By Awa B Bah*
The Gambia`s Finance and Economic Affairs Minister Amadou Sanneh on Thursday 29th June 2017 presented a revised budget of government revenue and expenditure estimates for the 2017 financial year, before the country`s legislators at the National Assembly building in Banjul.
The revised revenue, recurrent and development expenditure estimates is designed to reduce the budget deficit of about 4.7 billion dalasis.
According to Sanneh, the austerity measures to be taken include debt management, sale of vehicles and planes, the gateway project, mining and fuel for NAWEC.
Sanneh claimed that the former APRC regime has contributed to the deterioration of the economy by mismanagement of public funds and abuse of public institutions.
He said the Coalition Government inherited a ‘dire macro-economic situation’, with a public debt equivalent to 83.3% of the country`s GDP in 2013, which rose to 120.3 % in 2016. He added that domestic foreign reserves depleted to less than 2 months of future imports.
Sanneh said the APRC administration “abused State-owned enterprises such as GAMTEL, SSHFC, and NAWEC.” He claimed that D4.7 billion was embezzled within a period of 3 years.
According to the Finance Minister, the previous regime`s poor agricultural policy, siphoning of royalties from the sub mining sector, and the purchase of 44 pickup vehicles in 2011 contributed to the huge deficit.
He said the Barrow administration, will prioritize ‘macroeconomic stability’ and address the burgeoning debt situation, through fiscal discipline.
He said: “This revised budget has a total financing gap of D955 million, compared to the D4.7 billion budget that was previously approved in December 2016.”
Measures taken by the government includes all outstanding CBG lending to the budget, through various facilities were consolidated into a 30-year bond at an interest rate of 5.5% at the end of 2016, with projected interest savings of D330 million per annum.
He said curtailing expenditure considerably which has further supported the decline in T-bill rates, with an average reaching 11.5 % in early April 2017 compared to an average of 17 percent in 2016 is expected to reduce domestic interest payments in 2017 by D377 million.
There will be cuts of D475 million mainly in goods and services, including from the budget of the Office of The President and staff audits of the civil service.
Adding that for the first time in the uniformed services (which has expanded strongly in recent years) have been launched recently and are expected to be completed June 2017, while the elimination of ghost-workers from the payroll could deliver savings and the staff audit could also lay a foundation for a more comprehensive civil service reform.
Policies governing the bloated vehicle fleet and its cost he revealed will be reformed with the expected savings in spending on goods and services in the tune of D942 million.
“Asset sales are expected to yield D471 million in 2017 including four Presidential planes, and sale of land in prime tourist areas, which could generate investment”, said Sanneh.
The Minister said previously diverted non-tax revenue from the international telecommunication voice gateway, sand and heavy metal mining concessions, and other fees, are expected to yield D566 million.
He announced that plans are underway to vigorously pursue recovery of purported stolen assets of the government through all available channels, including the assistance of the World Bank Stolen Assets Recovery Unit.
He also indicated that apart from cutting down expenditure, government has reduced the price of fertilizer for farmers to boost production.
Sanneh said: “Government has reduced the sale of fertilizer from D950 per bag to D700 per bag.
“Efforts are being made to reduce the price of seed nuts from D2, 500.00 per bag to D2, 000 per bag to increasing production remarkably from 3,000 MT to 200,000 MT.”
In addition, he said they have extensively engaged development partners like the IMF, World Bank, European Union, and the African Development Bank, to work closely to bring about macro-economic stability and jointly agree on implementing certain reforms to speed up the economic recovery process.
The revision of the 2017 approved budget, he said, is to further reduce non-priority expenditure, which is one of the prior actions agreed upon in order to receive budgetary support.
In the revised budget for 2017, he revealed that total revenue and grants for the 2017 Revised Budget is now projected at Dl2.242 billion, which represents a reduction of 5.7 per cent over 20I6 figure of Dl2.994 billion decrease mainly attributed to the loss of revenue during the political impasse.
He added that most businesses were closed, coupled with the negative impact the impasse had on the tourism sector with flights and bookings cancellations.
Projected grants, he said, are estimated to decrease significantly from D4.396 billion in 2016 to D782 million in 2017, representing a decline of 82% primarily as a result of the end cycle of various projects in the country, and a more realistic methodology in the capturing of project grants within the budget.
However, unlike the previously approved budget, which did not earmark any budget support for the year, this revised budget, the minister highlights, is projecting a budget support to the tune of D2.4 billion most of which support will come from the IMF, World Bank, EU, and the African Development Bank.
Total expenditure and Net-lending Sanneh announced is projected to decline from D16.911 billion in 2016 to D13.198 billion in the revised 2017 budget, representing a decrease of 22 % of the bulk attributed to Domestic Interest Payments, which declined by 30% or over Dl billion, and Other Current (OC) expenditure, which declined by 37% or over D3 billion.
The debt Interest payment is projected to consume around 34 % of government Tax revenues in 2017 that is 9% less than what it consumed in2016, moving from D3.720 billion in 2016 to D2.768 billion .
In terms of financing the deficit, Net Domestic Borrowing (NDB) he highlighted, is projected to decrease significantly to Dl.18 billion in 2017 from a budgeted amount of D3.39 billion in 2016.
He concluded that if the revised budget is approved, it will be useful tool in the drive to achieve sustainable macroeconomic stability.