By Buba T. Ceesay
MSc. BSc. Hons, PgCert
The 2024 budget is the most retrogressive budget ever in the history of The Gambia. The budget estimates presented by the Minister of Finance and Economic Affairs Honourable Seedy Keita has been criticized for various reasons.
Total projected revenue and grants D34.93 billion show an increase of 5% only as compared to the previous year’s budget This rate of growth may also be inadequate to meet the needs of a developing country and tackle major problems.
Secondly, it is not clear as to how the government plans to go about this 24% increase in tax revenue. While the Minister spoke about steps to improve the tax administration through digitalization and better compliance, there was no clarity on what strategies or actions will be put into place. It is impossible to conceive how the target for tax revenue can be achieved without presented plans and actions.
In addition, the fact that more work is done toward improving collection of Corporate Income Tax from large contracts in construction and public-private partnership sectors has engendered hijacked questions on how burdensome collecting all those might be to those industries. The tax policies should not hinder economic growth and discourage investments.
Further, there are also concerns related to the viability of this budget since it is based on non-tax revenue including an arbitration award and funds from Trans Gambia Asset Recycling Program. None tax revenue, the sources might also be capricious as well as full of outside factors hence risky for any organization to have such a source whereby all its revenues are gained from.
There many issues illustrated by Minister during the budget presentations that should be criticized as a lack of transparency and unrealistic projections.
First, the choice to cut down project grant disbursement by 34% seemed arbitrary and baseless. The given explanation, which states that it should correspond to optimistic predictions of 2023 does not provide any verifiable support or reason for such a significant reduction in recognition. This puts into doubt the validity and integrity of budget forecasts.
Furthermore, the budget does not focus on important areas of spending including social assistance and infrastructure development. It is worrying that little focus in the budgets has been placed on such sectors, considering their great influence of development and well-being within any country. The bias towards short-term financial responsibilities at the expense of long-Term development growth and development is mainly represented by an emphasis on the debt interest.
Also, a rise in the net interest on debt by 76 percent is worrying and raises questions as to whether the government can efficiently handle its debts. Such a huge leap in debt interest expenditure points to poor management of the debts and financial planning. This might have very serious implications for the future fiscal balance and economic performance of the country.
As a result of these issues, an alternative budget proposal should be prepare and present to national assemble. This should be a growth budget to give sufficient funds through increased revenue for Government programs and services.
It should also entail how best the tax revenue will be increased, justice dispensed and ensure that taxes are collected efficiently. The budget should also show the need to diversify sources of revenues so as not be too reliant on unstable non-tax incomes. A progress budget can be more efficient in meeting the country financial needs and fostering sustainable economic development by addressing these problems.
¯To achieve this, yet another progress budget should be made addressing such shortcomings and targeting the nation’s requirements.
The new budget will have to include a comprehensive revision of spending and revenue sources, which should concentrate on fostering sustainable growth as well as simultaneously solving several urgent issues in the nation.
In addition to this, the budget should also base itself on sound projections with a real economic foundation and take into consideration those factors that could be considered risky or uncertain in the world economy as well.
Instead, something less obscure and more credible should be used to ensure that resources can be run more efficiently while motivating the country’s development in long term.