By Fatou Dahaba
The Minister of Finance and Economic Affairs has disclosed that the total revenue is expected to increase by 5% on the back of an 86%, 24%, and 15% increase in non-tax, tax, and budget support grants.
However, he noted that project grants are expected to decline by 34 percent.
Minister Seedy Keita made this disclosure on Friday, 8th December 2023, while presenting a 2023 budget speech before parliamentarians, outlining the government’s income, expenditure, debt services mechanisms, austerity measures, and expected project grant decline, among others.
“Total expenditure to increase by 8% mostly attributed to increases in capital expenditures to the Ministries of Higher Education and Foreign Affairs, and debt service payments. These allocations are allocated for the University of The Gambia (UTG) Project Phase II and constructing a Chancery for the Gambia embassies in Abuja, Dakar, and Brussels.”
He told lawmakers: “The budget deficit in 2024 as a percent of GDP is estimated to decline to 2.55 percent compared to 3.0 percent in 2023 and therefore result to a reduction in the net foreign borrowing by 21 percent.”
He says spending in social sectors – education, health, and agriculture – accounts for 26% of the budget. ‘Capital Expenditure will constitute 28% of the budget to build the infrastructure and capital base for economic development.’
He said the key priority of the budget and the medium-term fiscal objectives will be to reduce the budget deficit and the country’s overall debt.
‘The Rationale for the 2024 Budget Allocation discussed below focuses mainly on Government Local Funds (GLF).’
On the National Debt Service, he said, “Debt Service payments have increased from D4.3 billion in 2023 to D7.5 billion in 2024, representing a 74 percent increment year-on-year. As a share of the total GLF appropriation, debt service comprises more than 25 percent of the total budget. This is roughly equivalent to the combined budget allocation to education, health, and agriculture sectors.”
” To ensure fiscal sustainability and improve future conditions regarding revenues and expenditure management, the Finance and Economics Affairs Minister disclosed that the government will increase fees on land registration, documentation, and administration to reflect the service cost.”
He said the new schedule of fees will be gazetted and come into force thereafter.
“In the Health Sector, certain user fees will be increased to support cost recovery. The Ministry of Health will work with relevant stakeholders to inform the necessary increment. The fees in the fisheries sector will also be revised to ensure that the fees charged reflect the cost of the administration in the Fisheries sector and provide more funding for the sector for job creation and employment growth.
The current travel moratorium issued via the Office of President Adama Barrow will continue for the 2024 Fiscal Year. Official travels will only be restricted to statutory travels, and the size of delegations will also be trimmed.”
Minister Keita states that inflation reached a record-high level of 18.5% (year-on-year) in September 2023, which was reduced to 18.05% in October 2023.
The Minister said the main driving factors of inflation are food and fuel prices: “Food availability in the market remains generally robust across the country, and there has been a notable increase in the prices of cereal crops in 2023 compared to the preceding year.”
Kieta added: “Tighter global financial conditions in response to multi-decade highs in global inflation rate is adversely affecting the country’s macroeconomic fundamentals, generating foreign exchange shortages, weighing on forex reserves, and exerting pressure on the dalasi.”