Introduction - UNDP The Gambia

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________________________________________________________________________________________________________________________ Similarly, the development of the tourist industry poses several environmental challenges. Past hotel investment and construction of hotels along the shorelines have had the effect of promoting massive beach erosion around the Kololi, Senegambia, Fajara, Cape Point, Wadner, and Banjul beaches. These beaches were only reclaimed through a massive public investment rehabilitation programme to save the beaches on which the hotels are built. However it is not known how long the beaches that have been rehabilitated will last. Future investment in the hotel industry would require a dialogue between the public sector and the private sector, as destruction of the tourist industry through improper land use would consequently lead to unemployment, a decline in income and increases in poverty; it is also counter-productive to the achievement of the MDGS. Ecotourism is gradually developing in The Gambia and this environment-friendly form of tourism investment should be vigorously promoted as it provides employment, generates income, reduces poverty and at the same time preserves the natural environment as its primary resource and product. The Makasutu Ecotourism Camp and Sindola Tourist Camp in Western Division, Tendaba Camp in Lower River Division and Baobolong and Janjangbureh camps in Central River Division (which are all developed by private entrepreneurs) are now internationally known and continue to attract up-market tourists such as bird watchers and others interested in nature tourism. Concluding Remarks: From the information and analysis presented, it is apparent that there are several issues, constraints and challenges for the development of capacity building strategies that would place the private sector as the lead agent in building capacity for human development or making the private sector the lead agent for the PRSP to achieve the MDGs. This is because despite national and international declarations for private sector-led economic growth and development, almost all funds for national capacity building programmes are directed to the public sector and little or none goes to, or can be accessed by, the private sector. The lack of direct funding for private sector growth and development in the capacity building programmes is a major issue and is a constraint to the development of the private sector. Most capacity building programmes in Africa, including The Gambia, remain fragmented and fail to address the capacity constraints that limit the effectiveness of the private sector. To be effective, the capacity building needs of the private sector must be made core objectives in government and donor-funded capacity building programmes or projects. Current national capacity building programmes are predominantly public sector activities while the private sector capacity needs remain incidental. As a stakeholder in national human development however, the private sector should be interested in capacity building issues, such as the capacity of the public sector to formulate and implement policies that support private sector growth and development. The private sector should also be aware of the government’s human development programmes. In this regard, it is ironic that the private sector in The Gambia is not fully aware of the existing MDGs and the PRSP. This lack of knowledge of the MDGs and the PRSP by the private sector also probably reflects a lack of interest in these goals, as the private sector may see the goals as socially oriented goals, with very little direct and immediate effects on the development of the sector. Private entrepreneurs are generally interested in ventures that bring them quick financial results rather than investing in social or public goods. 3.2.2 Macro-Economic Performance and the Private Sector The nature, structure and performance of the national economy, to a large extent, determine the growth and development of the ________________________________________________________________________________________________ Building Capacity for the Attainment of the Millennium Development Goals in The Gambia National Human Development Report 2005 28
________________________________________________________________________________________________________________________ private sector (See Table 9 for the contribution of the private sector to the GDP). This section seeks to address how economic performance affects private sector growth and development, and what challenges, constraints and opportunities the private sector faces on the basis of economic performance and how these can be tackled. The section examines issues such as monetary policy, fiscal policy and the national debt, and how these impact on private sector growth and development. Table 9: Participation of the private sector in the GDP (in percentages) Industry 2000 2001 2002 2003 2004 1 Agriculture 84.4 84.5 84.4 84.5 84.5 2 Mining and quarrying 80.0 80.0 80.0 80.0 80.0 3 Manufacturing 88.9 88.9 88.5 88.5 88.1 3.1 Large and medium manufacturing 85.0 85.0 85.0 85.0 85.0 3.2 Small-scale manufacturing 95.0 95.0 95.0 95.0 95.0 4 Electricity and water 0.0 0.0 0.0 0.0 0.0 5 Building and construction 35.0 35.0 35.0 35.0 35.0 Total industry 79.4 79.7 79.1 79.7 80.5 6 Trade 8.6 8.1 35.7 35.7 35.7 7 Hotels and restaurants 65.0 65.0 65.0 65.0 65.0 8 Transport 55.0 55.0 55.0 55.0 55.0 9 Communications 15.0 15.0 15.0 15.0 15.0 10 Real estate and bus services 85.0 85.0 85.0 85.0 85.0 11 Public administration 0.0 0.0 0.0 0.0 0.0 Total services 27.7 26.7 38.1 38.5 39.2 Total industry and services 54.4 54.6 56.8 58.6 60.8 Source: Central Statistics Department quoted in Situation Analysis of the contribution of the Private Sector Towards the Millennium Development Goals in The Gambia Report 2005 Monetary Policy: Monetary and fiscal policies are strategies, adopted by Government to influence the direction of the economy, regulate the financial sector and conduct government business respectively. Consequently, these policies have profound effects on private sector growth and development in the economy. The current lending policies of commercial banks, characterised by high interest rates of up to 27 per cent for commercial loans, act as disincentives to borrowers and potential investors. Furthermore, the attractive yields from the purchase or investment in treasury bills, which are government bonds with high interest rates, are attracting available finance from the banks and individuals who find returns on treasury bills more attractive than investing in alternative private sector ventures. Consequently, the commercial banks are reluctant to lend money to businesspeople for long repayment periods; instead they invest their excess liquidity in treasury bills. This trend and practice is inimical to private sector growth and development as funds for investment get absorbed by the treasury bills, and thus inhibit growth and diversification in investment. Current monetary policy has however led to the control of inflation. The Consumer Price Index shows that the inflation rate declined from 17 per cent in September 2003 to 12.3 per cent in September 2004. This is good for the economy and for business, as a low inflation rate helps to stabilise the value of the ________________________________________________________________________________________________ Building Capacity for the Attainment of the Millennium Development Goals in The Gambia National Human Development Report 2005 29
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Introduction - UNDP The Gambia

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