2023 BUDGET IS D35 BILLION

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By Omar Bah

The Minister of Finance and Economic Affairs has yesterday told National Assembly Members that the government expenditure is projected to rise from D31.18 billion in 2022 to D35.41 billion in 2023, as he tabled the 2023 budget estimates.

“This increase is mainly driven by increases in other expenditures, which are projected to increase by D3.77 billion in 2023 (or 13% growth),” Minister Seedy Keita told NAMs.

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He explained that personnel emolument expenditures, which are part of other expenditures, are projected to increase from D5.75 billion in 2022 to D6.14 billion in 2023. “This increase is as a result of the assumption of the payment of hardship allowances for teachers in lower basic schools (previously paid by the World Bank), payment of allowances to election officers for the upcoming local government elections, Personnel Costs for the National Assembly, as well as yearly increments based on promotions,” he added.

According to him, the 2023 budget will factor Budget Support to the tune of D2.77 billion compared to D1.07 billion in 2022.

“The bulk of the budget support is expected to come from the World Bank (US$20 million), the European Union (US$13 million), AFD (US$2million) and the African Development Bank (US$7 million),” he said.

He said the total revenue and grants for 2023 is projected to reach D31.48 billion, which represents a growth of 18.42 per cent over the 2022 figure of D26.59 billion.

“The increment is mainly attributed to an estimated increase in tax revenue, budget support grants, and Non-Tax Revenue while project grants is projected to reach D11.83 billion compared to D9.66 billion in 2022, whereas Non-Tax Revenue is projected at D2.97 billion compared to D2.20 billion in 2022. Meanwhile, total Tax Revenue is also projected to marginally increase by 1.5 percent to D13.92 billion, compared to D13.66 billion in 2022. 32,” he added.

Fiscal revenue

He said on the fiscal front, revenue has registered a low outturn because of grant disbursements of only 30 percent of the projected yearly outturn of D13.6 billion.

“The projected disbursement of budget support grants from the European Union of US$23 million and African Development Bank of US$7 million did not materialize. Furthermore, the increase in global oil prices, leading to fuel subsidies to the tune of D1.3 billion as at end September 2022, also contributed to the low revenue outturn,” he said.

He said the outturn for revenue and grants is projected to reach D29.9 billion by end 2022. “However, as at end September, actual outturn for Revenue and Grants stood at D14.4 billion, representing only 48 percent of the projected outturn,” he stated.

Minister Keita said the Russia- Ukraine war has negatively impacted on growth prospects resulting in rising global commodity prices, falling remittances, a fall in international tax revenues and increase in financing pressures.

On sector specific growth outlook, Minister Keita added, agriculture is projected to continue on the growth path reaching 6.6 percent in 2023 – primarily supported by crop production, fishing and aquaculture.

He said the growth prospects for the industry sector is estimated to increase to 6.9 percent in 2023 up from 6.0 percent in 2022 – mainly supported by electricity and mining and quarrying activities while recovery in tourism, transport and storage, finance and insurance will enhance growth to 4.0 percent in 2023 from 2.4 percent in 2022.

Inflation

According to Minister Keita, inflation has reached 13.3% in September 2022 up from 11.7% in June 2022 and 8.2 percent a year ago, adding that in the near-term, inflation pressure will continue to increase due to global inflationary pressures.

Debt interest

On debt Interest, Minister Keita stressed that the end-year projections of D3.48 billion will overshoot the revised budget by D442 million mostly relating to the increase in both domestic and external debt service due to the appreciation of the US Dollar and the increasing cost of domestic debt.

“Personnel cost as at end-year is estimated to be D386 million below the revised budget amount of D5.75 billion compared to a projected yearly outturn of D5.36 billion,” he added.

He said on the external front, the imports of goods increased by 12.9 percent in the first half of 2022, mainly reflecting an increase in the imports of energy, food items and vehicles while exports increased by 23.8% in the first half of 2022.

Minister Keita said the largest allocation of the recurrent expenditure budget is to the Education sector followed by the health sector to build and sustain the human capital of the country.