23th November 2023.
The Minister of Finance and Economic Affairs tabled the 2024 budget estimate before the National Assembly regarding the Estimates of Revenues and Expenditures for the Fiscal Year 2024. The Minister highlighted the legal basis for tabling the budget, which includes the 1997 Constitution and the Public Finance Act of 2014.
According to Section 152 (1) of the Constitution, the President is obligated to instruct the Minister of Finance to prepare and submit the budget estimates to the National Assembly at least 60 days before the end of each financial year. Amended but will take effect next budget session.
Additionally, the Public Finance Act requires the Minister to lay before the National Assembly the Appropriation Bill of Estimates of Revenues and Expenditures.
The Minister emphasized that the key focus of the 2024 Budget is to reduce the overall fiscal deficit, gradually decrease net domestic borrowing as a percentage of GDP, rationalize expenditure, improve domestic revenue mobilization, and implement non-debt revenue-creating initiatives.
The Minister said the budget also aims to restructure the debt profile for reduced debt burden and prioritize concessional financing of infrastructure projects outlined in the Green Recovery-Focused National Development Plan (RF-NDP) called YIRIWA.
“The Draft 2024 Budget Estimate aligns to consolidateaccelerateccelerating reforms, and building economic resilience while improving the well-being of the population,” the Minister pointed out.
He also emphasizes improved domestic resource mobilization to support the provision of essential services in education, health, agriculture, and infrastructure development, fostering inclusive and resilient growth. The Minister acknowledged the global economic headwinds, including the war in Ukraine, the lingering effects of the COVID-19 pandemic, and tightening global financial conditions, which have posed challenges.
He said despite these challenges, the projected Real Gross Domestic Product (GDP) growth for 2024 stands at 4.9 percent, slightly lower than the 5.3 percent recorded in 2021 when the recovery from the pandemic was underway but higher than in 2023, adding that the growth performance has been affected by the impact of the Russia-Ukraine conflict and rising interest rates to combat inflation.
The Minister further reveals that sector growth projections reveal that agriculture is expected to continue its upward trend, reaching 8.3 percent growth in 2023 compared to 3.6 percent in 2022, driven primarily by crop production, fishing, and aquaculture while the industry sector is anticipated to grow by 7.4 percent in 2023, supported by electricity and construction.
In the service sector, the Minster said growth is forecasted to be at 2.5 percent in 2023, with tourism and wholesale/retail trade contributing to the rebound. He added that the full recovery in the tourism sector is expected by 2026 when tourist arrivals return to pre-COVID levels.
The minister highlighted the challenges faced by the country’s macroeconomic fundamentals due to tighter global financial conditions, including foreign exchange shortages, pressure on the currency (Dalasi), disruptions in cashew exports, and elevated freight costs.
“To address these challenges, the Central Bank of the Gambia conducted foreign currency interventions of nearly USD 139.44 million in 2022 to alleviate supply-side constraints and support the importation of essential commodities,”
The minister also discussed the impact of high food and energy prices, fueled by the war in Ukraine, on inflation. Although inflation reached a record high of 18.5% in September 2023, it has recently declined to 18% as of October 2023. He said the Central Bank has implemented monetary policies to tackle the price hikes by raising its policy rate to 17% in August 2023.
Looking ahead, the minister projected a moderate rebound in growth to reach 4.9% in 2024, with an average annual growth rate of 6.1% in the medium term. Saying the agriculture sector is expected to be the main driver of growth, adding that the war in Ukraine and its spillover effects, along with lower real incomes and higher interest rates, pose challenges to tourism and trade.
The minister then provided an update on the budget execution for the first three quarters of 2023. He said overall, the budget execution is on track, with spending in line with projections due to a decline in recurrent expenditures.
“Revenues and grants for the same period exceeded projections by 28%, mainly driven by an increase in tax on international trade and non-tax revenue, and a dividend payment by the Central Bank,” the Minister said.
In terms of tax revenue, the Minister said there was a slight increase of over 4 percentage points, influenced by higher taxes on international trade and measures taken by the government to improve import volumes. Non-tax revenue also increased by 3%, reflecting positive performance.
The minister then discussed the proposed expenditures in the 2024 budget. According to him expenditure and net lending are projected to increase slightly by 6%, driven by increases in debt interest and personnel emoluments. He further reveals that goods and services and capital expenditures are expected to decline, mainly due to the projected decrease in project grant disbursements, adding that the largest allocation in the expenditure budget is for education, followed by infrastructure, health, and agriculture.
“Revenue and grants for 2024 are projected to increase by 5%, with tax revenue expected to grow by 24% through improvements in economic performance, tax administration enhancements, and the collection of Corporate Income Tax. Non-tax revenue is expected to increase by 86%, partly due to anticipated receipts from arbitration awards and the Trans-Gambia Asset Recycling Program. The government also aims to enhance domestic resource mobilization for self-reliance rather than relying heavily on donor support,” the Minister explained.
The Minister indicates that in terms of financing the 2024 budget deficit, domestic financing and borrowing from development partners will be the main sources. The gross deficit is estimated to be 2.55% of GDP, representing a reduction from the 2023 budget. The government aims to sustain the deficit reduction strategy to lower the debt level and achieve a more robust financial position.
The minister acknowledged the challenges posed by global economic and geopolitical developments, as well as climate change, but expressed optimism for a stronger economy with declining inflation. The planned reduction in the fiscal deficit over time, supported by domestic resource mobilization and expenditure containment, will contribute to reducing the overall debt ratio. The government is committed to implementing reforms and enhancing public financial management to prioritize investment in human capital development and infrastructure.
By: Kexx Sanneh
In conclusion, the Honorable Minister submitted the draft estimates of revenues and expenditures for the fiscal year 2024 for consideration and approval by the National Assembly.
Here is the Budget Appropriation
1. OFFICE OF THE PRESIDENT = D872, 621, 251
2. NATIONAL ASSEMBLY = 478, 518, 644
3. JUDICIARY = = 224, 097, 352
4. INDEPENDENT ELECTORAL = 40, 520, 888
5. COMMISSION PUBLIC SERVICE = 16, 485, 000
6. COMMISSION NATIONAL AUDIT OFFICE = 211, 998, 038
7. MINISTRY OF DEFENCE = 992, 922, 810
8. MINISTRY OF INTERIOR = 1, 588, 400. 968
9. MINISTRY OF TOURISM AND CULTURE = 46, 199, 000
10. MINISTRY OF FOREIGN AFFAIRS = 1, 797, 495, 477
11. MINISTRY OF JUSTICE = 224, 375, 190
12. MINISTRY OF FINANCE AND ECONOMIC AFFAIRS = 2, 053, 669, 984
13. PENSIONS AND GRATUITIES = 515, 000, 000
14. OMBUDSMAN = 43, 373, 892
15. CENTRALIZED SERVICES = 677, 881, 000
16. MINISTRY OF LANDS & REGIONAL GOVERNMENT = 381, 635, 000
17. MINISTRY OF AGRICULTURE = 844, 809, 675
18. MINISTRY OF TRANSPORT, WORKS AND INFRASTRUCTURE = 2, 637, 133, 176
19. MINISTRY OF TRADE, REG. INTEGRATION & EMPLOYMENT = 117, 093, 600
20. MINISTRY OF BASIC AND SECONDARY EDUCATION = 4, 184, 845, 999
21. MINISTRY OF HEALTH = 2, 323, 916, 292
22. MINISTRY OF YOUTH AND SPORTS = 122, 395, 144
23. MINISTRY OF ENVIRONMENT CLIMATE CHANGE & NAT. RES = 301, 794, 000
24. MINISTRY OF INFORMATION = 39, 773, 660
25. MINISTRY OF FISHERIES AND WATER RESOURCES = 55, 100, 000
26. MINISTRY OF H/EDU, RESEARCH, SCIENCE &TECHNOLOGY = 230, 487, 961
27. MINISTRY OF PETROLEUM AND ENERGY = 183, 567, 926
28. MINISTRY OF GENDER, CHILDREN AND SOCIAL WELFARE = 81, 107, 063
29. NATIONAL HUMAN RIGHTS COMMISSION = 74, 537, 722
30. MINISTRY OF COMMUNICATIONS AND DIGITAL ECONOMY = 91, 418, 684
31. MINISTRY OF PUBLIC SERV, ADMIN REFORMS& POLICY = 258, 617, 785
32. NATIONAL DEBT SERVICE = 7, 509, 395, 262
Total Appropriation = 29, 221, 188, 443
