World Bank: Reviving Gambia’s economy after COVID-19 depends on strengthening resilience

EYEAFRICA TV: Banjul, THE GAMBIA:- The World Bank said preserving the Gambia’s recent gains and reviving the economy after COVID-19 will depend on strengthening resilience.

This comes as World Bank Africa launched a report on Gambia’s Economic Update 2020 on Thursday. The annual publication provides an update on economic developments and the development challenges facing The Gambia.

During the launch, a diverse set of experts discussed crucial actions that need to be taken from the country’s development challenges to preserving its economic gains.

“Following two years of strong growth, at 6.1% in 2019 and 7.2% in 2018, The Gambia’s economy has been affected by the global COVID-19 pandemic and is expected to stagnate in 2020 due to trade disruption and the fall in tourism,” the World Bank said in the report.

“Declining incomes, rising food prices, and school closures resulting from the health crisis took a toll on the livelihoods of many households. The economy is expected to gradually rebound in 2021 if the pandemic recedes and the global economy starts to recover.”

The report, Preserving the Gains, noted that overall fiscal deficit was the lowest in a decade pre-COVID, reaching 2.5% of GDP in 2019, but rose in the first half of 2020 to accommodate pandemic-related spending pressures.

On agriculture, the report said favorable rainfall, good access to inputs, and few pest outbreaks have resulted in a strong turnaround in the sector.

“Despite the impact of the pandemic on the earnings of Gambians in the diaspora, official remittances grew at record pace in the second quarter of 2020, perhaps due to travel restrictions closing informal channels.

“This has positively affected the country’s international reserves, which continued to rise in 2020,” the report underlined.

The report concluded that global pandemic has put downward pressure on inflation, which had previously been increasing.

“The Gambia sustained economic expansion in recent years has contributed to reduce poverty rates,” said Feyi Boroffice, World Bank Resident Representative.

“However, the recent economic downturn threatens this progress. The government has deployed several initiatives to mitigate the impact of COVID-19 on the most vulnerable households but scaling up its support will be crucial to strengthen resilience.”

The report acknowledged that achieving macroeconomic stability will require improving spending efficiency and increasing tax revenues, as well as strengthening public financial management and governance of state-owned enterprises, combined with better service delivery for crucial infrastructure including energy, water and telecommunications. 

The core of The Gambia’s growth path and post-COVID economic strategy, the authors said, is creating a skilled labor force that is more productive and better able to adopt and adapt to new technologies.

They highlighted the need to increase productivity, partially through infrastructure improvements, in order to create jobs.

The Gambia has a young population with a rapidly growing working-age population, but low labor force participation rates and high unemployment undermine this demographic dividend. There are also large geographical and gender differences. Almost two-thirds of all employed workers are male, and while 43% of the working-age population live in rural areas, only 35% of employment is located there.

“Future economic growth will depend on a more inclusive jobs agenda. This will mean creating better-paid jobs and reallocating workers to the most productive sectors,” said Mehwish Ashraf, World Bank Country Economist and lead author of the report. “But also creating more opportunities for women and young workers who are currently more at risk of becoming economically and socially excluded.”

The World Bank, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries respond to the health, social and economic impacts of COVID-19. This includes $12 billion to help low- and middle-income countries purchase and distribute COVID-19 vaccines, tests, and treatments, and strengthen vaccination systems.

The financing builds on the broader World Bank Group COVID-19 response, which is helping more than 100 countries strengthen health systems, support the poorest households, and create supportive conditions to maintain livelihoods and jobs for those hit hardest.

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