Gambia 1993 PA
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Despite sound economic growth of more than 4 percent in recent years, nearly 60 percent of the population falls below the overall poverty line and 40 percent below the food poverty line. However, if income security were defined to mean a safety margin of more than 25 percent above the poverty line, less than a quarter of the population could be classified as being in a non-precarious position. There is little difference in The Gambia in the incidence of overall poverty between urban and rural areas. The incidence of food poverty is more prevalent in rural than in urban areas. In particular, seasonal food poverty affects the rural population much more seriously than the urban population, which derives a higher proportion of household income from cash activities and has easier access to imported food supplies.
Household size appears to be the single most important predictor of poverty in both urban and rural areas. In urban areas, poor households average more than 11 people, while the wealthiest households average 4.2 persons, and a similar situation prevails in rural households. Large households tend to be multi-generational, have a higher incidence of polygamy, and a higher dependency ratio, all of which add up to lower per capita expenditures. While the gender of the household head does not appear to be a significant predictor of the incidence of poverty in either urban or rural areas, gender characteristics are important in household welfare. The importance of women as food providers is evident in urban areas where female-headed households have an approximately equivalent incidence of overall poverty vis-à-vis male-headed households, but a significantly lower incidence of food poverty. Rural households with proportionately more women appear to spend a higher percentage of expenditures on food and, thus by inference, are likely to be better nourished.
Incentive and Regulatory Framework
The Gambia's reform program, initiated in 1986, was successful in revitalizing economic growth, restoring macroeconomic stability, and preserving competitiveness by providing for a market-determined exchange rate, removing agricultural subsidies, liberalizing price controls, curbing public expenditures, and reforming public enterprises. Since the second phase of the reform program began in 1988, economic growth has averaged about 4 percent per annum, which is significant by regional standards but which has yet to make substantial inroads into existing low living standards.
Most importantly, rapid population growth translates into a per capita increase of only 0.6 percent, better than in some neighboring countries but not enough to generate dramatic change. Moreover, with the withdrawal of agricultural subsidies and uncertain weather conditions, in recent years, the rate of growth and the GDP share of the agricultural sector has lagged as people have sought to diversify the sources of household income. In recent years, the most dynamic sources of growth have been in the service sector (for example, communications, hotels, restaurants, transport, and trade). The greatest impact of this transformation has been in and around Banjul (although there is some evidence of a shift in the sources of economic growth in the rural areas), which has affected rural living standards mainly indirectly through remittances (which have become an increasingly important source of rural household income in recent years).
Thus bringing about a significant increase in overall living standards will require much higher levels of economic growth than The Gambia has seen thus far, in the context of sustained economic management. Moreover, without significant reductions in population growth, even the most optimistic growth scenarios will not raise living standards appreciably within an acceptable period of time.
Data on public expenditures are limited and not entirely reliable. Government budget classifications do not facilitate functional and economic analysis. Actual expenditures are subject to revision, and fiscal discipline is weak, so that expenditures may be recorded under inaccurate headings.
Educational expenditures were sharply curtailed in the initial phase of the reform program, but have since risen significantly. Primary schools now absorb more than 40 percent of the sector's recurrent budget, and secondary schools about 25 percent. Increasing the sector's share of recurrent expenditures is now an explicit objective, but administrative capacity in the sector remains very weak.
Health expenditures were also initially affected but have since recovered. The hospital share of the health budget has risen in recent years, while many primary health care programs suffer from serious shortfalls in resources. Analyzing the efficiency of the sector is extremely difficult as data are incomplete and do not reflect substantial donor financing of recurrent and capital expenditures.
Government expenditures in the agriculture sector have been sharply reduced since the reform program began. Currently, most agricultural expenditures are for extension, livestock/ husbandry services, and natural resource management. Donor financing represents almost half of total sectoral expenditures.
In the absence of any state-supported welfare programs, social safety nets in The Gambia are based on social and religious traditions. Primary among these is a Gambian phenomenon known as the "F-connection" (family, friends, firms) whereby households and small businesses generally operate as an extended family, with friends and family being regarded as "entitled" to live and work with friends and relatives, especially in urban areas, for indefinite periods. This sharing of income and work continues to act as an effective safety net in times of economic crisis and is a major factor in explaining the low levels of income inequality in The Gambia (both within and between urban and rural areas). However, the obverse implication is that anyone with above average earnings is expected to support near relatives and friends with lower income levels, which may serve as a disincentive to individuals to increase their incomes. In addition, the tradition of giving alms either directly or through the Mosque to the most destitute is a long-standing and deeply-rooted Islamic tradition.
In 1992, the Government of The Gambia launched a comprehensive strategy to reduce poverty. As currently envisaged, the program aims to enhance productive capacity through diversification and support for small enterprise development. It will also expand access to basic services, consolidate and improve existing coverage and quality, and develop the institutional capacity of the poor within the context of decentralization. Finally, it will develop comprehensive Information-Education-Communications programs for all line ministries. The strategy will utilize existing resources and programs insofar as possible, although some new programs are likely, especially in the area of integrated urban development and small enterprise promotion. A major new feature of this program is the objective of increasing community involvement in the design and implementation of development activities.
Although the overall institutional capacity in The Gambia is very weak, the capacity and competence of the Statistical Department for conducting and analyzing household survey data appears relatively strong. The first survey set limited objectives for itself in collecting and analyzing baseline data. The second survey has recently been launched and, when combined with the analysis of the first survey, should constitute a rich source of information on household income and expenditures.