The minister of Finance and Economic Affairs will today, Friday, December 14th, 2012 at 10:00am, present before members of the National Assembly, the total revenues, recurrent and development expenditure for the fiscal year 2013.
Known as the Budget Speech, the occasion is expected to be graced by the vice president and minister of Women's Affairs, Aja Dr Isatou Njie-Saidy and other Cabinet members, diplomats and members of the community. It would be recalled that on December 3rd 2012, the Finance and Economic Affairs minister Abdou Kolley presented before the House, the estimates of the budget.
The legal requirements for the presentation of the government of The Gambia budget to the National Assembly are specified in the 1997 Constitution, and the Budget Management and Accountability Act of 2004. Section 152 (1) of the 1997 Constitution of the Republic of The Gambia requires His Excellency the President to instruct the minister of Finance and Economic Affairs to prepare and submit to the National Assembly, at least 30 days before the end of each financial year, the Estimates of Revenues and Expenditures of The Gambia for the following year.
During the presentation of the estimates, Minister Kolley reiterated government's commitment and determination to continue with the fiscal and structural reforms undertaken during 2012, noting that government will continue to consolidate the microeconomic gains recorded for the past successive years.
He recalled the major crop failure in 2011 due to drought that affected several countries throughout the Sahel region, saying crop production fell by about 60 percent from previous year's harvest, and even though several non-agricultural sectors of the economy performed well during the year, real GDP as a whole is estimated to have contracted by about 4 percent in 2011.
Budget for 2013
Dilating on the 2013 budget, Minister Kolley said within a weak global economic environment, revenue projections for 2013 have been cautious. Moreover, he added that to avoid a spiralling of our already high domestic debt, domestic financing of the budget has been limited to about D340M and there was rigorous privatisation in this budget to make sure that expenditure outlays match revenue projections as much as possible, within a limited scope for increase in domestic debt to finance the deficit.
Total revenue & grants
He told deputies that the the Total Revenue and Grants for 2013 is D7, 608.8BN. "The drivers of this increase in revenue will be income tax, both personal; and company, as well as import sales tax on non-oil items and collection from the replacement for sales tax, the VAT," he stated, adding that these forecasts assume GRA will continue to make improvements in compliance levels. "Non-tax revenue is expected to rise by 4.8% to D598.7 million. Grants are expected to be almost double the 2012 levels to stand ad D2.2 billion," he noted.
Total expenditure & net-lending
Minister Kolley said government's 2013 expenditure and net-lending is projected at D8, 301.5 billion. "Other current expenditure is estimated to be D1933.1 million, a rise of by 3.2 percent from 2012. Capital spending is estimated to rise by 18.0 per cent in 2013. Part of this will be financed by donors, with capital spending financed by the GLF projected to be D236.3 million (13.1 percent) of total capital spending," he said.
According to the Finance and Economic Affairs minister, the equity participation is expected to be D41.5 million in 2013 reflecting equity participation in Sehelo-Saheliene Bank for Investment and Commerce (BSIC) and ECOWAS Bank for Investment and Development (EBID). He said that D25 million is budgeted for a Civil Service Loan Scheme, which will be used to provide loans to qualified civil servants starting in 2013.
He said Gross Budget Balance is projected as a deficit of D870.7 million, down from D951.4 million in 2012. "In terms of financing this deficit, net domestic borrowing is projected to be limited to D340 million in 2013, around 1 percent of GDP. Reducing net domestic borrowing is a critical step on the path to eliminating net domestic borrowing and putting the Budget on a sustainable footing," he stated, adding that interest payments currently consume around 22 percent of government revenues.
Minister Kolley told NAMs that other financing items are D603.6 million from foreign amortization, D45 million on Arrears and Guarantees, and D50 million is projected for capital revenue. He concluded that the budget, if approved, will be a useful tool in the drive to accelerate growth and reduce poverty as well as sustain macroeconomic stability.
Meanwhile, shortly after the presentation of the budget estimates before NAMs at the National Assembly Chambers in Banjul, deputies then proceeded to the Paradise Suites Hotel for a two-day pre-budget workshop organised by the National Assembly in collaboration with the UNDP, and the African Development Bank (AfDB) under the Institutional Support for Economic and Financial Governance project.
The workshop was aimed among other things to ensure the NAMs make informed decisions on the allocation of Resources for the Social Priority Sectors; enable NAMs assess the adequacy or otherwise of the levels of funding provided for the Social Priority Sectors to meet the MDGs and PAGE; identify the Funding gaps/ shortfalls thereto; and discuss strategies and sector proposals for resource mobilisation.
At that workshop, Omar Jobe, the executive director of the Pro-Poor Advocacy Group (Pro-PAG) during a power point presentation analysing the 2013 budget estimates, revealed that the total appropriation estimates of the 2013 budget stands at D4, 290, 858, 170.
In a breakdown, he said: "The Office of the President got an allocation of D300, 808, 647; National Assembly, D48, 704, 184; Judiciary, D48, 090, 878; Ministry of Defence, D362, 304, 616; Ministry of Interior and Religious Affairs, D364, 656, 666; Ministry of Foreign Affairs, D393, 028, 632; Ministry of Finance and Economic Affairs, D309, 890, 679; Pension and Gratuities, D95, 925, 000; Miscellaneous, D113, 100, 00; Ministry of Agriculture, D118, 604, 901; Ministry of Trade, Industry and Employment, D55, 181, 281; Ministry of Basic and Secondary Education, D660, 122, 737; Ministry of Health and Social Welfare, D437, 002, 298; Higher Education, D80, 182, 124; and others D239,347,611."
Jobe explained that Domestic Borrowing is 26.33%, while Foreign Borrowing is 73.67%. "Borrowing is necessary to offset the 2013 budget deficit of -692,737. But domestic borrowing has a crowding out effect, in the sense that it results in low private sector borrowing, low private sector investments, high interest rates and slower economic growth," he added.
He noted that the sources of government revenue are the Gambia Local Funds (GLF), which is mainly from taxation (66.74%); loans from domestic and foreign sources (10.59%); and grants from domestic and foreign sources (22.67%).
He then made it clear that for 2013, allocations to poverty programmes from the GLF fund increased slightly to 50.55% from 49.10% in 2012, discretionary allocations have dropped by the same proportion, from 50.90% in 2012 to 48.45% in the 2013 budget, and for all funds (loans, grants and GLF), poverty programmes have already taken the lion's share - driven by donor funding.
At the end of the two-day workshop, NAMs unanimously amended and approved the 2013 Draft Budget Estimates which will today be officially presented before the House.