History
The Republic of The Gambia on the west coast of Africa is located on two banks of the River Gambia. With a population of about 1.5 million people, it is the smallest country on the African continent and ranks 155 of 177 countries on the United Nations Human Development Index.
The Gambia became independent in 1965. A military takeover in July 1994 interrupted the country's democratic process, and it was not until early 1997 that, following presidential elections, the country returned to constitutional rule.

Economic/political context
In November 2006, the Government finalized the second Poverty Reduction Strategy Paper (PRSP II) for 2007-2011. It will be presented at the Boards of both the World Bank and the International Monetary Fund in the coming months. The PRSP II updates the Strategy for Poverty Alleviation II (SPA II) for 2003-2005, The Gambia’s first PRS.

The Gambia has had mixed success in implementing its first PRSP and achieving the Millennium Development Goals (MDGs), including the goals for lowering the poverty level and increasing economic growth. Improving performance will require continued progress on policy reforms in areas such as investment, infrastructure, and social services.

The Government has successfully stabilized the economy over the last three years. The IMF has approved a new PRGF. Economic developments are encouraging. The real GDP growth recovered from a drought-induced decline in 2002, to average about 6 percent a year during 2003-2006. Foreign direct investment in 2003-2005 averaged more than 10 percent of GDP.

In September 2006, the incumbent Yahya Jammeh, won the presidential elections. Parliamentary elections took place in January 2007.

Development picture/donor coordination
The government has been working with several development partners. Apart from the International Development Association (IDA), the country's largest development partners are the IMF, the European Union, the African Development Bank (AfDB), the United Kingdom (DFID), and agencies of the United Nations family. The government's PRSP was presented to donors during the Sixth Donor Roundtable Conference in Geneva in September 2002, sponsored by UNDP.

The decision point under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative was reached in December 2000. The Gambia benefited from interim debt relief from IDA, AfDB, and IMF. With continued improvements in policy performance, the country could reach the HIPC completion point by the second half of 2007.

The World Bank Group’s role
The World Bank, through the International Development Association (IDA), is helping The Gambia to establish a sound macroeconomic and sectoral environment conducive to economic growth, and to develop the economic and social infrastructure and human resources.
A Country Assistance Strategy (CAS) for FY03–05 was approved in March 2003 by the Bank's Board of Directors, endorsing the support IDA is providing to the priorities established by The Gambia's PRSP. A new CAS for the period 2008-2011 is under preparation.
The Third Education Project, Phase 2, was approved in June 2006, and the Community-Driven Development project was approved in August 2006.

As of March 2007, IDA had approved 31 projects for The Gambia totaling about US$296 million equivalent. The current portfolio consists of five projects totaling US$52.9 million equivalent: (a) Capacity Building for Economic Management, (b) Gateway, (c) Africa Emergency Locust, (d) Third Education, Phase 2, and (e) Community-Driven Development.

Analytical work in FY07-08 will include: (a) civil service reform and capacity assessment, (b) poverty assessment, (c) investment climate assessment, (d) doing business survey, and (e) diagnostic trade integration study.

The International Finance Corporation (IFC) has not been very active in The Gambia, mainly focusing on recovering its investments as a relatively high portion of projects have come under litigation. Nonetheless, IFC has identified two or three commercial banks as possible candidates for the Global Trade Finance Program. In addition, Foreign Investment Advisory Service will provide assistance in developing the regulatory and legal framework for a free trade zone being developed under the World Bank-financed Gateway project.
Private Enterprise Partnership for Africa and African Management Services Company are seeking opportunities to build the capacity of micro, small and medium size enterprises (MSMEs) and institutions that support MSMEs . No new IFC projects have been approved in The Gambia since 1998. As of February 28, 2007, IFC’s outstanding portfolio in The Gambia was US$760,000.

The Multilateral Investment Guarantee Agency (MIGA) does not have any exposure in The Gambia, nor has it received any applications for investments in the country in FY07. In FY06, MIGA provided capacity development support to the Gambia Investment Promotion and Free Zones Authority (GIPZA), mainly in the areas of website development and annual work-plan design and implementation.
The Gambia is not a World Bank Institute (WBI) focus country and is not an active participant in WBI programs.