World Bank says weak financial performance makes Gambia’s electricity tariffs among the highest globally

The World Bank’s Gambia Public Finance Review (PFR), 2026, released yesterday, has noted that due to the sector’s weak financial performance and considerable system losses, The Gambia’s electricity tariffs remain exceptionally high, averaging $0.21 per kilowatt-hour, ranking the country among the highest globally, which negatively impacts affordability for consumers.

The report added that progress in electricity access in The Gambia is impeded by “high costs, weak financial viability and inefficient” subsidies.

 The PFR provides a blueprint for the Gambia Government to strengthen fiscal policy and sustainability, mobilise revenues equitably and improve the quality and volume of public spending.

The report said while steady – but uneven – progress has been made for access, the electricity sector faces significant challenges in terms of affordability and financial viability.

“Electricity access has shown progress – from 56 percent in 2017 to 74 percent in 2024 – but still faces poor access in rural areas, acute regional disparities, limited affordability, and poor financial viability which burdens public finances’’, the report highlighted.

It added that the electricity sector has changed dramatically following the transition to democracy in 2017 with private sector entry, diversification of the energy mix with the start of hydropower imports and completion of the first solar park, all of which has helped boost generation capacity.

“However, it has been relying on heavy-fuel oil for power generation, exposing the sector to shocks in global oil prices, exchange rate pressures, undermining cost-recovery efforts,” the report said. 

Inefficient subsidies
The World Bank report further stated that the electricity sector faces high, regressive and inefficient subsidies which primarily benefit wealthier households due to poor targeting. 

“In 2020, the richest 10 percent received 36 percent of subsidies, while the bottom 40 percent got less than 9 percent.

“Long-term sustainability requires lowering electricity costs, which can be achieved gradually over time with consistent investment. In the short term, reforming subsidies can improve financial and social outcomes”. 

The report recommends that since The Gambia’s tariffs are globally high immediate actions should focus on cutting generation and distribution expenses and boosting Nawec’s efficiency. 

It added that other actions to boost cost effectiveness include implementing revenue protection measures, developing a foreign exchange risk management policy to guard against currency fluc-tuations, reducing non-technical losses, expanding transmission infrastructure, deploying digital solutions, increasing the share of renewables in the energy mix and crowding in private investment.

The report also stated there’s is a need to redirect funds from broad energy subsidies to specifics which could achieve fiscal savings amounting to 30 percent of overall electricity subsidy expenditures, or 0.1 percent of GDP.

The Gambia’s PFR was jointly launched with country’s Economic Update report by The World Bank Group (WBG), in collaboration with the Ministry of Finance and Economic Affairs at the OIC Conference Center.  

The event brought together government officials, development partners, economists among others.