With an investment gap in its every sector, opportunities for producing millionaires in The Gambia are as widespread as the River Gambia from which it drew its name, GGCI boss believes.
However, this opportunity for growth is, apparently, clouded by the duo anti-business cancers of exorbitant cost and access to finance for old and prospective business entrepreneurs, Alieu Secka, the CEO of the Gambia Chamber of Commerce and Industry, said.
“In any survey done in The Gambia, the first challenges to businesses have always been cost and access to finance. We are making some small progress but very slow indeed,” Secka said in an interview with torchongambia.
“Currently, if you want to borrow money from the banks, you are looking at something between 20 to 25% interest rate. That is a very high and uneconomical rate for businesses.”
For Mamjarra Nyassy, a fashion designer at Serrekunda Market, who has bought a stall to have her products displayed at the recently concluded GCCI trade fare, Secka’s argument tells a story in her business career.
Ambitious, innovative and creative, Nyassy holds graduate diploma in Business Administration and she would start her own business as supplier of different products to local hotels and later get fashion designing.
Nyassy who believes that in business she “must squeeze water out of stone”, admitted cost and access to finance in the country has hacked her big business heart to a piece.
“Funding from banks is not easy to get. They will come and ask you to fill forms, do their survey and at the end give you an amount lesser that you want, if you are lucky and none if you are not,” she said.
“I had some contract to design different African outfits and send them abroad to sell them to people who have requested for it but I could not access funding. The bank I applied to only gave me half of the amount I asked for.”
The Gambia Chamber of Commerce and Industry has been a mediating party between private investors and the Government and thus seeks to protect the interest of private businesses in the country.
However, Secka observed that the problem of access to finance is partly aggravated by Government’s taste for domestic borrowing.
“Unfortunately, the banks are also required to have certain deposit with the Central Bank and the current rate on returns on deposit on treasury bills is high. These also cloud out private financing because most of these banks would rather invest on treasury bills and make 17% than risk it with, say, a start-up or a private investor,” he said.
“But it is the economy that suffers… Because if the private investors have money, they create jobs, pay taxes and thus the investment in the productive sector of the economy shoots up… But it is a tough situation to be in because the Government is also challenged in that the country is tax-based and they need money to provide services for the people.”
Currently, the domestic debt of The Gambia stands at D22.6 billion or 59.1% of the GDP as at the end of 2015, according to the Central Bank figures released today, February 4.
Secka also noted that the country’s business environment is considerably challenged by higher cost of energy
“There are various studies that confirmed that we are one of the most expensive countries when it comes to cost of energy,” he said, adding that NAWEC, the national energy company, also finds it difficult to deal with the rising demand for energy in addition to rising cost of production.
But despite the challenges, Secka said, millions worth of investment gap are left to be filled in the country, particularly in agriculture.
“We import $50 million worth of rice every year— so you can imagine the savings and the impact it will have on our economy if we are self-sufficient in rice production… Electricity supply is another gap and for a businessman, that is another opportunity,” he said.
“These investment gaps can be an opportunity for the private sector and we continue to engage the business communities to see how they can exploit these opportunities… There are several investment opportunities in agro industry in the country.”