Thursday, September 21

Minister of Finance Briefs National Assembly On Mid-Year Budget Execution

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Hon. Seedy Keita, Minister of Finance & Economic Affairs

By Ramatoulie Jawo

The Honorable Seedy Keita, Minister of Finance and Economic Affairs, briefed the National Assembly members on the mid-year budget execution for 2023 on Monday.

In his briefing, the Minister provided an overview of how the budget has been managed so far in the year and what is expected for the remainder of the fiscal year. He highlighted the key aspects of the budget, such as revenue, expenses, and their variances. He also included an analysis of the government’s financial performance against the set target.

“The report aims to offer an overview of the government’s financial operations, allowing proper assessment of the effectiveness of the execution and management of the budget. It helps us make informed decisions and take appropriate actions to ensure fiscal stability,” he told the NAMs.

Hon. Keita said the consolidated GLF revenue underperformed by 17.91 percent below the end-June budget.

“This underperformance is mainly caused by the non-realization of budget support, which are now expected in the second half of the year, and the weak performance of the non-tax component of revenue, which stands at 25.61 percent less than its projection for the period under review,” he said.

Hon. Keita revealed that the Gambia Land Fund (GLF) expenditure for the review period stands at GMD 9.8 billion. This is 22.45% below the mid-year budget of GMD 12.71 billion.

Keita attributed the shortfall to the cash allocation system that the GLF uses. This system dictates that expenditures be met from the revenue generated in order to reduce the need for borrowing.

“This is mainly attributed to GLF Capital and Other Current lower than budget. Capital expenditure is expected to improve in the 2nd half of the year as we begin to implement the 2nd phase of Bertil Harding Highway project and the health infrastructure project, and we aim to improve the expenditure budget execution in the second half when the budget support revenues are realized.” He said.

In his presentation, he also showed a table that analyzed the sources of income and how they had performed against the mid-year budget. He highlighted that while there had been significant milestones in some areas, such as tax revenue on international trade and VAT on imports, there were also some sources of income that had fallen short of budget.

“It is important to highlight that while we have achieved significant milestones in some types of taxes, such as tax revenue on international trade and VAT on imports, there are certain sources of revenue that fell short of budget for the first half of the year, including non-tax revenue and tax on income and wealth.”

The minister disclosed that delays in the receipt of budget support from development partners decreased the overall revenue performance for the first half of the year.

“The first half-year revenue performance overall is below budget due to delay in receipt of budget support from development partners. The activities on the prior actions, which are preconditions for the approval and disbursement of the budget support, flowed into the second half of the year. And as such, disbursements could not be made for the projected revenue in the first half of the year. Tax on income and wealth is below expectations, with a total of GMD 2.19 billion, compared to the mid-year target of GMD 2.44 billion. The payroll tax performed better than expected at GMD 48.34 million, which is GMD 3.74 million in excess,” he disclosed.

He also highlighted that the overall actual revenue fell short of the budget but was offset by a lower actual expenditure than budgeted.

“In conclusion, the budget implementation during the first half of the year remains prudent. The overall actual revenue budget fell short of the budget by D1.83 billion, but this was offset but a lower actual expenditure than budget by D2.854 billion, leading to a lower financing requirement than budget of more than D2 billion.

The cash allocation mechanism is an important tool that assisted in the budget implementation process as expenditures were constrained by the revenue generated.

Efforts were exerted to realise the prior actions for the budget support, which is an important element of the revenue, and already significant milestones are realised in the second half of the year.

Fiscal measures will be instituted to support a prudent budget implementation whilst making the needed expenditures to support growth,” he concluded.