By Dr Ousman Gajigo
One of the points I have been highlighting during my commentary on the Gambian government budget is its lack of credibility. In other words, what is projected in a typical budget by the Ministry of Finance and what ends up being actually spent diverge significantly. One of the reasons for that divergence is the intentional omitting of expenditures that senior government officials know will happen in the coming fiscal year.
A prime example of this is the 2025 budget, where a major loan taken by this government was omitted. This involved a loan in the amount of over D 2 billion obtained from the Islamic Development Bank. The loan was signed on 2nd December 2024. While the loan has a grace period of seven years, the service payments start in 2025. In fact, two payments are due within the 2025 calendar year.
Yet, this loan was not mentioned in the 2025 budget that the Minister of Finance, Seedy Keita, submitted to the National Assembly, and effectively the whole nation, on 15 November 2024. The loan was not mentioned in the Budget Speech, which the Minister delivered before the National Assembly on 13 December 2024.
The lack of inclusion of this loan in the 2025 budget was deliberate and there was no good reason for its omission. A loan that was signed in early December must have been approved by the Islamic Development Bank weeks earlier. Formal loan approvals from multilateral development bank are also preceded by weeks of internal processing and appraisal. This means that the knowledge about the loan, its amount and other necessary information were known by the Minister of Finance months before the finalisation of the 2025 budget and its presentation before the National Assembly.
The reason for not properly disclosing this loan was to make sure it was overshadowed by discussions of budget so that citizens are kept in the dark about how this government is accelerating our march towards debt distress. From late November to mid-December 2024, most Gambians were focused on the 2025 budget and the size of the national debt. This meant that this new loan and its tabling before the National Assembly for ratification went unnoticed. This was exactly by design.
What this also showed was that the National Assembly Members (NAMs) did not perform well in their duties in this particular issue. The NAMs should have rejected the ratification of this loan for a number of reasons. First, there should have been a proper debate about whether this loan was needed in the first place. And the determination for whether this loan was needed should have included consultations from experts on public finance management rather than relying solely on our incompetent Minister of Finance.
There should also have been a proper debate in the National Assembly on why this loan was not included in the 2025 budget. As explained above, there is no valid reason why the Minister of Finance can claim that the negotiation and finalisation of the loan could not have been included in the preparation of the 2025 budget. So, the fact that loan ratification happened despite these problems shows that our NAMs bears some of the responsibility for the excessive loans that this country is now carrying.
It is not difficult to show that this loan was not needed at all. Let’s recall that the current debt of the country is over D 120 billion and growing. As a percentage of our GDP, it is high and the servicing of the debt currently consumes about 30% of our annual budget. By all indications, the country is very close to being in debt distress.
Faced with such an unfolding public finance disaster, one would think that senior officials in the country would undertake better public finance management by avoiding unnecessary loans. But instead of presenting a budget that is prioritized and avoids waste, the nation is presented with yet another terrible budget. Instead of avoiding taking on more unnecessary debt, our senior public officials are saddling us with yet more debt.
A careful examination of the 2025 budget shows that there was no need for this new loan because there was in fact room to finalize the Bertil Harding highway. The 2025 budget included a huge amount of waste and unnecessary expenditures. Let me name a few. The Office of the President alone took more than D1 billion, which is more than any Statehouse ever spent before Adama Barrow came to power. No one has any idea what useful ways that money is being spent. Over D2 billion was allocated to the Ministry of Foreign Affairs, a ministry which does not need more than a quarter of that amount. There are hundreds of millions of dalasi spent on vehicles and fuel that are unnecessary.
The financing and the construction of the Bertil-Harding highway is long overdue for an audit. With the significant amount of corruption ongoing in this administration, the National Assembly should have requested an audit of the amount already spent on this highway project. Just like other audits have shown significant financial mismanagement and corruption, there is no doubt that an audit would find similar misdeed on earlier loans concerning this road project. Yet there was no debate on the floor of the National Assembly to see how much has been wasted so far before agreeing to saddle the nation with yet more debt.
This new loan represents the prioritisation of short-term political interest over long-term national interest. The negotiation of a long 7-year grace period for a loan that is supposed to be fully repaid in less than decade shows that this government does not care about impact on debt distress on the nations. It is high time we wake up to this fact.
