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City of Banjul
Saturday, September 26, 2020

A critique on the Gambia’s 2019 FY current and revenue estimates budget and supplementary appropriation bill for the FY 2018

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By Dr. Assan Jallow Introduction “The budget is not just a collection of numbers, but an expression of our values and aspirations”- James Cameron Budgetary processes in developing countries are most often poorly designed and executed with over-ambitious programmes that are not feasible or beneficial in enhancing economic growth and prosperity, and of which The Gambia is no exception. In the mind of the politician or Minister, it is all about presenting to the public an over-inflated and exaggerated budget in numbers, not cognizant of the dire consequences of spending what has not been budgeted in the event of limited resources/funds of finance. Budgeting is not a crowdfunding initiative as seen in the popular ‘gofundme’ projects. National/public budgeting goes beyond that dimension as it deals with the livelihood and how lives are lived. In fiscus management, we are reminded of the popular sayings in the Wollof parlance, “ kou neeh naam, neykaa fah”, as no one goes to the market to buy foodstuffs without money. For this case, budget matters and it is the life-blood of the citizens under whose names taxes are charged/levied and loans are contracted to finance development projects such as roads, building of schools, hospitals, bridges, debt repayments, etc. Sad that the citizens are used as a cover-up and dubbed as the direct recipients of these loans which are sometimes misused or diverted from their intended purposes to the pockets of few politicians and public officials. Conventional wisdom reminds us that the 2019 budget of The Gambia will be financed through taxes, non-tax revenues as well as budgetary support from both locally and internationally borrowed resources. This is evident as it is the standard practice in public finance management for all emerging and developing economies like The Gambia. However, what we do not know is: (a) what are the loans and grants profile of the country, (b) how will the generated tax revenues be ploughed back for our development needs as a country, (c) How much is earmarked for domestic finance of projects and social programmes for the citizenry, since there is no quid pro bono in taxation? (d) how much will come from borrowed resources and how are we going to finance the repayments, (d) how much will come from non-tax revenues? (e) Are there any government sales? (f) what had happened to sales of land and the presidential planes? (g) how were/are the generated proceeds handled? (h) Are there plans for possible rates reduction on the personal income and company income taxes? If there is/are what the planned tax rates are? And (i) Any plans of removing VAT on domestic airline fares? Having gone through the appropriation of funds for the respective ministries, departments and agencies (MDAs) of government, I am left with more questions than answers as to the rationale and context on the devised budgets for the FY 2019. Under no circumstance should the Office of the President, Ministry of Defence, Interio, Foreign Affairs and Gambians Abroad and Finance be allocated (a) 700, 063, 75 (b) 727,557,747, (c) 996,904,978, (d) 1,189,282,799 and (e) 827,727,837. Drawing an inference on the numbers, one can deduce that they are all increased within the 200, 000, 000 (two hundred million) ceiling mark, which indicates a default by design. Others will defend it and they will justify it with an insult on the human mind. This form of allocated funds are unjustifable and indefensible. And, for the conscientious objector, it is unacceptable for these ministries that obviously provides no social service programmes of any nature to the citizenry be allocated chunk of the funds at the expense of critical ministries like Higher education, youth and sport, agriculture, just to name but a few. This kind of allocation is tentatively a sham and it is scandalous and proved that the current administration under President Barrow shows no definitive interest and vision to govern and move the country beyond the path of enhanced agricultural productivity, improved health service delivery and increased human capital resource capability of the citizenry. The economic outlook for the year 2019 will no doubt be challenging for The Gambia, as the world is currently undergoing through the embryonic cycle of scarce/limited resources and financial depletion of funds. We are a donor-driven and begging nation that extensively depend on increased borrowings to sustain chunk of our budget bills. Borrowing has the prospects of weakening the external position of the government, as if we go beyond the limits of the borrowing caps, established therein by our development partners like the World Bank, IMF, ADB, AfDB, EU, etc. Our currency (GMD) has been weakened and depreciated by almost 50% against all the major foreign currencies like the $, £, €. Also, the overall fiscal deficit has increased from 1.7% of GDP, thus reaching 7.9 percent by the end of 2017. And GDP real growth declined due to policy slippage, erratic rainfalls and electoral uncertainty that led to a quickly averted political impasse. Besides, we are the least country regarding geoeconomics, while our strategic position is weakened by Senegal’s geopolitical interests in which her government under the leadership of President Macky Sall is playing politics to control and over-shadow our narratives in the global stage. In consequent, we must note with caution that our country is nursing a past troubled financial mismanagement. That past had almost dried The Gambian economy. It has also placed the country in the unforgivable trajectory of serious infrastructure deficits, rising poverty, poor social programmes, cronyism, chronic unemployment, unproductive agricultural base and absence of productive sectors like manufacturing industries to create wealth, generate income or revenues for the government and employment for the citizenry all had affected the growth of our economy. These are among the numerous constraint factors that has created the unintended imbalance of a structural friction on our economy with records of the low level of domestic and foreign investments, coupled with increasing government’s reckless spending culture and unsustainable expenditure budget, multiplicity of taxes, erratic power supply and lack of business confidence in our domestic economy. The Gambia has a history of wasteful spending culture. Both previous regimes of the People’s Progressive Party (PPP) 1965 – 1994 and the Alliance for the Patriotic, Reorientation, and Construction (APRC), 1994 – 2016 had faulted along these lines, as a result of adopting the insatiable elephant system of incremental budgeting. And it seems the government of President Barrow is following ensuite that dead-end route. This form of budgetary process favors and promotes supplementary or appropriation budgets, after the initial budget is passed, approved and assented by the President, through the approval of the National Assembly, dubbed as the “fiscal profligacy of white elephant projects” for the Presidency and his courting cronies”. This form of disruptive budgetary system is designed with the features of uncontrollable measures to loathe and siphoned funds by public officials and their enablers in government. Thus, making our national budget premised under the wings of unnecessary spending as if the government is on a careless spending spree to feed the stomach infrastructure of certain public servants and politicians at the expense of the taxpayers’. On the Need for a Supplementary Appropriation Bill The SAB is a constitutionally-mandated provision as per the 1997 Constitution, s 153–154, and its related subsections for the Hon. Minister of Finance to appropriate additional funds from the Consolidated Fund and table it before the NAM for consideration and approval. The primary objective of any SAB budget from an economic perspective is to cater for the shortcomings in the approved budget. Suffice to say, it is an additional budget support mechanism to help finance other unmet contingency plans and international obligations, amidst the exhaustion of funds before the end of the current FY (2018). Therefore, NAMs should take a proper and objective review on presented request on need prioritization basis to avoid any default or late subscriptions from the government. I am of the view that the rejection of some of the requested budget items are not politically-motivated. It was an exhaustive exercise of scrutiny and for the government to do its work more effectively and give justifiable reasons for future request of additional funds that are unambitious, and within the means of due execution and sustainability all geared to significantly reduce the magnitude of the contracted fiscal deficit and the rising proportion of debt to GDP. By extension, it is a resuscitation measures of the government to cushion any of its unmet financial obligations. Though, it is sometimes abused by government in trying to justify amounts that when thoroughly looked into are outside the norms of reasonableness and of which the current SAP of 1 billion tabled by the Hon. Minister of Finance is an example of economic deafening and financial madness. And, no sane individual would approve such unjustifiable request, just 20 days left to the end of the year, 2018. That is unacceptable for a government that cried of inhering a broke economy and promised to institutionalize sound, robust and fiscal policies that enforces stringent austerity measures to contain waste on expenditure, save funds and propel cost-effective, sustainable and beneficial development programmes for its citizens. Kudos, to our elected representative (NAMs) for doing justice to the SAB before the honorable House of the Assembly. There is a saying that you can gauge a government’s effectiveness and efficiency when they’re given tight budgets to work and make the impossible plausible within a space of time. It is an essential precondition to measure performance regarding growth and the outcomes of the set deliverables. The Barrow government should pursue a workable macroeconomic fundamentals that has the right triggers infused with the dynamics of innovation as a prescriptive measurement strategy, considering our past fiscal distress. Recommendations: Every identified problem must be addressed with right soothing solutions to avoid their reoccurrence. Therefore, the following are among the few recommended strategies as a way forward in addressing our peculiar financial distress and overly inflated national budget: a) Building sound fiscal and monetary policies that are akin to the prevailing economic realities of the country. b) Limiting/cutting off other government’s traveling votes or expenses, ending the chartering of private planes/jets for the president and limits the travels of the President of not more than eight (8) travels in the year. This when applied effectively will be a maximal cost-savings for the government, and the saved costs can be redirects to fund the critical priority areas and sectors like health, education and agriculture. c) Reducing the trips or foreign travels of cabinet ministers and other high-profile government officials (Permanent Secretaries, Heads of Public Sectors and Agencies). Our foreign missions and consulate officials abroad should be representing the government in meetings, seminars and conferences that are supposed to be held within their assigned jurisdictions. It is more cost-effective to utilize this category of worker than having to ferry delegates all the way from and to Banjul to attend some of this no-returns in investments conferences and bilateral agreements. d) Cut down the size of the government to end the bloated, waste and embezzlement, and make the civil/public service sizeable, leaner, smarter and more service-oriented to enhance quality, productivity and effectiveness. e) Put an embargo on short-term courses or trainings where capacity can be sought, organized and delivered locally in MDI and the University of The Gambia. Local content matter and it is time to think global and act local, as to help us to understand the dynamics and the economic realities on how to sail through amidst challenges in all spheres of human development and precisely, nation-building. We have the quality trainers, lecturers, scholars, subject-matter specialists and researchers that can deliver top-notch training programmes across the public sector. f) Limit the allocations of state resources on national celebrations. We are a nation on the march to restore democracy and build strong institutions, not organizing fanfares in the form of political masquerades of dancing and clapping when most of the populace cannot afford a proper meal or attend to the welfare and health needs of their children. g) The Office of the First Lady shouldn’t be allocated with any government funds. No statutory provisions is establishing such office. Therefore, it is unconstitutional to use public funds to operate the office and that is where strict prudent financial management should start to avoid setting bad precedence in governance, ethics, transparancy and accountability. h) Privatize non-functioning and burdening public enterprises that are adding no value to government. i) Liberalize the sea transportation services for the private sector to have confidence to invest and provide other related services. j) The government such pursue a well-meaning industrialization programmes or plans in the building factories and manufacturing industries to address the crisis of unemployment and curtail irregular migration of our teeming youthful populace. k) Reallocate additional funds to other key ministeries like health, agriculture, youths and sports and higher education by taking out 200,000,000 (two hundred million) from the Office of the President, Ministry of Defence, the Interior, Foreign Affairs and Finance. Our national budget policy priorities should be anchored on the nexus of prudent fiscal discipline and financial sustainability as a response towards building a more resilient, purpose-driven, consolidated collective delivery and accountable budget mechanism on our pro-poor programmes. In the spirit of continuity and sustainability of the government’s policies, focus should be geared on stimulating economic growth and providing opportunities of expansion in the economy that will cater for job creation, improving education outcomes, increasing wellness and safety, providing an inclusive and sustainable living environment that supports ingenuity and innovation, and embedding the practice of good governance, transparency for all. In short, the budget estimates must meet the needs and aspirations of the people. It must be concretized on the pillars of issued-based policies and pro-poor programmes. To conclude, budgeting is only feasible if the anticipated resources are available to fund the intended programmes of the government. Therefore, caution must be taken to guide the entire budgetary process and allocation of funds to worthwhile and critically-needed services or project areas that will add value to people’s lives and help grow the economy. Not on the scale of randomized binary lenses of wasteful spending spree due to the forces of the political hands. Stewardship is a critical asset that must not be compromised in the delivery of public goods. It behooves us all to take care or caution in the generation, allocation, distribution, execution, management and monitoring of our scarce resources. This is to save our economy from the aisle of unending financial misery that could deepen and degenerate into an economy of sham where food poverty and rising unemployment will induce the vices of irregular migration through the meditterean seas to Europe. The best way to go for the sustainability of the 2019 Budget is austerity, i.e. by limiting and controlling expenditure spending under the guiding framework of action and the only singing anthem that should be championed and lived with to usher our country to the progressive path of sustainable economic growth and development]]>

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