sectoral gr trends projections 1998-2013

8/14/2019 Sectoral GR Trends Projections 1998-2013

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TRENDSAND PROJECTIONSOF SECTORAL GDP GROWTH RATESFOR THE GAMBIA DURING 1998-2008-2013 AND SOME POLICY

ISSUES

TARUN DASMACROECONOMIC ADVISER

Institutional Support Project for Economic and Financial Governance (ISPEFG)Department of State for Finance and Economic Affairs (DOSFEA)

The Republic of GambiaThe Quadrangle, Banjul, The Gambia

28 FEBRUARY2009

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CONTENTS

1.Introduction

2. Impact of Global Financial Crisis and Economic Slowdown on theGambian Economic Growth

3. Data Base, Projection Methods and Presumptions(a) Least-squares time trend growth rate

(b) Exponential growth rate(c) Average of Annual Growth rates(d) Presumptions

4. Outlook and Policy Issues

4.1 Focusing Agricultural and Rural Development4.2 Improving Investment Climate4.3 Economic Diversification and Private Sector Development (PSD)4.4 Financial Sector Reforms4.5 Small and Medium Enterprise (SME) Development4.6 Development of Human Capital4.7 Focusing on Pro-poor Growth Strategy

Appendix Tables

Table-1: Trends of Sectoral GDP at constant 2004 Factor Cost in 998-2008

Table-2: Trends of Sectoral Real GDP Growth Rates during 1998-2008

Table-3: Trends of Sectoral Shares in real GDP during 1998-2008

Table-4: Semi-logarithmic Time Trends Ln (Yt) = + Time

Table-5: Projected Sectoral GDP at constant 2004 Factor Cost during 2009-2013

Table-6: Projected sectoral real GDP Growth Rates during 2009-2013

Table-7: Projected Sectoral Shares in Real GDP During 2009-2013

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1. INTRODUCTION

In January 2009 Macroeconomic Adviser prepared a report entitled An Operational

Macroeconomic Forecasting Model for Gambia- Basic Concepts, Data Base,

Calibration Techniques and Projections. The Model was presented in a meeting chaired

by honorable PS-I and attended by participants from EMPU, Budget and DebtManagement Unit in the DOSFEA Committee room during 1100-1230 hours on the 13 th

February 2009. PS-I made the following valuable comments:

(1) In the absence of relevant data from GBOS and CBG, the sectoral GDP and

different items for the balance of payments for the base year 2008 were estimated

by the author. In an ideal situation, the provisional estimates by the respective

organizations need to be collected and used for updating the model.

(2) The model has not fully captured the impact of global financial tsunami and

economic slowdown during 2008-2009 on the Gambian economy, as the model

uses the historical growth rates for projections for 2009-2013. There is some

evidence that the global economic crisis has affected adversely Gambian exports

and inflows of remittances and grants to India. However, Gambia still could be a

better place for direct foreign investment by the non-resident Gambians as the

avenues for investing in the other countries are limited and less profitable.

(3) The growth rates for electricity need upward revision as the government is

presently implementing a massive program on rural electricity supply.

(4) There is also an ongoing program on civil service reforms which may induce

work efforts and enhance both consumption and investment demands.

(5) Trends of international prices of crude oil, petroleum products and food products

and their impact on the Gambian imports and domestic inflation need to be

examined carefully. Although presently these prices are showing downward

trends, reversal of trends and rise of these prices in future cannot be ruled out

completely.

(6)Inflation was contained within 5 percent in 2008 by eliminating the sales

tax on rice imports altogether in May 2008. Appreciation of the

dalasi also helped cushion the impact on inflation to someextent. But, these avenues may not be available in future leading

to pressure on domestic inflation.

(7) Government has a plan to drawdown a part of domestic debt and may engage in

borrowing more of external debt with higher concessional element.

.

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Analysis of detailed sectoral tables given in the Appendix leads to the following

conclusions:

(1) Agricultural sector was not affected by the global economic situation and

performed very well during 2008. Crop production achieved a fantastic growth

rate of 45.7 percent in 2008, the second highest growth rate during the past decade(highest being the growth rate of 56.3 percent recorded in 1999 after a bad harvest

in 1998). Livestock and fishery maintained more or less their trend growth rates in

2008, while forestry production recovered from its negative growth in 2007 andachieved a marginal growth rate of 1 percent.

(2) There was missed performance within the industrial sector. As in the most of the

countries of the world, manufacturing was affected adversely by the globaleconomic slowdown and its value added declined by (-) 2.5 percent due to decline

of exports and production of cotton products. Mining and quarrying achieved a

growth rate of 6 percent in 2008 compared to 6.9 percent in 2007, while

electricity, gas and water supply achieved an excellent growth rate of 15 percentin 2008 on top of 17 percent registered in 2007. Construction value added

remained invariant in 2008 compared to a decline by (-) 9.8 percent in 2007.Overall, industrial value added achieved a marginal growth of 0.7 percent in 2008

compared to a decline by (-) 3.1 percent in 2007.

(3) Many of the services sectors were adversely affected by the global financial crisis.

Wholesale and retail trade was the worst affected sector and its value added

declined by (-) 12.9 percent in 2008, the highest negative growth rate since 1998,

due to decline of exports and re-exports and negative growth of manufacturingsector. Public administration value added remained invariant due to significant

rise of wage bill for the public sector. The growth rate of value added for health

and social sectors decelerated significantly from 10.9 percent in 2008 to only 1.2percent in 2008 due to government revenue constraints and decline of funding by

donors.

(4) However, within service sectors, financial services and telecommunications

performed very well and real estate, other business services, transport and storage

and tourism related services performed reasonably well.

(5) As the exposure of the Gambian banks to the foreign financial markets and their

holdings in American and European banks are limited, there was practically no

adverse impact on the Gambian financial services, which recorded an excellentgrowth rate of 14.5 percent in 2008 compared to an average growth rate of 14.6

percent during previous three years 2005-2007. Telecommunications also

performed well and achieved a growth rate of 10 percent in 2008 on top of 20percent recorded in 2007.

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3. Data Base, Projection Methods and Presumptions

The basic data on sectoral value added at the constant 2004 factorcost are obtained from the GBOS. Then following three kinds of growthrates are calculated for the past data.

(a) Least-squares time trend growth rate

The IMF uses the Least-squares growth rates to forecast the countrygrowth rates in their World Economic Outlook (WEO) published twice ina year, wherever there is past data for at least 9 years to permit areliable calculation. The least-squares growth rate, r, is estimated byfitting a linear regression trend line to the logarithmic annual values ofthe GDP value added in the relevant period. The regression equationtakes the form

Ln Yt= a + bt

which is equivalent to the logarithmic transformation of the compoundgrowth equation,

Yt= Yo (1 + r)t

In this equation, Y is the variable, tis time, r is the trend growth rate,Ln is the natural logarithm operator, and a = log Yo and b = Ln (1 + r)are the parameters to be estimated. Ifb* is the least-squares estimateofb, the average annual growth rate, r, is obtained as [exp(b*) 1] and

is multiplied by 100 to express it as a percentage. The calculatedgrowth rate is an average rate that is representative of the availableobservations over the entire period. It does not necessarily match theactual growth rate between any two years.

(b) Exponential growth rate

The exponential growth rate between two points in time for a variableis calculated from the following equation

r= Ln (Yn /Y1)/n

where Ynand Y1 are the last and first observations in the period, n isthe number of years in the period, and Ln is the natural logarithmoperator. This growth rate is based on a model of continuous andexponential growth between two points in time. It does not take intoaccount the intermediate values of the series.

(c) Average of Annual Growth rates

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Average Annual Growth Rate () = GRi /11

GRi = 100 * (Yi / Yi-1 -1) for i=1, 2, 11 for the years 1998, 1999, .. 2008.

CV = 100 * SD/

SD = (GRi - ) / 11Where Ln stands for natural logarithm, GRi for growth rate for the i-th year, CV for

coefficient of variation and SD for standard deviation.

Table-4 presents the least squares estimates of , and the growth rates for thesectoral value added. As judged by the goodness of fit statistics viz. t-value, R and

Adj.R, least squares estimates appear to be very good fits. All the three types of growth

rates are presented in Table-3. In general, as expected, the least squares trend growth rateis lower are than the exponential growth rate, which in turn is lower than the average

annual growth rates for most of the sectors. It may also be observed from Table-3 that

annual growth rates highly volatile with high standard deviation (SD) and co-efficient ofvariation (CV). and therefore average annual growth rate cannot hold good for the

medium and long term.

(d) Presumptions

The projections of sectoral value added for the years 2009-2013 are done on the basis of

the trend growth rate, which happens to be the minimum of these three types of growthrates. However in order to capture the impact of the global slowdown, some of the

projected sectoral growth rates are modified on the basis of above mentioned comments

and suggestions given by honorable PS-1. Sector-wise assumptions are indicated below:

(a) Renewed focus on agriculture, horticulture, modernizing and commercializing

agriculture, particularly the groundnut sector; non-traditional agricultural crops

such as cashew nuts, mushrooms and sesame etc. will continue. Assuming thatthere would be no weather shocks during 2009-2013 crops, forestry and livestock

will grow at the trend growth rates while fishing will maintain the growth ratesachieved in the last three years.

(b) As mining started with low base in 1998, the exponential, annual average and the

trend growth rates in the range of 23 to 30 percent are considered to be

exceptionally high and cannot be maintained in the medium term. However, givensuccessful exploration of new oil fields, mining and quarrying will retain the

average growth rate around 7.5 percent per annum during last three years.

(c) Due to adverse impact of global slowdown, manufacturing value added will

continue to have negative growth rate in 2009, and is expected to recover slowlyin the subsequent years as domestic and world demands pick up.

(d) Due to massive rural electricity supply programs, utilities sector is likely to

maintain their recent high growth rates around 10 percent in the medium term.

(e)The Gambia has traditionally acted as a regional re-export hubdue to liberal trade policies and relatively efficient ports andcustoms administration. However, policy shortcomings resulted

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in lower re-exports due to unstable exchange rate, slow progressto simplify further its customs clearance procedures and improvethe ports facilities, while neighboring countries such as Senegalhave closed the competitiveness gap. In early 2006, Gambiaadopted the ECOWAS Common External Tariff (CET) and

increased its import sales tax in order to harmonize its tariffregime with the region. Although these reforms are intended topromote regional trade integration, the near-term tax increaseon imports might have reduced the countrys competitiveness inre-export trade. These unfavorable conditions were exacerbatedby the global slowdown leading to significant fall of re-exportsand wholesale and retail trade in 2008. It is expected that traderelated value added will continue to have negative growth ratearound historical trend growth rate of (-) 1.8 percent.

(f) Given the past trends, construction activities are expected torecover in the medium term.

(g)As indicated earlier, financial services, transport and telecom,travel and tourism related services such as hotels and restaurantsvalue added, real estate and business services were notadversely affected by the global financial crisis and slowdownin 2008 and are expected to maintain their trend growthrates.

(h) Social sectors will be able to maintain their historical growth rates as a result

of ongoing civil service reforms programs being executed by the government.

(i) There will be some pressure on domestic inflation leading to marginal

increase of CPI inflation to 5.5 percent in the medium term compared to 5percent in 2008. Given world inflation around 2 percent, Dalasi is expected to

depreciate in terms of US dollar by 3.5 percent (equal to the difference

between domestic inflation and world inflation) to main the real effectiveexchange rate constant.

4. Outlook and Policy Issues

The projected sectoral growth rates during 2009-2013 are presented in the Appendix

Table6 and projected sectoral shares in GDP are given in Appendix Table 6. It will be

observed from the tables that the overall real GDP growth rate is projected to declineto 4.5 percent in 2009 followed by acceleration of growth rate to around 5 to 5.5 percent

in the subsequent years. Crops, public utilities, tourism, transport andtelecommunications, financial and business services will act as leading sectors and

drivers of growth. Overall economic growth and its sectoral decomposition in 2008,

adverse impact of the global economic slowdown on the Gambian exports and traderelated services, and the sectoral growth projections for the medium term lead to a

number of policy issues, particularly the following:

4.1 Focusing agricultural and rural development

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Medium term projections emphasize the critical role of agriculture to boost overall

economic growth and to ensure poverty reduction, food security and employment

generation. The initiatives in the agriculture sector need to be focused on private sector

promotion. The PRSP indicates that most of the poor are farmers particularly groundnut

farmers, who live in rural areas, and that agricultural productivity has stagnated in recent

years. Agricultural development need to be regarded as an integral part of the national

development plan with multi-sectoral approach encompassing agricultural development,

employment generation, and improvement of both human capital formation and rural

physical infrastructure. Governments massive rural electricity supply program is in the

right direction and need to be continued in the medium term.

Government may not directly intervene in agricultural production and supply of essential

inputs. Rather, government should encourage the banks to supply rural credits at lower

interest rates and play a supportive role to private sector investment in rural and

agricultural development. This could be achieved by promoting private sector

participation in the government owned groundnut plants as the initial steps and eventual

divestment of the groundnut plants. The ongoing groundnut sector restructuring strategy

and reforms need to be carried to their logical ends.

Given fertile land, plenty of sunshine and water, Gambian agriculture can sustain high

growth rates. Focus on agriculture in government budget and national development plans

will have many positive impacts on the economy. This will help the country to augment

food grains production, avoid food imports and generate more productive employment in

agriculture related activities and food processing industries. This will in turn help in

reduction of poverty, hunger and malnutrition at a faster speed.

4.2 Improving investment climate

It is necessary to take appropriate measures to improve the investment climate based on

ongoing assessments. The latest World Bank Doing Business Survey indicates that the

Gambia ranks relatively poorly in terms of ease for doing business. The PRSP outlines

programs to strengthen the infrastructure, provide investment incentive schemes, and

streamline legal and administrative procedures. Electricity supply is considered to be the

most critical constraint, in addition to high costs of bank credits, high corporate taxes and

constraints on access to land. Appropriate reforms are desired in these sectors.

The second PRSP focuses on strategic planning and implementation, strengthening public

expenditure management, internal controls on budget, and fiscal and monetary

coordination in order to prevent macroeconomic slippages. The other major constrains to

rapid growth relate to low capacity of the public sector, and governance shortcomings.

These risks are being addressed through the ongoing civil service reforms, measures to

strengthen management of public resources, and improving the investment climate. The

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PRSP also emphasizes the adoption of a Medium-Term Expenditure Framework (MTEF)

as a means to further deepen the integration of PRSP priorities with the budget, and better

identification and linkages between outputs and outcomes.

4.3 Economic Diversification and Private Sector Development (PSD)

Economic development in the Gambia in future will continue to depend on sustaining and

enhancing traditional sectors, particularly agriculture, mining and tourism, while improving

competitiveness for re-exports. Diversification of Gambias economic base depends on ongoing

civil service governance reforms, business and investment climate reforms, and investment in

much needed public goods (health, education and public infrastructure). In a perfectly

competitive world, improving the overall investment climate for private businesses does not need

the direct support by the Government to specific areas (such as rural areas) or specific sectors

(such as small and medium enterprises). However, the real markets in any developing economy

like the Gambia are neither perfect nor competitive. Due to the existence of market and product

imperfections, the Government can play a facilitating role (and not an interventionist role) tohelp address some of the market failures and encourage diversification. It may design a Private

Sector Development (PSD) strategy including Public-Private-Partnership (PPP) with the help of

the other stakeholders, identify new areas to support sustainable growth and development of the

Gambia and focus on the effective use of scarce economic and financial resources.

4.4 Financial Sector Reforms

Both the nominal and real lending rates (i.e. nominal rate minus the inflation rate) are very high

in Gambia leading to high cost economy. In the absence of alternatives, financial institutions

compete for savings and deposits and the deposit rates have remained relatively high and rigid.Going forward, banks would need to explore new financial products and value added services for

the customers rather than relying only on the deposit rate and lending rate differentials.

4.5 Small and Medium Enterprise (SME) Development

For broad based growth in the Gambia, development of a strong SME sector is critical,

especially given the need for employment generation and development of new products for

export markets. SMEs could provide much useful support to both agriculture, manufacturing and

services sectors; for example, in food processing, meat and fish production, automobile repair

and maintenance, product quality control, handicrafts, and at the same time generate

employment. However, SMEs face a number of impediments, such as high cost of financing, and

inadequate support systems. They have low skilled staff, weak capacity and resource constraints

for individually conducting market research and business planning, and face a domestic banking

system that also lacks the capacity or skills to assess the creditworthiness of SMEs, and hence,

are unable to lend much to SMEs. Building the capacity of banks to evaluate risk of lending to

SMEs would not only facilitate lending to this sector but also help banks enhance their risk

management practices in general.

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4.6 Development of human capital

There are new sets of challenges to maintaining the relative success in the social sectors

such as education and health. The PRSP indicates that the next challenges are to improve

education outcomes and the quality of schooling, and putting greater emphasis on

primary services and preventive care. If every Gambian is healthy, educated and livelonger, they can participate more and gain more from the development process. The

PRSP supports greater decentralization and expansion of social development funds in

order to better target public services for the poor and the rural sectors.

4.7 Focusing on Pro-poor Growth Strategy

Although the Gambia is a small economy with 1.7 million people, there is considerable

scope to enhance domestic demand. As 60 percent people are poor and unemployment is

the root cause of poverty, we need to emphasize pro-poor and employment generating

growth strategy. In a paper on the interrelationships among growth, employment and

poverty, James Heintz, Carlos Oya and Eduardo Zepeda (2008)1 have concluded that:

The growth pattern of The Gambia does not appear to be pro-poor, as improvements in

the rate of growth appear to have at best halted the spread of poverty. Weak productivity

performance and the low quality of employment help explain the poverty record. On the

macroeconomic side, an excessive emphasis on inflation reduction and reliance on

monetary policy instruments have helped sustain a high-interest rate environment, which

discourages investment and employment creation. As part of an alternative policy

package, The Gambia could reformulate macroeconomic policies to target growth

instead of inflation, select a more effective mix of policy instruments, and pursue

financial reforms to increase the supply of credit to the economy and particularly to

employment-intensive activities. In addition, targeted public investments are essential for

sustaining more rapid growth and improvements in employment opportunities.

A review of the available evidence suggests that labor markets in The Gambia do not

function in a way conducive to poverty reduction. The employment situation conforms to

the typical configuration, whereby traditional activities and informality dominate rural

and urban areas. The Gambia also faces high open unemployment rates in cities,

particularly among the youth. Measures to increase the labor mobility of the poor are

urgently needed. The Gambia has benefited from a rapid increase in literacy and basic

education, although more progress is needed to improve the quality of education and,

1 Heintz, James, Carlos Oya and Eduardo Zepeda (2008) Towards an

employment centered development strategy for poverty reduction in Gambia:

Macroeconomic and labor markets aspects, Country Study No.6, International Poverty

Centre (IPC), Brazil, July 2008.

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particularly, to provide comprehensive training that adequately meets the demand for

skilled labor. Finally, there is an urgent need to overhaul labor institutions with the aim

of improving labor conditions, reducing labor segmentation and improving knowledge

systems.

The purpose of this rather long quotation is to emphasize theirpolicy prescription thatthere is an urgent need to adopt a pro-poor and employment-oriented policy in the

Gambia for faster reduction of poverty, attainment of millennium development goals

(MDGs) and sustaining high growth over time. I fully agree with this policy advice.

Appendix Table-1:The Gambia- Trends of Sectoral GDP

at constant 2004 Factor Cost during 1998-2008(in Million Dalasi)

I T E MS 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008Est.

GDP 2004FC

12740 13641 14390 15218 15328 15693 15578 15893 16940 17972 19263

Agriculture 2942 3828 4114 4470 3661 4374 4667 4631 4813 5003 6425

- Crops 1390 2173 2453 2709 1848 2512 2820 2744 2857 2980 4341

- Livestock 1194 1241 1279 1317 1356 1397 1439 1482 1527 1588 1635

- Forestry 85 88 92 96 99 102 105 109 112 107 108

- Fishing 274 325 291 348 358 363 302 296 318 328 340

Industry 1814 1833 1894 1996 2218 2274 2357 2504 2967 2875 2894

- Mining 33 36 42 76 203 231 267 278 300 321 340

- Manuf. 822 835 851 866 906 921 973 996 992 1006 981

- Utilities 121 125 133 156 174 160 134 136 144 168 194- Constr. 838 838 868 899 935 963 982 1094 1531 1380 1380

Services 8590 8591 9007 9391 10115 9723 9247 9540 10082 11133 11066

- Trade 4797 4848 5158 5230 5384 4911 4380 4437 4371 4681 4076

- Hotels 525 525 525 525 525 525 439 447 452 459 473

- Trans. 492 482 501 521 560 575 589 611 645 700 742

- Telecom 588 527 559 795 1224 1250 1335 1428 1685 2106 2317

- Business 1488 1503 1536 1570 1636 1669 1702 1858 2127 2336 2596

-- Finance 1105 1245 1472 1661 1901

-- Real Est 597 613 655 675 695

--- Market 51 53 54 56 57

-- Rent 546 560 601 619 638

-- Pub Adm 326 326 341 357 376 376 376 371 371 401 401

-- Others 374 380 386 393 410 418 426 387 430 450 461

--- Edu. 172 153 186 186 192

--- Health 170 148 157 174 176

--- Others 83 86 88 90 93

Unadj.GDP 13346 14253 15015 15857 15994 16372 16271 16676 17862 19011 20385

Errors -606 -612 -625 -639 -666 -679 -693 -783 -921 -1039 -1122

GDP 2004FC

12740 13641 14390 15218 15328 15693 15578 15893 16940 17972 19263

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Taxes lesssub

169 153 249 268 229 223 240 258 287 332 333

GDP constmp

12909 13793 14639 15486 15557 15915 15818 16151 17227 18304 19595

GDP currmp

6194 6836 7517 9160 10683 13532 15818 16832 18317 20444 22788

CPI Inflation 1.1 3.8 0.9 4.5 8.6 17.0 14.2 4.3 2.1 5.2 4.0

Source: Gambian Bureau of Statistics (GBOS)

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Appendix Table-3: The Gambia- Trends of Sectoral Shares in real GDPduring 1998-2008 (in percentage)

I T E MS 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

GDP 2004 FC 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Agriculture 23.1 28.1 28.6 29.4 23.9 27.9 30.0 29.1 28.4 27.8 33.4

- Crops 10.9 15.9 17.0 17.8 12.1 16.0 18.1 17.3 16.9 16.6 22.5

- Livestock 9.4 9.1 8.9 8.7 8.8 8.9 9.2 9.3 9.0 8.8 8.5

- Forestry 0.7 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.7 0.6 0.6

- Fishing 2.2 2.4 2.0 2.3 2.3 2.3 1.9 1.9 1.9 1.8 1.8

Industry 14.2 13.4 13.2 13.1 14.5 14.5 15.1 15.8 17.5 16.0 15.0

- Mining 0.3 0.3 0.3 0.5 1.3 1.5 1.7 1.8 1.8 1.8 1.8

- Manuf. 6.5 6 .1 5 .9 5 .7 5 .9 5 .9 6 .2 6 .3 5 .9 5 .6 5.1

- Utilities 0.9 0 .9 0 .9 1 .0 1 .1 1 .0 0 .9 0 .9 0 .8 0 .9 1.0

- Constr. 6.6 6.1 6.0 5.9 6.1 6.1 6.3 6.9 9.0 7.7 7.2

Services 67.4 63.0 62.6 61.7 66.0 62.0 59.4 60.0 59.5 61.9 57.4

- Trade 37.6 35.5 35.8 34.4 35.1 31.3 28.1 27.9 25.8 26.0 21.2

- Hotels 4.1 3 .9 3 .7 3 .5 3 .4 3 .3 2 .8 2 .8 2 .7 2 .6 2.5

- Trans. 3.9 3 .5 3 .5 3 .4 3 .7 3 .7 3 .8 3 .8 3 .8 3 .9 3.9

- Telecom 4.6 3.9 3.9 5.2 8.0 8.0 8.6 9.0 9.9 11.7 12.0

- Business 11.7 11.0 10.7 10.3 10.7 10.6 10.9 11.7 12.6 13.0 13.5

-- Finance 7.1 7.8 8.7 9.2 9.9

-- Real Est 3.8 3.9 3.9 3.8 3.6

--- Market 0.3 0.3 0.3 0.3 0.3

-- Rent 3.5 3.5 3.5 3.4 3.3

-- Pub Adm 2.6 2.4 2.4 2.3 2.5 2.4 2.4 2.3 2.2 2.2 2.1

-- Others 2.9 2 .8 2 .7 2 .6 2 .7 2 .7 2 .7 2 .4 2 .5 2 .5 2.4

--- Edu. 1.1 1.0 1.1 1.0 1.0

--- Health 1.1 0.9 0.9 1.0 0.9

--- Others 0.5 0.5 0.5 0.5 0.5

Unadj.GDP 104.8 104.5 104.3 104.2 104.3 104.3 104.4 104.9 105.4 105.8 105.8

Errors -4.8 -4.5 -4.3 -4.2 -4.3 -4.3 -4.4 -4.9 -5.4 -5.8 -5.8

GDP 2004 FC 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Taxes less sub 1.3 1.1 1.7 1.8 1.5 1.4 1.5 1.6 1.7 1.8 1.7

GDP const.mP 101.3 101.1 101.7 101.8 101.5 101.4 101.5 101.6 101.7 101.8 101.7

Source: Estimated on the basis of Table-1.

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Appendix Table-4: Semi-logarithmic Time Trends Ln (Yt) = + Time(Time=1, 2, 3 .. 11 for the years 1998, 1999, 2000 ..2008)

Variables t-stat

for t-

stat

for R R Adj.R

Trend GR

*

GDP at 2004 FC (Ml. GD) 9.45 450.84 0.03 11.07 0.93 0.97 0.92 3.5

Agriculture and allied 8.07 123.61 0.05 5.44 0.77 0.88 0.74 5.4

-- Crops 7.41 65.42 0.07 4.28 0.67 0.82 0.63 7.4

-- Livestock 7.06 3191.8 0.03 94.43 1.00 1.00 1.00 3.1

-- Forestry 4.45 220.16 0.03 8.86 0.90 0.95 0.89 2.7

-- Fishing 5.72 96.85 0.01 0.92 0.09 0.29 -0.02 0.8

Industry 7.41 277.90 0.05 13.86 0.96 0.98 0.95 5.6

-- Mining & quarrying 3.36 13.42 0.27 7.18 0.85 0.92 0.83 30.3

-- Manufacturing 6.69 429.43 0.02 9.64 0.91 0.95 0.90 2.2

-- Electricity, gas, water 4.82 63.15 0.03 2.65 0.44 0.66 0.38 3.0

-- Construction 6.59 108.13 0.06 6.72 0.83 0.91 0.82 6.2

Services9.03 319.62 0.02 5.64 0.78 0.88 0.75 2.4

-- Wholesale/retail trade 8.57 201.02 -0.02 -2.87 0.48 0.69 0.42 -1.8

-- Hotels & restaurants 6.31 186.64 -0.02 -3.68 0.60 0.78 0.56 -1.8

-- Transport, storage 6.10 335.38 0.04 15.88 0.97 0.98 0.96 4.4

-- Telecom 6.09 68.41 0.15 11.75 0.94 0.97 0.93 16.7

-- Business services 7.17 157.38 0.05 7.98 0.88 0.94 0.86 5.5

---- Financial 6.87 523.85 0.14 34.74 1.00 1.00 1.00 14.7

---- Real estate, business 6.35 517.00 0.04 10.78 0.97 0.99 0.97 4.1

---- Market services 3.91 5.50 0.03 21.51 0.99 1.00 0.99 2.7

------ Imputed rent 6.26 457.76 0.04 9.99 0.97 0.99 0.96 4.2

-- Public administration 5.78 304.98 0.02 7.14 0.85 0.92 0.83 2.0

-- Other service 5.90 262.73 0.02 5.64 0.78 0.88 0.76 1.9

---- Education 5.05 64.69 0.04 1.73 0.50 0.71 0.33 4.2

---- Health, social 5.04 63.91 0.02 0.94 0.23 0.48 -0.03 2.3

---- Others 4.40 1082.7 0.03 21.52 0.99 1.00 0.99 2.7

Unad-GDP at const price 9.49 452.69 0.04 11.50 0.94 0.97 0.93 3.6

Errors and omissions 6.24 112.01 0.06 7.54 0.86 0.93 0.85 6.4

Taxes less subsidies 5.12 58.13 0.06 4.82 0.72 0.85 0.69 6.5

GDP const.mp (Mill.GD) 9.46 441.72 0.03 10.96 0.93 0.96 0.92 3.5

GDP curr mp (Mill GD) 8.59 202.40 0.14 22.05 0.98 0.99 0.98 14.8

Source: Semi-logarithmic Time Trends fitted by Tarun Das, MacroeconomicAdviser

* Note: Trend growth rate equals [exp ()-1].

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Appendix Table-5: The Gambia- Projected Sectoral GDPAt constant 2004 Factor Cost during 2009-2013

(GDP in million Dalasi and GR in Percentage)

I T E MS 1998-2008

1998-2008

1998-2008

1998-2008

2009-2013

2008 2009 2010 2011 2012 2013

Exp-GR Ave.GR CV(%) TrendGR Proj.GR Est. Proj. Proj. Proj. Proj. Proj.

GDP 2004FC

4.1 4.2 152.4 3.5 5.2 19263 20120 21124 22252 23482 24825

Agriculture 7.8 7.9 56.6 5.4 6.1 6425 6813 7226 7668 8139 8642

- Crops 11.4 12.8 51.1 7.4 7.4 4341 4663 5009 5380 5779 6207

- Livestock 3.1 3.3 700.7 3.1 3.1 1635 1687 1739 1794 1850 1908

- Forestry 2.4 2.6 110.7 2.7 2.7 108 111 114 117 121 124

- Fishing 2.1 1.4 11.6 0.8 3.5 340 351 364 376 390 403

Industry 4.7 4.9 85.9 5.6 4.5 2894 2952 3079 3245 3422 3611

- Mining 23.3 28.6 55.4 30.3 7.5 340 365 393 422 454 488

- Manuf. 1.8 1.8 81.2 2.2 1.3 981 959 980 1002 1025 1048

- Utilities 4.7 6.6 59.4 3.0 10.0 194 213 234 258 284 312

- Constr. 5.0 5.9 47.8 6.2 5.0 1380 1415 1471 1563 1660 1763

Services 2.5 2.9 61.3 2.4 5.0 11066 11550 12090 12691 13359 14102

- Trade -1.6 -0.7 -9.8 -1.8 -1.8 4076 4003 3931 3861 3792 3724

- Hotels -1.0 -0.8 -15.2 -1.8 3.0 473 487 502 517 532 548

- Trans. 4.1 3.9 128.5 4.4 4.4 742 774 808 843 880 918

- Telecom 13.7 17.5 91.9 16.7 10.0 2317 2549 2803 3084 3392 3731

- Business 5.6 5.3 109.6 5.5 10.1 2596 2852 3137 3454 3807 4199

-- Finance 13.6 14.5 569.0 14.7 12.0 1901 2129 2385 2671 2991 3350

-- Real Est 3.8 3.9 193.5 4.1 4.1 695 723 753 783 815 849

--- Market 2.7 2.8 417.4 2.7 2.7 57 59 60 62 63 65

-- Rent 3.9 4.0 177.4 4.2 4.2 638 665 693 722 752 784

-- Pub Adm 2.1 2.2 72.2 2.0 2.0 401 409 418 426 435 443

-- Others 2.1 2.0 41.8 1.9 3.2 461 475 490 505 521 538

--- Edu. 2.5 3.4 24.7 4.2 4.2 192 200 208 217 226 235

--- Health 0.7 1.2 11.7 2.3 2.3 176 180 184 188 192 197

--- Others 2.7 2.8 417.5 2.7 2.7 93 95 98 100 103 106

Unadj.GDP 4.2 4.3 157.8 3.6 5.3 20385 21314 22395 23603 24920 26355

Errors 6.2 6.0 100.0 6.4 6.4 -1122 -1194 -1270 -1352 -1438 -1530

GDP 2004FC

4.1 4.2 152.6 3.5 5.2 19263 20120 21124 22252 23482 24825

Taxes lesssub

6.8 9.2 45.2 6.5 6.5 333 354 377 402 427 455

GDPconst.mP

4.2 4.2 152.7 3.5 5.2 19595 20475 21501 22653 23910 25280

GDP curr

mp

13.0 14.1 221.4 14.8 11.0 22788 25112 27815 30911 34415 38384

CPI Inflation 5.5 4.0 5.5 5.5 5.5 5.5 5.5

Source: Projected by Tarun Das, Macroeconomic Adviser

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Appendix Table-6: The GambiaProjected sectoral real GDP Growth Rates during 2009-2013

(in Percentage)

I T E MS 1998-2008

1998-2008

1998-2008

1998-2008

2009-2013

2008 2009 2010 2011 2012 2013

Exp-GR

Ave.GR

CV(%)

TrendGR

Proj.GR

Est. Proj. Proj. Proj. Proj. Proj.

GDP 2004 FC 4.1 4.2 152.4 3.5 5.2 7.2 4.5 5.0 5.3 5.5 5.7

Agriculture 7.8 7.9 56.6 5.4 6.1 28.4 6.0 6.1 6.1 6.1 6.2

- Crops 11.4 12.8 51.1 7.4 7.4 45.7 7.4 7.4 7.4 7.4 7.4

- Livestock 3.1 3.3 700.7 3.1 3.1 3.0 3.1 3.1 3.1 3.1 3.1

- Forestry 2.4 2.6 110.7 2.7 2.7 1.0 2.7 2.7 2.7 2.7 2.7

- Fishing 2.1 1.4 11.6 0.8 3.5 3.5 3.5 3.5 3.5 3.5 3.5

Industry 4.7 4.9 85.9 5.6 4.5 0.7 2.0 4.3 5.4 5.5 5.5

- Mining 23.3 28.6 55.4 30.3 7.5 6.0 7.5 7.5 7.5 7.5 7.5

- Manuf. 1.8 1.8 81.2 2.2 1.3 -2.5 -2.2 2.2 2.2 2.2 2.2

- Uti lities 4.7 6.6 59.4 3.0 10.0 15.0 10.0 10.0 10.0 10.0 10.0

- Constr. 5.0 5.9 47.8 6.2 5.0 0.0 2.5 4.0 6.2 6.2 6.2

Services 2.5 2.9 61.3 2.4 5.0 -0.6 4.4 4.7 5.0 5.3 5 .6

- Trade -1.6 -0.7 -9.8 -1.8 -1.8 -12.9 -1.8 -1.8 -1.8 -1.8 -1.8

- Hotels -1.0 -0.8 -15.2 -1.8 3.0 3.0 3.0 3.0 3.0 3.0 3.0

- Trans. 4.1 3.9 128.5 4.4 4.4 6.0 4.4 4.4 4.4 4.4 4.4

- Telecom 13.7 17.5 91.9 16.7 10.0 10.0 10.0 10.0 10.0 10.0 10.0

- Business 5.6 5.3 109.6 5.5 10.1 11.1 9.9 10.0 10.1 10.2 10.3

-- Finance 13.6 14.5 569.0 14.7 12.0 14.5 12.0 12.0 12.0 12.0 12.0

-- Real Est 3.8 3.9 193.5 4.1 4.1 3.0 4.1 4.1 4.1 4.1 4.1

--- Market 2.7 2.8 417.4 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7

-- Rent 3.9 4.0 177.4 4.2 4.2 3.0 4.2 4.2 4.2 4.2 4.2

-- Pub Adm 2.1 2.2 72.2 2.0 2.0 0.0 2.0 2.0 2.0 2.0 2.0

-- Others 2.1 2.0 41.8 1.9 3.2 2.4 3.1 3.1 3.2 3.2 3.2

--- Edu. 2.5 3.4 24.7 4.2 4.2 3.4 4.2 4.2 4.2 4.2 4.2

--- Health 0.7 1.2 11.7 2.3 2.3 1.2 2.3 2.3 2.3 2.3 2.3

--- Others 2.7 2.8 417.5 2.7 2.7 2.7 2.7 2.7 2.7 2.7 2.7

Unadj.GDP 4.2 4.3 157.8 3.6 5.3 7.2 4.6 5.1 5.4 5.6 5.8

Errors 6.2 6.0 100.0 6.4 6.4 8.0 6.4 6.4 6.4 6.4 6.4

GDP 2004 FC 4.1 4.2 152.6 3.5 5.2 7.2 4.5 5.0 5.3 5.5 5.7

Taxes less sub 6.8 9.2 45.2 6.5 6.5 0.1 6.5 6.5 6.5 6.5 6.5

GDP const.mP 4.2 4.2 152.7 3.5 5.2 7.1 4.5 5.0 5.4 5.5 5.7

GDP curr mp 13.0 14.1 221.4 14.8 11.0 11.5 10.2 10.8 11.1 11.3 11.5


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Appendix Table-7 The Gambia: Projected Sectoral Shares in Real GDPDuring 2009-2013 (in percentage)

1998-2008

1998-2008

1998-2008

2009-2013

2009-2013

2008 2009 2010 2011 2012 2013

AveGR

SD CV(%)

AVE CV(%)

Est. Proj. Proj. Proj. Proj. Proj.

GDP 2004 FC 100.0 0.0 0 100.0 0 100.0 100.0 100.0 100.0 100.0 100.0

Agriculture 28.1 2.8 10 34.4 1 33.4 33.9 34.2 34.5 34.7 34.8

- Crops 16.5 3.1 19 24.1 3 22.5 23.2 23.7 24.2 24.6 25.0

- Livestock 9.0 0.3 3 8.0 3 8.5 8.4 8.2 8.1 7.9 7.7

- Forestry 0.6 0.0 6 0.5 4 0.6 0.6 0.5 0.5 0.5 0.5

- Fishing 2.1 0.2 11 1.7 3 1.8 1.7 1.7 1.7 1.7 1 .6

Industry 14.8 1.3 9 14.6 0 15.0 14.7 14.6 14.6 14.6 14.5

- Mining 1.2 0.7 59 1.9 3 1.8 1.8 1.9 1.9 1.9 2.0

- Manuf. 5.9 0.4 6 4.5 5 5.1 4.8 4.6 4.5 4.4 4.2

- Utilities 1.0 0.1 9 1.2 7 1.0 1.1 1.1 1.2 1.2 1.3

- Constr. 6.7 0.9 14 7.0 1 7.2 7.0 7.0 7.0 7.1 7 .1

Services 61.9 2.9 5 57.1 0 57.4 57.4 57.2 57.0 56.9 56.8

- Trade 30.8 5.3 17 17.4 11 21.2 19.9 18.6 17.4 16.1 15.0

- Hotels 3.2 0.6 18 2.3 4 2.5 2.4 2.4 2.3 2.3 2.2

- Trans. 3.7 0.2 5 3.8 2 3.9 3.8 3.8 3.8 3.7 3.7

- Telecom 7.7 3.0 38 13.9 7 12.0 12.7 13.3 13.9 14.4 15.0

- Business 11.5 1.1 9 15.5 7 13.5 14.2 14.9 15.5 16.2 16.9

-- Finance 8.5 1.1 13 12.0 10 9.9 10.6 11.3 12.0 12.7 13.5

-- Real Est 3.8 0.1 3 3.5 2 3.6 3.6 3.6 3.5 3.5 3.4

--- Market 0.3 0.0 5 0.3 4 0.3 0.3 0.3 0.3 0.3 0.3

-- Rent 3.5 0.1 3 3.2 2 3.3 3.3 3.3 3.2 3.2 3.2

-- Pub Adm 2.3 0.1 6 1.9 5 2.1 2.0 2.0 1.9 1.9 1.8

-- Others 2.6 0.2 6 2.3 3 2.4 2.4 2.3 2.3 2.2 2.2--- Edu. 1.0 0.1 6 1.0 2 1.0 1.0 1.0 1.0 1.0 0.9

--- Health 1.0 0.1 8 0.8 5 0.9 0.9 0.9 0.8 0.8 0.8

--- Others 0.5 0.0 5 0.5 4 0.5 0.5 0.5 0.5 0.4 0.4

Unadj.GDP 104.8 0.6 1 106.1 0 105.8 105.9 106.0 106.1 106.1 106.2

Errors -4.8 0 .6 -13 -6.1 -1 -5.8 -5.9 -6.0 -6.1 -6.1 -6.2

GDP 2004 FC 100.0 0.0 0 100.0 0 100.0 100.0 100.0 100.0 100.0 100.0

Taxes less sub 1.6 0.2 14 1.8 2 1.7 1.8 1.8 1.8 1.8 1.8

GDP const.mP 101.6 0.2 0 101.8 0 101.7 101.8 101.8 101.8 101.8 101.8


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sectoral gr trends projections 1998-2013

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