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Friday, September 25, 2020

Gambia targets D2 billion debt relief

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By Omar Bah

The minister of finance and economic affairs, Mamburay Njie has disclosed that the government is expecting an estimated D2 billion potential debt relief next year.

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“The government is expecting to conclude negotiations on debt restructuring with their development partners, and an estimated D2 billion could be potentially freed up in 2020 as a result of this debt deferral,” he told NAMs whiles delivering the estimates of revenues, recurrent and development expenditures for the fiscal year 2020.

This, he argued, will give the necessary fiscal space to address debt sustainability issues as well as more financing of thenational budget to priority NDP spending.

Gambia’s debt to GDP in 2018 reached 1.191 million euros 1.406 million dollars, 86.57% of GDP.

The total revenue and grants in 2020 is projected at D24.47 billion.

He said the country’s total expenditure and net-lending is projected to increase from D28.825 billion in 2019 to D30.048 billion in 2020.

“Debt interest payment is projected at D4.648 billion compared to D2.702 billion in 2019 as a result of mounting debt stock, domestic debt in particular, coupled with the envisaged rolling over of some of the domestic debt,” Minister Njie observed.

He said other non-interest expenditures are estimated to decline from D20.064 billion in 2019 to D18.206 billion in 2020, adding that capital expenditure is estimated to increase from D1. 880 billion in 2019 to D2.752 billion in 2020.

Minister Njie said domestic borrowing is projected to increase to D3.9 billion in 2020 compared to D1.236 billion in 2019.

“The economy is anticipated to grow by 4.0% in 2019 compared to an actual real growth of 6.5% in 2018. The decline in growth is as a result of anticipated setbacks in both agriculture and services sectors,” he added.

He said gross domestic product is anticipated to grow by 40% in 2019 compared to an actual outturn of 6.5% in 2018, adding that the agriculture sector is anticipated to experience contraction in 2019 due primarily to poor performance from two important subsectors: crops and livestock.

“The ministry of finance and economic affairs has implemented strong budget execution guidelines for 2019 which has helped in minimising budgetary reallocation and augmentations, and in turn, improved ministries’ compliance to spend within their envelope. As of end 2018, Net Domestic Borrowing (NDB) was less than D3.4 billion, which is approximately 4% of nominal GDP,” he said.

He said the country’s non-realisation of NDB target of 1% of GDP was primarily as a result of the non-disbursement of budget support from its development partners.

“Although a total of D3.4 billion was factored as budget support, only the EU component of 25 million Euros was received, and critically, this was received in 2019 instead of 2018. The projected budget support from the EU and the World Bank, which comprises the bulk of our estimated support for this year, have not materialise as at end of September,” he added.

“In addition, we are also in advanced negotiations with the French Government for potential budget support of the tune of 2 million euros. We nevertheless still expect the EU (22 million euros) support before the end of the year,” he said.

He said the World Bank budget support is unlikely to materialise due to slippages emanating from the non-realisation of certain development policy operation targets.

He said total expenditure including externally finance capital expenditure and net lending has reached around D14.1 billion as of September 2019 more than the 2018 figure of D13.6 billion.

The 2020 budget, he added, also features an innovative developmental model referred to as the emergency community development programme (ECDP). “The ECDP will be implemented through local councils, and it aims to improve access to basic social services for rural populations through the establishment of socio-economic infrastructures,” he stressed.

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