Tuesday, November 28, 2023

Finance Minister presents budget for 2024


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Revenue & Grants = D34.9 billion, Expenditure = D39.4 billion, Deficit = D4.5 billion

By: Kebba AF Touray

The Gambia’s Minister for Finance and Economic Affairs, Seedy Keita has told the lawmakers that the total revenue and grants for the fiscal year 2024 is projected to reach D34.93 billion.

Minister Keita said this on Friday 17th November 2023 as he tabled the estimates of revenue and expenditures for the fiscal year 2024 of the republic of the Gambia.

He said “Total Revenue and Grants for 2024 is 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”.

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The 2024 Budget is anchored on the reduction of overall fiscal deficit, including the gradual reduction of Net-domestic borrowing as a percentage of GDP over the medium-term.

The total appropriation budget amounts to thirty-nine billion three hundred and eighty million Dalasi (D39.38 billion).

The said appropriation budget is estimated to be utilized by thirty-two entities of the country to deliver their respective development activities, programs and agendas for the people of the Gambia from 1st January to 31st December 2024 both days inclusive.

He said it is against that backdrop that the ministry intends to pursue rationalization of expenditure, improving domestic revenue mobilization and innovative non-debt revenue creating initiatives (Asset Recycling Program).

The Asset Recycling Program he said aims at restructuring the debt profile to reduce the burden of debt and focusing on concessional financing of infrastructure projects identified in the Green Recovery-Focused National Development Plan (RF-NDP).

He said that the NDP is branded as YIRIWA to reflect the development that it will usher in upon its implementation.

He said as a result, the Draft 2024 Budget Estimate has been prepared based on the objectives of consolidating recovery and accelerating reforms to build economic resilience and improve the wellbeing of the population.

“To this end, the Draft Estimate is focused on an improved domestic resource mobilization drive that supports the provision of quality essential services in education, health, agriculture and infrastructure development to promote a more inclusive and resilient growth”, he said.

Growth, he said, continues to remain strong despite global and domestic challenges, such as the war in Ukraine, the lingering effects of the pandemic and the tightening global financial conditions continue to slow down global growth and therefore affecting domestic economic performance.

On the macroeconomic front, he reported that provisional data estimates show that Real Gross Domestic Product (GDP) growth for 2024 is projected at 4.9 percent, lower than the 5.3 percent recorded in 2021, when recovery from the pandemic was underway but slightly higher than 2023.

He said this steady growth performance results from the spillover effects of the Russia- Ukraine conflict, which has severely dampened growth prospects. Previously, optimistic projections have been revised downwards owing to increasing interest rates to counter rising price levels.

He stated that Real GDP growth is projected at 4.8 percent in 2023, and on sector specific growth outlooks, agriculture is projected to continue on its growth path reaching 8.3 percent in 2023, compared to the 3.6 percent in 2022, primarily supported by crop production, and fishing and aquaculture.

He added that the growth prospect for the industry sector is estimated to increase to 7.4 percent in 2023 from 3.0 percent in 2022, mainly supported by electricity and construction.

On the service sector, he said growth is expected to subdue at 2.5 percent in 2023, with rebound activities in the tourism, and wholesale and retail trade subsector, with the tourism expected to recover from the COVID disruption by 2026 when the arrival of tourists reaches pre-COVID arrivals.

He reported that tighter global financial conditions in response to multi-decade highs in global inflation rate is adversely affecting the country’s macroeconomic fundamentals, namely generating foreign exchange shortages, weighing on forex reserves, and exerting pressure on the Dalasi.

He lamented that to aggravate the situation, the balance of payments is negatively affected by high food and fuel import bills, disruptions of cashew exports, and elevated freight costs.

“To this end, the Central Bank of the Gambia (CBG) conducted foreign currency interventions of close to USD 139.44 million in 2022 to ease supply-side constraints and support the importation of essential commodities”, he said.

On the issue of inflation, he said, “Inflation reached a record-high level of 18.5 percent (year-on-year) in September 2023, but this has recently declined to 18% as of end of October 2023. This elevated inflationary pressure stems from both food and non-food commodities.”

In terms of outlook, Minister Keita reported that growth is projected to moderately rebound to 4.9 percent in 2024 and strengthen further in the medium-term at an average of 6.1 percent growth per year.

Going forward, he said “The agriculture sector is expected to be the main driver of growth in the medium- term. As the West grapples with the spillover effects of the war in Ukraine, lower real incomes and higher interest rates are creating volatility and affecting the prospects for tourism and trade that reached critically low stock levels”.

The legal basis for today’s event the tabling of the 2024 Budget estimates before the National Assembly is anchored on the 1997 Constitution, and the Public Finance Act (PFM Act) of 2014, Section 152 (1) (amended) of the 1997 Constitution of The Republic of the Gambia, and Section 21 (1) of the Public Finance Act.

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