On 25th November 2021, out of curiosity on where people are putting their investments in The Gambia, I posted a quick survey on LinkedIn to have a view on the investment opportunities for Retail Investors.
By the way, this post is for educational purposes and not financial/investment advice. Opinions herein are mine and feedback taken from the survey. I also thank the respondents for participating in the survey.
Without further ado, let’s quickly give a definition of what investment is for the benefit of our non-finance readers and then look at the survey results.
What is Investment? Investment in the simplest term is the process of putting down money into a venture, technology, product or business to generate profits. For example, depositing money to earn returns or buying goods to resell at a higher price, etc.
Results of the Survey
The survey results suggest that most people in the Gambia put their monies in Real Estate (52%). On the other hand, 11% of the respondents invest their monies in T-bills, 16% leave their monies in Savings Accounts while some of the Tech Savvies in the health, finance and fashion sectors explore cryptocurrencies (21%).
Feedback & Opinion
Feedback received is that Real Estate is the booming industry in The Gambia since Government’s domestic borrowing appetite diminished in 2017. Some people consider this investment option as the most secured investment that guarantees future returns. Respondents state the consistency of land appreciation and how that gives them comfort in the safety of their monies.
This feedback can also be observed in the construction industry which has been booming in The Gambia since 2017. Many investors and businesses venture into the construction business to gain higher returns compared to the popular T-bill. This option of investment has higher returns on investments (ROI), however, yielding the returns in this space requires patience as it can be long term.
Most people going into Real Estate in The Gambia build houses/apartments for rental purposes. Some challenges with this are the hassle to collect rental dues, maintenance etc. Real Estate is also seen as an investment for the wealthy, thus the average Retail Investor finds this space expensive and capital intensive. Some of the top Real Estate Companies in The Gambia have been doing a fantastic job in introducing mortgage facilities. This helps reduce the barrier to entry for Retail Investors in the real estate business.
The survey results about crypto shows quite interesting as some of the Respondents highlighted so many benefits crypto offers. Notably is the high volatility and high returns offered in this space within short periods of time for Retail Investors. There is no barrier to entry. Some mentioned the swift and cheap transfers Crypto offers as compared to the traditional money transfer agents.
Cryptocurrencies are digital money/assets currently trending in many spaces (most notably, social media). Most of these assets are backed by revolutionary technologies aimed at taking out middlemen in the supply chain and solving real-life problems.
Similarly, the Metaverse (a virtual reality) shows so many potential upsides for investors in the crypto space. The key to note is that these assets/cryptocurrencies come with high risks due to price volatility. The most notable Cryptocurrency – Bitcoin has made many people millionaires within a decade. Many also look into cryptocurrencies due to the high short term returns offered by centralized exchanges like Binance. Some crypto experts see Bitcoin as a hedge against inflation and fiat currency devaluations.
16% of the respondents leave their monies in savings accounts. According to some Respondents, rates in Savings accounts are less than 1% p.a, however, due to small earnings, some can’t meet up the minimum requirement (GMD25, 000) to invest in the popular T-bills. They only have comfort leaving their savings in Savings Accounts to protect their monies.
Most people due to lack of investment opportunities for Retailers or knowledge of available investments in The Gambia compel them to leave their monies into a savings account. Despite the small ROIs in Savings Accounts many salary earners believe is the safest way to protect their monies.
11% of the respondents put their monies in treasury bills also known as T-bills. According to some respondents, rates in T-bills are as low as 2% p.a, however, due to low-income earnings, investing in high yielding products seems expensive. Most of the respondents spoken to are Retail Investors living in the diaspora. They are most challenged with the Dalasi devaluations and thus investing in T-bills no longer makes sense to them.
Since the fall of the APRC regime, Government’s appetite for domestic borrowing has drastically reduced. This has crashed rates in the T-bill space making it less interesting especially for Retail Investors. The exchange rate risk has become higher for those in the diaspora who wire foreign currencies to invest in the T-bill space.
This survey is an eye-opener for me and has actually given me the opportunity to connect with great minds. It has also given me perspective as to where and why people choose to invest. Most intriguing is the interest of people in the Crypto space. According to Forbes, the African Crypto market has grown by over 1200%. This is significant as more and more Africans leverage this new technology to improve lives. Blockchain- The crypto technology- comes with lots of solutions especially for Africa as land disputes can be history with this technology.
For the readers, it is important to note that investments come with risks. However, risks vary depending on the Investors risk appetite and the nature of the investment. Have an open mind and do your research before investing. Evaluate yourself to assess your risk profile, know your net worth and this can be a good starting point.