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Friday, March 1, 2024

Understanding 2023 Appropriation Bill

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By Burama Jammeh

Fair analysis of the annual budget of Republic of The Gambia must be premised on the undeniable facts that the sovereign people of The Gambia pay taxes (kafuung kafuungo/ozussou) for the primary procurement of their common welfare needs/wants. All immediately costs incurred to realize these effects must be proportionally appropriate and minimal.  Under no circumstances such costs should consume larger proportion of our collections.

Abridged 2023 Budget Projections (in GMD Billions)

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These are numbers obtains from online newspapers. There is some possibilities the actual numbers could vary for one reason or another.

I couldn’t yet find a copy (pdf) of the draft bill. Working on it…….

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Tax revenues of D13.92bn (about 10% of GDP) from an estimated GDP of US$2.3m (roughly D150bn) taxed at an average rate of 70% is a joke. We should be raking in  D105bn (around 70% of GDP). Where is our money? Corruption/leakages, no collection, poor collection, poor financial management, etc.

This budget will run into deficit with the promised spending of D35.41bn against total revenues of only D28.72. The budget deficit at this point will be D28.72bn – D35.41bn = (6.69bn)

Gambia government costs 79% (13.27/16.89 x 100) of domestic revenue. Is that acceptable to you/us? Do we exist to feed the government and/or they are created to serve us?

The Minister of Finance in his deliberations reported that the promised 2022 ‘Budget Supports’ from WB, EU, AFD & ADB did not materialized. His words – not mine; yet he/they estimated almost the same exact same amounts from the same sources for 2023 budget support. We want to see Variance/Utilization Report on the entire 2022 budget that demonstrates the projections versus actuals

Inclusion of D11.83bn of Project Grants is simply ‘Account-Padding’. These goes directly to ear-marked projects agreed with donor – thus inclusion/credit under revenues will cancel/debit at Projects. And that is even a mute-point. Some/many/most of these Projects are not directly handle by government such as Yeli/Bamba Bridge, Independent Stadium, GGFPC, etc. Why fatten the numbers with numbers you don’t hold and not at liberty to spend as we may wish. They ought to be reported differently/separately

Numbers of debt servicing do not feature (and/or not clearly on any of my sources). I will complete the matrix when I get some concrete numbers. Their inclusion will only worsen our bottom-line

Although not entirely clear, I want to consider D12.70bn capital expenditure as program/development budget (people’s business) rather than overhead costs. Certainly, that is categorically not true, but I have no way of separating the 2 at this point

Even with our incomplete matrix thus far, does this budget serve the utmost interest of The Sovereign People of The Independent Democratic Republic of The Gambia?

Do you think is ok our representatives spend 79% of our collection (domestic revenue) on themselves?


The foundation of this analysis is that these monies are collections (‘kafuung kafuungolu/ozussou’) of our people and for their common welfare needs/wants. Everything else is inferior to that ownership and purposes. We haven’t seen the text of budget thus far. We’re going off what was reported by Finance Minister Keita to the National Assembly.

The total planned expenditures are D35.41bn and projected revenues are D31.48bn.  The sum of components of revenue are D28.72bn (see matrix below); less than the projection by D2.76bn. That’s a significant discrepancy to resolve. The implied budget deficit is either D3.93bn or D6.69bn. Given that the revenues already included grants/budget supports it is safe to assume such deficit will likely be debt-financed. The national debt and implications of additional debt is simply compounding poverty – to be discuss under our analysis of the debt. 

Abridged 2023 revenues projections (in GMD Billions)

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Economic Analysis of 2023 Projected Revenues

First things first, all revenue numbers are projections. They’re not actuals. Chances are the actuals will be different – be more and/or less. In public accounting revenues are often overestimated. Making Variance/Utilization Reports of recent past years public that shows budgeted versus actual numbers would help the public assess reliability of these projections. Comparing projection to projection as often the case in this budget process is not helpful.  The words of Minister Keita himself, of the D29.90bn projected revenues of 2022 only D14.40bn turned out representing 48% of projections. Only 30% of promised budget support grants materialized. Crafting the national budget shouldn’t be academic exercise, politicking fiat and/or self-aggrandizing with a 2-hour national TV/Radio of number-salads but scaling up on our National Quality of Life Staircase from our meager resources.  You may also notice, the claimed projected grants (D14.60bn) is 86% of projected domestic revenue (D16.89bn). After almost 60 years of independent nationhood about half of the national budget relying on begging is no progress. The accounting rule for these grants ought to be either the funds are with our Treasury Department and/or a legally binding written commitment is secured. That will reduce some of these funny number padding.

Gambia tax income/production. Technically this is the GDP – the fair market value of all that is produced in Gambia in a year. The GDP estimate for 2023 is about US$2.30bn (roughly D150bn). The average effective tax rate in Gambia is 70% of income. That is to say on average 70-bututs of every dalasi earned and spend in Gambia goes to taxes. That means our annual tax revenues should be  D105bn and a far cry from the projected D13.92bn.

The 2023 projected collection of D13.92bn (mere 9% of GDP) is scandalous.  Where is our money? Will it not be collected? If so, why will it not be collected? Will it be collected and syphoned away from the people? How much will GRA self-congratulate with annual prizes and party jamboree? Why do we have GRA when we have Treasury Department? There must be an explanation considering Gambia government will cost us whopping D13.27bn in 2023. The cost of government are actual, not projections and must be paid whether our revenue estimates come true or not. This is (13.27/13.92 x 100) = 95% of our tax revenues. Gambia government burning 95% of our money on themselves is not less than legalized robbery. Government was created to serve the people and not live off the labor/sweat of the people.

Non-Taxes – These are revenues generated from fees, royalties, charges/surcharges, etc. of goods/services afforded by government. It also includes investment interests and of course the supposed dividend payments from our SOEs. The minuscule D2.97bn collected from such pool of sources clearly demonstrates poor financial systems of Gambia government. Shouldn’t Gamtel, SSHFC, etc. by themselves pay in more than that entire sum? In fact, the oppose is true. Instead, of dividend into the public coffer we are still subsidizing these ‘white-elephants’ called subventions. I have long argued we divest all our holdings in these ‘milk-cows’ of public corruption. Minister Keita reported one of the reasons for less revenues were subventions to the SOEs. This is not exactly true.  Subventions are no cause for less revenues; to the contrary, subventions are paid from the revenues.

Grants and appropriation – Grants are gifts from our friends. Government appropriation is the fiscal management of public assets/monies. Are grants appropriable for such budgeting purposes? That depends on varying factors plus applicable accounting principles.

Budget-support – This is a term used by Gambia referring to cash support of WB/IMF, USA, EU, AFD, ADB, UN, etc. to pay for specified overhead costs. For instance, GTZ agreed to pay personnel costs of seconded staff, WB taking up teachers’ personnel costs, etc. These amounts are known, duration, purpose and often committed to in writing. Such commitments should/could be included in the appropriation bill.

Project grants – These are different kettle of fish. There are so many variations that made them difficult to account for such budgeting purposes. Many do not necessarily make exact financial outlay decisions in time or in line with/for our fiscal calendar. The finances of some are expatriates-controlled – not handle by GG. Many others may carry introspective financial clauses such as capital purchases be made from markets of donor country or at best within their economic bloc. Many are multi-year projects that do not have defined annual financial plan.  On and on………. Some of the historically famous of such projects are Mixed Farming, Independent Stadium, GGFP, CRD-FP, URD-FP, etc. Even when you have all details, inclusion is simply ‘account-padding’ (inflating numbers) because credits to revenues must be debited at programs. The best and simple way to handle this bundle is to report it separately. That will reduce revenues from D28.72bn to (13.96 + 2.97 + 2.77) = D19.66bn. That increases budget deficit exponentially (19.66 – 35.41) = (15.75bn). With that our is deficit more than our annual tax revenue. Unacceptable!

Stay tuned for analysis on costs and its implications.

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