It was intended to promote cooperation between the two countries, but was dissolved by Senegal on 30 September 1989 after The Gambia refused to move closer toward union.

[3] In the 1860s and 1870s, both nations began to consider a land-trading proposal to unify the region, with the French trading another West African holding for the Gambia, but the exchange was never completed.

The opposing trade policies fueled a large black market around the Senegal–Gambia border, which brought cheaper manufactured goods into Senegal.

[9] Not wanting to wait for the Senegalese marketing system to pay them, more farmers began to smuggle their goods to Banjul, where the Gambian government paid in cash.

[12] Though the coup attempt was not well organized and quickly fell apart, it resulted in a prolonged period of instability and violence in the Gambia, as the rebels released many criminals from prisons and armed them in hopes that they would support the uprising.

Specific threats came from Kwame Nkrumah's Ghana, Moussa Traoré's Mali, Ahmed Sékou Touré's Guinea, João Bernardo Vieira's Guinea-Bissau, and Muammar al-Gaddafi's Libya.

[7] The Gambia had previously lacked a proper army, instead solely relying on a police force, and subsequently began to set up its own military.

Léopold Sédar Senghor, first President of Senegal, was one of "les trois pères" ("the three fathers") of Negritude—a literary and ideologically socialist movement of pan-Africanism, encouraging Africans throughout the Diaspora to embrace their shared culture.

[19] In fact, Senegal and the Gambia had already commissioned a United Nations report to study the possible plans and benefits of unification between the two countries in the 1960s.

According to Arnold Hughes, the Gambians had two primary concerns: one was a reluctance to fully integrate economically, and the other worried that the Senegalese would opt for a unitary Senegambian state rather than a confederation.

[2] In general, the economic policies of the two states did not match well; whereas Senegal had traditionally favored a centralized, almost mercantilistic economy, the Gambia relied on free trade and low tariffs.

[29] It saw the trans-Gambian highway and bridge project as a threat to its sovereignty and feared the loss of revenue generated by Gambian trade with Senegal's southern provinces as well as ferry services of the Gambia River.

[22] In early 1986, an economic crisis and foreign exchange shortages seemed to push the Gambians to finally consider adopting the West African CFA franc, used by Senegal.

The latter offered that its membership in the West African Monetary Union could be transferred to the Senegambia Confederation, so that both Senegal and the Gambia were automatically members.

[2] In the Gambia, the end of the confederation had little impact on the national economy, but considerably changed the local political and security situation.

[26] With the removal of the Senegalese troops, the Gambian government had to rely for the first time solely on its own military which was already internally divided and suffered from considerable unrest over favoritism and other issues.

[32] These problems resulted in repeated mutinies of Gambian soldiers and ultimately led to a coup d'état during which Yahya Jammeh overthrew Jawara.

[33] In Senegal, the confederation's end resulted in worsening the living conditions of the Casamance region's population, as the latter had economically benefited from the union.

[35] In 2020, Gambia was among the five largest global exporters of rosewood, despite declaring its own stocks close to extinction in the 2010s, thanks to timber illegally harvested in and smuggled from Casamance.

As a result, positions in the Confederal Army were highly coveted among Gambians; selection officers exploited this to their own favor, leading to favoritism and corruption.