This paper reviews the growth, employment, and poverty record of The Gambia focusing on
the macroeconomic environment and the structure and functioning of labour markets. Its aim
is to identify areas where current policies can be improved or where more knowledge needs to
be generated to better inform inclusive development strategies. 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 that 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 labour 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 labour 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, particularly, to provide
comprehensive training that adequately meets the demand for skilled labour. Finally, there is
an urgent need to overhaul labour institutions with the aim of improving labour conditions,
reducing labour segmentation and improving knowledge systems.