purchases o f food, souvenirs and gifts purchased from the informal sector,
informal sector excursions and local taxis. The US$14 million going directly to the poor
from tourism i s roughly equal to the total net earnings from all agricultural and fish exports
combined, o f which not all accrues to the poor. The challenge i s to exploit this opportunity in
a sustainable manner, promoting even stronger linkages to poor communities.
19.
Agriculture i s a crucial sector for shared growth, improved food security and poverty
reduction. In the last decade, the rise in rural poverty has been associated with poor
performance o f the agricultural sector and the inability o f farmers to access markets and
social services due to poor infrastructure. Revitalization o f the groundnut sector has the
greatest potential to alleviate poverty. The share o f households engaged in groundnuts i s
variously estimated at between 63 and 80 percent o f the 82,000 rural householdsg. Groundnut
farmers are among the poorest members o f Gambian society (76 percent are estimated to be
poor, as compared t o a national average o f 58 percent). Groundnut exports can boost farmer
incomes substantially, and the Government i s committed to implement reforms in order to lift
the sector from i t s current crisis.
20.
Other areas offer interesting possibilities. Cashew, a smallholder crop, can have a
positive effect on incomes in producing areas. Rough estimates suggest that feasible growth
in cashew exports over the next ten years could offer income to some 30,000 households,
generating annual revenues almost twice as high as for groundnut farmers. Horticulture can
also contribute to poverty reduction through increased employment in rural areas.
2007 DTIS
* Overseas Development Institute (ODI) report, The Gambia Tourist Value Chain and Prospectsfor
Poor Tourism, 2006.
2003 Household Survey gives the lower estimate.
Pro-
-7-
Increase in
Exports
100,000 arriv
Gross
Earnings
$100 million
Net
Earnings
$50 million
Households
Benefiting
10,000
Yearly Earn/
Household
GMD30,OOO
Groundnuts
50,000 mt
$24 million
$19 million
50,000
GMD5,OOO
Cashew nuts
26,000 mt
$14 million
$12 million
30,000
GMD7,5 00
Area
Tourism arrivals
B - DEVELOPMENT
CHALLENGES
21.
Reducing the levels o f poverty continues to be a major challenge for The Gambia and
the rate o f progress will have to be stepped up. The country's development challenges can be
grouped into the following areas:
Maintaining Macroeconomic Stability
22.
Earlier slippages in macroeconomic policies have been corrected and the external
Sustained
debt position has improved following HIPC and MDRI debt relief".
macroeconomic stability and strengthened public financial management provide the
foundations for sustained growth and poverty reduction. For this to continue, The Gambia
will need to continue to adopt prudent policies.
Governance
23.
Strengthening governance i s considered one o f the keys to improving public service
delivery. Since 1996, three out o f six measures o f governance on The Gambia by the World
Bank Institute have shown declines in government effectiveness, rule o f l a w and control o f
corruption. Three have shown progress in voice and accountability, political stability, and
regulatory quality (see Annex 6), although they remain l o w even by SSA standards.
In terms o f administrative accountability, the capacity o f the Gambian public sector to
24.
deliver quality public services has progressed, but remains limited, as executive interference
undermines performance. Attrition rates are high and there i s frequent turnover o f senior
government officials in central and line ministries, leading to many unfilled positions, which i s
compounded by the migration o f skilled staff (see para. 32). T h i s frequent reshuffling o f highlevel officials in government departments i s likely to hamper the effectiveness o f economic
policy implementation.
An overall civil service reform strategy i s being prepared based o n an analysis o f the
25.
major constraints in the public sector in effectively delivering public services. A governance
profile has been prepared by AfDB and a joint analytical work on civil service reform i s under
the fiscal impact o f the
way by the World Bank, AfDB and UNDP. The strategy examines: (i)
civil service, including the wage bill and the incorporation o f non-wage benefits and
performance management; (iv)
allowances; (ii)the reform o f pay and career structures; (iii)
pension reform; (v) capacity strengthening, including training; and (vi) improving governance.
The exercise allows for engaging the authorities at the highest possible levels on issues related
to governance and government commitment to the reform process.
Financial accountability has made progress due to technical assistance by
26.
development partners. The Government has successfully introduced a number o f significant
lo
HIPC
Completion Point Board presentation took place on December 18, 2007.
-8reforms in public financial management. These reforms have improved the transparency and
accountability in the use o f public resources, and reduced the opportunities for corruption.
These reforms include (i)Budget Management and Accountability A c t (2004), (ii)
Central
Bank reforms, (iii)
public procurement reforms, (iv) the establishment o f the semiautonomous
Gambia Revenue Authority (GRA), (v) the establishment o f an Integrated Financial
Management Information System (IFMIS), and (vi) the preparation o f public accounts, which
have been updated to 2006, thanks to considerable efforts to reduce the backlog. Progress has
been made in terms o f reporting: the authorities have consistently produced annual public
reports on budget execution, as well as reports on the utilization o f poverty-reducing
expenditures. However, the figures have been preliminary due to the large backlog in
preparing the public accounts. With IFMIS, i t i s expected that the 2007 accounts will be
prepared by end-March 2008, so that firm actual figures will be incorporated in the next
year’s budget. Anti-comption measures need to continue to be strengthened. The Gambia i s
ranked 121 among 163 countries by Transparency International. Access to information and
freedom o f the press are limited.
27.
On the legal and judicial front, challenges remain for the judiciary to exercise and
uphold i t s independence (see Annex 6). The overall legal framework related to business
operations i s largely consistent with international best practices. I t should be noted that poor
functioning o f the judiciary i s not perceived by the business community as a major
impediment to business, and the country i s ranked relatively high in the Doing Business
survey o n enforcing contracts. The authorities enacted an Alternative Dispute Resolution A c t
in 2005, and they are piloting the system. In addition, the authorities have been planning to
develop a Case Management Information System which should eventually expedite
resolution o f commercial disputes, but progress has been slow.
Public Spending and Efficiency
28.
Since 2000, a series o f annual Public Expenditures Reviews (PERs) have been jointly
conducted by the authorities, IDA and other development partners. I t should be noted that the
share o f poverty-reducing expenditures declined in the early 2000s because o f efforts to
restore fiscal and monetary discipline and rising domestic interest payments. It has increased
since 2005 in response to the expanded fiscal space due to a decrease in the share o f interest
payments in total recurrent expenditures (see Figure 2 below).
Figure 2. Poverty-Reducing Expenditures and Interest Payments”
(percent o f total locally funded expenditures)
50 0
40 0
v)
p 300
g 200
C
n
10 0
00
2001
-+-Poverty
2002
2003
2004
reducing expenditures
2005
2006
2007
Merest payments
29.
An analysis o f budget outturns shows that the Government allocates between one
quarter and one third o f total locally-funded expendituresI2 to poverty-reducing spending. I t
11
2004 figure i s missing because the data are unavailable.
-9goes up t o approximately h a l f o f total expenditures when interest payments are excluded. As
an indication o f their prioritization, the Departments o f State for Education and Health have
large budgets.
Delivery of Social Services
Service Delivery in Education. Expansion o f access to education i s a high priority
30.
for the Government, particularly for girls. The Government has adopted a National
Education Policy for the period 2006-2015, which focuses o n expanding and improving the
quality o f education. Education benefits from (i)
the largest government budget among most
ministries; (ii)support from donors, including the IDA-financed second phase Education
Project, and the PHRD co-financing grant from the Government o f Japan administered by the
funding from the EFA FTI Catalytic Grant.
W o r l d Bank; and (iii)
31.
The education sector has benefited from an extensive government program o f
expanding infrastructure, teacher training and school materials. Over 1,000 classrooms were
built under the first phase o f the IDA-financed project. The sector has seen some important
gains over the past five years. The Gambia has made tremendous success in expanding
access to education, across all levels o f the school system, with a gross enrollment rate (GER)
o f 76 percent in 2006. Gender parity was attained at the basic cycle level. At the senior
secondary level, the overall GER almost doubled, but the gender gap at that level i s s t i l l
significant. The Government has programs to recruit and retain qualified staff, including
hardship allowances and improved working conditions for teachers assigned to rural areas.
But education quality remains the biggest challenge. It i s important to also consider the
limitations in the skills development and education o f the work force, which are seen as
impediments for growth.
Service Delivery in Health. Provision o f adequate, effective and affordable health
32.
care for all Gambians i s important for poverty reduction and growth opportunities. Several
key policies, including a National Health Policy, a National Drug Policy, and a National
Nutrition Policy, have been either updated or designed. But the translation o f these policies
into actual implementation has been less than satisfactory. The major problems confronting
the health sector include: shortage o f motivated and qualified personnel; high attrition rates
and departure o f health personnel to the United Kingdom and other places; inequitable
distribution and inefficient utilization o f existing human resources; limited financial resources
to provide essential drugs, medical supplies, equipment, transport and fuel; inadequate
capacity in the sector, including managerial capacity to manage health delivery systems; high
costs o f meeting basic health care delivery services; and problems o f transportation. Basic
health services are managed in line with the Bamako Initiative. Health has the third largest
budget among government ministries. The share o f primary and secondary health care within
the recurrent budget for health has in~reased'~.
33.
The overall life expectancy in the country, estimated at 53 years, i s better than the
Sub-Saharan Africa average. The Gambia has also performed relatively well o n child health
indicators. The under-5 mortality rate was estimated at 129 per thousand live births in 199014
and has declined very rapidly since 1960. However, the infant mortality rate, currently
estimated at 75 per thousand live births as o f 200715, remains considerably higher than in
12
These expenditures are recurrent expenditures and parts o f development expenditures that are directly
h n d e d by the Government's own resources.
13
I t was 42 percent in 1999, the baseline year. F r o m 2001 up t o 2002, t h i s share remained relatively stable,
but subsequently, i t increased to 50 percent in 2003 and has generally maintained this higher level.
14
Government 2006 MDG Needs Assessment
l5Source: Population Reference Bureau
- 10Senegal and Ghana, the best performers o f West Africa. Moreover, there i s some evidence o f
a possible decline in the rate o f improvement in child health. The Maternal Mortality Ratio
(MMR) i s high, but has significantly improved over recent years.
34.
The prevalence o f malaria and diarrhea i s estimated to be 15 percent and 22 percent,
respectively. The annual incidence o f tuberculosis i s estimated at 118 per 100,000 persons,
but more reliable data are needed. The latest sero-surveillance data (2005) indicate that
H I V / A I D S prevalence has decreased to 1.1 percent for HIV-1, an indication that the
education and prevention programs have had some effect16. However, the HIV prevalence
may have increased in more recent years. Efforts will be needed to keep these levels low”.
The overall coordination o f the fight against H I V / A I D S requires a national and effective
institution that can muster the support from the highest level o f leadership. Recent claims by
the President o f The Gambia o f a cure for AIDS are alarming public health workers and the
international donor community.
Gender
35.
The Government acknowledges that the realization o f gender equality requires
empowerment o f the most affected (women and girls) and mainstreaming o f gender
perspectives in all sectors by all actors in the development process18. The country has been
promoting equal access for men and women to human capital development opportunities.
Important policies, including strengthened nutrition and antenatal care, have contributed to a
lowering o f the maternal mortality rate. Girls enrollment in education has increased
significantly, including through a scholarship program for senior secondary students, and girlfocused initiatives for basic schools. Although there i s n o discrimination by law, traditional
views continue to constrain access to productive resources and opportunities for women,
particularly in rural areas where education i s less readily available, especially in cycles
beyond lower basic. Women have limited access t o credit and land, and are generally poorer
than men. Gender development i s a key element o f JAS support in The Gambia in various
dimensions, including in education, health at local levels, promoting women-owned
businesses, and identifying legal and regulatory obstacles. Furthermore, a Gender Profile will
be prepared by the AfDB in 2009 to inform policy decisions related t o gender.
36.
The Gambia i s one of the 35 countries in the world where the total fertility rate
i s still above 5 (it is estimated at 5. I for 2007). The onset o f fertility decline in The Gambia
in recent years i s explained by an increasing age at marriage triggered by higher levels o f
female education. The Gambian population i s projected by the United Nations to double by
2050. Rapid population growth presents a major challenge for The Gambia, namely the need
to muster large amounts o f public and private resources to finance human capital investments.
An acceleration o f the demographic transition in the country would mitigate the risk o f The
Gambia not achieving significant poverty reduction over time. This will require an array o f
sound multi-sectoral actions and public policies, particularly in the areas o f health (supplying
family planning services, and family planning demand-creation dimensions), education
(targeting young girls more consistently, especially in completion rates for post-basic cycles),
gender (providing more autonomy and economic opportunities to women), and the provision
o f infrastructure, notably in rural areas. This JAS focuses o n these strategic directions,
l6However, the estimated prevalence rate i s based on data collected at prenatal care clinics, and actual rates
o f the general population could be much higher. The decrease to 1.1 percent could also indicate that more
patients have died over the past years.
The World Bank supported the country’s efforts to combat the epidemic through an HIV/AIDS project
(Credit 3455-GM - closed in December 2006), in conjunction with additional funding from the Global
Fund for AIDS, Tuberculosis and Malaria.
For details, see PRSP-11.
- 11 notably in the education s e ~ t o r ' ~ in
, health at the community level2', and in rural
development2'.
Infrastructure Bottlenecks, and Regional Integration
37.
Transport infrastructure i s particularly important in the case o f T h e Gambia, given
i t s ambition to serve as a regional trading hub. Improving access t o markets i s a key
objective.
38.
The Banjul Port i s efficient in terms o f speed and cost o f clearance o f goods,
although improvements could still be made. The AfDB i s preparing a Banjul Port Detailed
Design Study to that effect. The River Gambia was the initial basis o f The Gambia's role as a
regional hub, and the main mode o f transporting groundnuts. However, river transport has
shown a steady downward trend and i s underutilized at present. Some rehabilitation work
will be supported by the World Bank and the European Union (EU) in the context o f the
reform in the groundnut sector. The airport benefited from a major overhaul in 1997. It i s
performing well and has the capacity to expand flights considerably.
Roads are the
dominant mode o f transport, accounting for more than 90 percent o f the total motorized
fkeight and passenger movement, and therefore being a key to trade and growth.
Electricity. The high cost and unreliability o f electric power i s one o f the most
39.
severe problems confronting all industries in The Gambia according to the recent Enterprise
Survey. Firms in the manufacturing and tourism sector seem to be the most affected22.
Reliability o f supply improved in early 2007, but at the cost o f a 30 percent increase in tariffs,
making electricity far more expensive in The Gambia than in most other African countries.
Electricity services are only available in urban and provincial centers23. N A W E C
inefficiency i s reflected in system losses (35 to 45 percent), far above industry norms, leading
to a severe strain o n the utility's as well as the government's finances. Even with the new
Independent Power producer (IPP) at Brikama, the power situation remains strained, with
total available capacity o f 60 MW against a suppressed peak power demand o f perhaps 150
MW. Adding further generating capacity by itself will not accomplish much, given the
overloaded transmission and distribution system, with a transmission capacity o f about 50
MW24.Also, the rural poor face access problems that hinder attainment o f social objectives.
40.
The Government has requested support for the preparation o f a master plan to expand
the generation, transmission and distribution o f electricity to meet existing and projected
energy demand. The 2004 Electricity A c t liberalizes the sub-sector and opens it up for
private sector investment, but it has only been partially implemented. NAWEC i s slated for
divestiture under the Track Iprivatization category. The Gambia Divestiture Agency (GDA)
i s currently assessing the possibility o f divesting N A W E C through publidprivate
partnerships. The Government signed a 5-year management contact with a private firm to
assist in this task and to improve services (the selection process was not conducted through an
open and competitive process). The JAS provides financing for the preparation o f the master
plan as a way to reengage in the sector and may opt to pursue policy dialogue under the
Development Policy Lending. Investment lending i s expected to be provided by other
donors, including the European Union.
project (financed by IDA) and Japan PHRD Grant
Community-Driven Development Project (fmanced by IDA)
21 Peri-Urban Agriculture Project (financed by ADF)
22 Respectively 79 percent and 85 percent o f the firms.
23
Electricity is available mostly in the urban areas and provincial centers o f rural areas with coverage o f
less than 25 percent, with electricity consumption representing some three percent o f total energy
consumed in the country.
24 For more details, see DTIS, Excensia report (2006) and FIAS report (2004)
l9Education I112ndphase
20
- 12Telecommunications. The situation i s far superior to electricity, although s t i l l in
41.
need o f improvement. The proposed telecommunications bill further liberalizes the market.
Recently, a private management contract was awarded for the public telecommunications
enterprise, GAMTEL. I t was done under suboptimal procedures and some concerns were
raised about the transparency o f the transaction.
42.
Regional Integration. The Gambia’s geography and overall policy environment
stress the need for The Gambia to take advantage o f the benefits o f regional integration” and
make i t s relationship with i t s neighbor strategically important, for the re-export trade and for
a variety o f other economic issues o f mutual concern. T o this end, the one time SenegaloGambian Secretariat i s being revived (an interministerial committee headed by the two heads
o f government meets to reinforce bilateral issues). In the energy sector, the integration o f
energy systems under the umbrella o f the West Africa Power Pool Project (WAPP) in
general, and The Gambia River Basin Development Project (OMVG) in particular, would be
critical for energy sector development in The Gambia. The OMVG Power Program consists
o f two dams with hydropower plants and 1700 lun transmission line.
The capacity o f The Gambia to serve neighboring countries beyond Senegal i s
43.
constrained by two major hurdles beyond i t s control - the quality o f Senegalese roads and the
willingness o f Senegalese authorities to facilitate transit trade. The regional dimension o f
trade and growth i s to be highlighted. For example, an ECOWAS Regional Transport and
Transit Facilitation Program i s being implemented, with joint border control posts to be put in
place, and the application o f a single transit document under the Inter-State Road Transit
(ISRT) convention, which should facilitate smooth road services to eastern Senegal, M a l i and
Guinea-Bissau. In the same vein, plans for a bridge over the River Gambia may be revived,
with possible financing from the EU and AfDB, and the OMVG providing the administrative
structure to manage the necessary external financing. A useful parallel development could be
the setting up o f a dry port up-country, to receive river-transported goods and dispatch them
by road to Mali.
Investment Climate
44.
International comparisons o f development experiences suggest that countries with a
better investment climate enjoy higher private investment rates and therefore reach higher
growth rates26(see Annex 7).
45.
The Gambia i s in the middle o f the ranlungs vis-a-vis other African countries in
widely-used indicators o f the business climate and economic competitiveness2’. In the 2008
Doing Business indicators, The Gambia i s ranked 113’ out o f 175 countries, better than
neighbors, notably Senegal, but below some better-performing countries in Africa, such as
Ghana, Kenya and Uganda. For international trade, the DB indicators show that The Gambia
i s the third best in Sub-Saharan Africa. Overall, these results are consistent with those o f the
I C A and WEF: customs administration and international trade procedures more generally are
not seen as key problems in The Gambia. This explains in a large part the large inflows o f
FDI in recent years, due to positive returns in the construction area and tourism industry. The
25 The Gambia i s a member o f the Economic Community o f West African States (ECOWAS), the West
African Monetary Zone (WAMZ), and the African Union. I t has bilateral cooperation arrangements with
many countries.
26 2005 W o r l d Development Report
27
These include the W o r l d Bank’s Investment Climate Assessment (ICA - July 2007), the W o r l d Bank’s
D o i n g Business indicators, and other cross-national measures o f competitiveness such as the W o r l d
Economic Forum’s (WEF) Competitiveness Index and the Heritage Foundation’s Index o f Economic
Freedom (IEF).
-13Gambia i s ranked favorably in the areas o f labor regulation, but poorly o n investor protection,
tax rates and procedures.
46.
The recently completed W o r l d Bank Enterprise Survey for The Gambia shows that
electricity i s the most serious obstacle, followed by credit, land access and taxation. As noted
above, electricity supply improved significantly in 2007, but costs remain high. The JAS will
support the Government in the design o f an energy master plan, while AfDB will provide
assistance in rural electrification. Tax rates are cited as a major constraint by a third o f
formal sector firms surveyed”.
Taxes include those on profits, labor income taxes,
withholding and levies. The JAS will support the Government in the areas o f access to credit
and to land by firms.
47.
Financial Services. Long-term financing for productive investment i s o f course vital
for economic development, but i s largely unavailable in The Gambia, especially for small and
medium enterprises (SMEs). The Government has attempted in the past to establish
development banks, but this has proved unsuccessful, as the banks have suffered large losses
from non-performing loans, due to poor management and political interference. Microfinance
institutions have grown over the years, but are constrained by l o w capacity and inadequate
resources. Currently, commercial bank lending to the private sector i s mostly short term.
There i s limited competition in the financial sector, which i s dominated by two banks.
Finally, there i s poor technical capacity for skills in the sector.
I11- GOVERNMENT DEVELOPMENT PROGRAM
A - PRSP-I1
48.
The Country’s Vision. The Gambia’s longer term policy objectives are sketched in
the ambitious Vision 2020 which seeks to transform The Gambia into a dynamic middle
income country in six major activity areas relating to agriculture, industry, trade, tourism,
financial services and human resource development.
The country’s leadership i s well aware that it needs to achieve more to address
49.
the challenges in the next few years, and thus accelerate growth and poverty reduction.
Cognizant o f the need for increased growth and improved competitiveness o f i t s economy, i t s
susceptibility to external shocks, and the lack o f progress in social gains, The Gambia has set
out an ambitious medium-term strategy derived from the country’s Vision 2020. In
November 2006, the Government finalized the second Poverty Reduction Strategy Paper
(PRSP-11) for 2007-20 11.
50.
The PRSP-I1i s based upon the same five pillars of PRSP-I:
(i)
Improving the enabling policy environment to promote growth and poverty reduction;
(ii)
Enhancing the capacity and output o f productive sectors, namely: agriculture, fisheries,
industry, trade, tourism, and infrastructure, with emphasis on productive capacities o f the
poor and vulnerable;
(iii)
Improving coverage o f the basic social services and social protection needs o f the poor
and vulnerable;
(iv) Enhancing governance systems and building the capacity o f local communities and civil
society organizations to play an active role in economic growth and poverty reduction; and
(v) Mainstreaming cross-cutting issues like gender, youth, population, HIV/AIDS,
environment, and nutrition into the development process.
28
T h e tax burden o f a firm in T h e Gambia i s about six times higher than in comparator countries.
- 1451.
The Government’s overarching objective i s to eradicate poverty in the long run.
To achieve this goal, it i s committed to continue macroeconomic reforms to facilitate private
sector growth; to improve public sector management; and to increase priority for human
development. During the PRSP-I1 period, the Government i s focused o n sustaining the strong
level o f economic growth o f the last few years, notably with a special focus o n agriculture,
tourism, trade, energy and infrastructure, including I C T and housing. To strengthen
implementation o f i t s poverty-reduction programs, the Government i s putting in place
policies aimed at removing inequities in access to sources o f economic opportunities. I t
recognizes that the l o w rates o f progress so far in attaining the MDGs signals the need to
strengthen and expand MDG-related interventions.
The PRSP-I1 includes an implementation action plan that outlines costed priority
52.
activities, which should allow for improved monitoring and results orientation. In particular,
the Government i s taking action to prepare sector strategies to better guide and prioritize
implementation. The newly created National Planning Commission i s expected to take a
leadership role in preparing and implementing PRSP programs and integrating them with the
budget. Close collaboration with the Department o f Finance and Economic Affairs and with
all line ministries will be crucial. Involving local communities in implementation and
building the capacity o f civil society organizations to take part in the development process
was a government objective under PRSP-I and will continue under PRSP-11. Community
scorecards on service delivery monitoring were piloted in the health and education sectors in
2004, with assistance from the W o r l d Bank. Capacity building o f stakeholders including
local communities will be supported under the W o r l d Bank and AfDB projects during the
JAS period.
B - MACROECONOMIC
OUTLOOK
53.
The country has enjoyed robust growth and l o w inflation over the last four years,
thanks in large part to substantially improved macroeconomic policy implementation.
Annual growth has averaged 6 percent, and inflation fell from 17.6 percent in 2003 to 1.4
percent in 2006. The basic primary balance averaged 9.1 percent o f GDP and fiscal
performance has been strong (see Annex 4).
Medium-Term Prospects
54.
The medium-term outlook i s generally positive. I t i s based on real GDP annual
growth o f about 6-7 percent. Inflation stabilized at 6 percent at end 2007 after accelerating
markedly in the f i r s t h a l f o f the year when food prices surged as a result o f increases in
import costs (e..g., rice). The inflation rate i s expected to remain in the 4-5 percent range in
the medium term. The fiscal basic balance i s expected to register a surplus o f 3 percent o f
GDP a year to help bring down domestic public debt to a sustainable path. I t i s anticipated
that domestic revenues will remain at around 21 percent o f GDP, reflecting progress in tax
administration reforms. Progress has been slow but the growth o f domestic debt has been
contained. The stock o f gross domestic debt stood at 31.2 percent o f GDP at end-2006 and
has come down to 29.1 percent o f GDP in 2007, reflecting sustained good fiscal performance.
I t i s projected to fall to less than 21 percent by the end o f 2009, to 13.7 percent o f GDP in
2012, and to 8.4 percent o f GDP in 2027. Over the longer term, lower debt service i s
expected to provide additional space for increased priority expenditures and to partially offset
the downward trend in externally-funded projects.
The Gambia’s economy remains vulnerable to exogenous shocks, including higher
55.
o i l prices and droughts. Attainment o f the positive outlook will require the continuous
implementation o f sound macroeconomic policies, market-oriented structural reforms, and an
-15efficient Government investment program. However, the economy i s s t i l l expected to
annually grow at approximately 6-7 percent, benefiting fkom recent high levels o f foreign
direct investment, a projected increase in official project aid, and continued opportunities in
the services and industry sectors. Reflecting these trends, the external current account deficit
(including official transfers) i s expected to decline from 12 percent in 2008 to 9 percent o f
GDP in 201 1, a s i g n o f strong growth in tourism earnings and a slowdown o f import growth.
Continued fiscal discipline will be critical. The authorities have reiterated their resolve to
contain the fiscal deficit, better align budget priorities with their poverty strategy, and
improve the efficiency and transparency in the use o f public resources.
Table 6: Projection of K e y Macroeconomic Indicators - 2006-2011’’
I2006 I2007
I2008
I2009
I2010
I2011
Source: IMF
c - DEBTSUSTAINABILITY AND MANAGEMENT
56.
The Gambia recently became eligible for additional debt relief under the Multilateral
Debt Relief Initiative (MDRI) upon reaching the Completion Point under the Enhanced H P C
Initiative3’. While full delivery o f the above debt relief significantly reduces external public
debt, there i s a high risk that The Gambia will remain in debt distress, according to the L I C
DSA3’. The large domestic debt stock further supports the assessment that the risk o f debt
distress remains high. Sensitivity analysis shows that the country’s external public debt
indicators would substantially worsen in the presence o f large adverse shocks to export
performance and increased external financing on less concessional terms. The risk o f
remaining in debt distress underscores the importance o f continued fiscal prudence, policies
to support broad-based growth and export diversification, sustained donor support and
improved debt management.
The Government has initiated plans to strengthen debt sustainability. The second
57.
PRSP outlines a national development strategy that will encourage continued economic
growth, particularly exports o f goods and services, which will strengthen the country’s
capacity to service its debt. The PRSP also prioritizes prudent fiscal and debt management
policies. The Government has increased the minimum grant element in new external
borrowing to 45 percent, and it plans on limiting the volume o f non-concessional borrowing
for the foreseeable future. I t will further prioritize PRSP initiatives in line with available
funding. The Government has committed to developing a comprehensive debt management
29
These IMF figures differ f r o m those in the PRSP. Revised official data and recent economic
developments suggest a significantly higher outlook for the G D P growth rate than originally anticipated.
This largely explains the differences in projections. In their assessment o f the PRSP, IMF and W o r l d Bank
staff have recommended that the PRSP macroeconomic framework be updated with the latest available
data. This can be done in the next Annual Progress Report (APR).
30 See H I P C Report 41413-GM o f November 28,2007 (Board presentation on December 18,2007).
31
The updated Low Income Country (LIC) Debt Sustainability Analysis (DSA) shows that the NPV o f
debt-to-exports ratio falls t o 108 percent after the full delivery o f H I P C and MDRI assistance, which i s
above the policy dependent threshold o f 100 percent.
1
- 16strategy. I t s debt management capacity was assessed by the W o r l d Bank in March 2007
based on the Government Debt Management Performance Management Framework (GDMPMF). This assessment provides a basis for the refinement and finalization o f the debt
management strategy.
I V - WORLD BANIUAfDB STRATEGY FYOS-11
A - LESSONS
FROM
PAST WORLD BANWAFDBASSISTANCE”
58.
Implementation o f the 2003 World Bank C A S and the 2002-2004 AfDB CSP offer
valuable lessons for the JAS. Some progress was made in achieving the objectives o f the two
strategies. Social indicators have improved. Macroeconomic management has improved, as
has the fiscal situation. Over the past year, the Government has taken steps to improve the
business environment. Progress has been made in sectors where there are clear strategies in
place, such as education. Progress was also made where strategies took into account other
donor programs to ensure complementarity.
59.
With the benefit o f hindsight, the strategic objectives were ambitious given country
conditions at the time they were formulated following a period o f economic difficulties and
problems with economic management. Early in the period, the dialogue was not effective in
rural development and energy. Economic reform could not be launched because the
Government was not prepared to go forward, as policy frameworks were not in place.
60.
The W o r l d Bank and AfDB adopted a more results-oriented approach, but the
strategy documents did not offer fully developed indicators. Emphasis was gradually placed
on increased focus o n some critical indicators and key results in selected areas.
61.
Some generic problems have adversely affected the quality o f the portfolio o f both
institutions in the past33: (i)
weak co-ordination between the DOSFEA and the implementing
agencies; (ii)delays in ratifying and fulfilling the conditions o f financing agreements; (iii)
inadequate timely availability o f counterpart funding; (iv) episodes o f non-adherence to
procurement and disbursement procedures; (v) delays in submitting regular project audit
reports and quarterly progress reports; (vi) ineffectiveness o f project steering committees; and
(vii) weak technical and administrative capacities o f executing agencies. An important lesson
i s that project design should give more attention to managerial and technical capacity in light
o f critical shortage in capacity at all levels, including at local levels. On the World Bank
side, the adoption o f country financing parameters in 2005 has helped minimize the fiduciary
risks. For both institutions, close supervision and a focus o n simpler project design have
mitigated the above risks.
62.
Solid analytical and advisory activities (AAA) was prepared by the two institutions to
ground policy dialogue, notably o n public expenditure reform. An assessment o f seven
W o r l d Bank economic and sector work was recently completed34 as part o f the 2003 CAS
review process by a panel. The Panel found that the AAA program was strategically relevant
given clear linkages with the main CAS themes, the Bank’s poverty alleviation goals, the
PRSP, and other donors’ programs.
63.
32
Based o n the above lessons, there are some important implications for the new JAS:
See Annex 13 (World Bank CAS FY03-07 Completion Report)
Refer to Annex 9 for details o f current IDA-fundedportfolio and to Annex 10 for current ADF-funded
yytfolio.
AAA reports recently evaluated by the internal audit department at the World Bank, include the
following: 2003 CFAA, 2005 CPIP, 2004 PER, 2005 PER, 2006 PER, 2003 PPIAF trust fund on PURA.
33
- 17- Because o f capacity constraints, technical support under projects tends to require
especially high staff supervision inputs;
- As governance i s central to a successful PRSP implementation, the new JAS should
continue to place a strong emphasis o n it. Achievements in investment climate reform
and public expenditure management can be used as a proxy for economic management
and thus governance.
- Given constraints o n IDA and ADF allocations, JAS continues to be leveraged with that
o f other donors. The JAS objectives take into account available resources.
- The W o r l d Bank and AfDB intend to continue to coordinate closely o n policy reform
with the TMF and other donors, to strengthen the message and dialogue with Government.
- Strong coordination i s needed among donors o n program implementation.
- JAS i s results-based: outcome indicators are clearly linked to interventions, the JAS
shows a linkage between indicators and higher level objectives in the PRSP.
B - FRAMEWORK
FORWORLD BANWAFDB ENGAGEMENT
IN THE GAMBIA
JAS Framework
64.
This JAS i s being prepared at a time when the country has completed its MDGbased PRSP-I1 and the Government has just become eligible for debt relief under HIPC and
MDRI. There are expectations o f increased project aid from development partners, with a
roundtable planned for February 2008.
65.
As noted in the introduction, this JAS was prepared jointly by the World Bank
and AfDB and represents the first step o f an effort to harmonize donor assistance in The
Gambia in line with the Paris Declaration o n Aid Effectiveness. I t will allow the two
institutions to align their development programs, avoid duplication o f efforts, and combine
their technical expertise. Under this joint strategy, the World Bank and the AfDB have
developed shared objectives and a common platform for lending and non-lending services.
These will include coordinated contributions to budget support, complementary investments
in growth and competitiveness, and joint analytical work in the areas o f public finance, civil
service reform and governance, as detailed in Annex 1.
JAS approach
66.
Closer alignment with national priorities. The strategy i s based o n extensive
discussions held with the Government, the development partners, and c i v i l society (see
Annex 12 on the consultation process). The JAS covers about the same period as the PRSP-I1
(2007-201 1) and supports the achievement o f PRSP-I1 results. This country-based model
builds on the core principles o f t h e - A f i x a Action Plan35 (AAP). The JAS supports the
aspects o f the Government program where the t w o institutions have a comparative advantage
and where the Government feels that such support i s most needed.
67.
Strategic selectivity and donor coordination. In order to achieve i t s objectives, the
JAS will take into account lessons learned by both institutions in the implementation o f their
35
Meeting the Challenge o f Africa’s Development: A World Bank Group Action Plan (SecM2005-0445),
strengthen
August 17,2005. The JAS focuses on four o f the AAP’s flagships, namely those aimed to (i)
the private sector, (ii)
increase the economic empowerment o f women, (iii)
build s k i l l s for competitiveness
in a global economy, and (iv) raise agricultural productivity.
-18previous strategies, the performance and orientation o f current portfolios, the role o f other
partners, and the experience in terms o f public-private partnerships. The challenge i s to
respond within the constraints o f IDA and ADF allocation^^^, as well as the constraints o f the
country’s absorptive capacity and debt sustainability. This JAS will apply strategic
selectivity by not allocating resources to some key aspects o f the PRSP-I1 agenda, such as
support to HIV/AIDS, nutrition, telecommunications, generation, transport, which will
benefit from assistance by other donors during the JAS period. For example, support to
infrastructure development and some productive sectors i s provided by the European Union
(transport, including feeder roads; electricity). This selectivity has been applied through a
process o f prioritization discussed jointly by the Government, AfDB and the W o r l d Bank.
Given that the social sectors are covered under the current IDA and ADF portfolios during
the 2008-20 11 period, the Government has asked that the JAS be focused for the most part on
the growth agenda. As a result o f this process, only four new lending operations37 are
planned during the JAS period where the W o r l d Bank and the African Development Bank
a series o f two budget support operations, (ii)
a Growth and
have comparative advantages: (i)
a Livestock and Horticulture project (see Table 7).
Competitiveness project, and (iii)
68.
Additional funding options. Given limited IDA and ADF resources, additional
funding options will be explored. Collaboration with I F C (Global Trade Finance Program,
technical assistance, access to e-markets, etc) o n the W o r l d Bank Group side, and possible
funding through the Private Sector Window o n the AfDB side, will strengthen the impact o n
private sector development and provide support to MSMEs. Leveraging o f funds for the
growth agenda will be sought through the Enhanced Integrated Framework (EIF - see para.
108). The use o f trust funds such as GPOBA (water and sanitation), PPIAF (energy and
regulatory framework), Japan PHRD (support to communities and capacity building in
education) will be vigorously pursued. The Government has also applied for continued
financing under the EFA Catalytic Fund in the education sector for the period 2008-2010. T o
the extent possible, the JAS will make provisions for ensuring that conditions are put in place
for financing regional programs under the next IDA and ADF financing cycle. For example,
in infrastructure, plans to construct the Gambia bridge have been revived and efforts are
currently underway by AfDB to revise the costing o f the project. AfDB will also support the
regional OMVG energy program under i t s private sector window, through the Fund for
African Private Sector Assistance (FAPA). The FAPA technical assistance co-financed with
N E P A D to prepare the project has been approved and the grant agreement letter has been
signed. Different types o f public private partnerships have been proposed and will be
examined.
69.
Integrated approach. T o deliver nationwide results in areas such as improved
efficiency o f public finance, or to achieve results in specific geographical areas or sectors
(such as energy or groundnuts), the approach will combine various instruments (budget
support for possible policy options, investment operations, community interventions for
capacity building through NGOs). In the energy sector, for example, support will be
channeled through technical assistance under PPIAF for the development o f a master plan,
while possible small-scale investment may be funded under a W o r l d Bank Growth and
Competitiveness operation for the build-up o f service platforms, or under the AfDB Rural
Electrification Project for provision o f electricity at local levels. In the groundnut sector,
The scope o f new IDA and ADF financing during the JAS period i s limited, as the country’s forgone
IDA and ADF debt service under the MDRI Initiative w i l l be deducted from the country’s allocations (see
aras 114-115).
Additional financing in support o f the Capacity Building for Economic Management project was
approved in October 2007 (FY08)
36
”
- 19some capacity buildinghechnical assistance will be funded under the IDA and ADF funded
operations, while the policy dialogue will be conducted under the proposed policy lending.
A major challenge for The Gambia i s to build public sector capacity in order to
70.
ensure efficient government functions, support good governance and promote growth. In l i n e
with the Capacity Development Management Action Plan (CDMAP) prepared by the World
Bank, this JAS will help build capacity across sectors, projects and analytical activities. This
will be done at the level o f ministries and the administration, as w e l l as at the level o f local
communities and c i v i l society organizations. Activities to be financed by the W o r l d Bank
and/or AfDB will include:
- carrying out a c i v i l service reform study and providing support t o implement some o f the
study's recommendations,
- supporting reforms o f public
systems and the capacity o f staff to run them (procurement,
statistics, budget cycle),
- supporting capacity development o f justice sector institutions,
- scaling up support to local governments and service delivery at decentralized levels,
- providing assistance in education at the primary, secondary and tertiary levels, as well as
assistance in skills development,
- strengthening the monitoring o f PRSP results, and
- ensuring donor coordination o n capacity building activities.
7 1.
Managing the existing portfolio3'. Successful implementation o f the ongoing
portfolios will be an important tool for achievement o f the JAS outcomes, supported by new
operations and analytical work under the new joint strategy. Efforts will focus on enhancing
implementation quality in order to attain results. Effective portfolio management requires a
strong presence in the field. On the World Bank side, the Liaison Office i s playing a key role
in this respect. The Country Director will continue to visit The Gambia o n a regular basis
and facilitate a quarterly portfolio review (mini-CPPR) process. There are also a number o f
Dakar-based project task team leaders. In addition, a Monitoring and Evaluation (M&E)
specialist and an operations officer were decentralized to Dakar as o f October 2007. On the
AfDB side, support from SNFO and regular missions by Headquarters's staff will allow for
close supervision o f JAS implementation.
72.
This JAS will focus on results and outcomes, and will help harmonize M&E
requirements, including in areas such as budget support. In Annex 1, the Results Matrix
summarizes (i)
the PRSP-I1 objectives that the JAS seeks to support, (ii)
the results that both
institutions hope to contribute to through their interventions, and for which they will be
jointly held accountable, and (iii)
the instruments that both institutions will use to implement
the program. Should changes occur during JAS implementation, whether in terms o f resource
availability or performance, IDA and ADF-funded activities would be adjusted accordingly.
In addition, a mid-term JAS progress report i s scheduled for early 2010, which will allow the
AfDB and the W o r l d Bank to review and discuss necessary adjustments.
JAS Instruments
Budget Support. The JAS will be a platform for the two institutions, working in a
complementary fashion, to re-engage the Government in policy lending39. The Gambia i s
73.
See Annexes 10 and 11.
Development Policy Lending (DPL at the World Bank) i s called Policy Based Lending (PBL) at the
AfDB). The last IDA-funded adjustment operation closed in 1992 (2ndStructural Adjustment). On the
AfDB side, the second Structural Adjustment loan (SAL 11) was approved in January 1990 and became
fully disbursed by July 1992.
38
39
- 20 ready to transition to budget support, given i t s good growth record and demonstrated
continued commitment to improving i t s macroeconomic policy and fiduciary systems. Given
the governance and institutional weaknesses noted earlier, appropriate measures will be
incorporated in the design o f the policy lending operations to mitigate these risks, including
(a) incorporating recommendations o f the Country Financial Analytical Assessment
(CFAA)40, (b) t a h n g into account the institutional capacity for implementation, (c)
incorporating work being carried out under ongoing donor support to improve public
expenditure management systems 41.
74.
Should the Government’s reform program stall or macroeconomic conditions
deteriorate significantly during the JAS period, IDA and ADF resources earmarked for
budget support would be reallocated to less risky investments and poverty-targeting
operations. On the other hand, if the gradual reform scenario continues, the World Bank and
AfDB will focus o n areas where further traction i s likely and in sectors contributing to The
Gambia’s path t o prosperity. In order to foster demand for good governance and strengthen
social accountability, public sector management interventions will be supplemented with
active engagement at the level o f the domestic private sector and with support to institutions
outside central government, such as civil society, local communities and NGOs.
75.
During the JAS period, it i s anticipated that up to a third o f IDA and ADF financing
to The Gambia will be provided through a series o f two DPLs. Given the fact that the W o r l d
Bank and the AfDB have not engaged in budget support in The Gambia for a long period o f
time, a programmatic approach i s proposed in the form o f a series o f two operations, the first
one to be financed by the W o r l d Bank in early F Y 0 9 (about US$7 million), and the second
one by the AfDB (about US$3 million) with a time lag o f nine to twelve months. Should
additional IDA resources become available, notably as a result o f gradual improvement in the
country’s performance, a cofinancing by IDA o f the AfDB-funded operation could be
envisaged. The JAS will condition these two successive operations, to the greatest extent
possible, on achievement o f a set o f indicators that will be agreed with Government and with
other donors (budget support will also be provided by the EU, starting in late 2009). The
W o r l d Bank, AfDB and the EU will share a common policy matrix agreed with the
Government. The sharing o f the policy matrix will be formalized by a Memorandum o f
Understanding (MOU).
76.
Analytical work will help lay the foundation for support to the JAS key objectives.
B o t h institutions will ensure that, within their limited budget envelopes, sufficient resources
are allocated for the preparation o f new lending operations, including for upstream AAA.
The AAA program has been developed taking into account the analytical work o f other
development partners and knowledge gaps affecting the policy dialogue, or project
preparation implementation.
77.
The core diagnostic tasks that were completed by the W o r l d Bank and AfDB in prior
years have helped support the values element o f the new JAS, in particular with regard to the
governance agenda (CFAA, CPAR, PERs). Lessons have been learned from these activities,
including the need for supporting continued capacity building, dissemination and knowledge
sharing.
Prepared in FY08 by a joint World Bank and AfDB team.
IDA-fbnded Capacity Building for Economic Management Project, and AfDB-funded Institutional
Support for Economic Management project.
40
41
-21 C - PROPOSEDWOFUD BANWAFDB PROGRAMS AND EXPECTED OUTCOMES
78.
The proposed JAS platform for 2008-2011 i s based on two main pillars (see
Table 7 below: (i)
Strengthening the institutional framework for economic management and
public service delivery, and (ii)
Enhancing productive capacity and accelerating growth and
competitiveness. The JAS results matrix i s presented in Annex 1. The matrix establishes the
results chain for the JAS program and focuses o n outputs and outcomes, linked t o longer term
country outcomes. Indicators have been identified to measure progress.
JAS Pillar 1
Strengthening the Institutional Framework for Economic
Management and Public Service Delivery
This Dillar i s linked to the first. third and fourth pillars o f PRSP I1and will aim at (i)
improving the enabling policy environment, (ii)improving coverage o f the basic social
services and social protection needs o f the poor and vulnerable, and (iii)enhancing
governance. The success and sustainability o f the Government’s efforts in promoting growth
and reducing poverty will very much depend o n macroeconomic stability and the pace o f
structural reforms aimed at increasing the availability o f services and facilitating their access.
Specifically, the W o r l d Bank and AfDB will seek to assist the Government in improving
budgetary practices to increase the resource allocation and in supporting social programs in
order to achieve better access to public services and outcomes in education and health, water
and sanitation (see Annex 1 for contribution o f Pillar 1 to PRSP-I1 objectives and for JAS
outcomes/milestones and interventions by AfDB and the W o r l d Bank).
79.
80.
During the JAS implementation period, the strategy will focus on governance. In
particular, it will address issues related to the efficiency o f public resource management and
the effectiveness o f public service delivery in sectors such as education, health, water and
rural electrification. I t will support civil service reform to make c i v i l servants more
accountable and address issues o f high turnover rates.
-
EXPECTED
RESULTS
PILLARONE
(i)Imurovina the transparency and accountabilitv in the use o f uublic resources
8 1.
Strengthening governance i s crucial in improving economic management and public
service delivery in The Gambia. By strengthening budgetary procedures, fiduciary reforms
help improve the efficiency o f expenditures. By encouraging the involvement o f local
governments and c i v i l society, these reforms help optimize spending allocations.
82.
The Government i s committed to sustain ongoing public financial management
reforms. The 2003 CFAA action plan prepared jointly by donors42, as well as the
recommendations emanating from the W o r l d Bank’s FY04, FY05 and FY06 Public
Expenditures Reviews helped to raise the awareness o f the key challenges and necessary
actions and to place the reforms o n the agenda o f both the Government and donors over the
past few years.
42
Including the World Bank and AfDB
- 22 Table 7
Ongoing and Proposed JAS Lending and Analytical Program (2008-201 1)
AfDB
World Bank
PILLAR 1 -Strengthening Economic Management and Public Service Delivery
Ongoing Portfolio
Ongoing Portfolio
Capac. Building for Econ. Management (CBEMP) ($15.0 m)
Supplemental CBEMP ($3.0 m) 43
Education Phase 2 ($8.0 m)
Community Driven Development ($12.0 m)
Regional Locust ($1.9 m)
Institutional Support for Economic Management and
Governance (UA1.4 m)
Basic Education (UA1O.O m)
Health Services Development (UA7.0 m)
Planned Lending
Planned Lendin
Budget Support (lst
in series o f 2) ($7.0 m)
Budget Support (2" in series o f 2) (UA1.5 m)
5.
Ongoing AAA
Ongoing AAA
Renewable Energy Study
Planned AAA
Planned AAA
C i v i l Service Study/Governance Profile
Country Financial Accountability Assessment
Poverty Assessment
Public Expenditure Review (PER)
Civil Service Study/Governance Profile
Country Financial Accountability Assessment
Gender Profile
Banjul Port Study
-
PILLAR 2 Enhancing Productive Capacity and Accelerating Growth and Competitiveness
Ongoing Portfolio
Ongoing Portfolio
Gateway (US16.0 m)
Farmer Managed Rice Irrigation (UA5 .5 m)
NERICA Dissemination (UA1.5 m)
Peri Urban Agricultural Development (UA5 .O m)
Artisanal Fisheries Development (UA2.9 m)
Participatory Integrated Watershed (UA4.95m)
Entrepreneurship Promotion & Microfinance (UA8 .O m)
Community Skills Improvement (UA5.9 m)
Planned Lending
Planned Lending
Growth & Competitiveness ($8.0 m)
Budget Support (1" in series o f 2)
Livestock and Horticulture Development (UA4.0 m)
Budget Support (2ndin series o f 2)
Ongoing AAA
Ongoing AAA
Multi-country PPIAF Multi Sect. Regul. Framework
Planned AAA
Planned AAA
PPIAF Development o f Energy Master Plan
PPIAF Tariff Modeling
Diagnostic Re-export Trade Study
Private Sector Profile
43
was approved in October 2007 (FY08).
- 23 (a) Outcome: Strengthened public financial management
83.
Progress was realized in the implementation o f the Integrated Financial Management
Information System (IFMIS), which i s acknowledged by the Government as an integral part
o f i t s strategy to strengthen public expenditure management and monitor PRSP-related
expenditures. The first phase o f I F M I S was launched in January 2007.
Further integrating PRSP priorities into the Government budget. The PRSP
84.
emphasizes the adoption o f a medium-term expenditure framework (MTEF) as a means to
further deepen the integration o f PRSP priorities with the budget. This will require improved
reliability o f future projections o f sectoral resource allocations, and the preparation o f costed
sector strategies based o n explicitly defined outcomes and outputs. During the JAS period,
efforts in this direction may be initiated in the education sector.
In procurement, the W o r l d Bank has been providing extensive support in revising the
85.
legal framework and establishing the semi-autonomous Gambia Public Procurement
Authority (GPPA). A CPIP was carried out in 2003. An action plan was prepared in 2005 to
improve the national procurement system by (i)consolidating a comprehensive legal
framework (regulations, bidding documents), (ii)
setting up an institutional framework with
clearly defined roles and accountabilities (policies, execution, internal and external controls
and sanctions), and (iii)building capacities (in particular in decentralized areas). I t i s
important that the plan be discussed so that these actions can be validated and prioritized.
This would in turn facilitate the move toward the use o f country systems by the donor
community and support the dialogue with Government o n ways to separate GPPA regulatory
and control functions in line with the OECD/DAC recommendations on procurement.
Lending Instrument:
86.
The W o r l d Bank will continue to support the ongoing reforms during the JAS period
through the Capacity Building for Economic Management operation. Additional financing
for that project was approved in October 2007 in order t o (i)
implement the second phase o f
complete the establishment o f the Gambia Revenue Authority, and (iii)
initiate the
IFMIS, (ii)
upgrading o f A S Y C U D A to version ++.
87.
The AfDB will provide support under the Institutional Support for Economic
Management and Governance operation. The project will provide assistance in the
strengthening o f the internal audit function, with support to the National
Audit Office. I t will also provide support to SPACO (Strategy for Poverty Alleviation
Coordinating Office) and DOSFEA (Department o f State for Finance and Economic Affairs).
88.
B o t h institutions will promote the implementation o f public finance management
reforms through budget support. As noted above, in designing the policy-based lending;
the available analytical underpinning, (ii)
the institutional
considerations will be given t o (i)
capacity for implementation, (iii)the need to improve public expenditure management
systems, and (iv) activities o f other partners. In the context o f the JAS, the budget support
operation would mainly focus o n public finance management and civil service reform.
Analytical work:
89.
Coordination between the Government and donors was crucial and will continue to
be a key factor with the preparation o f a CFAA, to be carried out jointly by key donors in
FY08, as analytical work in preparation o f the first budget support operation. The CFAA will
be conducted by applying the Public Expenditure Financial Accountability (PEFA)
measurement framework. I t will assess the fiduciary risk management in the country and will
assist the Government in strengthening the national financial architecture. A full Public
Expenditure Review will be prepared in FY09, as an input in the second budget support
operation.
- 24 (b) Outcome: Strengthened national statistical system
90.
The JAS will continue to support the Government in i t s efforts to improve data
quality and availability so that monitoring o f economic developments and poverty reduction
can be strengthened.
Lending Instrument and analytical work
91.
The W o r l d Bank and the AfDB will actively support this agenda through the abovementioned Economic Management support projects and the budget support operations. In
addition, the World Bank will finance the preparation o f a poverty assessment in FY08 with
possible AfDB participation. A detailed implementation plan for the Gambia Bureau o f
Statistics (GBOS) i s to be costed (with assistance provided under a W o r l d Bank Trust Fund)
and discussed at the next donor roundtable.
(e) Outcome: Strengthened audit function
92.
The PRSP emphasizes the need to improve transparency and accountability in
planning, designing and implementing the PRSP program by facilitating citizen engagement
in the process and public resource management. I t also stresses the need to empower local
communities to influence priority setting and resource allocation, and the need to ensure
continued dialogue with civil society on the actions required to improve PRSP performance.
Lending Instrument:
93.
During the JAS period, the World Bank and AfDB support will seek to strengthen the
role o f Parliament and c i v i l society in overseeing and controlling the use o f public resources.
The ADF-financed Institutional Support for Economic Management and Governance Project
will provide assistance to the National Assembly, the National Audit Office, the new
Directorate o f Central Project Management and Aid Coordination, SPACO, and the Gambia
Bureau o f Statistics. The W o r l d Bank-financed Community-Driven Development project will
support local governments in delivering a platform o f basic social and infrastructure needs,
and hence will increase public sector accountability by allowing beneficiaries to oversee the
use o f these funds.
(iiImDroving
)
civil service
Outcome: Enhanced Human Resource management policy and tools are available
and used in public administration
94.
The PRSP acknowledges that the c i v i l service serves as a catalyst for economic
development and growth. The effectiveness o f the State to use public funds will largely
depend on i t s capacity to manage i t s human resources. Constraints include high attrition,
poor remuneration, inability to motivate and retain skilled personnel to allow for career
development and security o f tenure, and ineffective utilization o f expatriate staff to ensure
s h l l s transfer.
Analytical work
95.
A Governance Profile has been prepared by the AfDB and a c i v i l service reform
study i s being conducted in F Y 0 8 jointly by the World Bank and AfDB to complement the
above analysis. I t will propose an action plan to be supported by both institutions, notably
under the budget support operation. In particular, both institutions will support activities in
the education sector to motivate key staffs to work in under-served regions.
- 25 96.
Initiatives in the medium term include preparation o f (i)a pay reform strategy to be
funded under budget support, (ii)
a pension reform strategy, (iii)
employment and payroll
management, and (iv) performance incentives to support results management.
(iii)Public service deliverv in education, health, water and sanitation, and rural
electrification
(a) Education.
Outcome 1: Gross primary enrollment rate reaches 100%
Outcome 2: Gross completion rate reaches 90%
97.
The PRSP identifies education as a key determinant o f poverty reduction in The
Gambia, which i s part o f the Education for All Initiative. The PRSP notes that the next
challenge i s to improve education outcomes and the quality o f schooling. Primary
completion i s n o w at 62 percent and i s expected to increase to 80 percent by 2010 and to 100
percent by 2015. During the JAS period, substantial attention i s to be given to expanding
access to quality education, especially for girls. The W o r l d Bank (Education Phase 2 APL)
and AfDB (Basic Education Project) have had a long-term involvement in the sector. The
two institutions will continue their support to the sector in the following areas (i)
improving
performance o f students, teachers and schools, (ii)strengthening capacity building and
performance management, and enhancing monitoring and evaluation, and (iii)continuing
expansion o f effective access to under-served communities.
(b) Health.
Outcome 1: Increased number of households with
access to basic health services
98.
The PRSP notes that the challenge i s to put greater emphasis on primary services and
preventive care. The W o r l d Bank will continue to provide support to improving health
services by expanding community-based services under the Community-Driven Development
operation. The project allows rural communities, in partnership with Local Government
Authorities to plan, implement and maintain their priority social and economic investments,
including in health. The AfDB Health Services Development Project has been successful in
increasing access to health services44.
(c) Water and Sanitation.
Outcome: Increased number of water and sanitation
Connections in Greater Banjul Area
99.
The PRSP’s objective i s to provide access to safe water to 100 percent o f the
population in the Greater Banjul area and to 90 percent in peri-urban, growth centers and
rural areas o f the country. A Water and Sanitation study i s being financed by AfDB. I t will
form the basis for a Water Supply and Sanitation Project to be financed by the AfDB if
additional resources beyond the expected country allocation become available.
100. Support t o the sector could be envisaged by the W o r l d Bank Group under a possible
output-based aid (OBA) program. OBA i s one method for improving the delivery o f basic
services when the inability o f users to pay full cost would justify performance-based
subsidies to complement or replace user fees. This financing could be made available in The
Gambia for improving the delivery o f water and sanitation. Support to the Government’s
program o f small public infrastructure in urban areas 45 was provided by the World Bank
under the Poverty Alleviation and Capacity Building Project (including financing o f
pavements, markets, and schools). IDA funding o f a follow-up project to P A C A B could be
44
45
I s being extended.
The PACAB project closed in December 2006 (US19 million)
- 26 envisaged in the next JAS cycle under IDA-16. Should additional resources become
available under IDA-15, preparation could be moved forward (as a “standby” operation).
(d) Rural Electrification.
Outcome: Increased number of households with access
to electricity in targeted areas
101. The Rural Electrification Project financed by the ADF and BADEA i s to provide
continuous power supply to 46 towns and villages outside the Greater Banjul Area. I t
represents the initial stage o f a national grid which will eventually be connected to the
Greater Banjul System. The major challenge facing the energy sector i s to increase the
electricity access rate to 10 percent by 201 1 and to provide sustainable alternative fuels for
cooking since biomass based fuels are unsustainable. The other challenge i s to creating
additional capacity to generate and transmit electricity and increasing the sector efficiency by
reducing the system losses. To meet the energy needs o f The Gambia in the future, the ADF
funded a Renewable Energy Master Plan study, which made numerous recommendations in
particular to use biogas, solar thermal, methane, and hybrid diesel-wind technologies to
generate renewable energy. By investing in renewable energy technologies, The Gambia can
gain by selling Carbon credits to the developed countries, thereby drawing benefits from
Clean Development Mechanism (CDM) o f K y o t o Protocol.
JAS Pillar 2
Enhancing Productive Capacity and Accelerating Growth and
Competitiveness
102.
This JAS pillar i s in support o f pillar 2 o f PRSP 11. The JAS will provide a
framework for strategic investments and policy options to (i)support growth poles in The
Gambia and (ii)address key barriers to investment. These poles could be centered around
key sectors o f the economy such as tourism and agricultural exports. In order to improve the
productive capacity o f the poor, the strategy will provide support to agriculture and livestock
development, skills development for women, and microfinance.
103.
The W o r l d Bank and the AfDB bring significant comparative advantage in terms o f
(i)supporting the multi-dimensionality o f development o f these growth poles, (ii)
making an
leveraging additional financing
impact through complementarities o f investments, and (iii)
resources.
EXPECTED
RESULTS - PILLAR TWO
(i) Promotinp a competitive investment climate/Growth and Competitiveness
Outcome 1: Increased number of tourists
Outcome 2: Increased volume of agribusiness exports
Outcome 3: Improved credit to private sector
104.
The Gambia’s business environment presents both challenges and opportunities.
Foreign direct investment i s high (over 10 percent o f GDP), mostly t o finance hotels for the
tourism industry. IFC/FIAS will assist the authorities in addressing existing administrative
barriers that f i r m s face when they want to establish themselves and operate in the country. In
particular, in the context o f the W o r l d Bank-financed Gateway project, they will review new
investment policies, notably the Investment Act, the Free Zone Act, investment incentives,
their administration and impact. They will also review the simplification o f customs and
business registration procedures. Initiatives to support access to credit are described below.
Finally, they will support capacity and skills building initiatives.
- 27 105. As noted in para 16, tourism i s the dominant sector o f the economy. Agricultural
exports i s another potential driver o f growth. Current growth in The Gambia is, to a large
extent, spurred by the private sector, but constraints remain in terms o f poor infrastructure
and the need to strengthen the business climate and policy environment. This context creates
the justification for the concept o f growth poles to help provide the adequate business
environment to stimulate and lead economic growth in selected areas.
106. The support to “growth poles” in The Gambia, as well as initiatives aimed at
addressing constraints to growth and competitiveness could be financed under a proposed
Growth and Competitiveness operation.
Tourism and agricultural exports could be
envisaged as possible growth pole components o f the project.
107.
The project would rely on an infrastructure platform to help accelerate the growth o f
these sectors. This platform would be composed o f main infrastructure upgrades in the
energy, water and transport sectors to attract private sector investments. This infrastructure
platform would be complemented by policy reform in the business environment (including in
the financial sector), and some activities under the ongoing W o r l d Bank-financed Gateway
project.
108. The W o r l d Bank i s a core agency of the Enhanced Integrated Framework (EIF). A
D T I S was carried out in 2007. The EIF will have some US$3-4 m i l l i o n per country to
support the implementation o f the D T I S during the JAS period, with particular emphasis on
the growth and competitiveness agenda.
(ii)
Facilitating access to financial resources bv micro, small and medium sized
enterprises lMSMEs)
Outcome: Improved access to finance
109. The private sector in The Gambia consists mainly o f MSMEs, which are constrained
by limited access to finance and poor management and technical capacity. Based o n previous
poor performance o f projects in The Gambia, IFC has chosen a selective approach by
focusing on enhancing the capacity o f local financial institutions to improve the access to
finance o f their existing and potential S M E clients. Activities that IFC i s currently loolung to
finance include: (i)
improving access to finance through investment in local microfinance
institutions and provision o f facilities under the IFC Global Trade Finance Program to local
commercial banks, (ii)
strengthening enterprise skills (capacity building) and market linkages
o f these institutions through advisory services (through the PEP Africa and Africa M S M E
Programs), (iii)improving the business environment (reducing cost o f compliance with
business regulations for the formal sector). These activities would complement S M E support
to be provided by AfDB within the same strategic framework.
110. The ADF-funded Entrepreneurship Promotion and Microfinance Development
Project i s supporting the training o f rural women, men, and youth in entrepreneurship and
skills training to become economically empowered. The project also has a microfinance
component for wholesaling to experienced and qualified non-banking institutions. In
addition, the private sector arm o f the AfDB will support SMEs.
- 28 (iii) Strengthening the amicultural sector
Outcome 1: Improved productivity of crops, livestock and forestry
Outcome 2: Improved prevention and early warning system
111. The sector has been stagnant and lacks a coherent strategy. Agriculture-related
activities will contribute to poverty reduction and improved foreign trade by sustaining the
improved efficiency o f the groundnut sector, and (ii)
the development o f the
conditions for (i)
potential o f the Gambia’s agricultural sector, beyond groundnuts. Activities which could be
financed could include (i)
rehabilitation o f river transportation to alleviate current constraints
to the evacuation o f groundnut harvests, (ii)capacity building o f the various
research, and (iv) support
stakeholdershnformation exchange (quality/food safety issues), (iii)
to commercial environment.
112.
The PRSP notes that most o f the poor are farmers in rural areas, particularly
groundnut farmers, and that agricultural productivity has stagnated in recent years. The
assessment by W o r l d Bank and IMF staff o f initiatives in the agricultural sector recommends
that these initiatives be further focused o n private sector promotion. Development o f the
sector will likely require a multi-sectoral approach which encompasses agricultural
development, employment creation, and access to social basic services and infrastructure.
111. The W o r l d Bank i s providing assistance to the rural poor through a CommunityDriven Development operation, whereby rural communities plan, implement and maintain
their priority social and economic investments. The Gateway project i s providing some
support to the groundnut sector in terms o f limited rehabilitation o f river barges for the
2007/8 harvest and technical assistance to kickstart the implementation o f the sector roadmap.
As noted above, the proposed Growth and Competitiveness operation would help develop the
potential o f the Gambia’s agricultural sector beyond groundnuts.
112.
The ADB has traditionally given special attention to the agricultural sector in The
Gambia because it i s the major occupation o f close to 70 percent o f the active w ~ r k f o r c e ~ ~ .
The on-going agricultural portfolio consists o f seven projects including three multinational
projects (see Annex 11). The proposed interventions will allow diversification o f crop and
animal production systems, efficient management o f natural resources, and the development
o f rural financial services. The AfDB group, with 22 percent o f i t s cumulative commitments
to agriculture in The Gambia, has built up significant experience and expertise in the sector.
The proposed Livestock and Horticulture operation, which i s to be implemented nationwide,
i s country-driven and will build on the Peri-Urban Smallholder Improvement Project (PSI?).
The latter i s one o f the best performing projects in the on-going portfolio. Eighty percent o f
PSIP beneficiaries are women and the proposed project will target rural women as well.
(iv) Enabling the environment for development of the energy sector
Outcome 1: Secure funding for investments identified
I n new electricity master plan
Outcome 2: PURA applies new regulatory tools
113.
During the JAS period, the W o r l d Bank Group will provide support to The Gambia’s
energy sector, including technical assistance for the development o f an Energy Master Plan,
46
In addition to consistency with the country’s development agenda, t h i s i s consistent with the AfDB
Strategic Plan through 2007, w h i c h considers agriculture and rural development as an important priority
area.
- 29 possibly through a Public-Private Infrastructure Advisory Facility (PPIAF) funding. The
proposed funding could also cover regulatory aspects, energy access and prioritization o f
investments to support The Gambia’s growth agenda. The AfDB i s also providing support in
the area o f renewable energy through the commissioning o f rural electrification projects. For
example, under the Community Slulls Improvement Project, 21 skills centers in rural areas
are being equipped with solar panels.
114.
If an understanding i s reached on the sector fiamework, IDA funding o f a small
project at the national or regional level could be envisaged in the next JAS cycle under IDA16, with preparation to start in 201 1 as a “standby” operation. Preparation could be moved
forward if additional resources become available under IDA-15. On the AfDB side, the
“private sector window” plans to support an energy program for the Gambia River Basin
Development Organization (OMVG) in the form o f a public private partnership that includes
The Gambia. Technical Assistance has been approved .and coordination among the two
institutions will be pursued.
D - ESTIMATED RESOURCE ENVELOPES
Table 8: World Bank and AfDB allocations (FYO8-011)
IDA-14
1
OBA
I
IFC
Additional Financing CBEMP
FY08
3.0
Budget Support
FY09
7.0
ADF-l
Budget Support
CY09
1.5
3.0
Growth & Competitiveness
FYlO
8.0
ADF-l
Livestock and
Horticulture
CY08
4.0
7.0
Water & Sanitation
1 1 I ;Elli 1
TBD
SME/Microfinance
1
1 I
TBD
TBD
Water and Sanitation
TBD
Priv.Sect
1
Line o f Credit to
SMEs
II I1 I1 II
TBD
TBD
TBD
TBD
TBD
TBD
World Bank
115. Actual allocations during the JAS period will be determined o n an annual basis and
will depend on (i)
total IDA resources available, (ii)
the country’s performance rating4’, (iii)
the performance o f other IDA borrowers, (iv) the number o f IDA-eligible countries; and (v)
terms o f financial assistance (grants or credits).
116. As presented in Table 8, the joint strategy has been prepared o n the basis o f an
estimated $18 million allocation over the period FY08-11. Additional financing o f US$3
million under the Capacity Building for Economic Management Project has been approved in
FY08. The period FY09-11 will be covered under IDA-15. The envelope under IDA-15
IDA country allocations are based o n the country performance ratings (CPR), which i s based o n CPIA
ratings, country portfolio ratings, and governance indicators.
47
-30takes into account the fact that debt relief under MDRI has been netted out o f the IDA
allocation4*. The IDA allocation to each project should be seen as indicative.
African Development Bank
117.
Actual allocations during the JAS period will be determined under ADF-11 (20082010) and ADF-12 (2011). As for IDA15, MDRI debt relief i s netted out o f the ADF
envelope4’. Given that ADF-11 resources are yet to be determined, it i s assumed that the
level o f ADF resources will correspond to the level under ADF-X, minus MDRI: about
US$lO million, including about US$3.0 million for budget support, assuming guidelines o f
ADF-X apply. Confirmation o f whether they apply will be known after the ADF X I
Replenishment Meetings early 2008. The ADF-XI1allocation for 201 1 i s not yet determined.
V - RESULTS MONITORING AND EVALUATION
118.
A National Planning Commission (NPC) i s being set up to coordinate
planning and implementation of PRSP-11. A pro-poor advocacy group (Pro-PAG) has also
been established by Civil Society Organizations (CSOs) to participate in the monitoring o f
the PRSP. In terms o f monitoring capacity, good progress has been made in restructuring the
Central Statistics Department (CSD), transforming it into the semiautonomous Gambia
Bureau o f Statistics (GBOS), and providing training programs and new recruitment o f i t s
staff. A new Statistics A c t was enacted in 2005, a Statistical Master Plan has been prepared,
and a Statistics Council constituted. It i s important that adequate resources be channeled to
GBOS to ensure i t s semi-independence and hold it accountable for improved data quality and
availability. The poverty database has been improved through the 2003 household
Expenditure Survey, the 2003 population census and the 2005/06 economic census. The
World Bank i s currently working with GBOS in preparing a Poverty Assessment and will be
working with the Government o n disseminating results within a few months o f data
collection.
A JAS implementation monitoring system i s in place. T o ensure adequate review
119.
o f AfDB and W o r l d Bank contributions toward the development o f The Gambia, related
activities under the control o f the two institutions are well defined in Annex 1. The JAS
matrix includes a l i s t o f results and intermediate outcomes to be monitored during the period
FY08-11 and for which the two institutions will be jointly held accountable. Project activities
will be assessed on a regular basis, including during regular portfolio reviews. The overall
JAS and portfolio M&E systems will contribute to increasing the country’s capacity to
monitor i t s PRSP program and strengthening the country’s data capacity and external aid
monitoring. The JAS implementation monitoring system will be linked to the Government’s
PRSP monitoring in different ways, including through (i)regular reporting o n W o r l d
BanWAfDB projects and programs (review o f key performance indicators, portfolio reviews,
a mid-term evaluation o f the Joint Assistance Strategy.
project completion reports), and (ii)
48
Debt cancellation under the MDRI f r o m IDA would result in average annual debt service savings (net o f
HIPC assistance) for The Gambia o f US$4.6 m i l l i o n between 2008 and 2011 and US$6.1 m i l l i o n over the
next 30 years.
49
MDRI relief f r o m the AfDB will yield annual debt service savings (net o f HIPC assistance) averaging
US$1.6 m i l l i o n over the next five years and US$3.9 m i l l i o n over the following 39 years.
- 31 V I - PARTNERSHIPS and PARTICIPATION
120,
The Gambia continues to be highly dependent o n external development assistance.
Over 80 percent o f the country’s development budget i s contributed by the international
donor community. Major donors include the AfDB, the World Bank, IMF, EU, DFID,
OPEC, UNDP, the UN agencies, Taiwan ROC, and Japan (see a summary o f donor
interventions in Annex 8).
External donor assistance i s expected to increase over the period 2007-2012. The
121.
Government i s planning a donor conference in February 2008 to mobilize additional external
aid for supporting the implementation o f PRSP-11.
The issue of aid harmonization i s important in a small country like The Gambia.
122.
M o r e than 15 donors are providing assistance, which i s channeled through a broad variety o f
entities, both governmental and non-governmental. An overall framework for external
partners’ coordination i s not yet in place, and different government agencies deal with
different development assistance agencies. The Gambia has signed the Paris Declaration o n
Aid Effectiveness, and most external partners are aligning external assistance with country
objectives, but are preparing separate assistance strategies for the period 2007-201 1,
including U N D P and the EU. This JAS i s an important step in the process o f harmonization.
123.
The preparation o f this JAS was discussed with other partners. Joint analytical work
i s envisaged with a number o f donors, including o n fiduciary issues, such as the next Country
Financial Accountability Assessment (CFAA). Joint project supervision will be sought,
along the lines o f what i s already in place in the education sector5’. This JAS also supports
the Government t a h n g the lead in coordinating donor assistance, in particular through the
newly established Central Project Management and Aid Coordination Directorate. Progress
in terms o f donor collaboration will be measured at the time o f the JAS Progress Report to
see t o what extent a further consolidation o f strategic frameworks could be envisaged for the
next cycle (2012-2015), notably with the U N D P and the EU.
124.
Participation. The JAS i s based on in-depth discussions with the Government and
First, a one-day workshop o n “The
consultations with donors and other stakeholders.
Gambia Path to prosperity” was held in Washington D C in early March 2007 o n “The
Gambia with a Government high-level delegation l e d by the Vice President and attended by
seven Secretaries o f State, representatives o f the private sector, and donors. The workshop
discussed sources o f growth, key development challenges and the country’s priorities. The
authorities expressed their views o n the proposed support to be provided by the W o r l d Bank
and the AfDB to the Government’s development agenda. Additional insights came from
follow-up consultations in The Gambia in April 2007 with Government. As progress was
made o n triggers to meet the HIPC Completion Point, and as it became clear that the IDA and
ADF resource envelopes would be adjusted downward to take into account the MDRI debt
relief, in-country consultations were held in October 2007 to revisit the scope o f the strategy
and to hold discussions with stakeholders and donors (see Annex 12 for more details).
VI1 - MANAGING R I S K S
125.
There are two external factors which pose risks to the successful implementation
of the proposed joint strategy. First, the country remains vulnerable to drought. Weather-
’’
Government’s Education Program i s now supervisedjointly under Government leadership by all donors
involved.
- 32 related shocks have a spillover effect on critical sectors such as tourism, agriculture and
infrastructure. This JAS strongly supports risk mitigation measures in rural areas and
agricultural productivity.
126.
Second, given the country’s small domestic market and strong reliance o n external
trade and service industries, The Gambia i s susceptible to an increase in o i l prices, possible
global recession, and related changes in the tourism sector. The emphasis in the joint strategy
o n supporting fiscal prudence and economic diversification through improving the business
environment i s essential to mitigate these risks.
127.
Risks to the reform momentum are moderate. The finalization o f a new PRSP,
and indications o f increased project aid from development partners provide the necessary
space for the Government to generate a consensus o n economic reform measures. However,
the W o r l d Bank and AfDB programs are relatively small and may not have the necessary
leverage. Donor coordination i s therefore crucial to accompany the Government’s reform
program in a more meaningful and sustained way.
The potential deterioration of the macro situation i s a risk, which could be
128.
potentially triggered in the event o f any number o f exogenous shocks, or in the case o f policy
slippages. The JAS program reflects the need for maintaining fiscal balances and reducing
domestic borrowing. The high level o f external debt i s also a risk factor. The authorities
intend to limit new debt accumulation and to keep borrowing on highly concessional terms.
The country has requested assistance for the development and adoption o f a new debt strategy
by mid-2008 to ensure debt sustainability beyond the HIPC Completion Point.
Governance remains a factor. Inadequate fiduciary controls could result in
129.
increased corruption and could undermine investor and donor confidence. The Government
i s taking actions to improve governance in key areas. The W o r l d Bank and AfDB will
continue to (i)
engage in policy and institutional reform, (ii)carry out a systematic analysis
o f corruption r i s k s in sectors o f potential engagement, (iii)
strengthen project and portfolio
supervision efforts, (iv) pursue remedies when corruption i s found, and (v) enhance
disclosure o f information to facilitate oversight o f project implementation by beneficiaries
and c i v i l society. The proposed re-engagement o f the two institutions in budget support
operations i s a sign o f improvement o f the country’s own systems. In case o f significant
improvements or slippages in core governance areas, the program o f activities financed under
this JAS could be adjusted.
Managing capacity shortage. Capacities o f public institutions in The Gambia are
130.
notably constrained by high staff turnover and unfilled positions. The two institutions will
work closely with the Government to complete a c i v i l service reform study and to provide the
necessary support to put in place the proposed recommendations.
13 1. Finally, at the level of project implementation, the development effectiveness o f
portfolios financed by the AfDB and the World Bank are hampered by the weak capacity in
project management. T o mitigate this risk, the two institutions will work closely with
Government and other development partners to increase support to public sector reform,
including civil service reform, and to provide extensive capacity building at national and
local levels in the context o f projects and analytical work. The JAS program will be
monitored o n an annual basis and a formal JAS mid-term review will be conducted t o assess
progress and determine the need for any revisions to the scale and scope o f the
proposed programs.
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-37-
The Gambia a t a glance
2/26/07
~
Key Development Indicators
The
Gambia
SubSaharan
Africa
Low
income
1.5
11
2.6
26
741
24,265
2.1
37
2,353
29,265
1.8
31
0.4
290
1,920
552
745
1,981
1,364
560
2,486
6.5 (2006)
3.7 (2006)
5.3
3.1
7.5
5.6
44
75
46
100
29
59
80
39
(2005)
Population, mid-year (millions)
Surface area (thousand sq. km)
Population growth (%)
Urban population (% of total population)
GNI (Atlas method, US$ billions)
GNI per capita (Atlas method, US$)
GNI per capita (PPP, international$)
GDP growth (%)
GDP per capita growth (%)
I
Age distribution, 2005
Female
Male
150-54
20
0
10
10
20
percent
(most recent estimate, 2000-2005)
Poverty headcount ratio at $1 a day (PPP, %)
Poverty headcount ratio at $2 a day (PPP, %)
Life expectancy at birth (years)
infant mortality (per 1,000 live births)
Child malnutrition (% of children under 5)
59
a
56
89
17
Under-5 mortality rate (per 1,000)
Adult literacy, male (% of ages 15 and older)
Adult literacy, female (%of ages 15 and older)
Gross primary enrollment, male (% of age group)
Gross primary enrollment, female (% of age group)
79
84
99
87
73
50
110
99
Access to an improved water source (% of population)
Access to improved sanitation facilities (% of population)
82
53
56
37
75
38
200,
150
100
I
50
0
1990
OThe Gambia
Net Aid Flows
(US$ millions)
Net ODA and official aid
Top 3 donors (in 2004):
United States
Japan
Germany
Aid (% of GNI)
Aid per capita (US$)
I980
I990
2000
2005
55
99
49
63
4
0
5
12
6
4
3
3
3
3
3
2
23.0
84
34.0
106
12.3
37
16.5
43
6.8
-0.2
12.2
12.0
0.2
3.7
3.2
4.3
1.7
7.9
100
12.8
100
28.6
100
2000
1995
2004
OSub-Saharan Africa
Orowth of GDP and GDP per capita (%)
10 7
Long-Term Economic Trends
95
90
Consumer prices (annual % change)
GDP implicit deflator (annual % change)
Exchange rate (annual average, local per US$)
Terms of trade index (2000 100)
+GDP
00
-GDP
(
per capita
1990-2000
200045
(average annual growth %)
1980-90
Population, mid-year (millions)
GDP (US$ millions)
0.7
24 1
0.9
317
Agriculture
Industry
Manufacturing
Services
30.8
14.9
5.6
54.3
Household final consumption expenditure
General gov’t final consumption expenditure
Gross capital formation
Exports of goods and services
Imports of goods and services
Gross savings
1.3
421
1.5
461
3.6
3.6
3.4
3.0
2.8
3.6
29.0
13.1
6.6
57.9
35.6
13.1
5.4
51.1
33.0
13.0
5.1
53.9
0.9
4.7
7.8
2.7
3.3
1.o
0.9
3.7
2.0
7.2
4.2
5. Q
63.0
31.2
26.7
75.6
13.7
22.3
77.8
13.7
17.4
78.5
11.1
-2.4
1.7
0.0
3.1
-2.2
1.9
4.1
4.2
2.9
42.7
63.6
59.9
71.6
5.3
48.0
56.8
13.6
43.4
60.3
11.9
1.2
-5.5
-0.2
-0.8
20.9
3.5
5.3
-7.2
(% of GDP)
25.0
Note: Figures in italics are for years other than those specified. 2005 data are preliminary estimates. .. indicates data are not available.
a. Country poverty estimate is for 1998. b. Aid data are for 2004.
Development Economics, Development Data Group (DECDG)
- 38 The Gambia
Balance of Payments and Trade
2000
2005
Governance Indicators, 2000 and 2004
(US$ millions)
Total merchandise exports (fob)
Total merchandise imports (ci9
Net trade in goods and services
I18
197
-78
Voice and accountability
14
8
Regulatory quality
Current account balance
as a % of GDP
-16
-3.8
-60
-13.0
Reserves, including gold
111
85
Workers' remittances and
compensation of employees (receipts)
126
193
-37
I
Political stability
Rule of law
Control of corruption
7
Central Government Finance
(% of GDP)
Revenue
Tax revenue
Expense
18.5
16.2
22.1
19.8
17.2
30.1
Cash surpluddeficlt
-1.8
-9.2
Highest marginal tax rate (%)
Individual
Corporate
35
35
0
25
50
75
1W
0 2004
Country's percentile rank (0-100)
02000
higher values imply bene, ratms
Source: Kaufrnann.Kraay-Ma6truUrri.W o M Bank
Technology and Infrastructure
2000
2004
Paved roads (% of total)
Fixed line and mobile phone
subscribers (per 1,000 people)
High technology exports
(% of manufactured exports)
35.4
19.3
30
99
3.1
2.6
75
46.1
..
78
47.1
2.3
..
..
2,030
1.0
0.21
0.20
IBRD
Total debt outstanding and disbursed
Disbursements
Principal repayments
Interest payments
0
0
0
0
0
0
0
0
IDA
Total debt outstanding and disbursed
Disbursements
Total debt service
171
6
4
245
19
6
1
1
0
I
1
0
0
0
-
-
External Debt and Resource Flows
Environment
(US$ millions)
Total debt outstanding and disbursed
Total debt service
HIPC and MDRi debt relief (expected; flow)
Total debt (% of GDP)
Total debt service (% of exports)
Foreign direct investment (net inflows)
Portfolio equity (net inflows)
483
22
90
674
34
114.8
9.5
168.1
16.6
44
0
60
0
Agricultural land (% of land area)
Forest area (% of land area, 2000 and 2005)
Nationally protected areas (% of land area)
Freshwater resources per capita (cu. meters)
Freshwater withdrawal (% of internal resources)
C02 emissions per capita (mt)
GDP per unit of energy use
(2000 PPP $ per kg of oil equivalent)
Composltlon of total external debt, 2004
Energy use per capita (kg of oil equivalent)
Shn-term, 27
(US$ millions)
lateral 255
Private Sector Development
Time required to start a business (days)
Cost to start a business (% of GNI per capita)
Time required to register property (days)
2000
-
Ranked as a major constraint to business
(% of managers surveyed who agreed)
n.a.
n.a.
Stock market capitalization (% of GDP)
Bank branches (per 100,000 people)
2005
iFC (fiscal year)
Total disbursed and outstanding portfolio
of which IFC own account
Disbursements for iFC own account
Portfolio sales, prepayments and
repayments for iFC own account
MlGA
Gross exDosure
New guaiantees
Note: Figures in italics are for years other than those specified. 2005 data are preliminary estimates.
.. indicates data are not available. -indicates observation is not applicable.
Development Economics, Development Data Group (DECDG)
8/12/06
-39-
MiIlennium Development Goals
The Gambia
With selected targets to achieve between I990 and 2015
(estimate closest to date shown, +/- 2 yean)
Goal 1: halve the rates for $1 a day poverty and malnutrition
Poverty headcount ratio at $1 a day (PPP, % of population)
1990
1995
64.0
Poverty headcount ratio at national poverty line (% of population)
Share of income or consumptionto the poorest qunitile (%)
Prevalence of malnutrition (% of children under 5)
26.2
2000
59.3
57.8
4.8
17.2
2005
67
54
34
77
47
81
97
2
13
142
99
85
137
97
84
Goal 2: ensure that children are able to complete primary schooling
Primary school enrollment (net, %)
Primary completion rate (% of relevant age group)
Secondary school enrollment (gross, %)
Youth literacy rate (% of people ages 15-24)
48
43
18
44
Goal 3: eliminate gender disparity in education and empower women
Ratio of girls to boys in primary and secondary education (%)
Women employed in the nonagricultural sector (% of nonagricultural employment)
Proportion of seats held by women in national pariiament (%)
64
21
0
Goal 4: reduce under-5 mortality by two-thirds
Under-5 mortality rate (per 1,000)
Infant mortality rate (per 1,000 live births)
Measles immunization (proportionof one-year olds immunized, %)
151
103
86
146
101
91
Goal 5: reduce maternal mortality by three-fourths
Maternal mortality ratio (modeled estimate, per 100,000 live births)
Births attended by skilled health staff (% of total)
540
55
44
Goal 6: halt and begln to reverse the spread of HlVlAlDS and other major diseases
Prevalence of HiV (% of population ages 15-49)
Contraceptive prevalence (% of women ages 15-49)
incidence of tuberculosis (per 100,000 people)
Tuberculosis cases detected under DOTS (%)
2.4
189
18
223
73
206
76
242
69
Goal 7: halve the proportion of people without sustainable access to basic needs
Access to an improved water source (% of population)
Access to improved sanitationfacilities (% of population)
Forest area (% of total land area)
Nationally protected areas (% of total land area)
C02 emissions (metric tons per capita)
GDP per unit of energy use (constant 2000 PPP $ per kg of oil equivalent)
I
.
Internet users (per I,000 people)
Personalcomputers (per 1,000 people)
Youth unemployment (% of total labor force ages 15-24)
Education indicators (%)
125 1
02
53
46.1
0.2
0.2
0.2
82
53
47.1
3.5
0.2
7
0
19
0
1
30
9
11
192
33
18
442
Goal 8: develop a global partnership for development
Fixed line and mobile Dhow subscribers (Der
DeoDie)
.. 1.000
.
.
82
53
Weasles immuniratlon (% of I-year olds)
CT indicators (per 1,000 people)
100,
250
2w
,j
150
,
,
,
,
,
,
100
,
50
0
20w
2002
2005
0
1990
1895
2000
2005
2000
2002
2005
+Primary net enrollment ratio
+Ratio
of girls lo boys in primary &
secondary education
OThe Gambia
0 Sub-Saharan Africa
Note: Figures in italics are for years other than those specified. .. indicates data are not available.
Development Econom cs. Development Data Group (DECDG)
0 Fixed +mobile subscnbers
B4 Internet users
9/26/07
-40Annex 3: The Gambia Poverty Indicators
Table A
Poverty Indicators by Local Government Area
Banjul
Kanifing
Brikama
Mansakonko
Kerewan
Kuntaur
Janjanbureh
Basse
(percentage)
Poverty Head Count
Poverty Gap
(2003)
(2003)
YO
YO
7.6
2.2
37.6
14.1
56.7
24.2
62.6
21.9
69.8
35.1
94.9
50.9
75.7
29.0
67.9
28.4
Poverty Severity
(2003)
YO
0.8
6.8
13.7
10.0
21.6
30.5
14.4
15.0
Source: 2003 Household Survey
Table B
Poverty by Gender o f the Household Head
Gender
Male
Female
Head Count
Poverty Gap
YO
48.2
63.0
YO
17.2
27.1
Source: 2003 Household Survey
Poverty
Severity
YO
8.5
15.1
Meadcapita
Living Standard
Dalasi
14,312
11,303
- 41 Annex 4: Selected Economic and F i n a n c i a l Indicators, 2004-2009
2004
Act.
2005
Act.
2006
2007
1st rev.
Proj.
2nd rev.
Act.
2008
2009
~-
Proj.
2nd rev.
Proj.
2nd rev.
(Annual percentage changes, unless otherwise indicated)
National income and pnces
Nominal GDP (millions of dalasis)
Nominal GDP
GDP at constant pnces
Consumer price index (penod average)
Consumer price index (end of penod)
External sector
Exports, f.0.b.’
Of which: domestic exports
Imports, f.0.b.’
Terms of trade’
Nominal effective exchange rate (period average)
Real effective exchange rate (period average)
12,042
20.1
7.0
I43
8.1
13,182
9.5
5.1
5.0
4.8
14.248
8.1
6.5
2.1
0.4
15,918
11.7
7.0
5.0
5.0
16,007
12.4
7.0
5.0
5.0
17,900
11.8
6.5
5.0
5.0
20,017
11.8
6.5
5.0
5.0
10.5
47.5
46.2
-10.2
-1 1.3
-1.2
-16.5
-72.4
10.2
-13.8
4.2
4.5
3.9
143.7
-0.6
-3.0
3.0
1.3
6.2
10.8
17.6
-0.6
4.5
17.7
21.5
-0.3
3.9
3.5
17.8
0.7
4.5
4.7
0.9
1.6
18.3
28.8
-10.5
-10.6
-6.5
-1.2
7.7
13.1
0.3
12.8
6.3
5.5
0.0
1.o
26.2
17.8
8.5
3.8
8.4
0.0
-3.7
8.0
12.6
-4.6
-1.6
2.6
0.0
-5.6
8.6
-3.6
12.2
-3.8
2.8
0.0
13.2
11.8
4.1
7.7
-2.1
3.7
0.0
6.1
11.8
3.9
7.9
-0.6
4.0
0.0
4.5
2.4
28.0
2.3
12.5
1.9
10.4
2.0
2.0
11.6
2.0
2.0
...
...
Money and credit
Broad money
Net foreign assets
Net domestic assets
Credit to the government (net?
Credit to the pnvate sector and public enterpnses
Claims on foreign exchange bureaus
Other items net
Velouty (GDPIaverage broad money)
Yield on treasury bills (percent per yearf
...
...
(Percent change: in beginning-of-year broad money)
...
(Percent of GDP)
Gross investment
Gross domestic savings
Grass national savings
29.0
8.0
22.8
26.8
4.1
11.7
27.9
10.6
16.4
27.7
4.1
13.3
23.6
5.3
12.8
24.9
5.0
12.8
24.0
5.7
13.2
Central government budget
Domestic revenue
Grants
Total expenditure and net lending
Overall baiance, including grants
Basic baiance’
Basic primary balance’
Net foreign financing
Net domestic financing
20.9
4.5
31 .I
-6.2
2.4
9.6
5.7
0.5
19.7
1.7
30.0
-9.2
-0.1
8.5
5.5
3.7
21.2
1.7
29.2
-6.8
1.5
8.4
5.2
1.6
22.0
8.5
29.1
1.4
4.3
9.2
3.2
-4.7
22.1
6.3
25.4
2.9
4.1
9.0
0.8
-3.3
21.1
3.9
29.1
-4.1
1.4
4.9
4.6
-0.5
21.1
4.1
29.6
-4.3
1.6
4.7
5.0
-0.7
Stock of domestic public debt
32.9
35.5
32.2
28.9
29.6
24.3
20.8
External sector
Current account balance
Exciuding official transfers
Including official transfers
-14.7
-6.1
-20.2
-15.1
.14.7
.11.5
-19.4
-12.9
-16.1
-10.8
-17.5
-12.2
-17.0
-11.8
(Millions of U.S. dollars, unless otherwise indicated)
Current account balance
Excluding official transfers
Including official transfers
-58.9
-24.6
-93.4
-69.6
-74.7
-58.4
-111.1
-73.8
-104.1
-70.1
-138.7
-96.7
-146.3
-101.4
Overall balance of payments
Gross official reserves
In months of Imports. c.i.f.
31.3
84.0
4.3
13.0
96.6
4.5
24.4
118.6
5.5
10.8
120.2
5.7
10.4
120.0
4.8
-3.1
130.0
4.9
-2.1
140.0
4.5
580.7
146.5
17.7
628.2
134.7
215.4
17.7
676.7
133.6
101.9
16.5
266.9
46.1
114.0
13.1
323.4
49.9
106.8
18.5
377.0
47.5
118.5
7.0
436.7
50.7
130.6
7.0
0.0
-7.6
15.9
0.0
-1.4
14.6
0.0
-2.7
11.8
4.0
-2.8
4.0
-2.8
4.0
0.0
4.0
0.0
...
...
...
...
External public debt
Stock’
Stock (percent of GDP)
Net present value of debt (percent of exports)’
External debt service (percent of exportsf
Use of Fund resources
Purchasesldisbursements
Repurchaseslrepayments
Credit outstanding
(Millions of SDRs)
Sources: Gambian authorities: and IMF staff estimates and projections.
’Computed based on values in U.S. dollars.
‘ExCiUdinQ reexports and imports for reexport
’Including advances to the government in foreign currencies.
‘Weighted average for all maturities based on weekly auction data for the month of December for 2004-06. and for October for 2007.
’Defined as domestic revenue minus expenditure and net lending, excluding externally financed capital expenditure.
‘Defined as domestic revenue minus expenditure and net lending, excluding interest payments and externally financed capital expenditure.
‘Assuming HlPC and MDRl debt relief is delivered at end-2007.
‘Exports of goods and nonfactor services (not including reexports).
- 42 Annex 5: Trade Indicators
Table A
Composition of Merchandise Exports (Millions of U S dollars)
1998
12.5
3.5
3.1
1.4
2.3
109.3
Groundnuts
Fruits and Vegetables
Fish and fish products
Cotton
Other Domestic Products
Re-exports
2004
9.8
3.0
0.3
0.2
3.1
101.1
Total
132.1
117.5
Source: IMF (2006b, Table 34); h i t s and vegetables figures corrected using Comtrade data as
reported in Chapter 10; 2004 groundnuts figure also corrected by authors.
Table B
The Gambia’s Foreign Exchange Earnings by Category
1997-2003 Average (Percentage Share o f Total)
Merchandise
Groundnuts
Fruits and vegetables
Fisheries
Other Merchandise
Services
Re-export trade, net
Transportation
Tourism
Remittances
17.3
10.6
3.0
2.4
1.3
62.8
18.8
10.8
33.2
19.8
Total
100
Source: IMF (2004, Table 111.2, p. 39).
Figure A
Shares o f Imports By Origin
2004-05
2002-03
OTHER
ASIA
EU
ECOWAS
Source: DOSTIE, Trade Review Table.
EU
- 43 Annex 6: Governance Indicators
Governance Indicators for The Gambia
1996 to 2006
Voice and
Accountability
Political Stability
Government
Effectiveness
Regulatory Quality
Rule o f L a w
Control o f Corruption
2006
23.6
2005
18.3
2004
31.3
2002
32.2
2000
17.8
1998
17.8
1996
11.5
53.4
26.1
54.3
28.9
56.3
37.0
67.8
25.6
61.1
37.4
65.9
29.4
46.2
40.3
39.5
47.6
30.6
35.1
45.7
29.6
41.0
46.2
32.0
33.2
46.2
38.3
39.5
49.0
42.2
47.3
56.7
36.4
6.8
63.3
65.0
Source: WBI Governance Indicators
- 44 Annex 7: Growth and Competitiveness
Sectoral Structure of the Economy and Investment Climate
Primary Sector
1.
The primary sector i s dominated by agriculture. About 9 1 percent o f the extremely
poor and 72 percent o f the poor in The Gambia work in the agricultural sector. However,
because o f l o w productivity and value-added, the sector only contributes about a third o f
GDP. Given these percentages, agriculture i s a crucial sector for shared growth, improved
food security and poverty reduction. Increasing agricultural productivity and diversification,
improving access to markets, and linking the agricultural sector to the growing tourist
industry could provide good opportunities t o achieve these goals.
2.
Groundnuts remain the country’s main cash crop engaging directly or indirectly
over 80 percent o f the population. As noted earlier in this report, the groundnut sub-sector
continues t o involve the largest number o f the poor. Exports have declined drastically since
the 1980s, hitting an all-time l o w in the 2006-2007 season. The current crisis i s not related
to the country’s comparative advantage for groundnuts, the shortcomings o f farmers, or
international market conditions, but rather to a combination o f l o w world prices, inconsistent
sector management, and excessive government intervention.
3.
The underlying problems in the groundnut sub-sector are numerous: The cooperative
movement has consistently shown poor financial and operational management to the point
where farmers have lost faith in their institutions; subsidized fertilizer application i s valuesubtracting; international standards for edible groundnuts and groundnut o i l are not widely
known or enforced; transport and storage are poor; the industrial processing facilities and
river barges suffer from chronic lack o f investment and maintenance; and prices do not
reflect quality differences. L o w quality, especially manifested by high levels o f aflatoxin and
pesticide residues, has excluded Gambian nuts from the lucrative European market in edibles,
relegating them to the birdfeed market.
There i s an urgent need to (i)
reduce dependence on groundnuts by encouraging
diversification, and (ii)
restore sustained growth in the sector by increasing efficiency and
competition at all levels o f the value chain through new entries and private sector
investments. With improved organization, and the return o f experienced strategic investors,
groundnut output could be restored to previous highs. With current prices rising, and the
prospect o f s t i l l better prices as quality improves, revenues to farmers could quadruple. The
sub-sector needs gradual re-privatization o f industrial assets, first through management
contracts. This should be accompanied by complementary measures laid out in the Roadmap
(recently approved) and policy statement n o w being finalized to include: a new pricing
system, the reorganization o f input supplies, crop finance, quality control, maintenance and
investment o f assets, research and marketing, a revitalized producer organization and a
regulatory framework.
4.
5.
Horticulture seems a promising area o f agricultural diversification that could reduce
dependence on groundnuts. In the 20 years o f i t s evolution, the Gambian horticultural export
industry has made slow progress. A number o f entrepreneurs have tried horticulture, and all
but two have failed or withdrawn. However, there i s room for growth in this sub-sector given
the potential in the European and regional markets. With good management and minimal
support from Government to provide a conducive business environment, horticultural f i r m s
- 45 should be competitive. In addition, there i s good potential for linking the agricultural sector to
the hotel and tourist trade, and there i s scope for processing o f fruits and vegetables in
connection with the newly created free zones. T h e sub-sector can contribute to poverty
reduction through increased employment in rural areas.
Cashew i s another promising area o f d i v e r ~ i f i c a t i o n ~ ~There
.
i s significant
6.
opportunity for cashew in The Gambia given the intrinsic quality o f the nut, the cost structure
o f collection and export, and the likely growth in the global market. I t i s critical that these
advantages be maintained by providing the best environment in which the industry can
develop without intervention. Cashew i s an excellent smallholder crop and the impact o f a
successful development o f cashew exports can have a positive effect on incomes in a
producing area. Rough estimates suggest that feasible growth in cashew exports over the
next ten years could offer income to some 30,000 households, generating annual revenues
almost twice as high as for groundnut farmers. T h i s would be more than all those engaged in
tourism-related activities - and significantly more o f the poor - even if tourism should double
in size52.
7.
Livestock rearing in The Gambia i s carried out for local consumption and i s an
important farming activity in The Gambia in fostering food security. However, there i s scope
for expanding supplies to the local tourist industry and for creating positive linkages with an
impact o n revenues.
8.
The fishery sector in The Gambia i s unique in i t s geographical configuration.
Marine fisheries’s processing and exports are intertwined with the situation in the Senegalese
fishing sector, and the crisis there has contributed to a crisis in The Gambia. Exports have
fallen from US$40.0 million (1985) to US0.4 million53. The number o f licensed industrial
vessels has dropped from 160 (1991) to 3, and current receipts by the Government are
minimal. None o f the industrial catch i s being processed locally, which i s where some o f the
potential lies for local value-added. Rebuilding a modest industrial fishery sub-sector and
expansion o f artisanal fisheries appear feasible. K e y challenges include the situation o f fish
resources, international competitiveness, infrastructure, and sector policies.
Secondary Sector
9.
The industrial sector, which remains small (at around 13 percent o f GDP in 2005),
consists mainly o f construction and agro-processing activities. The manufacturing sector
accounts for only five percent o f GDP. However, two small factories are showing new
initiative by pioneering a radically different form o f export-oriented production, namely the
production o f garments for the EU market. B o t h have begun operations in the last two years.
Tertiary Sector
10.
Services, including trade, transport, communications, and tourism are key subsectors and represent a large share o f the economy - about 54 percent o f GDP in 2005.
2007 DTIS
2007 DTIS
53
This does not capture fish caught by industrial vessels in waters o f The Gambia’s Exclusive Economic
Zone (EEZ) and landed directly abroad.
51
52
- 46 11.
Trade. The Gambia has a highly open economy, with import and export ratios to
GDP that are higher than most neighboring countries. The Gambia’s import to GDP ratio
averaged nearly 60 percent in the 1980s and 1990s, before dropping somewhat in the early
2000s, but remaining well above the regional average54, due to the fact that many imports are
re-exported.
The main domestically produced exports are groundnuts and tourism. Exports o f
12.
goods and services from The Gambia are equivalent to about 45 percent o f GDP55 (or 30
percent if re-exports are netted out). This i s better than some West African countries, but less
competitive than some o f the best-performing small states in other parts o f the world, such as
Barbados and Mauritius. The Gambia needs to raise and diversify domestically-produced
exports in order to raise the rate o f economic growth, enlarge the available pie, and stimulate
various demands for the goods and services offered by the poor.
13.
Re-exports are one o f the most important industries in The Gambia in terms o f GDP
and employment and play a dominant role as shown in Table 3 in this report. And yet, reexports are largely ignored in the official documents on The Gambia. The re-export trade
accounted for about 80 percent o f total exports in 2006 and contributes significantly to
government revenue as goods are subject to tariffs when imported even if intended for reexport; consequently 40 percent o f The Gambia’s total government revenues and 50 percent
o f tax revenues are from taxes on international trade, a very high dependence even by African
standards. Re-exports fell about 10 percent in 2006, continuing the long-term decline since
the mid 1990s.
A number o f factors reduce the country’s competitiveness: narrowing o f the
14.
differential in favor o f The Gambia with regard to trade taxes, port handling efficiency, etc.
Indeed, the country i s confronted with trade policy challenges to i t s role as a regional trading
hub:, including the ECOWAS common external tariff, which could have a negative impact o n
government revenues. Officials in The Gambia understandably express concerns about the
sustainability o f the re-export trade, as other countries reduce trade barriers and improve trade
facilitation.
Framework for trade. The Gambia fares well in terms o f regulations for
15.
international trade and for the labor market. In terms o f the ease o f dealing with licenses and
permit requirements for ongoing businesses, the Doing Business (DB) indicators rank the
country 73 out o f 175 countries, a relatively high ranking. Customs clearance procedures
work well by African standards. Like l o w tariffs, a relatively efficient customs service i s a
crucial ingredient in The Gambia’s re-export trade (see Table G below). T o maintain i t s
comparative advantage, the application o f procedures can be improved, and corruption needs
to be carefully monitored. Although precise data are not available, duty waivers have been
estimated to be as high as 16 percent o f merchandise imports. The high value o f waivers,
lapses in recording procedures and discretionary granting o f concessions potentially indicate
problems with corruption. For the first time in history, Customs conducted a survey o f
taxpayers at the end o f 2005 in order to identify ways to improve services and reduce
corruption. This report should be publicized and measures based o n i t s findings implemented
54
About 52 percent in 2005
’’ T h i s figure for total exports i s somewhat deceptive as i t includes a lot o f re-exports.
To compare with other
countries, i t is necessary to correct for the disproportionate role o f re-exports which are a rather uniquely Gambian
phenomenon. Using the figure for net foreign exchange earnings (after accounting for imported inputs), the ratio o f
exports o f goods and services to GDP would be closer to 30 percent.
- 47 in order to improve customs operations. The country operates A S Y C U D A version 2.7 for
which the core modules were recently upgraded and stabilized. This was a major
achievement as it effectively computerizes customs administration. At present, the
authorities are upgrading the system so that manifest information can be transmitted
electronically, and import/export declarations can be inputted directly by the traders.
16.
Institutional Structure for Trade. The successful formulation and implementation
o f trade policy and export development poses a major institutional challenge for the
Government. I t requires effective coordination across government agencies as well as with
the private sector and c i v i l society. Normally, this requires a clear strategy with broad
ownership, political leadership at a high level, effective coordinating committees, and a
secretariat to keep the process moving. None o f these elements i s in place at present. Some
support i s to be provided through the Trade Integrated Framework Initiative.
Transport infrastructure i s particularly important in the case o f The Gambia, given
17.
i t s ambition to serve as a regional trading hub. Improving access to markets i s a key
objective. In this regard, the port i s the key node, and roads and river transport facilities
linking the port to the rest o f country and the Region. If Banjul i s to compete with other
larger ports, The country would therefore have to make numerous improvements to i t s entire
transport network.
18.
The Banjul Port i s efficient in terms o f speed and cost o f clearance o f goods,
although improvements could s t i l l be made. The River Gambia was the initial basis o f T h e
Gambia’s role as a regional hub, and the main mode o f transporting groundnuts. However,
river transport has shown a steady downward trend and i s underutilized at present. The
airport benefited from a major overhaul in 1997. It i s performing w e l l and also provides
links to the above hub. I t has the capacity to expand flights considerably. Recent
developments in air safety and security warrant scrutiny o n the part o f the Government.
Roads are the dominant mode o f transport, accounting for more than 90 percent o f the total
motorized freight and passenger movement, and therefore being a key to trade and growth.
Tourism in The Gambia i s relatively small but o f considerable economic
19.
significance, and i s a major contributor to employment and therefore poverty reduction.
Tourism i s the top net foreign exchange earner, generating as much as all other exports
combined. Tourism constituted 16 percent o f GDP in 2006 and contributed over 10,000
direct or indirect jobs, amounting to about 20 percent o f all private sector formal jobs. A
careful study o f the sub-sector has estimated that the direct benefits accruing to the poor from
tourism in 2005 were roughly US$14 million which i s more than total gross receipts from a l l
commodity exports combined56. Total tourism revenues remaining in the country are closer
to US$50 million.
20.
The tourism sector has been growing strongly. The Gambia offers a range o f
opportunities to broaden i t s appeal through natural, cultural and historical attractions.
Although the tourism sector i s thriving, a number o f constraints handicap the long-run
prospects for growth. Challenges are present in terms o f the institutional environment, most
notably the deficient supply and high cost o f public services; the high cost o f electricity; high
taxation; high interest rates and lack o f access to credit; inadequate marketing o f The Gambia
in foreign markets, and l o w capacity. The Government has developed a master plan for
56 Jonathan Mitchell and Jojoh Faal, The Gambian Tourist Value Chain and Prospects for Pro-Poor
Tourism, ODI, December 2006.
- 48 tourism development with support from the African Development Fund. I t recognizes the
problems and recommends a strategy o f upgrading tourism facilities, and diversifying i t s
products, along with an enhanced marketing effort to raise The Gambia’s profile. However,
the Government has been slow to begin implementation.
Investment Climate
The recently completed W o r l d Bank Investment Climate Assessment for The Gambia
21.
shows that in addition to electricity, other obstacles include credit, land access and taxation.
Land. Most land in the Greater Banjul area i s State land and approval from the
22.
Department o f State for Local Government and Lands i s needed for the leasing and
mortgaging o f land. The approval process for obtaining a lease or transfer o f land for
commercial purposes i s seen as one o f the main impediments to investment in The Gambia.
Time to register property i s 371 days in The Gambia as opposed to 109 for the Africa Region
as a whole. The new business park close to the airport will provide areas for business and
will help export-oriented f i r m s avoid the land access issue. Also, it i s t o be noted that the
land-tenure system in The Gambia i s characterized by a dual ownership structure under the
concept o f freehold interest and under customary tenure controlled by headmen (Alkalos).
As noted in Chapter I1 o f this report, rural women have n o rights to o w n land despite their
high engagement in the agricultural sector. The insecurity o f tenure among women becomes
evident in times o f death o f spouses or divorce, as they can lose access to the land.
23.
Taxes. A central issue concerns the proliferation o f local and sectoral taxes, which
together are oppressive to business5’. The Gambia i s ranked 165* in 175 countries regarding
the payment o f taxes in DB indicators. In effect, the overall taxation rate o f f i r m s ’ profits i s
almost four times higher than the average for Sub-Saharan Africa (see Table G below). For
example, the tourism industry faces a variety o f special and uncoordinated taxes from both
municipalities and the Tourism Authority. The cumulative level o f these taxes i s too high.
Greater coordination o f the various taxes i s urgently needed. The possibility o f substituting a
value-added tax for the sales tax should be considered as a way o f improving the equity and
efficiency.
Indirect taxes, consisting o f customs and sales tax, account for approximately 75
24.
percent o f tax revenue. Revenue collection relies heavily o n indirect taxes, but this i s not
atypical for a small, export-oriented country. The newly established Gambia Revenue
Authority (GRA) has as one o f its objectives the broadening and diversification the tax base
in the country, notably by taxing the informal sector, but this i s not easy to accomplish. It
could even discourage the entry o f informal companies into the modem economy.
Financial Services. Large domestic borrowing by the Government has contributed
25.
towards high interest rates, thus crowding out access to credit by the private sector. In 2006,
credit to the private sector and public enterprises was about 13 percent o f GDP, which i s
small compared to most countries in Africa. The agricultural sector received 15.0 percent o f
loans from commercial banks in 200558. This l o w level i s the result o f the restructuring o f
non-performing loans for groundnut marketing in previous years, which has directed funds
away from loans to productive activities. Commercial bank lending rates were around 20-25
51
For more details, see 2004 FIAS report and 2007 DTIS.
compared with 24 percent for re-exports and 45 percent for others, including fishing and
personal loans
58
- 49 percent, despite the relatively l o w T-bill rates (11 percent). There are several reasons for
inadequate supply and high cost o f loans to the private sector: bank inefficiency, the mix o f
monetary and fiscal policies, the short-term nature o f deposits, the lack o f an organization to
disseminate information on credit risk, and deficiencies in the legal environment. The share
o f fixed investments financed with bank funds i s l o w in The Gambia, less than five percent
compared to almost 18 percent in Senegal.
- 50ANNEX 7 (tables)
Table A
Private investment has grown faster in countries with a better investment climate.
3
4
5
8
7
8
9
sentud are averages for
0'9 index of "inwslmnerrt profile"
is basad on measures of contract enforceability,
expmpriafon, pmfit rapatriation, ;end payment
dalap. Higher numbers are associated with less
risk and saonger irwestment climates.
Soume: World Bank and Internaijonal
Country Risk Guide.
Table B
2006 Selected Competitiveness Indicators
Doing
Business
World
Economic
Forum
102
The Gambia
113
Benin
105
137
94
NA
Ghana
Guinea
157
NA
Guinea-Bissau
173
NA
Kenya
83
94
Mali
155
118
101
Nigeria
108
Senegal
146
NA
142
Tanzania
104
107
113
Uganda
Number of countries
175
125
Source: W o r l d Bank, W o r l d Economic Forum, Heritage Foundation.
Heritage
Foundation
123
117
105
126
131
95
88
146
83
94
66
157
- 51 -
Table C
-
The Gambia Constraints to Firm Operations and Growth
Percet-rtngs01fornial firms perceieiiw obstndest o b e 'mnlor"or
'%vary avawere"to iirni oimrations anrl ~ o y y l l i
Labor Regulation
Judicia system
Po iticsl uncertainty
Crime
Corruption
T'enspor:
=ill &nd Educatioi of av&ilable w x k f x c e
customs Regulalionr
'ism1 Administration
m s i r e s s Licensing m d opersting permit=
MBCrOeCOnJmiC st&iltty
Anticorrpetilive 3r irfornal Eradice%
Tar
Land Access
CTedi:
Eectricity
I
0%
2OYo
40%
80%
60%
lOCl%
Source: Report 2007 Investment climate Assessment
Table D
2006 Doing Business Indicators by Issue, Selected Countries (By ranking)
The Gambia
Ghana
Mali
Senegal
Ease o f Doing Business Composite
113
94
155
146
Starting a Business
124
145
163
150
Dealing with Licenses
73
83
122
66
Employing Workers
25
120
131
152
Registering Property
130
113
93
151
Getting Credit
143
117
143
143
Protecting Investors
162
33
99
135
Paying Taxes
165
77
141
159
Trading Across Borders
24
61
167
94
Enforcing Contracts
53
50
140
138
Closing a Business
76
94
99
74
Source: World Bank Doing Business Indicators, online.
- 52 Table E
Comparative Cost Structure - Electricity and Telecommunications
The Gambia
Ghana
Uganda
Mauritius Senegal
Electricity rates
$ per kwh
US0.18 cents up USS0.06
to 130 kwh
US$0.03 US$0.07
US$0.08
Telephone charges to
Europe per minute
US$0.70
USS3.0
US0.50
US0.50
US1.40
Source: Sahel Invest
Table F
Percentage o f Fixed Assets Financed Through Bank Credit.
China
20.4
Senegal
South Africa
16.5
Mali
Mawit ania
The Gambia
0.00
6.0
4.1
5.00
10.00
15.00
20.00
Note. Unweighted sample data.
Source. World Bank (2007). The Gambia: An Assessment of the Investment Climate
25.00
- 53 -
Table G
Taxation o f firms in selected countries.
350
1
300
250
200
150
100
71.2
50
0
Gambia
SSA
average
China
Mali
OECD
average
Senegal
South
Africa
Mauritius
Note.
T h i s indicator considers the total amount o f taxes and mandatory contributions payable by a business.
Source. D o i n g business 2007.
Table H
Average time to clear goods at customs (days).
9.0
8.0
7.6
7.6
7.0
6.0
1
5.0
4.0
3.0
2.0
1.0
0.0
China
Senegal
Mali
South
Africa
Mauritiu
Exports EJ Imports
Source. E n t e p r i s e surveys.
3Morocco
Gambia
- 54Annex 8: Donor Interventions
Economic
Management and
Policy Reforms
.Poverty
Reduction
PRSP
and
Governance
&
Decentralization
Health
Education
Infrastructure
The World Bank through lending and non-lending operations i s providing assistance in
the areas o f economic formulation and execution and public financial management. Its
main on-going operation i s “Capacity Building for Economic Management” (US$ 18.0
m)
The IMF i s currently providing technical assistance in the areas o f financial management,
particularly in the areas o f revenue administration reforms, including customs and the
establishment o f a central Revenue Authority. I t has also provided assistance to the
Statistics Department in updating the CPI data and improving the national accounts.
The AfDB Group through i t s “Znstitutional Support for Economic Management and
Governance ” (UA 1.4 m) i s assisting mainly in debt management.
The EU (Euro 18 million) for proposed budget support
DFID i s providing technical assistance in the areas o f financial management and
governance through “Gambia Financial Governance Program P.S. 2 m” and the old
“Legal Capacity Building Program (PS 0,807 m”, Gambia debt Project P.S. .3 m”.
UNDP i s supporting governance reforms, and providing technical assistance through its
“Economic Management & Capacity Building Project’’ and through its “National
Governance Program”
The AfDB through its “Entrepreneurship Promotion and Microfinance Development
Project” (UA 8 m) i s providing microfinance for vulnerable groups and through its
“Community Skills Development Project” (Loan UA 4.4 &Grant 1.45 m) provides
support to community based organizations through the construction o f multi-purpose
skills centers and formalizing relationships between the Bank and micro-finance
institutions.
The EU i s mainly involved in food security and income generation (US $2 m).
Other development partners: UNDP, EU, DFID and The UNDAF.
The UNDP (i)
Proposed “National Governance Program ”;and (ii)
“National
Environmental Youth Corps”.
EU: (Euro 8 m): to support public sector and civil service reforms, support to
strengthening o f legislative and judicial processes, support to improvement o f trade
reforms
Other Development Partners: United Nations agencies.
The AfDB Group supports basic health through its “Heath Services Development Project
11” (UA 7.0m) (the project i s being extended).
The World Bank: “HZV/AZDS Rapid Response” (US$ 15 m - closed in December 2006)
and “Participato y Health/Population/Nutrition ” (US$18.0 m - closed in June 2005).
Other Development Partners: IsDB and other UN agencies.
The AfDB Group through i t s “Basic Education ZZZ Project” (UA 10.0 m) assists in
improving the accessibility and quality o f primary education through the expansion of
classrooms, teachers training, and provision o f learning materials.
The World Bank “Third Education Project Phase ZZ” (US$ 15 m).
UNDP: “Formal and Vocational Training, $2 m ”
Other Development Partners: DFID, IsDB, OPEC, U N D P and other UN agencies.
The AfDB Group: (i)“Water SuppZy and Sanitation Study” (Grant U A 1.2 m); (ii)
“Rural Electrification Project” (UA 2.9 m); (iii)
“Renewable Energy Study” (Grant UA
0.75 m)
IsDB “Westfield Road” US$6 m.
The EU Proposed“Transport Program” (Euro 20 m)., RWSS (Euro 6.8 m): (national
roads, bridges linking north and south banks, upgrade o f ferry terminals, capacity
building)
“Energy Program” (Euro 10 million): upgrade and maintenance o f electricity transmission
and distribution, capacity building.
Other Development Partners: OPEC, IsDB, Kuwait Fund, the Netherlands.
55
Agriculture and
Rural Develop.
The AfDB Group: (i) “Peri-Urban Agricultural Development Project” (UA 5.07 m), (ii)
“Participatory Integrated Watershed Management” (UA 4.95 m); (iii) ‘ilrtisanal
Fisheries Development Project” (UA 2.9 m); (iv) NERICA Rice Development (UA 1.56
m), (v) ‘[Farmer Managed Rice Irrigation Project” (UA Loan 5.0 &Grant U A 0.5 m).
EU: STABEXProject, Euro .65 m, Groundnuts Price Fund Euro .6 m.
Other Development Partners: FAO, IFAD, Japan, Taiwan, BADEA, IsDB, GTZ.
Private Sector
The World Bank: Gateway Project (US$ 16.0 m)
The EU: Ruralprivate sector development (US $ 3.0 m “ 10” EDF”), Support to non-state
actors, Euro 2.5 m.
x
r
K
7
r-
0
0
N
Y
cn
z
8
2 Z
0 0 0
N N N
I
c
C
C
c
P
- 58 Annex 11 - Ongoing AfDB Rural Development Projects
- Farmer Managed Rice Irrigation: The project i s developing tidal irrigation areas for rice
production. I t also has a rural credit support to farmers via Village Savings and Credit
Associations (VISACAs) and training and capacity building for farmers and D O S A staff. The
main objective o f the project i s to increase the rice production and incomes o f smallholder
rice farmers.
- NERICA dissemination: the multinational project aims at enhancing rice production and
import substitution. The project effects technology transfer through production o f foundation
and certified seed and through provision o f field equipment to selected groups o f seed
producers for demonstration purposes. Farmer groups are also provided with training in land
management.
- Peri Urban Agricultural Development: the project focuses o n the development o f
livestock by promoting small-scale livestock enterprises such as poultry and small ruminant
breeding plus support to the horticulture sub-sector. Training for farmer groups has been
provided in the thematic areas o f livestock development and horticulture husbandry.
According to the mid-tern review report conducted in March 2007, implementation was
highly satisfactory in the horticulture development and capacity building components. Except
for the construction o f slaughter houses and wells, the implementation was quite satisfactory
for the livestock development component.
- Artisanal Fisheries Development Project: This project aims at increasing fish production
and the cash income o f fisherfolk. The project contributes to resolving the the problem o f
protein deficiency in rural areas through increasing inland fish production and consumption.
The project creates employment for the fishing communities at large at for woment who are
the main target o f the credit program which i s a component o f the project.
- Participatory Integrated Watershed management: This project aims at increasing land
productivity and reducing soil erosion on a sustainable basis. The project i s designed to
empower communities at the grass-root level through the transfer o f control o f efficient land
use management f r o m the Government to local people.
- The proposed Livestock and Horticulture Development Project: This proposed
investment operation would build on the Peri Urban Project and aims at raising the
productivity and quality standards o f the livestock and horticulture sectors. I t would address
issues related to the whole value chain, including productivity, farm-gate disposal, live
animal marketing, marketing to the local tourism industry, product processing, and export.
The strategic objectives o f the operation would therefore be linked to those o f the Growth and
Competitiveness project with regard t o enhancing the productive capacity o f the poor.
Backward linkages with the tourism industry would be forged. The operation would also
include capacity building activities.
- 59 Annex 12 - Consultation Process
The JAS i s based o n in-depth discussions with the Government and consultations with donors
and other stakeholders. First, a one-day workshop o n “The Gambia Path to prosperity” was
held in Washington D C in early M a r c h 2007 on “The Gambia with a Government high-level
delegation led by the Vice President and attended by seven Secretaries o f State,
representatives o f the private sector, and donors.
The workshop discussed sources o f growth, key development challenges and the country’s
priorities. The authorities expressed their views o n the proposed support to be provided by
the W o r l d Bank and the AfDB to the Government’s development agenda.
Additional insights came from follow-up consultations in The Gambia in April 2007 with
Government. As progress was made o n triggers to meet the HIPC Completion Point, and as
i t became clear that the IDA and ADF resource envelopes would be adjusted downward to
take into account the MDRI debt relief, in-country consultations were held in October 2007 to
revisit the scope o f the joint strategy and to hold discussions with stakeholders and other
donors.
Parlementarians noted the importance for the W o r l d Bank and African Development Bank to
engage with their group o n development issues for a number o f reasons. First, they are strong
advocates for development, as they debate and approve budgets, review policies and promote
coherence across policy areas. Second, they promote the rule o f l a w and exercise oversight.
And finally, the projects submitted by the two Banks are subject to their approval, either
directly through ratification, or also indirectly through the budget process. They noted their
appreciation for the closer consultation with their group, which they viewed as a change in
the way development assistance i s carried out.
Consultations were held with civil society, including representatives o f NGOs, trade unions,
and the media. The group noted the increased and transformed role o f c i v i l society in
general, which has n o w joined governments around the globe as agenda setters, decision
makers and providers o f community services. The group stressed that experience has shown
that policies to reduce poverty are most effective when priorities are set by the countries
receiving aid. In their view, collaboration with civil society and the private sector can
enhance efforts to promote growth. They also emphasized the role that civil society can play,
including (i)ensuring that the voice o f the poor i s heard, (ii)building common ground
offering solutions to local problems. On the
through participatory approaches, and (iii)
World Bank side, participation o f civil society i s sought in the implementation o f the
community-driven development project and the Gateway project. On the AfDB side, it i s
sought in the implementation o f most rural development projects. The group o f NGOs
stressed the need to consolidate their relationship with Government and other stakeholders in
order to (i)better link NGOs to development actors and better match donor and NGO
programs, and (ii)
strengthen c i v i l society participation in PRSP-I1 implementation.
- 60 Annex 13 - The Gambia CAS Completion Report
-
Date o f CAS: February 10,2003
Period Covered by CAS Completion Report: March 2003- June 2007 (FY03-FY07)
CAS Completion Report originally drafted by Herminia Martinez and revised by
Francoise Perrot
I- INTRODUCTION
1.
This CAS Completion Report (CASCR) reviews the experience implementing
IDA’S Country Assistance Strategy (CAS) for The Gambia, dated February 10, 2003
(Report No. 25436-GM), covering the period FY03-05. Due to the delay in the new
CAS, the progress during the period FY06-07 i s included. The report reviews the Bank’s
strategic objectives, program o f support and their relevance to The Gambia’s
development goals. I t assesses the Bank’s performance and presents a set o f lessons for
the new assistance strategy (JAS) for FY08-11, prepared jointly with the African
Development Bank.
The report i s based on reference documents59 and discussions with the country
team, government counterparts and various stakeholders. IEG consulted the Bank’s team
during the preparation o f their assessment.
2.
3.
The CASCR assesses CAS implementation from the perspective of the Bank’s
new results framework. Because the CAS was prepared before the introduction o f the
current approach to monitoring, it did not explicitly identify core measurable results, and
indicators were not refined. I t only provided some progress benchmarks (Appendix 1).
An effort was made in the CASCR to retrofit the intended objectives from a broader
perspective.
4.
The present evaluation concludes that overall performance during the period
FYO4-07 i s rated moderately satisfactory. Progress in most sectors during the CAS
period has been uneven. The country maintained an average growth rate o f 5 percent, but
growth did not translate into poverty reduction due to poor service delivery. The Bank
strengthen public finance
was moderately successful in assisting the Government to (i)
management, (ii)provide public infrastructure, and (iii)increase primary school
enrollment. However, some goals were not achieved, notably in the divestiture program
and in preparing a comprehensive rural development strategy.
59 CAS; Project Appraisal Documents; Implementation Status Reports; Supervision Reports (aide
memoire); Implementation CompletionReports; ESW reports and QAG Assessment Report; IEG reports.
- 61 11- THEGAMBIA’SDEVELOPMENT OBJECTIVES
5.
The Gambia’s long term objectives were enunciated in the 2002 PRSP (Report
24366-GM o f June 20, 2002). PRSP-I was based on extensive poverty analysis which
showed an increase in poverty linked to declining incomes and ineffective public
expenditures, The Government thus focused the PRSP-I on poverty reduction. The
PRSP acknowledged the need for continued growth. The Government identified five
broad pillars for i t s policy framework which were to:
(i)
Improving the enabling policy environment to promote growth and
poverty reduction;
(ii) enhancing the productive capacity and social protection o f the poor and
vulnerable;
(iii) improving coverage o f the unmet basic needs o f the poor;
(iv)
building capacity o f local communities and civil society organizations to
play a greater role in development; and
(v)
mainstreaming cross-cutting poverty issues (gender, environment,
nutrition, HIV/AIDS awareness) into development programs.
The PRSP also presented a macroeconomic framework for 2003-05 which was largely
consistent with the policy framework.
6.
The Government prepared two Annual Progress Reports (APRs) covering PRSP
implementation during 2002-03 and 2004, respectively. The APRs and accompanying
Joint Staff Advisory Notes (JSANs) were presented to the Fund and World Bank
Executive Boards in April 2005 and June 2006, respectively.
7.
During 2006, the Government prepared a new PRSP (PRSP-11), which was
presented to the Boards in June 2007, together with the accompanying Staff Assessment
(JSAN). PRSP-I1 reviews implementation during the entire span o f the first PRSP (20022005), elaborates a comprehensive policy strategy for the medium term (2007-201 1). I t
includes a detailed action plan to achieve macroeconomic and structural targets and l i n k s
objectives more closely to the achievement o f MDGs, including costed and time bound
interventions to achieve each MDG. An addendum to the JSAN was recently produced
as part o f the H P C Completion Point. I t focuses on implementation during 2005.
111- BANK’SSTRATEGIC OBJECTIVES
8.
The CAS was prepared within the fi-amework o f the PRSP and was also informed
by work o n a policy review6’, by the performance o f the portfolio, and extensive
consultations with the Government, civil society and other partners. The main focus o f
the overall Bank’s strategy was to support PRSP targets. The CAS was organized around
60
Under preparation at the time
- 62 three broad areas, which supported PRSP pillars. The Bank’s program supported a
majority o f these objectives in different sectors.
Figure 1 - CAS support to PRSP Pillars and K e y Sectors
Key Sectors Supported
by CAS
PRSP Pillar 1
CAS Area 1
*
Improve public
expenditure
management
Improving the enabling
environment for growth
and poverty reduction
CAS Area 2
PRSP Pillar 2
Promote private
sector growth
Enhance the productive
capacity and social
protection of the poor
c.)
*
- Macro environment
- Public Finance Management
- Domestic Debt
*
-
Key Sectors Supported
by CAS
Private Sector
Agriculture
Energy
Public infrastructure and
services
Improve coverage of
basic social sewices
CAS Area 3
Key Sectors Supported
by CAS
c-)
Enhance equity
and quality of
service delivery
-1
PRSP Pillar 4
Building capacity for
local, people-centered
development
- Education
- Health
- Public Infrastructure and
!*
services
Iv - THEGAMBIA’SPROGRESS TOWARDS ITS GOALS
Macroeconomic stability and Growth
9.
With the exception of the economic slowdown in 2002-2003, The Gambia’s
overall macroeconomic performance in the last few years has been strong. In 2002,
the impact o f adverse weather on agriculture and poor macroeconomic management led
-63
-
to a 3 percent decline in real GDP. Since then, The Gambia has enjoyed robust growth,
mainly because macroeconomic policy has been strengthened. This macroeconomic
stability over the last few years has sustained foreign exchange inflows and vibrant
economic activity.
Real GDP growth averaged 6.4 percent for 2003-2006, led by
tourism, construction, and telecommunications sectors. Growth is projected to reach 7
percent in 2007. However, while The Gambia’s growth in recent years has been
commendable, reducing poverty has continued to be a major challenge for the country.
10.
During the period o f CAS implementation (FY03-07), both the Bank and the Fund
supported the Government in macroeconomic and structural reforms under the agreement
overseeing division o f responsibilities. The IMF took the lead in the policy dialogue on
macroeconomic policies and monitored macroeconomic performance by way o f
quantitative performance criteria and indicators. The Bank focused more on capacity
building for economic management, as well as social, institutional and structural reforms.
These complementary efforts contributed to growth in The Gambia.
Poverty
11.
The Gambia remains a poor country, with a GNI per capita o f U S 2 9 0 in
2005. The poverty analysis o f the latest Integrated Household survey indicates that the
overall poverty headcount ratio i s 57.9 percent. In addition to prevalence o f poverty,
inequality i s significant. The Gini coefficient o f 0.484 for 2003 i s relatively high.
Through the CAS, the World Bank aligned i t s operations in support o f poverty reduction
targets, as outlined in the country’s PRSP. Under the Bank-funded Capacity Building for
Economic Management Project (CBEMP), a poverty analysis o f the Integrated
Household Survey was prepared and issued in June 2006. I t allowed for a confirmation
o f poverty results for the collection period covering five quarters in 2003-2004.
-
V ASSESSMENT
OF CAS OUTCOMES
12.
The CAS focused on PRSP development objectives, and not on CAS outcomes.
The CAS noted that “the Bank would align i t s operations in support o f PRSP targets in
order to ensure progress toward the MDG targets”. The CAS therefore focused on PRSP
pillars. Under these pillars, it specified three objectives : (i)
improve public expenditure
promote private-sector led growth, and (iii)
enhance equity and quality
management, (ii)
o f service delivery. I t only included some progress benchmarks. Thus, this CASCR
analyzes the intended objectives from a broader perspective.
13.
The CASCR reviews each pillar in terms o f the pillar’s main objectives, the
related assistance instruments, and i t s achievements or shortcomings with regard to the
CAS area o f focus. As noted above, CAS baseline and targets are missing.
- 64 CAS Objective - Improving Public Expenditure Management
The CAS objective i s supporting the first PRSP pillar o f improving the enabling
14.
policy environment for growth and poverty reduction.
15.
The Bank supported structural reforms to strengthen the macroeconomic
framework and public finance management through a Capacity Building for Economic
Management project (CBEMP). In addition, analytical work included a Development
Policy Review (DPR - FY03)), which assessed the country's prospects, a Country
Financial Accountability Assessment (CFAA - FY03), a Public Expenditure Review
focused on fiscal discipline (FY06), and a Country Procurement Issues Paper (CPIP FY05).
16.
The authorities have acknowledged that the original macroeconomic targets for
2004 and 2005 were not met, but this was largely due to exogenous factors and the
persisting after-effects o f past policy slippages in 2002-2003. Adjustments were
successfully implemented in recent years and public expenditure management reforms
have achieved their objectives.
17.
Macroeconomic performance.
Following the early-2000s slippages,
macroeconomic stability has been maintained since 2004. The authorities have pursued
prudent fiscal and monetary policies, resulting in a resumption o f growth o f about 6.2
percent on average for the period 2004-2006, outpacing population growth which
averaged about 2.8 percent in recent years.
18.
Fiscal performance.
A tightening o f fiscal policies from late 2003 lowered
inflation and contributed to sustained growth. The CAS target o f maintaining overall
budget deficit at less than 5 percent o f GDP has been met in 2007. The overall fiscal
deficit reached 5.7 percent o f GDP in 2004, 8.6 percent in 2005, and 6.3 percent in 2006.
However, fiscal performance in the first half o f 2007 has been strong. The overall balance
i s expected to register a surplus o f 2.9 percent in 2007. The basic balance, a measure o f
the domestic fiscal adjustment effort61 moved into surplus in 2006. The basic primary
balance62moved from a deficit o f over one percent o f GDP in 2001 to an average surplus
o f 8.8 percent o f GDP during 2004-2006, and i s expected to reach 9 percent in 2007.
-
Table 1 Summary o f Central Government Operations, 2005-2007
Revenue
Overall Balance
Basic Balance
Basic Primary Balance
2004
20.9
-5.7
2.4
9.6
2005
19.7
-8.6
-0.1
8.5
2006
21.2
-6.3
1.5
8.4
2007*
22.1
2.9
4.1
9.0
'' Defined as domestic revenue minus expenditure, excluding externally-fundedcapital expenditure
Defined as domestic revenue minus expenditure, excluding interest payments and externally-funded
capital expenditure
-65
-
19.
Domestic debt management. Progress has been slow but the growth o f domestic
debt has been contained. The CAS target o f limiting the growth o f domestic debt as a
percent o f GDP has been partially met. The stock o f gross domestic debt stood at 31.2
percent o f GDP at end-2006, up 8 percentage points from i t s level in 2000. The increase
reflected large extra-budgetary spending in 2001, and the Central Bank’s sale o f
Government debt between 2003 and 2005 to sterilize the impact o f rebuilding
international reserves. However, the stock o f debt has come down to 29.1 percent o f
GDP in 2007, reflecting sustained good fiscal performance. The Government has
committed to developing a comprehensive debt management strategy (DMS). Domestic
debt i s projected to fall from 29.1 percent o f GDP at the end o f 2007 to 13.7 percent o f
GDP in 2012 and to 8.4 percent o f GDP in 2027. The relatively tight fiscal policy
programmed for the medium term will help bring domestic interest rates close to single
digits levels. N o w that the country has become eligible for external debt relief under
H P C and MDRI, the lower debt service, combined with lower interest rates on domestic
debt, provides space to increase poverty reducing expenditures.
20.
Progress has been slow towards further integrating PRSP priorities into the
Government budget progress. The PRSP emphasizes the adoption o f a MTEF as a means
to further deepen the integration o f PRSP priorities with the budget. The CAS target o f
introducing a medium-term expenditure framework (MTEF) and program-based
budgeting has not been met. The Ministry o f Finance started work on the MTEF during
the 2005 budget process when an overall resource envelope was developed, but the 2006
budget was produced on an annual basis. The authorities have initiated efforts to establish
sector wide approaches in the education and health sectors. Existing public expenditure
reviews (PERs), including sectoral PERs for the education, health, agriculture, and road
sectors, could form the basis for the preparation o f a MTEF. However, DOSFEA needs
to give this priority well in advance o f the budget preparation process.
21.
Good progress has been made in carrying out public financial management
reforms. These reforms have improved transparency and accountability in the use o f
public resources.
The Budget Management and Accountability Act was introduced in 2004. I t provides
for a fuller integration o f recurrent and development budgets, a closer linkage
between budget preparation and execution, and consolidation o f public funds.
The Central Bank Act was introduced in 2005. It provides increased operational
independence o f the Central Bank.
The Gambia Revenue Authority (GRA) Act was introduced in 2004. I t created the
authority which consolidated administration o f income and sales tax with customs.
The CAS target with respect to the introduction o f an integrated financial
management information system (IFMIS) has been met. The first phase o f the system
was launched in January 2007, and i t represents a comprehensive public expenditure
management I T system for all stages o f the budgeting and accounting process. I t
currently does not cover expenditures from donor projects.
Public accounts have been updated to 2006. The IFMIS i s expected to produce the
2007 accounts by end-March 2008.
- 66 -
In addition, the authorities have consistently produced annual public reports on
budget execution, as well as reports on the use o f interim HIPC debt relief.
Overall Pillar Assessment. The above pillar has been rated as satisfactory.
22.
Public expenditure management in The Gambia has improved during the last five years,
and in spite o f the country’s weak institutional capacity, the planned reforms have made
good progress.
CAS Objective - Promoting Private Sector-led Growth
23.
The CAS objective i s supporting the second PRSP pillar o f enhancing the
productive capacity and social protection o f the poor. The Bank’s strategy focused on
helping The Gambia: (i)
clarify i t s agriculture strategy, (ii)
have an energy policy in
place, and (iii)
provide public infrastructure and services.
Bank program in support of private sector development. A Diagnostic Trade
24.
Integration Study (DTIS) was carried out in FY07, which provides a framework for
accelerated growth and makes recommendations on improving the business climate and
on strengthening and diversifying domestic production o f goods and services in areas
such as groundnuts and other agriculture. A survey was conducted in 2007 to help
prepare an Investment Climate Assessment (ICA), which will be finalized in the next
CAS period. The CAS work program included a proposed Private Sector Assessment
which was not carried out. Instead, informal sector work was carried out in regulatory
reform and energy. The Bank approved supplemental financing for the Poverty
Alleviation and Capacity Building project (PACAB).
The CAS envisaged that the
Gateway project would support divestiture activities. Financing for preparatory studies
was made available under the project.
25.
Agriculture. Most o f the poor are farmers in rural areas, particularly groundnut
farmers, and agricultural productivity has stagnated in recent years. The sector i s not
diversified, with heavy reliance on groundnut production and traditional subsistence. A
new agriculture sector strategy is under preparation, aimed at promoting pro-poor growth
and employment in the rural sector through private sector development. Development o f
the sector will likely require a multi-sector approach which encompasses agricultural
development, employment creation, and improvement o f health, education and physical
infrastructure. The DTIS has helped identify the constraints to sector growth and
possible avenues for diversification and institutional arrangements, notably in the
groundnut sector. Although there has been progress in terms o f clarifying the
Government’s approach to sector development, the CAS target i s viewed as not having
been met, as the strategy was not completed under the CAS period.
26.
Groundnuts. Since 2000, mismanagement and policy instability have led to a
downward trend in exports, hitting an all-time l o w in 2006-200763. The Government
unsuccessfully attempted to privatize the public groundnut processing plants from 2005
63
2007 DTIS
- 67 to 2006. Since then, it has prepared a comprehensive sector reform strategy to revitalize
the groundnut sector. A sector reform “roadmap” has been prepared in consultation with
key public and private sector stakeholders, including the World Bank, IMF and EU. This
roadmap outlines the government’s plans to fully liberalize the sector and to privatize the
management o f the publicly-owned groundnut plants. Steps already taken include, inter
allowing free entry o f operators at all levels o f the value chain, (ii)
transferring
alia, (i)
management responsibility for the sector to the Agribusiness Service Plan Association
(ASPA), which will determine the producer price, (iii)
putting GAMCO, one o f the two
processing plants, under a receivership as part o f the liquidation process, and (iv)
dissolving the board o f directors o f GGC, the other processing plant, and initiating steps
to reconstitute a new Board which will no longer intervene in the daily operations o f the
company.
Energy. Electricity i s identified by the I C A as the most important constraint
27.
facing formal sector firms. Power outages are frequent and the price o f electricity i s very
high. In i t s PRSP-11, the Government has identified energy as a priority sector. Some
progress has been made. The 2004 Electricity Act liberalizes the sub-sector and opens i t
up for private sector investment. N A W E C was slated for divestiture. However, the
Government has instead opted for a 5-year management contract with a private firm to
begin the process o f improving performance and restructuring N A W E C . In 2007, the
Government expressed interest in preparing a master plan to expand the generation,
transmission and distribution o f electricity to meet existing and projected energy demand.
Financing for the master plan will be provided under the next CAS period. In spite o f
progress made in the last few years, the CAS target o f having an energy policy in place
was therefore not met.
28.
Provision of public infrastructure and services. Improving poverty alleviation
continues to be emphasized in both Bank strategy and Government policy. Through the
P A C A B project, the Bank responded to The Gambia’s urban issues. They are
characterized by limited access to basic infrastructure, deteriorating infrastructure due to
lack o f maintenance, and insufficient municipal financial resources. Progress was made
in providing urban services, and the project was successful in providing basic
infrastructure services to poor communities and increasing employment, both CAS
targets. In all 79 civil works were implemented and more than 73 percent o f sub-projects
are reported to have been implemented in poor areas. The project also helped strengthen
local government authorities in prioritizing their investment needs through urban audits,
and maintain their infrastructure.
Overall pillar assessment. The above pillar has been rated as moderately
unsatisfactory. Although the constraints to growth in the groundnut sector and the rest o f
agriculture have been identified there was slow progress in the preparation o f a rural
development strategy. In the same vein, progress was made in the form o f concrete
measures taken by Government to revitalize the sector as part o f the implementation o f a
29.
sector reform roadmap, based on full liberalization o f the sector. But groundnut export
volumes have not yet fully rebounded from their l o w 2006-2007 figures. In energy, a
full-fledged sector policy i s not yet in place but the Government has taken measures to
improve operations o f the public utility by bringing in private management. More needs
- 68 to be done, such as improving the contractual arrangements for private management and
strengthening the legal regulatory environment, including by building the capacity and
mandate o f the Public Utilities Regulatory Authority (PURA).
CAS Objective - Enhancing equity and quality of service delivery
30.
The CAS objective is supporting the third PRSP pillar o f improving coverage o f
basic social services and the fourth PRSP pillar o f building capacity for local, peoplecentered development. The Bank’s strategy focused on helping The Gambia to expand
access to and quality o f social service delivery.
31.
The Gambia i s on target to meet some MDGs in 2015, such as those related to
increasing primary school enrollment or halving the proportion o f underweight children.
For the other health indicators, progress i s more limited. The HIV/AIDS prevalence rate
has deteriorated in the last year.
32.
Health.
Health care has expanded significantly.
The country has a
comprehensive set o f health policies, including the National Health policy, a National
Drug policy, ad a National Nutrition policy. Health has the third largest budget among
government ministries. The share o f primary and secondary health care within the
recurrent budget for health has increased from 42 percent in 1999 to 50 percent in 2003
and has generally maintained this level. The share o f poverty-reducing ex enditures,
including health, decreased from 2002 to 200564,but has increased since 2005 . Primary
and secondary health care have expanded significantly, particularly the construction o f
health centers through donor financing. Moreover, investments in health centers have
mostly been made in poorer regions. Physical access to basic health services i s general
good, with 85 percent o f the population living within one-hour travel time, o f a health
facility. Hospital beds, at 1.2 1 beds per 1,000, compare favorably with other sub-saharan
countries. The challenge now i s to ensure that the health centers are properly equipped
and staffed.
8
33.
The Bank supported The Gambia’s health program through the Participatory
Health Population and Nutrition project (PHPNP). The project was approved in FY98
and closed in FY05. Total fertility rate declined from 6.4 to 5.1 percent. This decline i s
likely attributable in part to higher female education and delays in marriage o f younger
cohorts o f women, but also attributable in part to social marketing and availability o f
family planning services supported under the project. Infant mortality declined from 92
to 75 percent. Child malnutrition was reduced by 28 percent, reflecting a decrease from
26 percent o f under fives being underweight to 20 percent.
34.
The Bank’s H I V / A I D S program’s objective was to help the country organize a
preemptive response to the epidemic through a multi-sector approach. K e y performance
indicators related to HIV prevention reveal limited impact o f project activities.
64
From 37 percent in 2002 down to 24 percent in 2005
From 24 percent in 2005 to 26 percent in 2006 and i s expected to increase to 34 percent in 2007.
- 69 According to behavorial surveys conducted in 2002 and 2005, knowledge about modes o f
HIV transmission and prevention did not improve, risky sexual behavior increased. [ add
email ] .
35.
Education. The Gambia’s sector program objectives are well articulated in a new
comprehensive Education Policy (2006-20 19, which focuses on expanding and
improving the quality o f education. Despite the commitment to education expressed in
both sectoral and macroeconomic policy documents, the 2001/02 macroeconomic crisis
led to severe reductions in the Government budget. This was reflected in the share o f the
budget allocated to education, which fell from 20.7 percent in 2002 to 14.2 percent in
2003. Since then, recurrent budget allocations to education showed increases in 2004
(15.2 percent) and in 2005 (16 percent). However, this i s more an illustration o f the
overall macro-economic crisis than o f lack o f commitment to education; in fact,
Government provides more money to the education sector than to any other sector in the
economy, and budget increases each year have favored education over almost all other
sectoral departments.
36.
The education sector has seen some important gains, but challenges remain.
the largest government budget among all ministries, (ii)
Education has benefited from (i)
support from donors, including IDA’S first phase o f its education APL project (which
closed in April 2005) and the ongoing 2ndphase o f the project, and (iii)
funding from the
EFA FTI Catalytic Fund. Over 1,000 classrooms were built with the support o f the first
phase o f the IDA-hded operation. Between 1998 and 2004, girls’ gross enrollments
grew from 67 to 79 percent in lower basic, from 32 to 65 percent in upper basic, and from
11 to 24 percent in senior secondary. Education quality remains the biggest challenge; by
all measures, quality i s l o w and i s showing little improvement across the country, with a
particular challenge for girls, who continue to under-perform boys at all levels.
Overall pillar assessment. The above pillar has been rated as moderately
37.
satisfactory. Progress was made in access to health services and school enrollment.
Capacity constraints and the quality o f education remain a challenge in the coming years.
VI- ASSESSING THE BANK’S PERFORMANCE
Quality of Products and Services
The quality o f Bank work was on the whole satisfactory. Appendix 2 compares
38.
the planned and actual deliveries o f lending and non-lending support through FY07.
Overview. The program (originally to be implemented over the period FY03-05)
39.
included three lending operations in the base case and a broad program o f non-lending
activities including seven formal or informal reports. The lending program was back
loaded, with no lending planned for FY03, possibly because economic and policy
problems which emerged in 2002 were being resolved. Base case conditions were the
satisfactory implementation o f the PRSP, including sufficient budget allocations for
- 70 priority sectors; and a satisfactory performance in the macroeconomic front (as
demonstrated by performance on the Fund PRGF program) and o f the IDA portfolio. In
hindsight, the requirements for the base case may have been strict. The triggers for the
high case lending scenario required Government action in the energy sector in addition to
continued improvements in the macroeconomic front.
The Bank focus on
macroeconomic reform was on public expenditure management, which was appropriate
given the Bank’s comparative advantage. The Bank’s lending program was relatively
narrow in scope, focusing on the social sectors which were viewed as a priority. This
may have been justified as the IDA allocation for The Gambia i s small and an
infrastructure project and one focusing o n providing services to the private sector and
divestiture were being implemented. The program was risky as i t was back-loaded and
two o f the three lending operations were follow-ups to ongoing projects, which were to
have been delivered late in the program and resulted in overall delays in CAS
implementation. Bank lending was affected by the Government’s reluctance to move
forward on key sectoral reforms (notably energy), the slow pace o f macroeconomic
reforms, and o f project implementation. In hindsight, the non-lending program might
have been ambitious given capacity constraints and the limitation on Bank budgetary
resources.
(0 Lending
39.
Commitments. By the end o f the CAS period (end FY07), the three operations
planned under the CAS base-case scenario were delivered. In total, new IDA
commitments during the FY03-07 period was US$21.9 million, as compared with US$25
million in the CAS base-case lending scenario. This lower level o f new IDA
commitments i s due mainly to IDA resource constraints. The programmed Phase I1o f
the Education Sector APL, planned for FY04, was approved in FY06, largely as a result
o f delays in the revision o f the new Education Policy. The health and C D D operations
were combined into one project (CDD operation) presented to the Board in August 2007.
A locust operation, not originally envisaged in the CAS, was approved in December 2004
as part o f a regional effort to combat locust invasion.
Project Design. The two projects that closed during the CAS implementation
40.
period had design problems. IEG rated Bank performance as marginally satisfactory in
the Education Sector Program because the review team considered the design over
ambitious. The I C R for the Participatory Health, Population and Nutrition Project rated
the Bank’s performance in lending unsatisfactory because o f the overly complex design,
a view shared by the team that carried out the Quality at Entry Review in 1998. I t appears
that there may also be design problems with projects under implementation. For
instance, the design o f the Gateway Project i s probably over-ambitious given The
Gambia’s limited capacity and the government’s ambivalence to reform. The Poverty
Alleviation and Municipal Development Project, which had a relatively straightforward
design focusing on infrastructure delivery, was successfully implemented. The Quality
Assurance Group did not assess any o f The Gambia’s products over the CAS period or in
FY06.
- 71 41.
Outcomes. Due to the Government’s weak institutional capacity and difficulties
in implementing structural reforms, there were delays in implementing reforms in the
ongoing and newly approved projects. For example, delays in resolving the external and
domestic debt issues made discussions support for priority sectors difficult, although
Bank interventions contributed to maintaining the level o f budgetary support for health
and education relatively stable during the period. Support to capacity building for
economic management contributed greatly to helping the Government deal with crosssectoral issues, such as public finance management, which were instrumental in the
country moving toward HIPC completion point and access to debt relief.
42.
Despite problems, the health and education sector operations contributed to
shifting sector priorities and focus away from construction and towards results in terms o f
services provided. The operations had an impact on the improved service indicators in
education and health discussed earlier. Bank involvement through the HIV project
contributed to a greater understanding o f issues. Actions through the Poverty Alleviation
Project contributed to resolving a serious institutional issue in G A M W O R K S,which has
an important role both in ensuring the prompt execution o f projects and in promoting
private contracting.
43.
The Gambia team prepared two ICRs in FY06, for the two projects which closed
in FY05, Phase Io f the Education Sector Program and for the Participatory Health,
Population and Nutrition Project. Both ICRs rated the project outcome as marginally
satisfactory66but the results as unsustainable, in part because o f the shortage o f budgetary
resources. IEG evaluated the education program, and found the outcome moderately
satisfactory, which i s the same rating as that given by the Region. IEG rated the health
project as moderately unsatisfactory, which i s lower than the satisfactory rating given by
the region because o f shortcomings in the achievement o f some objectives particularly
those related to service quality and program management. IEG also judged Bank
performance in the health project unsatisfactory even though there was recognition that
the Bank team had made a major effort to improve the project desigdimplementation
after the mid-term review.
Table 2 - Portfolio Trends (FYO3-07)
Source: IEG ratings
66
B o t h reports rated the project outcomes as satisfactory as the authors were constrained by the
rating system applicable at the time.
- 72 Choice of instruments. The Bank has been flexible in i t s assistance to The
44.
Gambia to respond to the country’s needs. The Bank included The Gambia in the
coverage o f the regional program to fight the locust invasion. I t also provided additional
financing to pursue objectives identified under the Poverty Alleviation and Municipal
Development project, in particular with regard to small infrastructure services. The
choice o f instruments during the CAS period was adequate. However, the Bank’s future
lending needs to be more consistent with its new result-based framework.
(ii) Analytical and Advisory Activities (AAA)
45.
The economic and sector work included detailed and thorough analytical work,
particularly in public finance, and provided the basis for the dialogue with the
Government. While no task was dropped, three o f the tasks in the original AAA program
in the CAS were slipped as follows: a C i v i l Service Reform study, originally scheduled
for FY04 as an informal activity, i s now planned as a full-fledged task. I t has been
launched and will be completed in the next CAS period (FY08). A Private Sector
Assessment, scheduled for FY05, has been turned into an Investment Climate Assessment
(ICA). The survey for the I C A has been carried out and the final report will be delivered
in the next CAS period (FY08). A Poverty Assessment, also originally planned for FY05,
has been slipped to FY08.
A Country AAA Assessment was carried out in FY07 as part o f the preparation
46.
for the next CAS. I t covered the following tasks: the FY04 Public Expenditure Review,
the FY05 and FY06 Public Expenditure Updates, the FY05 CPIP, the FY04 CFAA and a
PPIAF study on private sector participation in main infrastructure sectors.
47.
The Gambia AAA program was rated moderately satisfactory (rating o f 3)
overall, as well as in the dimensions o f internal quality, participation, consultation and
dissemination, and coherence and integration. Strategic relevance was found satisfactory
(rating o f 2), as the program was found to have clear objectives, well linked to the main
CAS themes, the Bank’s poverty alleviation goals, the country’s development framework
and other donors’programs. Its likely impact was rated moderately unsatisfactory (rating
o f 4). Building ownership and coalitions for change has not been as relevant in The
Gambia as in other countries because o f the centralization o f decision making and the
high turnover in senior government officials, due to decisions from the top. O f particular
concern has been the experience with capacity building o n the importance o f which the
Bank, the client and the donors agree. The civil service reform study should provide
direction in this regard. Bank inputs and processes received a rating o f moderately
satisfactory.
Porlfolio Management
48.
As o f June 30, 2007, the Bank’s portfolio in the Gambia included five projects for
commitments totaling US$55.9 million. The portfolio includes two old projects
(Capacity Building for Economic Management and Gateway) and three relatively new
ones (Regional Locust, Education Phase I1 and Community-Driven-Development). One
- 73 o f the five projects in the portfolio i s in “problem project” status (Gateway) and is being
restructured.
Table 3 - Portfolio Trends ( N O 3 - 0 7 ) *
* includes Regional Locust
49.
Disbursements increased over the CAS period reflecting activity in the Poverty
AlleviationlMunicipal Development and particularly the H N / A I D S Project which had
very high disbursements in 2005 and the Education Project. This trend continued in
FY06 when the disbursement ratio was 43 percent. The trend reflects in part the age o f
the portfolio, but also improvements in GAMWORKS, a key implementing agency. The
disbursement ratio in the CAS period averaged a high 33 percent compared to the
regional average o f 23 percent.
Fiduciary reporting has improved over the past five years. In FYOO, half o f the
50.
audit reports due were not submitted on time, a figure had declined to 20 percent in
FY02. In FY04 and FY05 all audit reports were received o n time. This reflects growing
understanding o f requirements by the implementing agencies, but also the increased
monitoring by the Bank o f financial reporting in general.
The Government and the Bank have decided to introduce quarterly performance
5 1.
reviews o f the portfolio. The first was carried out in March 2006, and proved effective in
resolving pending problems. The new practice i s expected to help improve portfolio
performance by identifying bottlenecks and avoiding delays in decision making o n the
part o f both the Government and the Bank. The next one i s scheduled for February 2007.
Bank internal reports show that most projects were regularly supervised. ISRs
52.
show that the team made some progress in setting indicators to measure project outcomes
in ongoing projects, although progress i s linked to the paucity o f data discussed above.
The number o f risk flags shown in the internal reporting records appears l o w given the
perceived implementation problems with the portfolio. The appraisal document o f Phase
I1 o f the Education Sector Program provides good indicators and targets which should
help in follow-up.
During the CAS period, the Bank established a liaison office in Banjul. This
53.
office should play an important role in the dissemination o f economic and sector work
and in resolving problems in project preparation and implementation.
- 74 Country Dialogue and Donor Harmonization
The dialogue with stakeholders and other donors which began at the time o f the
CAS preparation continued during implementation. The Bank and the IMF generally
coordinated their activities; it i s important that the two institutions continue to work
closely, particularly in ensuring that conditionality i s complementary. The Country
Financial Accountability Assessment was prepared jointly with the African Development
Bank, the European Union, and the Department for International Development o f the UK
(DFID), and the UNDP and DFID collaborated in the preparation o f the Public
Expenditure Review. Activities in the education sector, including those o f the recentlyapproved operation, were closely coordinated with donors involved in the sector,
including the DFID, the African Development Bank, and the EU. The recently approved
Community Development Program i s co-financed with the Government o f Japan
(PHRD), and program activities coordinated with the International Fund for Agricultural
Development, the African Development Bank and the EU. The Education project i s also
co-financed with the Government o f Japan (PHRD). The Bank also proposes to
coordinate technical assistance activities with DFID which i s now preparing a capacity
building project. The Bank and AfDB are jointly preparing the next assistance strategy.
54.
V I I - LESSONS
FOR SUBSEQUENT CAS DESIGN
55.
The following are lessons for the future CAS:
- The Bank should focus on areas where the Government i s willing to pursue
reform rather than focus on areas where no traction i s likely.
- IDA allocations and Bank budget resources may continue to be limited because
o f country size and performance; IDA support should continue to be leveraged
with that o f other donors. CAS objectives should take into account available
resources. Implementation resources should include costs associated with donor
coordination.
- CAS outcome indicators need to be linked clearly to IDA interventions,
the CAS
should show a linkage between indicators and higher level objectives in the
PRSP. Indicators should take into account the CAS timeflame. Base year
indicator needs to be included in the CAS.
- The composition o f the lending program needs to take into account the pace o f
project implementation in The Gambia: the program should be designed so as to
facilitate advancing operations in case o f delays in preparation o f some projects
and to the extent feasible the program should be front loaded.
-
Project design needs to be simple, given capacity constraints. Senior staff
should continue to be involved both at the time o f project design and o f project
implementation (resources should be made available).
,
- 75 -
Knowledge and capacity issues are a binding constraint to project
implementation; the country team will need to consider how to best address these
issues taking into account the Africa Region recommendations on capacity
building.
- The Bank should continue to coordinate closely on policy reform with the IMF
and other donors, to strengthen the message and dialogue with Government. In
particular, budget review should be rigorous and look at allocations among
Departments.
- Because o f capacity constraints technical support
under Bank projects tends to
require especially high staff supervision input;
- As governance i s crucial to a successful program implementation, the next CAS
may want to place greater emphasis on discussions with Government on this
subject; achievements in investment climate reform and public expenditure
management can be used as a proxy for economic management and thus
governance.
- 76 -
Planned
CDD
PHN
FY
Status
FY
FY04
FY05
Yes
No
FY07
(merged with CDD)
MAP SECTION
TH E GA M B I A
SELECTED CITIES AND TOWNS
MAIN ROADS
LOCAL GOVERNMENT AREA
“DIVISION” HEADQUARTERS
LOCAL GOVERNMENT AREA
“DIVISION” BOUNDARIES
NATIONAL CAPITAL
INTERNATIONAL BOUNDARIES
THE
GAMBIA
RIVERS
This map was produced by the Map Design Unit of The World Bank.
The boundaries, colors, denominations and any other information
shown on this map do not imply, on the part of The World Bank
Group, any judgment on the legal status of any territory, or any
endorsement or acceptance of such boundaries.
17°W
16°W
14°N
15°W
14°N
To
Kaolack
0
ATLANTIC
OCEAN
10
20
30
10
20
40 Kilometers
30 Miles
CENTRAL RIVER
D I V I S I O N Sukuta
CITY OF
BANJUL
Kanifing
0
S E N E G A L
To
Kaolack
KANIFING
M U N I C I PA L I T Y
14°W
NORTH BANK DIVISION
BANJUL
b
Ga m
Kerewan
Janjanbureh
Farafenni
ia
Mansa
Konko
Diabugu
LOWER RIVER
DIVISION
Brikama
WESTERN
DIVISION
Kalagi
Kartung
Ga
Basse Santa Su
To
Kolda
S E N E GAL
13°N
mb
ia
UPPER RIVER
DIVISION
To
Kolda
13°N
To
Bignona
To
Bignona
17°W
16°W
15°W
14°W
IBRD 33409R
NOVEMBER 2006
GUIN E A-B IS S AU