On the Proposed Budget for Fiscal Year 2020: Letter to the Finance Minister
Updated: Nov 21, 2019
Honourable Minister and my Dear Senior Brother,
I salute you on the occasion of another budget season at our National Assembly chambers. Indeed I should congratulate you for having been able to finalise the proposed budget and tabling the draft estimates before our lawmakers. Truly it is a most enormous task to come up with a budget with all numbers adding up sensibly given the harsh macroeconomic realities on the ground.
Those expecting you and your team to work miracles in the budget are speaking from the position of lack of understanding of this complex matter. There is not much that can be done given the realities. I still remember a Finance Minister I worked with when I was head of budget. Upon his appointment, he dazzled President Jammeh and his Cabinet with flowery budgetary terms and promised the sky and the moon regarding the National budget. But when it came to the brass tacks, it was a different ball game; we presented him with the real budget constraints and he just leaned back in his chaired and sighed “this is tough!”
Coming to the substantive matter at hand, I must say that despite the realities of the constraints you are faced with, given the macro-fiscal antecedents, your budget could have been better and no one should be blamed but you. Since your disingenuous decision to increase salaries by 50 percent (against my advice) and the counterintuitive borrowing spree your government has been indulging in, our budget situation has become worse and therefore you should be cautioned by the National Assembly if they were to take my advice.
My initial reaction to the budget estimates for 2020 is as follows, as shared on my public figure page on Facebook. Quoting from your statement on the estimates I stated:
“Finance Minister Mambury Njie has stated that the total revenue and grants in 2020 is projected at D24.47 billion, representing a reduction of 3% over 2019 figure of D25.2 billion...
“He said project grants are estimated to decrease from D9.9 billion in 2019 to D8.1 billion in 2020...
“Mr. Njie explained that total expenditure and net-lending is projected to increase from D28.825 billion in 2019 to D30.048 billion in 2020...”
A government that told her citizens that they should expect pledged donor funds of more than 1.4 billion Euro, is now admitting that donor support is actually falling...
Total revenue and grants is falling but expenditure is rising...
This is a classic case of mbojo mbojo economics!
As I stated earlier, I am well acquainted with the constraints you are dealing with; but the problem is that you are not helping yourself and the nation. How can you decide to increase your expenditure when you know that your income is dwindling?
The increase in the budget of the office of the President by D34 million is wrong. We all know the problem of dealing with that budget head knowing the difficulty of satisfying the political animal in that office. But the wisdom has always been to constrain the presidency ab initio, and then manage the situation as the budget implementation cycle unfolds.
By expanding expenditure for the presidency, you are simply pampering your boss for political patronage at the expense of the tax payer. The increase in salaries at the office of the President is also waste of resources. We know that the problem at that office is being compounded by further expanding the bureaucracy of an already dysfunctional office instead of taking the tough decision of redeploying or firing all the “squares pages in round wholes.”
I would surely recommend that the deputies at the Assembly cancel the proposed increase of expenditure under the office of the President to set a perfect example and send a message to the executive that the meagre resources of our tax payers cannot be used for ‘mbumbai’ in these trying times. This is not a partisan matter and I believe our representatives at the Assembly should set an example on this one if they would expect us to take them seriously.
Let me hasten to add that my call for deputies to vote down the proposed increase in the budget for the Presidency is not based on any political motive. This is motivated by the fact that the executive has for long trodden on the poor tax payers for too long. Now that the tax payers have voted to have something better than what used to obtain in the past, we cannot afford to repeat the mistakes of yesteryears. If the Mandinka saying that ‘sila kotor kataa satay kotor leh to’ is anything g to go by, then you are leading this country back into the doldrums of fiscal obstinacy. We can do better than this so let us strive to make the future better, cleaner and brighter. This is our collective responsibility regardless of our political leanings.
Honourable Minister, do you remember the parable of the firewood seeker I told you in my letter to you On the Audacity of Fiscal Profligacy ? How can you be complaining that the load you are to carry is too heavy and yet you go ahead and increase the load? So you have the audacity to admit that “Debt interest payment is projected to consume around 40 percent of government’s tax revenues in 2020 compared to 26 percent in 2019, moving from D2.702 billion in 2019 to D4.648 billion in 2020 ... as a result of mounting debt stock” but you are still borrowing? Certainly I did not need to hear you admit that salary payments are also rising because you decided to worsen an already bad situation.
It is worrisome that the lion’s share of our domestic revenue is being consumed by debt service and salaries (more than 70 percent from figures I am privy to). The rest is left for recurrent expenditure while development expenditure is left as a residual standing at D2.7 billion, which will not be fully disbursed during the relevant fiscal year as usual. We already had a structural deficit but you have decided to worsen that and who are you going to blame for this?
Truly the budget you have presented has so many issues that do not align with good fiscal policy thinking but the damage was done before this particular budget season. I only hope that you and your team would work harder to make sure our public corporations bring in more money into the budget as dividend payment to help ameliorate our current debacle. With domestic borrowing rising in the coming fiscal year, surely interest rates will pick up and the Crowding out of the private sector I wrote to you about in my previous missives is going to get worse.
And speaking about public corporations, honourable Minister, is it true that The Gambia National Petroleum Company, GNPC actually bought a plot of land in Banjul worth D17 million during your tenure as Managing Director?
Honourable Minister, while looking forward to your response on the above matters, I wish you good luck in your deliberation at a National Assembly that is clearly divided and ready for battle for myriad reasons. May the interest of the country reign supreme during the debate on the budget and may Allah continue to guide, bless and protect our dear nation, The Gambia.
Photo: Momodou Sabally (Credit: M.Sabally)
Momodou Sabally is a former research economist and National Budget Director, he has undergone extensive professional training in macroeconomics and public financial management at the IMF Institute, the Central Bank of England’s Center for Central Banking Studies, Harvard University’s John F. Kennedy School of Government and holds a masters degree in Economics from Georgia State University in the US.
Editors note: Views expressed herein are those of the author and do not necessarily represent the views of Gunjur Online. Got an opinion article? send it to us at GunjurNewsOnline@gmail.com