Monday, December 6, 2010
Gambia’s Financial Plan Estimates at D5 Million
NEWS BANJUL THE GAMBIA (MB)- Total Revenue and Grants is estimated to increase from an approved level of D5.50 billion to D5.65 in 2011, representing 17.82 percent of the Gambia’s Gross Domestic Product (GDP), reveals the Minister of Finance Honorable Abdou Kolley on the 29th November 2010. Kolley, in a presentation of the Estimates of Revenues, Recurrent and Development Expenditures for Fiscal Year 2011 to National Assembly Members at the house of Parliament in Banjul.
According to Kolley, the increased of the GDP is attributed to increases in domestic revenue and project grants noting that domestic tax revenue is also estimated to increase from approved figure of D3.99 billion in 2010 to D4.07 million in 2011. He continued, project grants is estimated to increase from D636.16 million in 2010 to D981.10 million in 2011.
Finance minister stated that total expenditure and net lending is estimated to increase from D5.77 billion in 2010 to D6.12 billion in 2011, representing 19.30 percent of GDP stating that this increase is mainly attributed to increases in personal emoluments, which is projected to grow by 11.5 percent and other current expenditure.
For interest payment, Minister noted that interest payment is projected to increase from D762.40 million in 2010 to D918.59 million; representing 2.90 percent of the GDP in 2011m pointing out that this is mainly attributable to the securitization of the government overdraft position with the Central Bank in the interest of better fiscal management.
Minister Kolley explained that the fiscal deficit is estimated at D466.36 million in 2011 outlining that this compares favorably with the previous year and further demonstrates government’s commitment to restrains borrowing especially in the domestic market, he added “the deficit would be fiancé by foreign and domestic borrowing amounting to D833.82 million and D120.00 million respectively, while foreign amortization is projected at D506.20 million.
“ The Gambian economy continues its robust growth line in the face of unfavorable global economic environment. “GDP is estimated to grow by about 5.5 percent in 2010, an improvement over the previous projection of 5 percent, underpinned by healthy performance of the agricultural sector”.
Inflation, Minister disclosed continues to be subdued with average inflation that is 12 months average which stands at 4.2 percent in September 2010 compared to 5.6 percent a year earlier. Food items, he stated counted for 55 percent of the weight of the basket of goods ad services, continued to be the main drive of headline inflation.
“ In line with our recently adopted domestic debt strategy the Ministry of Finance continues to keep a keen eye on the domestic debt stock and this caution is what also informs our decision to retain spending,“ Kolley was quoted saying.
The Minister pointed out as at end September 2010, the total outstanding domestic debt stock increased to D7.8 billion, that is 24.6 percent of GDP from 6.9 billion a year earlier driven mainly by the 30-Year Government Bond and increased Treasury Bills issuance.
According to the minister, the sharp surge in domestic debt is mainly explained by the recent transformation of the overdraft in the Treasury Main Account at the Central Bank of The Gambia into a long- term bond in the interest of better public financial management adding that “it’s also to help us conform with the borrowing limit of the Central Bank of The Gambia Act”.
The Minister went on to say that the Gambia’s performance under the current ECF programme with the International Monitory Fund is broadly satisfactory noting that all the quantitative, as well as targets were met, barring the basic balance which continues to be a challenge for the past two years, the difficulty in meeting this, Minister Kolley said is explained by high expenditures but recounted that some flaws in the computation of the basic balance criterion.
“The Ministry of Finance, Kolley continues to negotiate with the International Monetary Fund on issues citing to restraining expenditure and also come up with additional revenue measures,” the Minister was quoted.
In conclusion, Minister Kolley says “I look forward to deliberation and consideration of the 2011 Budget Estimates by the National Assembly. “ I am convinced that if approved, this budget will be a useful tool to drive government policy as enshrined in the vision 2020”, and finally submitted the draft budget.
After submitting the budget, Honorable Momodou Sellou Bah National Assembly Member for Basse second the motion stating that “we should not to depend much on grant but to work hard for the development of the country,” he concluded.
Note, the Minister’s submission of the estimates is in fulfillment of the requirements for the presentation of the Government budget to the National Assembly as detailed out in the 1997 constitution and the Budget Management and Accountability Act of 2004 citing section 152 (1) of the 1997 Constitution of the Republic of The Gambia. Minister Kolley explained in detailed that section 152(1) requires the President to instruct the Minister of Finance to prepare and submit to National Assembly at least 30 days before the end of each financial year the estimates of revenues and expenditures of The Gambia for the following year.