BUDGET 2022: Will The Budget For Next Year Be Adopted or Abandoned Based On The Results Of The Presidential Election?
Make no mistake, the 2022 budget as a post-election economic and fiscal plan for the incumbent will record another budget deficit.
In 5 months, Gambians will choose to entrust AdamaBarrow with four more years in office or to elect a new leader. As the unprecedented number of Presidential aspirants battle for the highest office in the country, it is a good time to consider the reality of what will happen to the Budget for 2022 that will be presented to the National Assembly a few days after the Presidential election.
The legal requirements for the presentation of the Government budget to the National Assembly are detailed out in Section 152(1) of the 1997 Constitution of the Republic of The Gambia and the Public Finance Act of 2016. The Constitution made it mandatory for the Minister of Finance, through the instruction of the President, to submit to the National Assembly the draft Estimates, at least 30 days before the end of each financial year.
The Estimates of revenues, recurrent, and development expenditures projected for the coming year for consideration and approval by the Parliamentarians, are collectively referred to as the Government Budget. Last year, the budget speech for 2021 was delivered on the 4th of December 2020, 14 days after receiving the estimates and related attachments from the Finance minister. The presentation of this year’s Budget Estimates will have to be done after the December 4thPresidential elections.
This will have far–reaching consequences given the unprecedented large number of political parties registered with the IEC as well as the increasing number of Presidential candidates ready to take part in the elections. Whether running as an independent or party-sponsored candidates, those who are ready to go to the polls without a shadow budget to tell Gambians what they intend to do with the billions of taxes to be collected and reported in the 2022 budget will surely have a big mountain of uncertainties to figure out. In the realm of the political battlefield, you fight your own war of ideas and programs in order to win votes.
The reality of the hash economic difficulties facing the country and the long sustainable budget deficits reported throughout the four years of the current government present a formidable challenge for any presidential aspirant to ignore. Already the 2022 budget formulation process has started and we have yet to hear the involvement of any presidential candidate in the process. Thus each candidate must develop aresource-based plan on how to manage the scarce resources they will inherit if voted into office. You don’t go to war using your enemy’s armory!
Those forward plans should be translated into numbersto provide a framework for effective budget execution. The government budget is prepared within the framework of the Medium-Term Economic Plan and the SDGs. Without a forward spending plan or a ‘shadow’ budget, candidates risk using the approved estimates of revenues and expenditures that the Barrow government will present to the National Assembly which may not align with their various electoral promises and policy objectives.
The government of Adama Barrow came into office in January 2017 initially utilizing the budget of the defeated candidate, Yaya Jammeh, which waspresented to the National Assembly by his erstwhile Finance Minister, Mr. Abdou Kolley on 5th December 2016, barely four days after he lost the election.
Following the discoveries of massive theft and irrefutable evidence of embezzlement of public funds, a series of economic reforms were initiated with support from the IMF, World Bank, and EU to urgently address budgetary gaps and balance of payment needs. Those interventions were captured and reported in a new set of budget figures which was presented to a new Assembly for approval in April 2017.
Although threats of Covid-19 remain, any elected president should focus on increasing revenue mobilization while prioritizing expenditure on areas that grow the economy. Emphasis should be supporting the economy to recover from the effect of the ongoing pandemic through the continued implementation of strong economic measures to stimulate economic growth and ensure both the fiscal and debt positions remain on a sustainable path.
The EU has been contributing significantly to support the budget of the Gambia for the implementation of the NDP, and prudent management of public finances. Since Adama Barrow came to power in 2017, the EU has disbursed more than 6.8 billion dalasis to the country’s national budget. These are monies paid directly to the National Treasury as part of the consolidated funds.
In June 2021, Barrow’s Finance Minister signed an l5-year loan agreement framework of US $250 million with the Islamic Trade Finance Corporation (ITFC) enabling the heavily indebted government to borrow up to US $50 million equivalent to D 250 billion every year to buy fuel for NAWEC, service the groundnuts and cashew nuts trade season, as well as purchase fertilizers for farmers.
The question to be asked is: how long shall this government continue to create Supplementary Appropriation Bills (SAP) to repay the loans incurred on behalf of NAWEC and the National Food Processing Corporation formerly GGC? Will any of the presidential candidates resolve to end this over-dependence on loans and monies received on behalf of taxpayers living in foreign countries to develop our nation?
As a poor nation, we are now facing an existential threat of political divisions with rising insecurity across the country. The year 2022 will turn out to be a momentous year with whoever is elected to lead must make the hard choice of cutting down the over-dependence on borrowing and grants to fill up the wide budget deficits. Already President Barrow had made promises to include the Alkalos and Chiefs in the Government salary structure as civil servants in 2022.
This will have the consequences of increasing the rising cost of personnel emoluments which is currently over 40 percent of the tax revenues. This type of reckless spending is responsible for widening the deficit since Barrow not to mention the exponential increase in the number of public roads projects being self-financed with the limited resources available for development purposes.
Elections cost money, and financing both the Presidential and Parliamentary elections through domestic resources may affect the activities of not only different Ministries, Departments, and Agencies (MDAs) involved in the electoral process, but for a cash-strapped government borrowing more money to bridge the growing fiscal gap from the domestic banks will deepen the fiscal deficit making it difficult to maintain fiscal and debt sustainability through fiscal consolidation.
It will make a lot of sense if the National Assembly should request the government, through the Finance Minister, to table the next year’s budget bill 60 daysbefore the end of the year so that the budget speech may be presented before December 4th elections. The constitutional requirement for the submission of the government budget did not specify the exact date, it only says at least 30 days. It could be 40 days or even 90 days!
From all indications, Budget 2022 will either be a ‘Transitional Budget’ or a socioeconomically ‘Retrogressive Budget’, depending on who is going to be elected President in the 2021 elections. Let us vote wisely!
Written By: Morro Gaye