Credit peeterv/iStock
Credit peeterv/iStock
Credit peeterv/iStock
Credit peeterv/iStock
Introduction
State-Owned Enterprises (SOEs) are foundational to The Gambia’s socio-economic fabric, tasked with delivering essential public services, driving infrastructure development, and generating employment. Despite this strategic mandate, the sector has long been encumbered by inefficiency, financial instability, and profound governance shortcomings. By the close of 2023, the liabilities of SOEs had ballooned to an estimated 20.3% of the nation's Gross Domestic Product (GDP), a stark figure underscoring the immense fiscal strain they impose.
Repeated government interventions to clear arrears and absorb debts have diverted critical resources from national development priorities. These bailouts, however, are not isolated events but symptoms of deeper structural weaknesses. Audits have consistently revealed insolvency, fragile accounting systems, and a critical lack of clarity between commercial and social mandates. The limited effectiveness of SOE boards, characterized by administrative dominance, has further compounded the issues. In response, the 2023 SOE Act was enacted, a transformative moment designed to re-establish prudent management, restore accountability, and reposition these entities as engines of sustainable growth.
The Fiscal Imperative for Reform
The governance deficits afflicting Gambian SOEs are deeply entrenched. In 2019, for instance, the state was forced to assume 75% of the national energy company’s debt, adding 2.8% of GDP to the fiscal deficit. Transfers and subsidies to SOEs escalated from 0.6% of GDP in 2019 to 1% in 2020, while their tax contributions remained negligible, averaging just 0.23% of GDP between 2016 and 2019. This structural imbalance was perpetuated by governance frameworks where board oversight was often left to line ministries, diluting accountability and entrenching inefficiency.
A New Paradigm in Board Architecture
A well-constituted, credible board is the cornerstone of effective corporate governance. The 2023 SOE Act introduces a paradigm shift in this regard, mandating that private members now outnumber government (ex-officio) representatives. The new structure, typically comprising four private members, two ex-officio members, and the Managing Director, seeks to reverse the previous trend. Private members with proven business acumen are expected to inject commercial rigor, innovation, and strategic foresight.
From Patronage to Professionalism: The Recruitment Revolution
This new architecture is supported by a paradigm shift in recruitment. For the first time, all SOE board positions were publicly advertised by the SOE Commission, introducing a transparent, merit-based selection process. While challenges in attracting a broad applicant pool initially existed, targeted engagement has improved the quality of candidates, many of whom possess extensive private sector or international experience.
However, significant challenges remain. Despite valuable contributions from retirees, SOE boards must also incorporate younger professionals to boost technological skills and bring new perspectives. Achieving genuine inclusivity requires actively increasing female participation and involving people with disabilities, ensuring boards represent the communities they serve and foster more responsive governance.
Early Vindication and the Path Forward
Though nascent, the reform journey has started yielding results. Cumulative net losses across SOEs declined by over 50%, from D2.9 billion in 2023 to D1.4 billion in 2024. Boards are becoming more proactive in implementing audit recommendations and strengthening internal controls. These gains demonstrate the collective impact of stronger leadership, regulatory oversight, and the continued support of development partners such as the World Bank and IMF.
The 2023 SOE Act marks a pivotal turning point, laying the groundwork for a more accountable, efficient, and fiscally disciplined SOE landscape. To sustain this momentum, four imperatives must guide the path forward:
Broaden the talent pipeline with deliberate efforts to attract qualified women, people with disabilities, and young professionals.
Fortify board independence to ensure decisions are driven by commercial logic rather than institutional allegiance.
Enforce performance contracts to anchor accountability in measurable outcomes.
Invest in board capacity through continuous professional development.
By ushering independent, commercially astute, and technically proficient individuals into SOE boardrooms, this reform holds the transformative potential to restore fiscal balance and elevate the strategic value of public enterprises. Ultimately, strong boards are not the destination; they are the launchpad upon which The Gambia can rebuild its SOEs into engines of national development, financial sustainability, and public trust.
