Musa Gibril Bala Gaye, secretary of state for Finance and Economic Affairs, on Monday tabled the 2008 draft budget estimates before members of the National Assembly for consideration and approval at the commencement of the fourth meeting of the Assembly in the 2007 legislative year.

The draft budget which includes total revenues and grants for the said year stands at D4,476 million. Out of this total, he said, domestic revenues constitute D3,771 million, representing 14 per cent increase over the 2007 budget figure of D3,322 million.

The process for the preparation of the 2008 budget conforms to constitutional and legal requirements for the National Assembly under Section 52 (1a) of the 1997 Constitution to consider and approve the 2008 estimates within a maximum period of 14 days after receiving the estimates.

According to SoS Gaye, out of total domestic revenues, direct tax constitutes D1,017 million, about 27 per cent; indirect tax, D2,345 million, about 62 percent and the remaining  D408 million or 11 per cent, is from non-tax revenues and grants. He added that the government will step up revenue collection efforts by further strengthening tax administration, noting that complementary budget resources of D502 million for HIPC and MDRI debt relief are also incorporated in the 2008 budget.

He added, “the 2008 budget has been framed against the background of the execution of the 2007 budget and on certain key assumptions. The fiscal strategy for 2008 will continue to foster growth and development, by according  high priority to those sectors that can assist government efforts to alleviate poverty in this country.

The key parameters of the macro-economic framework for fiscal year 2008 to consolidate the recent macro economic achievements and for the attainment of the Gambia’s economic and social objectives are that growth will remain solid at between 6-7 per cent, inflation will be below 5 per cent, domestic debt to GDP ratio as well as the current account deficit including transfers will be reduced and international reserves will be maintained at a level equivalent to about 4 months of imports”.

Expenditure and net lending for 2008 he said, is projected at D5,205 million, 15 per cent higher that the 2007 budget figure of D4,512. The increase according to him, is on the account of the use of HIPC/MDRI debt relief resources of D502 million and also part of privatisation proceeds of 390 million from the sale of 50 per cent share of Gamtel/Gamcel to finance increased investment expenditures in 2008.

“There is therefore, an upsurge in current expenditure of 11 per cent and capital expenditure of 21 per cent. Recurrent expenditure has increased from D2,531 million in 2007 to D2,812 million in 2008. Out of total recurrent expenditures, personnel emolument amount to D918 million or 32 per cent, other charges D1,143 million or 46.6 per cent and interest payments on external and domestic debt account for D622 million or 22 per cent. Purchase of goods and services will increase from D523 million in 2007 to D725 million in 2008 or 39 per cent increase. Current transfers and subsidies are also projected to increase from D397 million in 2007 to D418 million in 2008,” he said.

The Finance and Economic Affairs Secretary of State then informed NAMs that the expected basic balance surplus for the 2008 budget will contract to D259 million or about

1.2 per cent of GDP. The reduced basic balance surplus is the result of the impact of the appreciation of the dalasi on revenues and the expansion in both recurrent and GLP capital expenditures.

He added that, the budget deficit of D730 million or about 3 per cent of GDP will be financed by external borrowing of D1,024 million, capital revenue of D15 million repayment of domestic debt of D57 million, repayment of arrears of D179 million, privatisation proceeds of D390 million and payment to bank and non-bank sectors of 266 million.

He then emphasised that the government’s goals are to reduce poverty and meet all the Millennium Development Goals (MDGs) on the basis of sustained growth and macro-economic stability which should be underpinned by fiscal policy which seeks to promote fiscal discipline, efficiency and effectiveness in spending with the necessary complementary monetary policies. In order to meet these ultimate goals much easier, he added, government has scaled-up the share of government local funds (GLF) spent on poverty programmes to about 46 per cent in the 2008 budget.

Overview of 2007 budget

Providing details on the 2007 budget execution as background for appreciating the budget projections for fiscal year 2008, SoS Gaye said during 2007, performance on the fiscal front has been very impressive. He added that the expected outturn is that the 2007 budget will register a substantial surplus of D416 million, equivalent to 2.6 per cent of GDP, compared to the forecasted surplus of 0.2 per cent of GDP in 2007. This outstanding fiscal performance he added, is a landmark in the history of Gambia’s budget performance.

On the tax and revenue reforms undertaken by government, he said it has started to pay dividends, especially the creation of the Gambia Revenue Authority, and the introduction of new revenue collection systems and procedures.

“Total revenues and grants are expected to reach D4,536 million, a modest increase of 3 per cent over the 2007 budget estimate of D4,402 million. At the end of 2007, domestic revenue collection is anticipated to rise by 6 percent from D3,322 million to D3,535 million, or 22.1 per cent of GDP. This revenue-to-GDP ratio of 22.1 percent is among the highest in sub-Saharan Africa,” he confirmed.

Expenditure and net-lending for 2007, according to him, is now projected at D4,064 million,10 per cent lower than the 2007 budget figure of D4,512 million.

He said the drop comes mainly from capital expenditures, owing to lower than expected disbursements on externally funded projects. He said that current expenditure for 2007 is estimated to increase by 5 per cent from D2,531 million to D2,653 million. “Personal emolument will be at D734 million, 5 per cent lower than the budgeted figure of D765 million. Other charges is estimated at D1142 million, 25 per cent higher than the budgeted figure of D920 million. Interest payments will be D782 million, 15 per cent lower than the budget figure of D846 million. Capital expenditure is forecasted at D1,411 million, 27 per cent lower than the budget figure of D1,936,” he said.

He then stated that basic balance surplus of D416 million or 2.6 per cent of GDP, indicates that government has not borrowed from the Central Bank to finance the budget. Instead he added, government deposits at the central Bank have been raised, and this has been made possible by a combination of factors such as the increased revenue collection and expenditure control.

Hon Sellu Bah, NAM for Basse seconded the motion describing it as non-controversial as the estimates for the past four years are presented in line with the needs of the Gambian people. On surplus, he described it as a landmark and a sign of good control measures applied by the department of state for finance and economic affairs. He also lauded the tremendous efforts by government in revenue collection which is manifested in the creation of the Gambia Revenue Authority (GRA) which greatly reduced the burden of the Central Bank.

He then saluted the government for targeting to reduce poverty noting that, the economy is moving in that direction and Gambians are experiencing the rightful part, the economy is heading to.

Hon Fatoumatta Jahumpa-Ceesay, speaker of the National Assembly then deferred the debate to Monday, December 10, to allow members to thoroughly study the document to ensure justice in the deliberations.