Abstract

The impact of public expenditure on the productive sectors agriculture industry and service in The Gambia is analyzed within the framework of a Dynamic Computable General Equilibrium DCGE model The model is applied and calibrated to assess the impact of a 10 increase in public expenditure on economic growth and welfare over five years The results indicate an increase in GDP and value-added mainly as a result of growth in the service sector Also an expansion of the service sector leads to the migration of jobs to the rural areas which will consequently enhance rural labour income A significant finding is that general public expenditure on agriculture may not get the desired result for poverty reduction specifically in rural areas As a result public agricultural spending should be targeted across various agriculture sub-sectors such as irrigation among others The Government of The Gambia GoTG should also prioritize investment in the service sector given that it has immense potentials in enhancing the livelihoods of Gambians in rural areas