Name: Hasham Tariq Id no: 12882

Subject: International Business Friday 6 to 9 Country: Gambia Sub date: 17/04/2013

Submitted to: Miss Sania Usmani

CONTENTS
Gambia Facts ............................................................................................................................................................................. 4 Introduction ............................................................................................................................................................................... 5 Political system: .................................................................................................................................................................. 6 Gambian Economy: ............................................................................................................................................................ 6 Legal Systems: ...................................................................................................................................................................... 7 Inflation and Gross domestic product rate(GDP ): .............................................................................................. 8 Gambian Trade policy:........................................................................................................................................................... 9 Gambia tariff policy: .......................................................................................................................................................... 9 Corruption .................................................................................................................................................................................. 9 Labor ...................................................................................................................................................................................... 10 Opportunities For investments in Gambia:................................................................................................................. 12 Horticulture Business: .................................................................................................................................................... 12 Business Opportunities in Fisheries Industry ...................................................................................................... 13 Livestock Business opportunities .............................................................................................................................. 13 Opportunities in Manufacturing Industry: ............................................................................................................. 13 The Tourism Industry ..................................................................................................................................................... 13 Guide for Overseas Businesses: ....................................................................................................................................... 14 timings of Office ..................................................................................................................................................................... 14 Pace of Activity .................................................................................................................................................................... 15 Corporate dress code in Gambia ............................................................................................................................ 15 Religion ................................................................................................................................................................................... 16 Gender Issues: ......................................................................................................................................................................... 16 Social Stratification:.............................................................................................................................................................. 16 Registration of a Business in Gambia ............................................................................................................................ 17 SECURITY IN opposition to Double Taxation........................................................................................................ 17 Managing the Risk and argument declaration ...................................................................................................... 18 Product: ..................................................................................................................................................................................... 19 Business strategy ................................................................................................................................................................... 20

Entry mode in to Gambia:.............................................................................................................................................. 20 Competitor analysis ......................................................................................................................................................... 21 DISTRIBUTION................................................................................................................................................................... 22 TARGET MARKET ............................................................................................................................................................. 22 Promotional Strategy: ..................................................................................................................................................... 23 Pricing strategy: ................................................................................................................................................................ 23

References

GAMBIA FACTS

INTRODUCTION

Gambia which is one of the smallest countries in the African region got freedom in 1965 from the U.K. For a short time period it resulted in a federation by the name of Senegambia from 1982- 89.in 1992 they signed treaty of friendship. In 1994 there was a takeover by the military which removed the president from power and any type of political action was totally restricted in the country. Later in presidential elections were held which resulted in a return of the democracy. In 2001 and 2002 again presidential elections which made way for Yahiya AJJ to become the president.

The current president Yahiya Jammed seized power after a military coup and is the ruler since, after re-election in 2001, 06, and now in 2011.The country mostly relies on tourism and agricultural products and lacks natural resources. Gambia is heavy exporter of peanuts but it also get victimized because of heavy fluctuation in the international market in the prices of peanuts. As a result, the country is dependent on foreign aid to correct and fill the gaps that are there in its B.O.P. . On the other hand, the country for this to happen has yet to strike crude oil as the leader in power wants the state to become an oil producing state. Majorly the source of foreign exchange is the tourism industry and remittances sent from abroad.

POLITICAL SYSTEM: Gambia has a parliamentary system of Government. Which means the head of the state is also the head of the government its got its independence in 1965 and practices multi party democracy. The second republic came in to existence in 1997 which followed a two-year transition from a dictatorship rule from 1994 to 96.

GAMBIAN ECONOMY: The Gambian economy is based on a liberal, market-based financial system being a agricultural country, it earns significant amount of earning through export by exporting groundnuts, for importing goods it also has a very minimal duty administrative measures are also very minimum, floating exchange rate system with literally no exchange controls, and a important dependence on the tourism. The natural resources in the country are very low and also have to base partially on its agriculture industry, and also depend on the money sent from abroad from its citizen working in other countries (remittance). of the residents depend on the

agricultural and this industry provides for 1/4th of GDP. The sector of agriculture is blessed with unexploited potential the arable land has not been cultivated and the cultivated land accounts for a less percentage of arable land, about less than 50 percent. Manufacturing activity includes the hides processing, and peanuts, on a small scale. Natural beauty of Gambia can be compared to that of Europe, making tourism a very important sector for the company, further heightened through private sector and governments investments in advance facilities and nature friendly eco tourism. However, in 2012 resulted in a decrease in GDP because of sluggish tourism. Tourism brings in about 1/5 of the total GDP. Agriculture also took a decrease/hit in 2012 due to bad weather patterns. The re-export from Gambia trade accounts for approximately 80% percent of exported goods. Rates of underemployment and unemployment stay high. LEGAL SYSTEMS: Gambia has a legal system which is mixed consisting of English law(common), Islamic shariah law, and customary law. The latter two systems only apply to the natives Gambians and or Muslims There were efforts made to update the law. In 2010 dispute resolution through he court system has been speeded up. Also efforts are being made in order to further speed up the disputes and litigation process through the legal system.

INFLATION AND GROSS DOMESTIC PRODUCT RATE (GDP ):

Inflation increased from 3.9% in 2010 and in 2011 it was of 4.7%. This was due to increase in the commodities rice such as energy and food products. During this time the national currency also depreciated in comparison to other currencies. Inflation i in 2013 inflation is estimated to be equal to or less than 5%, in line with the monetary-policy target of 5.0%. The deficit in the budget because of the limitations in 2011 also dropped up to 4 % where earlier that year in 2010 it was 5%, further in the year 2013 it is expected to lower more to 2.8% Though. economic growth decrease 6.3% to 5.5% in 2011 but it is expected that it si going to stabilise around 5.6% in 2013.The economic growth has lately since 2008 has depended upon the agricultural product. Also the bad weather conditions and the recent global crisis has also forecasted that there would be more decrease in GDP. However many steps have been taken by the government many reforms have been introduced the reforms to be applied agri-culture which will continue to enhance the economy and its growth.

GAMBIAN TRADE POLICY: The trade policy of Gambia is very liberal, aim of which is to make the country seeks export led through value added productivity is emphasizing is the elimination of import barriers such as tariff and other kind of barriers done to limit import/export. There are no limitations on the quantity of imports and rates/taxes were evaluated and decreased. Due to this reason tariff rationalization was also done, making decrease on duty of products to 18%. GAMBIA TARIFF POLICY: Harmonized System (HS) has been used as basis for the tariff regime, Gambia. Majorly specific tariff is applied up to up to (8). On the rest the advalorem tax is applied. Majority of the tariff/rate charge is less than 30 percent and only less than 1% of rates go beyond the Forty percent%. There are zero % tariffs on importing raw materials, some specific type of capital machinery and the duty on luxury goods is 90% and few other goods that the government imports. The HS-tariff schedule comprises of 31 rates.

CORRUPTION Corruption is a seriously prevails in the Gambia economy and the government has taken several measures to combat this issue. Many strict laws have been established through the criminal code, to give a legal platform for fighting this issue .The problem exists even in the Government sector and there has been several cases where government officials were convicted for crimes related to corruption. e.g

some government representatives from the agriculture ministry were found guilty related to fertilizers which resulted in a loss of about 6 million dalasi. There were also a commission which was found by the president and its aimed at discovering people from the government who are involved in generating illegal wealth. This again resulted in many workers from the government losing their jobs and paying heavy fines for the crimes. For this in 2004 a government program was started by the name operation no compromise and through this key government officials were locked up in jails and few were exiled out of the country. Though this is a serious issue and has affected the country in terms of F.D.I according to Unites States of America it is not a serious restriction of foreign investments in Gambia. After a research held by Transparency International the country out of 171 countries was given a rank of 91 in the 2010 Corruption Perceptions Index. Having signed many conventions on the international platform the country but has not approved U.N and OECD conventions made against corruption.

LABOR Economically active population of Gambia is around 400,000. Out of which 75% which makes the majority of its population working in the agriculture sector, among the rest 25%, only 7% of its population has government jobs while the 19% of its population is working in the business and service sector. Also the Gambia faces a very high rate of unemployment due to shortage of trained professionals and skilled labors. Majorly the

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skilled professionals are in mechanical industry and for construction industries technical labor is hired from the foreign and countries close by. The workers because of the law pay 54 dollars for registration and a work permit fee of 11 dollars.

The 1990 labor act, the 2007 amendments that were made to the act, describes the proper policy of labor relations will work in the state. It has all the condition related to your human resource management from hiring, selection, recruitment, dismissals, pay protection laws, how to register a trade unions and many others. Further it consists of measures for the resolution of problems among workers or with the company, including an industrial/company hearing. Working hours and minimal wages and are enforced through six joint industrial councils: commerce, artisans, transport, port operations, fisheries and agriculture. Employees belonging to the private sector also receives also relieve paid leave of more than 10 days up to a month.

Workers/labors are part of unions, but these entities have not been very successful and active. Also not many workers are part of these unions. Amongst the active unions are mostly catering to the transport and labor engaged in manual labor such as dock workers. In 1985 a Workers confederation was also formed in Gambia, its main purpose it to handle union activities. It is also very much involved in negotiations pays and employment benefits for its members Trade unions and labor unions exist but are not very active. Most workers are not part of a union. The most active unions cater to the dock workers and workers in the transport sector. The Gambia Workers Confederation was formed in 1985 and it coordinates union activities for the members. It is a member of the ILO International

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Labor Organization. The confederation though is not political but is increasingly active in negotiations on pay and working environment conditions for its members.

OPPORTUNITIES FOR INVESTMENTS IN GAMBIA:

HORTICULTURE BUSINESS:

For Investment this sector is also very thriving because of the many economic up rise in Gambia. There are rising production and the export Opportunities for this business in the country. Through Farming Gambia is doing an export of more than 110 tons of fruits and vegetables. Government is also giving incentives for investors and land for agriculture can be bought from the through the Government from land owners. Investment in Agro Processing Business There is a huge annual import of agro processing products like juices, dairy products and there is a need for investment for producing these goods in the country, but there is shortage of investments in this area. Also through imports not all the demand of for these products can be served because of the demand increase from the tourism industry which. There needs to be investments made in the juice processing industry for supplying juices such as orange, mangoes e.t.c .This will lower the imports also in the case of tomato ketchup and pepper sauce. There is also huge investment potential required for establishing a feed mill. All the these products also has an International Export demand

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BUSINESS OPPORTUNITIES IN FISHERIES INDUSTRY Many companies in Gambia are looking for ways to increase demand for fish products, Companies are looking for financing, plant modernization and joint ventures. Government is also providing priorities, and spotting good market opportunities for investors in this sector.

LIVESTOCK BUSINESS OPPORTUNITIES

Production from the farm animals/ or livestock totals for a Six percent of the total Gross Domestic Product of Gambia, at the recent market prices. Activities are only restricted for the nurturing for cattle for the domestic market. There is no organized raising, grazing to cater to the demand of dairy and beef for local and growing market due to tourism. In the same way, enterprises who are equipped with the production of poultry are have to face a very high cost when they import feed, which is a resulting because of the unproductive response of supply from the local market and the hotel industry .

Opportunities in Manufacturing Industry:

This business is only limited to medium and small scale companies, which are mainly catering to the demand of the local market. Sanitary wares and quality ceramic tiles demand is dealt by importing these items. Investment in a foundry uses scrap metals for the production of finished-iron and metal plates which are required in the construction industry and small-scale repair workshops, offers good investment opportunity for doing business. Also there is investment potential for pharma or medicine business, electrical products like light is requiring manufacturing and assembling plants. Same is the case in mechanical and electrical parts required for domestic appliances.

THE TOURISM INDUSTRY

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Tourism is one of the main product for Gambian economy and its generates great revenues and is also a source of employment for the country Increasingly efforts are being made by the Government for flourishing of this Industry; they are unifying the Gambian culture as an integral part of the tourism industry, making it its competitive advantage. Development can be brought in tourist spots such a forest parks, monuments having cultural significance. The U.S and European markets can also be targeted; these markets are already under evaluation and shows great prospects. There are also many hotel development projects like building 5 star hotels, restaurants, recreational facilities, bars etc which require financing and ventures. Currently Investments needs in tour operations focusing in Gulf, Europe and U.S also airline industry and operations also need heavy money influx connecting to the destinations above. It will give momentum to Gambian tourism industry.

GUIDE FOR OVERSEAS BUSINESSES: EXPORTING When clearing and shipping goods intended for exporting in Gambia and entering Banjul Port some regulation ,the duties (custom, excise)policy shall be pursued
TIMINGS OF OFFICE

Government jobs timing - 8 to 4 pm Business hour timings - 9 to 5 pm Friday half day - 12.30 pm

In spite of the problems in the country, the norms cultural values of the country shall be given importance and while doing transactions must be taken care off , no matter what type of business you would want to do.

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 PACE OF ACTIVITY

Trade and Business moves a slow pace in Gambia, so it requires patience for doing Business dealings. When meeting someone for Business purposes start the discussion by greeting the other person so other does not presume that youre in a rush and not confident. Listen carefully to the other person while the other is speaking without interrupting.

CORPORATE DRESS CODE IN GAMBIA

Punctuality Time is money is the concept used for businesses work in a calm and flexible manner. Nobody rushed to work rush while doing dealings related to their Business, planning is also not very much emphasized. Being punctual is also not an issue while doing commerce as might in other countries, being a Businessman. As the concept of urgency and being in a hurry is not favored, a good idea is to contact the person through a call before leaving for the meeting with the person.

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 RELIGION Islam is the main residing religion In Gambia, citizens pray 5 times a day. But the influence of Islam varies in different parts of the country and the importance and the influence of Islam must be kept in mind while working in different cities of the country such as Banjul, as the city has great influence of religion over their activities. Working Relationships Trust and familiarity are the concepts on which the business relationships are based. Doing Business on the basis of friendship will helps improving the success in the business community in Gambia so contacts, and developing a good relationship in business is very important and works in your favor. Paying respect to the elders is very much emphasized by the society. Disagreement with your partner should be expressed in a very subtle and indirect way and should not come put as confrontational. GENDER ISSUES: Though the women in Gambia are expected to take care of their homes and their role is regarded generally as house-wives, there has been increase in trends of women moving towards making their own career. Girls education has been emphasized by the current president. They cannot defy the instructions given by their husbands/males and is a male dominated society. Both genders would not socialize outside their family. In rural areas women cannot drive .Unacceptable behavior from women would be to smoke, drink, and visiting non-relative males. Though foreign women are honorees and can socialize with man outside.

SOCIAL STRATIFICATION : There is quite visible difference in Gambia between the rich and poor; the society is largely dividing on basis of social status in the society. A segregation of some ethnic

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group might appear as openly known in the society. The urbanization is towards its rise in Gambia but even that has not reduced any effects of social stratification. A certain ethnic group Creole only marries close to their own sub society. Blacksmiths will not get married to the family of entertainers and the independent caste will also not get married to either of the two. This is quite evident when you are there in Gambia and modernization h as little effect on such social division Though in Capital cities like Banjul social stratification is less visible and people mostly in commerce are judged by their work.

REGISTRATION OF A BUSINESS IN GAMBIA Just like any other country n Gambia as well you Can register your business as a sole trader, as a company, or could register your business as partnership The process of registration is quite simple require one to submit the documents to the registrar of the companies The documents require are 1. Memo (MOA) 2. Article (AOA) Also you need to pay and show the paid slips of Stamp Duty and Business paid registration from the department of income tax. o Slips of payment of Stamp Duty & Business paid registration has also to be presented from department of income tax..

SECURITY IN OPPOSITION TO DOUBLE TAXATION Any resident of Gambia who has paid tax in any year of a Commonwealth member country would get a release from any kind of double taxation. There have been agreements made with different countries for double tax agreement.

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MANAGING THE RISK AND ARGUMENT DECLARATION The constitution of the country gives assurances and protection against any kind of government takeover of a private firm/nationalization or any kind of confiscation of any investment made .This was further protected by the free zones and Investment promotion act in 2001 The Gambia also has a membership International Centre for the Settlement of Investment Disputes and Multilateral Investment Guarantee Agency of the World Bank Group.

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PRODUCT: Oranju which is a very well known brand in Pakistan, is also made and manufactured there. Exports its product to many Asian, and Middle-east countries including Kuwait, UAE, Bangladesh, Sri-lanka to name a few. In order to expand wants to enter new markets and has decided to enter African region with its products exports, starting with Gambia.

The product selected for the export to Gambia is an Orange juice by the name of Oranju. Gambia is located in the midway between the equator and Tropic of cancer, making a climate with high temperature. Temperatures in summers can rise up to 42 c. Thus, the demand for fruit juices for local as well as the demand created

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through tourism sector makes our product ideal to prosper in this country. Also the Gambian trade policy is very liberal and being designed more towards favoring investors to come into Gambia and invest. Thus the government has made a minimal trade restricted policy with minimal non-tariff and tariff barriers. This also makes our product to be imported into Gambia and be readily available at competitive prices with local beverage industry.

BUSINESS STRATEGY ENTRY MODE IN TO GAMBIA: Gambia has yearly import of over $200 million and its imports are far less in comparison is around only 10 million dollars. After research our company decided that the best entry mode for the Gambia would be to EXPORT. As we are new company in Gambia, through exporting we would also be able to avoid the manufacturing cost in Gambia. The trade policy is Gambia is very favorable because of the low restrictions barriers and the focus of the Government towards tariff and quota barriers, as already explained in the trade policy of the Gambia above. Once the company would gain the experience curve and understand on the basis of ground reality of country. We will later on after establishing the name of the product we would start manufacturing it in the country.

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COMPETITOR ANALYSIS: There many different drinks available in Gambia targeting different market segments from Beer to soda drinks. When we talk about our competition in Gambia, we will majorly facing it from the others juice import companies and the local beverage industry. Amongst the different and main beverage importing business we have K. Chellaram & Sons (Gambia) Co. Ltd, Sasco Import Export Gambia Co. Ltd King Foods Gambia Limited Gambiga

What we have noticed in almost all of these beverage importers, is even if we talk about the premium quality MNC beverage products, is that there is no marketing. These importers normally just import the juices, drinks; make it available, supply to the supers marts and local retailer. With ORANJU we will initially launch a whole campaign regarding our product in respect to our target market. Also the differentiation amongst the product even if its there is not being promoted to the customers as in our case we will differentiate our product in terms of it being healthy and quality drink.

But some of these have been in the business for as long as decades as in case of K. Chellaram & Sons (Gambia) Co. Ltd, which has been in the industry since 1950s also other MNC beverage industry have their differentiation and recognition in Gambia e.g Pepsi, Coke

This serves as our disadvantage as we our new in the industry in Gambia and for us to develop economies of scale could have been a factor. But, due to low tariff and favorable government regulation and our established network in other countries from where we will be importing our product from, our price will not be affected which will be further explained later.

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As our product being targeted to a niche market so it further narrow down our competition to energy drinks and companies selling juices rich in vitamins.

DISTRIBUTION As we are an exporting Business our main aim at first would be to distribute our product through the strong contacts of our agent in the country and later we will also try to use the fragmented channel distribution once we build good contact in the distribution channel for the product in the country. Pull strategy is necessary because of the nature of the product as it cannot be sell through personalized selling . The product will be available in the Shops in major cities of Gambia- Banjul, Bathurst. Commercial areas where the target class customers are found will be the grounds where the normal distribution channel product is launched, Educational institutes, Universities and school. Apart from that, busiest airports of the country will display a master product from time to time. Kick start with Duty free shops in all the major divisions of the country, namely (Central River, Kuntaur, and Lower River) and much more for in other divisions after the success.

TARGET MARKET This product is launched to be available in reach all masses; however the main target audience and niche is youth, The Company is actually targeting university students because more Juices and fast foods are used by those students. Students who inspired from western juices this is totally new product for them same like western juices. Its contain variety of vitamins, iron, and citric acid. Orange juice is a commonly used commodity which is equally good for all segments and age groups, Such as children, young and older peoples. They need to have energy for

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work, so our project as its name shows is an Orange flavored juice which is enriched with vitamin C man needed.

PROMOTIONAL STRATEGY: For promoting our product we will be using all the mediums including radio advertisement, T.V advertisement on all major channels such as GRTS TV etc, Hoarding, and banners. The aim at first for advertising would be to persuade our customer to try our product. We will be hiring famous Gambian T.V personalities for our advertisements and would also cover sports events. We will also use promotional strategies such as free samples and coupons.

PRICING STRATEGY: As our aim for Oranju is to target youth and which is our main niche. Our pricing will based on competitive pricing, we could have opted for penetrating prices in order to gain a mass market share, but the plan of our product is to offers premium quality product, which is healthy and enriched in vitamins, targeting a health conscious niche of youth. Oranju juice will be available in 0.33 liter, 500ml bottles and 1litre packs. Pricing around 30 Dalasi for 0.33 liter, 35 Dalasi for 0.5 liter bottle and 1 liter packs will be available for 50 dalasi.

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REFERENCES: http://atlas.media.mit.edu/country/gmb/ http://www.amiebensoudaco.net/the-gambia-legal-system http://www.accessgambia.com/information/economic-profile.html http://www.africaneconomicoutlook.org/en/countries/west-africa/ http://www.culturecrossing.net/basics_business_student_details.php?Id=19&CID=7 7

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