Rising Costs Push Gambian Small Businesses to the Brink

**Rising Costs Threaten Small‑Business Viability in The Gambia**

*Banjul, 27 August 2026* – Small‑ and medium‑sized enterprises (SMEs) in The Gambia are confronting mounting pressures from higher prices for raw materials, electricity, transportation and imported equipment, according to interviews with local entrepreneurs and recent statements from the World Bank and the International Monetary Fund (IMF).

**Business owners report tighter margins**

Agi Fatou Bobb, founder and chief executive officer of Mbobanjack Enterprise – a processor of locally produced agricultural commodities into fortified baby foods, cereals, beverages and fruit‑vegetable products – said that rising wholesale prices and inflation have forced customers to purchase smaller quantities. “Customers are buying smaller quantities,” Bobb told reporters, adding that many have become more price‑conscious and reduce their spending on processed foods.

To mitigate the impact, Bobb said her company has reduced raw‑material purchases, focused on fast‑moving items, and cut non‑essential spending. She also absorbs part of the cost increase rather than passing the full amount onto consumers. However, she highlighted persistent challenges in accessing finance: “Banks often require high interest rates, strict collateral, short repayment periods and lengthy application procedures,” she explained. Informal savings groups, known locally as *kafoos*, provide quicker access to funds but typically lack the capital needed for major investments such as new processing equipment or packaging upgrades.

Electricity reliability and cost were identified as another major constraint. Frequent power interruptions disrupt processing and storage, especially for perishable products, while reliance on diesel generators raises operating expenses. Bobb noted that transportation costs for agricultural inputs and finished goods have also risen, increasing the risk of spoilage and delaying deliveries.

Rebecca Oli Jallow, owner of the fashion label Rebz, which produces children’s clothing and luxury casual wear, reported similar difficulties. She said the prices of fabrics, sewing materials and transport have climbed, and that customers’ reduced disposable income is affecting sales. Jallow added that import duties and other charges on fabrics and machinery, even when not directly imported by her firm, are passed on by suppliers, inflating local costs. Council taxes and equipment fees further add to operating expenses, while generator fuel costs make electricity a costly alternative during outages.

Babou E Sarr, chief executive officer of Cave Empire – an environmental and food‑processing company that converts organic waste into fertilizer and processes locally sourced lemons – said that imported packaging materials from China have become more expensive due to higher taxes and fees. The company has responded by reducing the size of its lemon product from 750 ml to 350 ml. Sarr also cited limited access to finance, inadequate storage for seasonal fertilizer demand, and rising transport costs for lemons sourced around Brikama and Foni as ongoing challenges.

**Sector‑wide data underline the constraints**

The World Bank estimates that SMEs account for roughly 80 % of businesses in The Gambia, yet only about 15 % have access to formal financing. The institution has identified affordable credit, lower energy costs and improved infrastructure as key levers to enable business expansion and job creation. In June 2026, the World Bank approved a $160 million regional electricity project that includes The Gambia and Togo, aiming to improve access to reliable and affordable power. The Bank warned that high electricity generation costs, limited infrastructure and affordability issues continue to hamper private‑sector development.

The IMF reported that inflation, which peaked at 18.5 % in September 2023, fell to lower levels but rose again to 7 % in April 2026, driven by food and energy price pressures. The Fund projects that Gambian economic growth will moderate to 4.7 % in 2026.

According to the World Bank, 81 % of Gambian workers are employed in the informal sector, and 41.3 % of youth aged 15‑34 are not in employment, education or training. Women face additional barriers, including limited access to finance and land.

**Calls for policy action**

The entrepreneurs interviewed collectively urged the government and financial institutions to provide:

* Affordable, long‑term financing with flexible collateral requirements;
* Reliable and affordable electricity, reducing dependence on diesel generators;
* Predictable and reduced taxes, duties and fees on imported raw materials and equipment;
* Improved transport infrastructure to lower logistics costs;
* Targeted business training in financial management, food processing, packaging, export readiness and machinery operation.

The National Enterprise Development Initiative (NEDI) has pledged to deliver entrepreneurship and investment training, grants and loans to Gambian women and youth. The national employment policy similarly lists affordable finance, electricity, water, sanitation, market access and infrastructure as priority support areas for informal

Article and image source: allafrica.com