The Gambia Let’ now look at the fiscal situation.
Within the concept of a modern nation state there is an unwritten understanding that certain things are impracticalities and/or prohibitively expensive for each individual members of a society to do. Some examples of these are roads, army for national defense, schools to some extent, etc. We consented (may or may not be explicitly/implicitly written in the constitution) to taxation to raise money to finance these common welfare needs/wants. Monies are collected and spend by government.
The matrix below shows money reported collected by each president on his last year in office and what it was spent on. The matrix shows the 2 years Dr. Barrow is in office. The human capital uses these monies to mobilize/organize natural resources into goods/services. Prosperity is defined by the degree we harness our productive resources and by not begging and/or contracting loans to buy the latest SUV or building the tallest building in town or putting up concrete slaps over River Gambia.
We state how Gambia gets money. How much money government reported to have collected each year under review. We will show how they spent your money. We hope the breakdown is simpler to understand than the annual 2-hour jamboree by Ministers responsible of Appropriation Bills. By the way in a functioning institutional democracy The Legislature (and not The Executive) do the Appropriation. In our case The Executive does both the appropriation and execution. The legislature are only used to stamp YES.
National Revenue: We start our examination of our money with National Revenue. This is revenue produced from our taxes, fees and charges/surcharges for good/services rendered by government and as well dividends from State Owned Enterprises (SOEs). SOEs are Gamtel/Gamcel, NAWEC, GPTC, GPA, SSHFC, etc.
These SOEs were created as a condition of IMF/World Bank support for the famous Economic Recovery Program (ERP). Gambia government was doing terribly badly in late 70s to parts of the 80s. There were shortages of basics such rice, sugar, flour, gasoline and other essential goods/services. As a precondition to finance an ERP, IMF/World Bank demand government shedding off all/some of these burdensome social services departments. Eventually they agreed upon placing those departments under a board and directors as a stand-out business of the state. The terms of this separation were defined in a performance contract with goals to expand services to as much of the nation as possible while making some profit (above costs) in order to sustain the business, reward the workers handsomely and as well pay dividend to the owners (Gambians/government). These promises alone propelled the wages and benefits of employees of these institutions above national level immediately. The rationale was/is that will motivate them to perform. It’s over 30 years since and none of them has achieved the goal of expanding quality service. Gamtel was promising until it starts to recede and couldn’t keep up with the rapid technological revolution. GPA facilities/services are as chaotic as in the 70s. Did you know how much SSHFC corporation is collecting from participating employees?
Here under is The National Income Statement:
Jawara/1994 | Yahya/2017 | Barrow/2018 | 2019/Barrow | |
INCOME | GMD in billions | |||
Tax Revenue Non-tax Revenue |
0.60 0.08 |
7.86 0.67 |
8.50 1.00 |
11.8 1.00 |
Total National Revenue | 0.68 | 8.53 | 9.50 | 12.8 |
EXPENSES | ||||
Personnel emoluments Recurring costs |
0.49 0.62 |
2.68 2.80 |
7.51 12.58 |
4.10 5.70 |
Total Costs of Government | 1.11 | 5.48 | 20.09 | 9.80 |
Debt Interest Servicing | 0.13 | 3.7 | 4.0 | 2.7 |
Cash Before Programs | -0.56 | -0.646 | -13.7 | -0.6 |
PROGRAMS | ||||
Roads
Domestic water Electricity Health care Education Parks/Amenities Etc. |
0
0 0 0 0 0 0 |
0
0 0 0 0 0 0 |
0
0 0 0 0 0 0 |
0
0 0 0 0 0 0 |
CASH (±)/BUDGET DEFICIT | -0.56 + | -0.646 + | -13.7 + | -0.6 |
Other Important Fiscal Conditions | |||
At/around 1965 | Now/2000s | Remarks | |
GDP | D50b | ||
National Debt | 0 | D60-75b | Depending on interest/exchange rates |
Debt Structure
Domestic = 60% International = 40%
|
Besides the so-called estates what are they doing to improve housing of Gambians. Are they offering any other goods/services to participants? The likes of GPTC have since disappeared and nobody cares. The story at NAWEC is no different from GUC. Most concerningly what remain of these institutions are slowly but surely re-subsumed back in central government portfolios rather than complete divestiture. They were (and are still not) prepared to do so because these entities are the FATTY-MILK-COWS OF PUBLIC CORRUPTION. I highly suspect Barrow’s wife’s so-called philanthropism is paid for by one and/or some of these institutions. Let her (The Foundations) made public the sources of funding. In 2017 Dr. Barrow not only signed GPA loan of over 100m (not sure that figure is in US Dollar, Euro or GMD) but it was done at the State House. That is (should have been) entirely the job of Directors and Board of Directors. Again, to restate our point – this is a source of totalitarianism and breeder of public corruption.
The seed of ALL monies of Gambia are taxes. The epitome of citizens demonstration of patriotism in a republic is authorizing elected representatives to collect taxes from the fruits of our labor to service our common welfare needs/wanted. Seeing Dr. Barrow making POLITICAL INDEPENDENCE, PATRIOTISM AND NATIONAL DEVELOPMENT as themes of the 54th independence celebration is simply pathetic. Sadly, it shows how quickly Dr. Barrow has moved far away from reality. Just like his predecessors, patriotism is forced innocent uniformed school kids lined up the route of his motorcade. Love is probably ignorant citizens blindly dancing around his motorcade and/or the poor showering him gifts from the fruits of their labor. For God sake, we are:
- Politically independent on February 18, 1965. That was over ½ a century ago. That is why you are 3rd to be able to speak to our nation on that day and not the Queen of UK. Stop insulting us!
- We’ve demonstrated our patriotism with consent for government collect taxes from fruits of our labor to pay for our common good and make laws for our safety and prosperity
- National Development is not putting together ignorant kids/youths to intimidate the rest of the country to support you. Or recycle the same old laundry-lists and call it a plan and/or vision
Surprisingly, Dr. Barrow left out (or maybe he forgot) – DEMOCRATIZATION. That horse rode him into the State House. That horse is the core terms of references of The Coalition 2016. Today he’s doing every he can to distance himself or even kill that hose.
Tax revenues are direct collection from the people. These are taxes from wage incomes, taxes levied on imports/exports, royalties charged by Area Councils to licenses paid by street corner shopkeepers, etc. Our matrix shows how much each president hoped to collect in those years. We do not know the actuals. Gambia government is not in the habit of publicly producing a Variance Report to show the actuals. The only publicly available Expenditure Report I saw was one on Dr. Barrow’s first quarter in office. That report shows the expenses but never mention how much taxes were collected in the corresponding period.
The Non-Taxes are surcharges and fees such as purchasing passport, ID Cards, Driver’s Licenses, Birth certificate, etc. and as well dividend payment (if any) of the SOEs. Unfortunately, the combined dividend payment (if any) of all SOEs to the state is less than a billion dalasis. These SOEs are now over 30 years in existence and none is close to fulfilling their national objective of expanding the goods/services to all who might need/want it. In fact, organization such as Gamtel are rapidly degenerating both in quantity and quality of services. GPTC has disappeared in thin air and they did not even bother to report what happened and we didn’t ask either. In a just nation people should still be in prison for such debacle.
GRANTS: We ignored what was reported as revenue from grants because is difficult and usually cooked up accounting technique to inflate numbers. Very few grants come as block grants (unrestricted cash) – use as you may wish. Many come for projects that are not reflected in the national budget – so reflecting the monies of such project as cash is deceptive (essentially lying) accounting. Other grants are promised to our nation and are donor implemented through expatriates such as Germany Forestry Projects, Chinese funding/building the Independent stadium & Friendship Hostel, CRR/URR Forestry Projects, etc. It will be ok to report grants as revenue if the rules are appropriately defined. Regardless, it has to be money government can use in areas covered by the budget and/or each grant included has to be offset by the same program its to pay for. The multi-year grants should be portion to what will be remitted/use in the year under budget. Lastly, grants are promises that may and/or may not have been promised ahead of the budget timetable – is a rather wishful number based on nothing but the intuition of the budgeters. These were our reasons to exclude grants in determining the projected budget revenue for our country. These artificial inflation of revenue by adding grants and over projection of taxes are the reason Gambia government could not even pay wages of the public services as budgeted – instead they rely on what they famously called BUDGET SUPPORT from mainly EU/IMF/World Bank.
Jawara’s last year in office (1994) projected National Revenue of D680m. Yahya’s last year in office (2017) projected National Revenue of D8.53b. Dr. Barrow’s first- and second-year numbers are D9.50b (Revised 2018 Budget) and D12.8b (2019) respectively.
These were monies they expected to collect for the years under review. The sovereign people of The Gambia paid these taxes for their representatives to judiciously procure their common welfare needs/wants. They are also authorized to pay the wages and inputs of those we contracted (public employees and goods/services used) to achieved those common welfare needs/wants. Personnel emoluments is an incidental cost and not the purpose of paying taxes. Suffice to state it cannot be reasonably justified larger proportion of tax money goes to personnel emoluments and other costs of running government.
Now we examine how our money is spent.
Personnel emoluments are the costs incurred on personnel past and present. This week the National Assembly approved raise for pensioners. Its normal employees would want the highest possible pay; yet an employer can only economically sustain overheads less the value of the enterprise. Government(s) of The Gambia paid (are paying) more than Gambia’s National Revenue on government. That means taxpayers will neither contain overheads costs nor will have money to provide the needed/wanted common welfares. The later are reasons we’re paying in taxes in the first place. Personnel emoluments for Jawara 1994 – D490m, Dr. Yahya 2017 – D2.68b and Dr. Barrow 2019 – D4.10b.
Recurring governments costs are rents, vehicles, fuel, maintenance, electricity bills, telephone bills, coffee/tea/sugar, milk, ink cartridges, computers, toilets, miscellaneous, etc. These are things we buy to safely or comfortably or productively keep public servants in their offices. Recurring costs for Jawara 1994 – D620, Dr. Yahya 2017 – D2.80b and Dr. Barrow 2019 – D5.70b
Debt and/or interest on debt is a legal liability expected to be paid as it become due. Failure to pay debt (principal and/or interest) on due date has both economical and legal consequences. Gambia has D60-75b in National Debt. That is about 130% our Gross Domestic Product (GDP). GDP is the measure of the size of our economy. GDP is the aggregate market value of all goods/services produced in The Gambia per annum. Mathematically GDP is determined: C (consumption) + I (private investment) + G (government spending) + (Net Exports = eXports – iMports). Gambia government reports an average 5-6% annual GDP growth since when I started following the numbers. The average Gambian is definitely not economically improving by 5-6% annually. It’s a fancy number they cook.
On average every single Gambian is shackled with debt of D30,000 – D37,500 at birth by our mismanagement/corruption of our governments. The average annual debt interest repayment ranges from D2.7 – 4b. That is 27% – 40% of National Revenue. Just imagine if you are to spend 27-40% of your salary paying off ONLY INTEREST ON DEBT YOU OWE TO YOUR FRIENDS/SOMEONE. How soon your family will go without 3-daily meals? Gambia didn’t go bankrupt because they’re playing games to keep us afloat.
Between the 3 presidents, on average Gambia spent 162% of National Revenue paying for Personnel, Recurring government costs and debt interest repayment. It means we have to arrange (loans and/or grants) to make up for the outstanding 62% (D6.2b). For just 2019 costs of government plus debt servicing is 98% of National Revenue. That means every dalasi of National Revenue 0.98b goes to wages, running government and servicing interest on debt. Only 0.02b/dalasi is theoretically left for any program if not looted.
In 1994 Jawara collected D680m and spent D490m (75%) on personnel, D620m (91%) on recurring costs and 19% on debt interest repayment. So Jawara spent D1.11b (163%) on himself and team. He spent additional 19% (D130m) to pay the interest on our debt for fiscal year 1994. We ran out of money before meeting overhead costs and legal debt liability. Obviously, nothing is left for roads, schools, water, electricity, etc. By the way those were the reason we pay in taxes in the first place. How come paying wages, buying coffee and electricity for A/C, driving a/c equipped vehicles, etc. became priority over our welfare needs/wants?
Let’s look at Yahya’s last budget (2017 Budget). Of a projected revenue of D8.53b he spent D2.68 (31%) on personnel and D2.80 (33%) on recurring expenses. That is 64% overhead expenditure. He has a legal debt interest liability of D3.7b (43%) for fiscal year 2017. Yahya also ran out of money – D2.80b (28%) above what he projected to collect. He has no ordinary means to provide social services. Again, how come paying for a government take priority over the primary reasons we paid in taxes?
We will now examine Dr. Barrow/Mr. Amadou Sanneh numbers. These are our new-kids on the block. They’ve arrived as change agents. They’ve come to fix the wrongs of the past. In 2018 they expected D9.5b in revenue and spent D7.51 (83%) on personnel and D12.58 (132%) on recurring expenses. The money is gone before debt interest payment of D4b (42%). By these numbers they’re aren’t worse than their predecessors? Look at the numbers of the following year (2019), is the same pattern.
This is the primary source of compounding impoverishment of Gambia. Our problem is not because we’ve no metric tons of gold/diamond/copper/platinum deposits at Jahali-Konko or trillions of barrels of oil offshore. Venezuela has lots of oil but the poorest nation in the Western Hemisphere. Nigeria, our own neighbors has billions of barrels but all it gave them is environmental disaster. Switzerland is not as blessed with natural resources as USA but with the highest standard of living worldwide. Since independence our meager resources have being employed on wrong priorities. For instance:
- We established a National Army 35 years ago. We also have NSA/NIA/SIS, Gendarmerie, PIU, etc. These are in addition to regular police force. Gambia is over 2/3 surrounded by Senegal so territorial integrity is not an issue. If the army was created to deter Senegal we are kidding ourselves. Not been able to stop ECOMIG is a good example. Yet we have wasted billions of dalasis every year wages, food, housing, uniforms, arms, ammunitions, etc. only to deploy them on fellow citizens at Westfield, Sibanor, Kanilai, Faraba Banta, etc. That’s the army that killed 100s or 1000s of unaccounted Gambians and yet they couldn’t even mount a check point at Farafenni to stop ECOMIG. That army has killed more Gambians since inception that annual fatality of road vehicular accidents. In addition, between Briakma and Banjul, about 35 miles distance, Gambians are subjected to an average of 10 – 12 check points (almost 1 check point/3 miles). What’s going on? Is this an Independent people? What’re the state looking for in our person, pockets and trunks, etc.?
- An estimated 2m population with less than 300, 000 students we’re billing the national treasury with 2 Education Ministries. Obviously one ministry can do the job. Even if that means saving taxpayers the emoluments of a minister – that’s a savings.
- What’re we paying Ministry of Information for? Seriously who will argue that our nation needs Ministry of Information. Whatever that ministry is doing is not needed, necessary and/or can be handle at office
- Why would we need Ministry of local government if they are governments of the people?
- Over 50 years we have Ministry of Works. Do you know Gambia still import office furniture? School furniture? Hospital furniture including cubicles? Why’re we paying those wages? Why are we buying wood, plywood, steal, etc.? What do they produce? What is it use for? All that is done at that Ministry (or intended to be done at that Ministry) could be efficiently contracted to Gambians – GTTI, Lamin High School, Crab Island, etc. That’s productive at both ends. Someone will tell me they’re not equip. That may be true but because we failed to use them…..
- We still have secretaries and bosses in each office and each has computer costing D60,000 – D100,000 for 1 3-line memo/week. The back and forth editing between the 2 is really comic to say the least. That is a serious misuse of resources such as time, computer, ink, paper. Or telephone operator after we have Gamtel for over 30 years
- Over 1000 vehicular fleet for a government residing within 1 square mile Banjul. In fact, all (or almost all) government facilities are along Marina Parade (from Gambia High School to the Albert Market).
I can go on with these redundancies that are consuming our meager resources for no corresponding values. Some of us think they ensure employment but in actuality they prevent productivity and productive employment. Honestly do we need all those vehicles for people’s business. Unless we’re ok tax dalasis to buy vehicles for others personal use – that am sure Gambians will not agree if they know the implications
TO BE CONTINUED
Part III – The Intersection of Democratic Government, Public Policy and Productive Resources
To The Gambia Ever True
Burama FL Jammeh
Financial Analyst/Economist