A Lot More Work to do to Achieve Economic Goals

This year’s budget seems on close examination to be something of a mixed bag. Certainly there are positives contained within it. Despite the hike in world food and energy prices, food consumer price inflation in The Gambia fell by 1% this year. The rate fell from 9.3% last year to 8.3% in September 2008.

The government has however revised its projected total revenues and grants for 2008 from D4,831 million to D3,345 million. The revision is “due to the food and fuel price increases and the financial crisis” according to the Secretary of State for Finance and Economic Affairs Mr. Moussa Gibril Bala-Gaye.

It will be a concern to many reading about the budget to hear the Secretary of State describe The Gambia as a “small, open, vulnerable economy which relies heavily on trade and overseas financial aid flows”. This is of course naked fact but this one sentennce highlights all too clearly just how precarious and economic position the government find themselves in. Real GDP growth is projected at 6.1% for 2008 “mainly due to a bumper crop harvest”. This is of course good news but shows very clearly what would have happened in the event of a bad harvest.

According to the Secretary of State “the inflationary impact of rising market prices for food and fuel have been mostly been contained up to July 2008”. Despite this, The Gambia reaching the completion point under the enhanced Highly Indebted Poor Country Initiative and also qualifying for debt relief under the multilateral debt relief Initiative, “capital expenditure will be revised from D1,679 million  to D755 million, or 1.5 % of GDP by end 2008”. One has to ask why this is the case. If we are under less pressure to service heavy debts should we not be increasing our capital expenditure?

The sectoral allocation for the coming year sees the servicing of debts continuing to eat up the largest proportion of our national budget with a total of 19.76% allocated to “debt service charges”. Works construction, and infrastructure are followed closely by education with 14.59% and 14.45% of the budget spending allocated respectively. The Office of the President enjoys a slightly higher allocation than the Department of Agriculture on 4.57% but remains slightly lower than the 5% allocation of the annual budget to meet the costs of the Department of Health and Social Welfare. This situation hardly seems fair. We need to radically increase spending on Health and Agriculture and despite the impressive amount currently spent on education increase that too. This budget shows us all too clearly that we still have a lot of work to do to realise the government’s goal of “transforming The Gambia into a financial centre”.