By Fatou Dahaba
Seedy Keita, the Minister of Finance and Economic Affairs, has announced that government expenditure and net lending are projected to increase slightly to six percent, rising from D37.15 billion in 2023 to D39.38 billion in 2024.
Keita, on Friday, tabled the 2024 Budget Estimates at the National Assembly in Banjul.
“This increase is mainly driven by increases in Debt Interest, which is projected to increase from D2.9 Million in 2023 to D5.9 billion in 2024 (i.e. by 76%)”.
Expenditures on Personnel Emoluments are projected to increase from D6.10 billion (revised to D6.7 billion) in 2023 to D7.43 billion in 2024.
“However, Personnel Emoluments have been revised in 2023 to take into account adequate adjustments relating to unplanned recruitments”, Keita told Gambian lawmakers.
Total Revenue and Grants for 2024 are projected to reach D34.93 billion, representing a growth of 5 percent compared to the 2023 budget of D33.22 billion.
“Tax revenue is expected to increase by 24 percent due to improvements in economic performance and enhancements in tax administration through digitalization and compliance”.
According to the Finance minister, the 2024 budget will factor Budget Support to the tune of D3.18 billion from development partners, compared to D2.77 billion in 2023.
“The bulk of the budget support is expected to come from the World Bank (USD25 million), the European Union (EUR14 million), the African Development Bank (USD7 million), Agence France Development AFD (EUR 5 Million).”
Subsidies and Transfers, which include Subventions, are projected to increase by D599 million to D4.96 billion in 2024, compared to D4.34 billion approved for 2023.
“This increase is partly due to the increases in subventions for the GRA (anticipated high revenue collections), Hospitals (MoH) and Schools (MoBSE), GBOS (Census) and the inclusion of new subventions such as the MCC Compact Coordination office, the Victims Commission, SOE Commission. Input subsidies for fertilizer also increased by D100 million.”
Debt service interest
The Finance minister added that payment is projected to be D5.11 billion in 2024 from D2.19 billion in 2023, representing an increase of 76 percent.
“Overall, Debt service (interest payments plus foreign amortization) is projected to reach D7.49 billion in 2024.
“The increase in the Debt service for 2024 is a result of the large increase in interest payments due to an increase in the MPC rate to a high of 17%, which translates to higher interest payments on the 30-year bond and other domestic debts and the anticipated rollover of other government securities”.
On the deficit, he said, the 2024 budget deficit will be financed mainly from domestic financing and borrowing from development partners. The Gross Deficit is estimated to reach 2.55 percent of GDP compared to 3.59 percent of GDP.
“This is a deficit reduction of 29% from the 2023 budget compared to the 2024 Budget. This deficit reduction strategy will be sustained in the near term in order to reduce the elevated debt level.
“The debt to GDP ratio was about 83% in 2022 and is now a downward trend. The deficit reduction strategy anchored on robust domestic resource mobilization and fiscal expenditure prudence will be sustained for a more robust financial position.”
Minister Keita further told the legislators that Non-Tax Revenue is expected to increase by 86 percent due to partially anticipated receipts of $10 million from an arbitration award and the payment of the first tranche of $15 million from the Trans-Gambia Asset Recycling Program.
“However, an additional D500 million has been factored to cater for more revenues from non-tax revenue to reflect the enhanced domestic resource mobilization drive.
“It’s time for the revenue base to expand to reflect self-reliance for our national development instead of relying on donor/ partner support.”
Disbursement is revised downwards by 34 percent to reflect the optimistic projections of 2023. He continued that this adjustment in the project grant will help match estimates as close as possible to its anticipated outturns.
“Goods & Services from the use of both Donor and Government resources is projected to be D9.84 billion in 2024, representing a one percent decrease compared to 2023.
“Similarly, capital expenditures are expected to decline by 12 percent. The decline in the budget for both Goods and Services and capital expenditures is associated with the decline in project grant disbursement from 2023 to 2024.
“This is mainly explained by the over-projection of project funds, which has been largely corrected for 2024.”
The largest expenditure budget allocation is to Education, and the combined allocation to the sector (both basic and higher Education) comprises more than 15 percent, declared the Finance minister.