Monday, October 8, 2012

Gambia continues to dip into consolidated fund

Finance and Economic Affairs Minister Abdou Kolley
The Gambia government claims it under budgeted its 2012 fiscal year and requested the house of parliament to support its quest to access an additional funding close to D500 million with less than three months to the end of the year.

Gambia’s real gross domestic product (GDP), the total value of goods and services that the country produced in 2011, fell by about 5 percent, while economic activity remained weak for much of 2012, according to a September 18 International Monetary Fund (IMF) statement. 


Mid 2011, the legislature gave a nod to a supplementary appropriation bill tabled by ex-Finance Minister Mambury Njie, enabling the government to acquire additional financing of it policies and programmes. The government dipped into the Consolidated Revenue Fund and withdrew a sum of D219, 800, 000 - more than 100 percent the amount Parliament approved in 2010.

On Tuesday September 25, the parliament did the same when it approved a D470.701, 622 Supplementary Appropriation Bill tabled by the Finance and Economic Affairs Minister Abdou Kolley. 

The money is divided among government institutions such as the Office of the President D101, 639, 222; National Assembly D9, 300, 00; Ministry of Defence D31, 000, 000; Ministry of Interior D15, 000, 000; Ministry of Foreign Affairs D15, 000,000; Ministry of Finance D41, 600, 000; Miscellaneous D70, 000, 000; Ministry of Agriculture D121, 562, 400; Ministry of Health and Social Welfare D52, 600,000; and Ministry of Youth and Sports D12, 000, 000.

Tabling the bill before the unicameral House, Abdou Kolley, the Finance Minister, said the 2012 Budget was premised on constraining the growth of the domestic debt and thereby consolidating macroeconomic stability.
He said revenue performance had been increasing marginally in nominal terms during the previous two years, accentuating the need for moderation in government spending. 

So far, he added, budget implementation has been prudent and revenues have performed beyond expectation and the first half of the year has recorded GLF spending of D2.5 billion, representing 64.1 percent of total GLF funds budgeted for the fiscal year 2012.

Like Mambury Njie, his predecessor, Kolley said all these spending pressures were not anticipated in the formulation of the current budget. He argued his Finance Ministry is presently facing what he called “urgent spending pressures.”

These, he said, is related to the 2011 drought and procurement of vaccines and pharmaceuticals etc.
He stressed there is a need to seek for a supplementary appropriation for the rest of the fiscal year of 2012.
A severe food shortage hit the Sahel region of Africa (including Gambia) this year as a result of drought and crop failure in 2011. Gambian farmers who are notoriously poor are the hardest hit.  

He revealed these expenditures will be funded through the budget support of US$8.7million of which the World Bank (WB) has already disburse US$5.9M and the African Development Bank (AfDB) is expected to disburse US$2.8M by the end of 2012. 

“The remaining gap would be met from better than expected revenue performance,” he hoped.
The motion was seconded by Hon. Netty Baldeh, NAM for Tumana, who is content with agricultural inputs being one area where government is spending lots of money this year. He argued most of the items on the SAP are forces outside the control of the Gambia government such as inflated fuel and food prices.

However, it is an open secret that for the past years, agricultural production has been on the decrease, and the farmers who made up to 70 percent of the population are caught in an endemic net of poverty and hunger.

It’s now a normal phenomenon in Gambia that year-on-year the government will go to the National Assembly seeking approval to take an additional fund from the Consolidated Revenue Fund. 

And the parliament, which is often referred to by critics as “rubber-stamp”, never hesitate to give their consent to the government to take any amount they need from the revenue fund.  

In 2009 and 2010 the government has taken more than D300, 000, 000 (three hundred million Dalasis) and D100, 000, 000 (one hundred million Dalasis), respectively, upon approval by the country’s Parliament.
The Consolidated Revenue Fund is the term used for the main bank account of the government.  This is the account into which must be paid all fees, taxes and revenues of the government, including court fines among others.

The tiny West African nation of 1.7 million is ranked among the Least Developed Countries (LCDs) and a Heavily Indebted Poor Country (HIPC). 

The Gambia still faces a heavy debt burden as the debt forgiveness grant for the country was last reported at US $1330000 in 2010, according to a World Bank report published in 2012. 

“Poverty is endemic in Gambia, with almost a third of the population undernourished and 60% of the population living on less than a dollar a day. And yet the country spent 6.3% of its Gross Domestic Product on servicing its debts, some $29 million, in 2005,” the World Bank says.

In an address to the United Nations 67th General Assembly in New York on September 26, 2012, Gambia’s vice president Dr. Isatou Njie-Saidy admits “Debt servicing still poses a major threat to our ability to attain sustainable growth.” 

She suggested debt cancellation or forgiveness is still a major option in order to help developing countries to continue to benefit from the appreciable growth they are experiencing and as well compromise their capacities to bring education and healthcare to their peoples.


Written Modou S. Joof

Follow on Twitter: @thenorthbankeve


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