By Sarjo Bayang, UK
Overall orientation and focus of Gambia’s Trade Policy is more external driven; far from home. Going by World Trade Organisation WTO 2018 Review Report, everything about Gambia tilts towards window dressing of the economy to suit agenda of external development partners. The World Trade Organisation WTO terms must be met before they accept Gambia as Trading Partner in the global arena.
Private sector engagement is not given serious commitment except for what external development partners prefer to accept. There is no mention of any suitable economic model that suits development requirements for Gambia.
Failure to formulate the right policy and most readily applicable economic model is critical imbalance when seeking to redress harshly imposed challenges like what Gambia faces. In the review report there is no mention of suitable economic development model for Gambia.
Concluding remarks by Chair of WTO Trade Policy Review states;
“Members also welcomed that The Gambia had modernized its food safety, TBT, industrial property and government procurement regimes. Reference was also made to the opportunities arising from tourism and logistics. The Gambia was invited to consider acceding to the WTO Agreement on Government Procurement and several WIPO treaties, and was encouraged to deposit its instrument of acceptance of the Protocol amending the TRIPS Agreement. In response, the Gambian delegation informed Members that The Gambia had started consultations with WIPO on the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty.”
Please refer to sourced document below:
To begin with, Gambia does not have the economic environment for industrial development. Any talks about “industrial property” is unfitting the occasion.
Conforming with protocol, Gambia like other nations in same disadvantaged position wishing to be accepted must agree with terms and conditions of external development partners. The Gambian economic reality is not tuned up for type of trade suggested in WTO Review Report 2018.
Gambian economy runs on distribution business with least industrial elements. Lot of work is required in advancing from this petty trader economic operation before moving goal posts towards industrial trade agreements with external development partners.
Not to deal with the immediate economic reality and seeking to take up challenges beyond prevailing economic circumstances will be a real high jump of the goal posts with least prospects of scoring.
Economic reality of Gambia is not Wealth Creating
Key character of Gambian economic arena is identified by low or medium volume distribution business. From independence, the economic infrastructure has not been enhanced to facilitate industrial trading activities.
There are commercial banks that lend out to selected low risk merchants mainly engaged in distributive trade. Cash flow is not healthy enough and in very limited circulation.
Producers of primary commodities have no bargaining power. Prices are determined by profiteering merchants. Producers barely retain just what keeps them going.
Families rely on limited income from those in gainful employment at home and abroad. Primary producers sell at marginally low market values. Gambian economy is not properly tuned up as wealth creating, especially for the majority.
Local producers have no bargaining power
The fact that farmers and other local producers have no bargaining power imposes serious economic constraints on the population particularly for those relying on seasonal crops.
Largest volume of goods sold in Gambia are imported and government derives tax revenue from these imports in addition to local sources.
Local producers operate as small and medium scale income generating ventures. Without bargaining power, local producers find it hard to realise break-even revenue from slow and limited sales.
One reason why local producers have no bargaining power is because they lack the capacity to make calculated business decision. Tailored training in entrepreneurship would have helped.
Another reason why local producers easily settle for the lowest price is because some of their produce are perishable. Only few have access to reliable storage facility. They end up having to sell very quickly.
For peanut farmers, they simply wait to hear what the market offers. They are not consulted when and where prices are decided.
Happiest moment for farmers and other small-scale producers in agriculture is when they stand to admire the greenery before harvest. After harvest, they are left at mercy of profiteering dealers.
Artisans and crafts producers who sell in tourist markets are no better fortunate. They don’t have guided pricing framework. Cash count in daily sales is what matters to some of them.
Worried about going home without next day fish money compels many of those small crafts sellers to accept last ready buyer at least profit or sometimes loss.
Central to issue of Gambian producers selling without bargaining power is the fact that they equally lack power and influence as key stakeholders.
In further reference to the remarks by Chair of WTO Review Report, Gambia is given no bargaining power while being encouraged to measure up in meeting WTO requirements.
Similarly, low scale Gambian producers have no bargaining power and lack the technical capacity to influence crucial decisions.
Where the state submits to dictates of world bodies as the situation at hand, local producers have no option but remain docile in conformity. A paradigm shift in the stakeholder matrix is much needed if the economy is ready to propel with right gears operating.
Reliance on Tourism and Peanuts is not Sustainable
Lack of bargaining power on the part of low and seasonal income bracket that rely on peanut as cash crop or tourism vendors imposes overall challenging constraints.
Government has every duty of responsibility in creating the enabling environment not just for gainful trade. Building the required capacity for low income small and medium scale entrepreneurs to undertake viable business with calculated achievement motivation continues a felt-need. Whether such desired situation is expressed or muted about does not deny it exists.
Crucial to the situation of so much reliance on tourism and peanut economy is a case where key stakeholders lack the capacity to influence decision critical to their overall success as individuals or in their collective. Absence of collective bargaining strength bears significant impact on individuals.
Development and Promotion of Enterprise Culture
High achievement motivated entrepreneurs have desire to grow their business and create wealth. To be enterprising, a desire for income is not enough. That is what makes enterprise culture different from simple social values where day to day survival remains prime concern.
In Gambian society, dependence on lead bread winners is prevalent. Large families depend on those among them with source of revenue from business or employment. People simply settle on basic means of living.
Such dependence hinges on long established social values where what belongs to one belongs to all. The home base syndrome. It has taken generations where family members keep to home without needing to move away. This is acceptable to social norms of togetherness.
What it encourages though is stagnation over longest period. When family members decide to relocate, that is considered separation from the embodiment.
The contrast of social values and enterprise culture may seem conflicting. It takes those with courage and seeming different orientation to face challenges of crossing borders by a choice of enterprise culture over social values.
Those who cross barriers and venture in business realise what it pays. They continue rising above the line of social limitations and help others along the way.
Viable Economic Model for Gambia Informal Sector Business Growth -The IBAS Strategy
Enhancing Entrepreneurship through Small and Medium Enterprises SMEs has been proven economic model for Gambia with evidence of impact.
Study by United Nations Development Programme UNDP, International Labour Organisation ILO, and Gambia Government in late 70s emerged with a suitable economic model.
Key line of enquiry for the study focused on the need to identify viable strategy aimed at employment creation in the informal sector business as economic regeneration scheme. Poverty reduction has been key performance indicator.
It emerged that the intervention required establishing a permanent institution with mandate for development and promotion of informal sector small, medium enterprises SMEs. This resulted to creation of IBAS. Eventually, Indigenous Business Advisory Services IBAS started as joint project of UNDP/ILO and Gambia Government.
To provide a window of financial support for start-ups and growing enterprises, funding was provided by European Economic Commission EEC and United Nations Capital Development Fund UNCDF. These funds were deposited in the defunct Gambia Commercial & Development GCDB as IBAS could not undertake direct financial service operations.
Unpaid loans provided by IBAS and those of defunct Gambia Commercial Bank brought about the establishment of Assets Management and Recovery Corporation AMRC. Whatever is recovered and managed by AMRC is not reflected in the Balance Sheet of IBAS up to this day.
Overall thinking behind the establishment of an institution like IBAS was so that technical assistance with financial support is provided for informal sector small and medium enterprises SMEs as noted earlier.
How it happened that after 30 years IBAS could not fulfil the dream of enhancing entrepreneurship to boost informal sector SMEs, many factors contributed.
Disappointingly, it is the parent government Ministry of Trade, Industry, and Employment that “killed” IBAS by tactical delays in the implementation process.
From being a joint project of UNDP /ILO and Gambia Government (GG), the plan was that once local staff get proper training, IBAS would be given autonomous status to serve as permanent institution. Some people at the Ministry of Trade, Industry, and Employment put heavy foot on the ground, by ensuring the goal of that autonomous status never score. They have succeeded in their scheme of tactical interference, by which process they failed entire Gambian nation.
By twist of irony, SME stakeholders had no idea what was happening behind closed doors. All they saw was that IBAs could no longer meet their demands. There are many untold stories and those who contributed to failing the informal sector SME growth dream at government Ministry of Trade, Industry, and Employment, lot of them are still alive with that guilt. The scope of this article is not meant to cover full scale sabotage by government own staffers in failing the informal sector SME growth as strategy for boosting employment and economic regeneration through Indigenous Business Advisory Services IBAS.
When the deposed junta regime decided to abolish IBAS, none of the government economists and development advisers raised even a finger.
Although IBAS collapsed through tactical sabotage by hands of people at Ministry of Trade, Industry and Employment, what they cannot claim with tangible evidence is the fact that Gambia does not a permanent institution for growth of informal sector SMEs as strategy for economic regeneration.
Not to do something about this gap created by past generation of government saboteurs will turn the current regime equally guilty and culpable for further economic failures.
National Enterprise Policy.
From what readily obtains, Gambia does not have required elements or the enabling economic environment for industrialisation.
There is potential for growth through informal sector Small and Medium Enterprises SMEs. Findings indicated that SMEs are the most viable route to economic regeneration and growth required by Gambia.
Unless by strike of chance oil starts flowing to attract industrial investors, Gambia remains a commercial economy relying on imported goods.
While at the negotiating table with development partners, Gambia Government will do greater economic justice by identifying viable road to growth in the informal sector Small Medium Enterprises. That sector is the engine of economic growth not just for poor nations like Gambia but even developed economies the world over.
It is a situation of futile attempts for Gambia to divert attention from development of the informal sector Small Medium Enterprises SMEs while engaging external development partners on industrial trade relations.
One suggestion in contribution to formulation of National Enterprise Policy is by supporting the revival of regional Business Advisory and Entrepreneurship capacity building operations as the IBAS model operated over the years.
Not everything is lost for good. The corporate memory required for rekindling SME informal sector business is within reach. Past managers, staff, and international experts that served to keep IBAS going despite all hurdles may be reached for their valuable input should the occasion arise to put Gambia on right track towards viable growth.
Gambia is not ripe for industrialisation. However, boosting employment in the informal sector small and medium enterprises is readily feasible and most viable. It takes right policy to keep a nation on right track to sustainable growth.