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City of Banjul
Friday, October 7, 2022

REVISED BUDGET PASSED WITH BITTER PILL

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By Tabora Bojang

The much-trumpeted pay rise for civil servants warranting a revised budget passed by the National Assembly last night would come at a high price and painful sacrifices in other areas of the economy.

Furthermore, the salary increment—30 percent across the board—apparently leaves the high-income earners better off than the vast majority on low wages. 

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The revised budget also means farmers are unlikely to get any subsidies for the sale of their groundnuts for this year’s farming season.

This means the relatively good producer price of a metric ton of groundnut which was at D22,000 could significantly be reduced.

In 2020, tons of groundnuts rolled over the border on a daily basis with some operators in Senegal raiding Gambian farmers with cash and fabulous prices better than those offered by national groundnut marketing body, GGC.

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This was addressed in 2021 with a significant producer price increment with the GCC reporting that it has profited over D1 billion from the purchase of 40,000 metric tonnes of groundnut from farmers across the country.

However, any expectations for higher producer prices this year could be dashed with new Finance Minister Seedy Keita informing lawmakers yesterday that there has been downward revision of total revenues amounting to D3.3 billion which manifest serious economic contractions, requiring a rethink of policy and expenditure.

The minister also reported severe declines in budget support grants due to the non-materialisation of grants from EU and the AfDB for a combined amount of 30 million Euros (D1.5 billion), while program grants are estimated to decline to D1.1 billion.

Minister Keita disclosed that in its bid to further create fiscal space, the Ministry will freeze all committee allowances for internal meetings held within the ministries, departments and agencies of the government.

“The groundnut subsidy, for 2022 has been removed since groundnut prices are surging globally and therefore minimising the need for the subsidy on groundnut,” the minister stated.

He said the Ministry of Finance is also taking aggressive steps to tackle what he calls the excess losses associated with tax exemptions or waivers under the Special Investment Certificate Schemes and also review all government concessions contracts with private partners especially those about to expire.

“The share of concessions fees on the current SECURIPORT [ airport levy of $20 per person] at the Banjul airport that goes to GCAA will revert to the consolidated revenue fund.”

Keita said a comprehensive plan has also been devised to ensure losses on land lease rental income are recovered.

“A comprehensive action plan has been drawn in collaboration with the Ministry of Lands to support collection and administration of land lease rentals. A rental income on both residential and commercial properties remains largely untaxed. As a result, the GRA and GBoS have conducted a survey of all rental properties in the GBA to establish a rental registry that can inform an enforcement plan and collection strategy,” Keita said.

Fuel prices likely to increase

The minister also reported declines in revenue of petroleum products to D1 billion due to subsidies on pump prices.

He told lawmakers that fuel prices would have been pegged at D92 per litre without the government subsidies.

But in its bid to restore oil revenue, the minister indicated that domestic retail prices will need to be revised to reduce subsidy elements and generate a total revenue of D750 million in the next 5 months.

This could see a steady rise in the pump prices as lower subsidy will mean citizens will bear the brunt of the pricing by petroleum dealers.

 Salary increment

The revision will witness a 30 percent increment in the basic salaries of civil servants. These include ministries and departments as well as sub-vented hospitals and schools under the Ministries of Health and Basic and Secondary Education.

However, the increase is only applicable to public institutions that use the civil service Integrated Pay Scale while pensioners are also excluded.

The minister explained that their exclusion was because their pensions were increased by 100 percent in 2018 which resulted in an income mismatch between them and active employees.

Keita said the increment has increased personnel cost in the central government to D575.8 million.

Who are the winners and losers?

The increment is across the board and would indicate those with high pays like the president, ministers, and special advisers are going to take home high pays as opposed to lower income earners in government such as nurses, teachers, junior civil servants between grades 1 and 8.

President Adama Barrow, whose monthly salary stands at D255,000 will now get his salary increased by D76,500, cabinet ministers whose basic salaries were D50,000 will now have D15,000 added.

However, a civil servant who takes home D2,500 as basic salary will have their salary increased by D750, those receiving D3000 will earn D900 additional, those receiving D10,000 will have D3000 increment, those earning D12,000 will have D6000 increment.

Majority of NAMs stated they are not opposed to anything that seeks to promote and enhance the lives and livelihoods of the citizens.

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