Promoting Agricultural Value Chains
In the OIC Member Countries
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The low and declining exports are due to a variety of factors, including the increasingly
stringent international quality requirements which pose problems for the Gambian groundnut
sector, low productivity and erratic weather conditions. For example, the dry spells
experienced during the 2006/2007 cropping season resulted in poor crop productivity. During
this period there was a gross reduction in the productivity of all major crops. Groundnut
production declined from about 82,000 tons in 2006 to 73,000 tons in 2007 (about 11 percent
decrease), resulting in a decrease in exports.
The high aflatoxin levels are particularly detrimental to Gambian exports since the main export
market is the European Union where official standards are strict. Consignments are often
significantly higher in aflatoxin than international standards allow (100-200 ppb are not
uncommon whereas the EU demands levels of 15 or 4 ppb) (Colley, 2013).
The Ministry of Trade, Regional Integration and Employment has overall responsibility for
trade policies in collaboration with the Ministry of Foreign Affairs. Tariffs are set by the
Ministry of Finance and administered by the Gambia Revenue Authority. Import tariffs are the
main trade policy instrument: like most agricultural products, groundnuts protected are by an
import tariff of 20 percent.
To attract foreign direct investment in processing and exporting facilities of groundnuts, the
Gambia established the Gambia Investment Promotion and Free Zones Agency (GIPFZA) in
2002, whose primary task was to establish and manage Free Economic Zones. However, the
free zone incentive did not manage to attract new export businesses and in 2010, the project
was closed. Subsequently, GIPFZA was restructured and transformed into the Gambia
Investment and Export Promotion Agency (GIEPA) with an extended mandate to also promote
export and support small and micro enterprise development. The incentives to attract
investors have been enhanced to increase private investment, but observers remain critical as
to the success of the project (World Bank, 2013).
GIEPA seeks to promote the Gambia by emphasising the country’s preferential duty rates and
quota free export to ECOWAS countries (under the ECOWAS Trade Liberalisation Scheme), the
European Union (under the Everything but Arms Initiative), the USA (under the African
Growth and Opportunity Act), and India, Brazil and South Korea (under preferential duty rates
for products from Least Developed Countries). Moreover, there are a number of measures in
place that should incentivize foreign investors, including tax exemptions (e.g. for turnover and
corporate tax for 5-8 years), import tax incentives (exemption of import taxes on direct project
inputs, such as agricultural machinery) and export incentives (exemption of duty and sales tax
on goods that are produced or imported within the Export Processing Zone). However,
business competitiveness is constrained by the enormous number and high levels of
duties/taxes on imports, high utility tariffs in particular with electricity, non-enforcement of
property rights, delays in processing lease applications, challenges with acquiring land for
project expansions, cost of credit by commercial banks, and lacking or low technical skills
levels of the population (GoG, 2012).
5.4.6 Conclusions and lessons learned
Groundnut is the primary agricultural crop in the Gambia, serving both a staple food crop for
domestic consumption and as an export commodity. As the groundnut sector has largely
declined over the past two decades, the Gambian Government has identified groundnuts as one
of the priority value chains to be rebuilt through its recent agricultural and export strategies.