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Gambia Has ‘Ineffective’ Laws to Deal with Corruption – U.S State Department Report

The U.S Department of State has recently issued its 2019 investment climate statement, detailing the Gambia’s business climate on various issues including the country’s openness to foreign investments, transparency and regulatory, intellectual property rights and state of corruption in the country.

Although the report acknowledged the positive steps taken by the government to address corrupt-free business environment, it identified the lapses which need adjustments.

There are laws in place to combat corruption by public officials in The Gambia. These laws are largely ineffective because the committees, which are commissioned to enforce them, are yet to be fully established. In cases when trials are conducted, they are conducted in a non-discriminatory manner,” the report stated.

It states that the anti-corruption laws of The Gambia contain laws or regulations that counter conflict-of-interest in awarding contracts or government procurement.

The Gambian Government encourages private companies to establish internal codes of conduct that prohibit bribery of public officials. The constitution of The Gambia calls for internal codes of conduct (Section 222), as do the OECD Guidelines on Corporate Governance to which The Gambia is a signatory.”

According to the business climate statement, private companies use internal controls and other programs to detect and prevent bribery of government officials.

The Gambia has signed and ratified the African Union Convention on Preventing and Combating Corruption and Related Offences, but has not ratified the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

In May 2014, The Gambia ratified the UN Anticorruption Convention. During former President Jammeh’s rule, the GOTG did not provide protections to NGOs involved in investigating corruption.

The U.S Department of States said that such protections are likely as part of the new administration’s pledge to take action regarding the African Union convention on preventing and combatting corruption.

At least one U.S. firm complained in 2016 of corruption as an obstacle to FDI. This was reported in the water resource management sector and involved a commercial dispute between the GOTG and a U.S. firm. The firm has since indicated that the new administration is taking steps to resolve the matter”.

Intellectual property rights

The statement has also found the Gambia’s Intellectual Property Rights (IPR) largely weak causing a history of infringement on rights in The Gambia.

The Gambia is a signatory to both the Paris Convention for the Protection of Industrial Property and the Bern Convention for the Protection of Literary and Artistic Works. According to The Gambia Police Force (GPF), few IPR crimes have been reported due to the lack of IPR experts in country.

No new IPR laws or regulations have been enacted in The Gambia in the past year.  There are also no reform bills pending in parliament. However, through the Ministry of Justice, the GOTG is currently in the draft stages of issuing an Intellectual Property and Trademarks Act,” the U.S Department of State pointed out.

Transparency of the Regulatory System

The statement has indicated that the Gambia government uses transparent policies and effective laws to foster competition on a non-discriminatory basis to establish “clear rules of the game.”

It describes the country’s legal, regulatory, and accounting systems as transparent and consistent with international norms.

Rule-making and regulatory authority exists with the President, his cabinet of Ministers, and the committee members under the National Assembly of The Gambia, and various government parastatals. This practice is in line with the U.S. federal notice and comment procedures, and applies to investment laws and regulations in The Gambia,” it indicated.

Financial Sector – Capital Markets and Portfolio Investment

The report says banks and policymakers alike would like to see the exposure ratio return to the long-run average over time, if the emergence of lending opportunities, both large-scale investment projects and retail credit, can be supported by the banks without compromising their financial soundness and overall financial stability.

Gambian banks are trying to return to a more balanced portfolio structure in the medium run following the secular decline in private sector lending relative to investment in government securities. CBG staff contends that the decline in the ratio was delayed by foreign banks entering the local market with an aggressive lending strategy to capture market share,” it indicated.

The U.S department of State says Gambia does not have its own stock market and sufficient liquidity does not exist in the markets to enter and exit sizeable positions, and there is no effective regulatory system to encourage and facilitate portfolio investment. There are no policies that facilitate the free flow of financial resources into the products and factor markets.

While the private sector has access to a variety of credit instruments, it outlined that, the cost of borrowing is high and frequently prohibits small businesses from borrowing.

However, it says the government respects the IMF Article obligations for member countries.

Openness To, and Restrictions Upon, Foreign Investment

The report credited the Gambia government for having no laws or practices that discriminate against foreign investors, including U.S. investors. It also observed that foreign and domestic private entities have a right to own business enterprises and engage in all forms of remunerative activities in The Gambia.

However, The Gambia restricts the ability of foreigners to invest in the country to the extent that the GIEPA Act states that ‘a person shall not invest in or operate an investment enterprise which is prejudicial to national security, detrimental to the natural environment, public health, or public morality, or which contravenes the laws of The Gambia.’

 

 

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