The Gambia: National Budget/Appropriation Law


A democratic republic has law(s) that inform how (and how much) revenue is raise in a given period. The tax code(s) serves these purposes.  Equally, a democratic republic must have law(s) that states what would be done, when it would be done, where it will be done, how much it will cost, etc. This is what necessitates a national budget (appropriation bill). In The Gambia, the appropriation law is an annual law and covers a calendar year (January – December).

Under Separation of Powers of a democratic government, the legislators are the appropriators. The legislature controls the national purse. National coffer is not control by the executive/president. The executive implement laws made by the legislature.  The judiciary on the other hand ascertain the constitutionality of those laws should they come into question. In The Gambia Separation of Powers exists only in name and for all practical purposes the executive/president has absolute control of governing. Thus, the executive writes the national budget and the legislature rubber-stamped it. The process is simply a formality and not a true exercise of democratic appropriation process.

As we are deep into the 4th (the last) quarter of 2019 we can assume our planners are at work on the 2020 Appropriation Bill. This is our money. The plans are ours and for us.  So, what should the average Gambian expect and/or be looking forward to in this law.

  1. What’s a national budget?
  2. What’re relevant elements of national budget?

The Budget of The Gambia is an annual law that projects revenues and proposed spending for the planned year. Yet no budget (including supplementary budgets) carry the proposal for Yeli/Bamba Tenda Crossing Bridget.  It is built! And nobody is prison for it. In The Gambia it appears laws/rules doesn’t matter so long someone think something is good. Nobody knows where that money comes from and on what terms. Apparently, the whole nation including NAMs are not demanding an answer. Not even the Environmental Impact Assessment (EIA) study is a concern for anyone including National Environment Agency and the so-called Climate Change Offices. Had we’ve a functioning institutional democracy this is a crime that should remove Barrow from office and send him to Mile 2 for a long period of time.

Appropriation Law is money-law of the land.  It can’t be change/ultered by any [significant ways]without approval by the right authority. For instance, the executive can make immaterial changes such as to start and finish up road at Brikama before Serekunda’s for some convenience or readiness of labor while the budget states Serekunda’s 1st. They may simply need a foot note for the reason for their discretion in the Variance Reports.  However, the executive cannot unilaterally decide to deviate funds for Banjul Serekunda road to build/renovate Bridge at Sofanyama Bolong. Such significant change ought to go back to the National Assembly for reauthorization.

Budget is important in that it informs all players how much we expect to receive and what we intended to do with it. It also anticipates shortfalls and usually makes room in such eventualities. Budget is also a vital management control tool – keeps the team focus on the set goal(s) and avoid unnecessary cash flow problems.

#1 Revenues:

The 1st important element of national budget (any budget for that matter) are revenues. These’re monies government expects to receive during the budget year. Government levies and collect taxes from people of The Gambia ranges from consumption to fees/surcharges and anything in between. Funds generated from such actions are called Tax Revenues. Government renders/provides certain goods/services such as passports, vehicle registration vehicles, ID cards, TINs, etc. for which they charge fees that covers the costs and some. These funds are called Non-Tax Revenues. This category also accounts for funds coming from businesses and investments of government. Good example of such businesses and investments are dividends from SOEs (provided they are paying anything), overseas investments, interest on loans to employees, etc.

Naturally, the importance of revenue cannot be overstated. These monies have to come in for the proposed spending to happen. Because taxation is law and people of the Gambia cannot avoid taxable events we are sure that some taxes will be paid. Although is always a big if all the proposed/expected revenues do come in and/or whether what is received are protected enough to go into the intended purposes. Variance Report should inform what’re ACTUALLY COLLECTED AND UTILIZED versus THE PROPOSED. Unfortunately, our government is not doing that (or not making it public).

Gambia has an unbelievably small revenue. To date our national revenue never exceeds US$200m (GMD10b). This is less than the annual salary of any Fortune 500 company CEO. This is partly because of our size that has direct bearing on the size of overall economic activities. However, our own ineptitude is responsible for this poor state of affairs. The main thrust of taxation is income. Incomes are taxed as it is earned and as well at consumption. For 54 years and counting Gambia government has no handle of income of people of Gambia. Hence, they couldn’t appropriately tax. The ONLY income they are close to handling are wages of employees of the formal sectors.   Incomes of individual entrepreneurial earnings are not determined hence are not fairly taxed. Groups and businesses are not required to turn in any certified accounting reports that determines earnings/income. Lazily a tax agent will stop at a Five-Star Hotel such as Kairaba Beach Office and ask for annual taxes of (say D5,000, D1,0000 or whatever). This is wrong, its lazy, is corrupt, it’s unfair for all parties involve. Such a formal business and its size should be required by law to produce certified accounting reports. Is up to government to require one report for taxation and other for reporting earnings to owners/shareholder. The 2-reports differ in the treatment of certain accounting variables such as inventories, depreciation, account receivables, account payable, etc. Is an accounting gimmicks but at least we know what’s happening and why? Taxi cab owners, tailor under my dad’s verandah, shopkeeper (my dad), etc. should be paying taxes on their income as sole proprietors than an arbitrary figure levied on them. Very few rental properties pay any tax because every house in the compound is viewed as family’s living quarters. We may have started at the very bottom but that should no longer be the excuse after more than half century. In fact, the point is not to have everything perfect but had we started we would have been away from Point A by some distance. The actual tax collection methods are below 21st century acceptable accounting practices. Tax agents with school bags collecting D5/passing taxi is not right. The same school bag collectors are roaming the markets picking D5/vendor/kiosk. We could very easily see the potential pitfalls for fraud in some of these methods. GRA, Customs, etc. agents are still collecting cash payments on receipts printable on any computer.  Certainly, our size is not helpful but our outdated practices are the killer blows.

Gambia government has 3 revenue sources.

The 1st of those 3 sources are direct/indirect taxation. Of the reported D12.8b national revenue of 2019 Budget taxes accounts for a reported D11.8b (92%of national revenues).

The 2nd element of our revenues are non-taxes. These are monies usually from goods/services rendered by government. For instance, we pay fees to acquire a driver’s license or passport or National Identification card, etc. Those fees are scheduled such that operational costs are covered and then some. As well under this category dividends from our businesses such as GPA, Gamtel, Gamcel, SSHFC, GPTC (not in existence), NAWEC, etc. – that’s provided they’re paid.

The 3rd element of revenues are grants/begging our friends for help. For the purposes of national budgeting this is a difficult area to assess. Help comes in different forms (not just cash), spread of some helps extend to several years and the fine details may not be defined right away, etc. Others are never handled by the government. Regardless Gambia government accounts grants (all or some) as revenues.

#2 Overhead Costs:

These are costs paid to and/or on those doing the businesses of the people. We’ve hired people; we gave them tools/equipment of work; we provided places of work; etc. all of which comes at certain costs. Together these are overheads costs. In our illustrative matrix overhead costs are personnel emoluments (self-explanatory) and recurring costs. Recurring costs are everything else Gambia government uses, needs, etc. including tea for offices, toilet papers for bathrooms, fuel, vehicles, inks, pens, pencils, rents, water, electricity, telephones, etc. In our matrix these costs are marked minus (-) sign on the right because they are subtracted from revenues.

General rule of thumb, overhead costs should be as small as possible because they’re not the purpose of the money. The dichotomy here are those to make such critical decisions are themselves direct beneficiaries of higher overheads. The higher the overhead costs; the less our ability to pay for needed development programs. That’s a direct inverse relation.

In 1994, Jawara’s last budget as president overhead costs was 163% of National Revenue. This is unacceptable. This means for every D1 of national revenue we (Gambia) have to go find additional D0.63b just to keep government open. In this scenario our revenues are not enough to pay costs of government.  That compared to Yahya’s last budget (2017), was 64%. This means every dalasi of national revenue D0.64b went to keep government open. Only D0.36b/dalasi is left for our businesses. Far better than that of Jawara but still not good enough.  How did Barrow do? Costs of government was 77% of 2019 budget (Barrow’s 1st full year budget) of national revenue.  Dr. Barrow spent D0.77b/dalasi of national revenue on government. Only D0.23b/dalasi is left for the owner’s businesses.

Comparatively, the 3 are numerically better than each, yet none is good enough for our purposes. Ideally overhead costs should not be more than 25% of national revenue and we should strive hard to knock it down to below 10%. That will leave 75% or more of national revenue for people’s businesses. It so happened that’re the very purposes of that money in the first place.

These are economic malpractice that’re impoverishing our nation. Changing it is easier said than done. It will be painful- from payroll to work conditions. The alternatives though are to continue to be the poorest of poor nations. Companies hire Turn-around Managers because usually those in charge are too deeply vested in the status quo is almost impossible for them to make deep enough changes. Personally, I (as a Mid-Level Manager) was directly involved the right-sizing of ActionAid The Gambia and as well the transitioning from our traditional direct-intervention (if you like call it boots-on-the-ground) to working through partners. In fact, I was The Partnership Officer (the lead person) until my resignation responsible to The Country Director the implementation of that strategy. I know first-hand how tough (and sometimes personal) it is to make certain decisions that will redundant a friend’s job and/or some work conditions. At the end of day is not about them and/or us; simply it was ActionAid ensuring her goals are achieved in the best possible manner. Equally, government of Gambia isn’t (and shouldn’t be) about them and/or us but the best path to achieving our collective common welfare.  For Gambia decentralization will certainly ameliorate the pain; still there are redundancies in current structures/systems that cannot remain under any circumstance if we’re to prosper. Think for a second! In Gambia we still buy a Dell Desktop for HR Manager, his/her Secretary and the Telephone Exchange Operator. Each computer is about US$1500-2000, their wages and benefits, etc. The only official use of the 3 computers is to type one 3-line memo/week. Imagine the waste in HR Manager hand draft memo on a piece of paper for the Secretary to type. They spend the whole week back and forth editing that 3-line memo one with a pen/pencil and the other typing. HR Manager should be able to type his/her memos.  After 35 years Gamtel should be able to provide auto-switch board that redirect calls to destination offices. That will cut out 2 associates and all their associated costs.  Vehicles, fuel, maintenance, etc. so much waste at our people’s expense. Major cuts (and/or rearrangements) will have to come through governance restructuring from Kartong to Koina starting at Banjul.  Failure to make the necessary changes means leaving our chances to laws of economics. It hasn’t been kind to us and will never.

#3 National Debt and Interest On The Debt:

Credit is an integral part of economic lifeline of the financial market. There are times taking out line of credit is more beneficial to an entity (company/nation/individual) than use own resources. But there’re others when is not necessary and/or even bad to take out credit. To advise the CEO on this critical matter and as well ensure every dime of the entity is at use (creating value) at every moment while avoiding cash flow shortages necessitates Chief Finance Officer (CFO) in every reputable company. Bottom line, every loan is a legal liability and comes with economics costs. 

Gambia has estimated D75b of national debt. This is about 130% of our GDP (size of our economy). That comparison demonstrates only the size of our debt and not our ability to pay. The debt per capita (per person) is about D37,500.00. We’ve a reported projected annual revenue about 7/8 times less than our debt. The reported annual debt interest due ranges from D2.7b – D4b. The later plus any due-principal will be about ½ of our national revenue. We can no way keep up that repayment levels. Simply imagine if you’re to use half of your salary to pay your debt.  That’s what Gambia has to do to avoid default. It’s unsustainable.

The structure of the national debt is 3:2; that’s 60% (about D45b) is borrowed from within Gambia through treasury notes at Central Bank. Someone told me about a year ago that government is also issuing bonds. I couldn’t confirm this but will be interested to see under writings of those debt instruments.  40% of national debt is contracted from outside sources. This ratio is titled against the local economy; hence defaulting will collapse our economic faster than it will affect outside creditors. Due to low creditworthiness Gambia has harder times to contract new loans from better markets on competitive rates. That increases our costs of borrowing. The effects of this cycle are compounding poverty.

The going rate of consumer loan at Commercial Banks in the Gambia ranges from 18 – 25%. Such high rates cannot favorably support investment. There is hardly a legitimate investment opportunity that assures 25% or more return. So conceivably, consumer loans in Gambia are small in volume and thrown at everyday consumable goods/services.  This will most certainly slow capital formation and growth.

The credit market usually does not require instance and/or one-time repayment of principal. Usually creditors assess interest for sometimes before they include a portion of principal in each scheduled repayment. That compound interest collection, fuels profitability of credit markets and hence continuity of credit services.

The above facts point to distressed economic conditions that no one in our past and current crop of politicians demonstrated capabilities to fix. In fact, most (or all) of them seem oblivious to these problems. They don’t seem to be aware of the existences these issues. It won’t surprise me if some see the numbers as simple academic exercise and that they have no real-life-consequences.

#4 Development Programs:

You may have noticed that we already stated that the purposes of taxation are to procure our common welfare needs and wants. We’ve also stated that costs of government are not the purpose but incidental to the conduct of businesses of taxpayers. Yet we deducted costs of government and debt/interest due on debt before purchasing any needs and wants of taxpayers. THAT SEEM CHEATING THE OWNERS OR AT MINIMUM UNFAIR. This is the case because naturally we have to have an infrastructure to mobilize the resources for the acquisition of our needs and wants. We’ve to pay upfront for this infrastructure. That’s the costs of government. It ought to be done at the lowest costs necessary. Debt principal and interest due on the debt is a different matter. They’re legal obligations. Failure to pay can increase the economic costs to several folds. 

Among others development programs of Gambia are environment, health, education, roads/communication/transportation, energy, sanitary domestic water, protection/security, agricultural development for food security, etc.  We have to be innovative/adaptive in our approaches to address these issues. That means we have to drop certain perceived traditional undertakings of government. For example, Gambia government no longer need to be entangled in the businesses of:

  1. Providing Radio & Television services
  2. Employee consumer loans
  • Electricity
  1. Telecommunication services
  2. Printing/copying services
  3. Building all schools for all Gambia
  • National Army/Gendarmerie/NSA>NIA>SIS/PIU, etc.

Some of these are not for a democratic government to do. For national army and super security complex are Jawara’s egoistic self-satisfying-paranoiac project. We don’t need an army for any reason. It’s a prohibitive economic burden. An uncontrollable threat to our democratic existence as Jawara himself realized years later. The defense of a government of The Gambia is the sole responsibility of Gambians provided they’ve unfettered participation in governance. For some of the others in the above list, Gambia government took them up because of the abnormalities (perceived or real) of our beginning as an independent nation and in part our own believe that government is answer to everything. That is no longer valid view point.  There are enough venture capitals to invest in these areas provided government affords basic market based regulatory environment, stamp out public corruption and as well opportunities for stability/peace, freedom and prosperity. Venture capitalists have strong profit motives to ensure efficient/effective delivery of goods/services. Competition drives down costs to consumers. Tax revenues to the treasury increases. Government now has more money for fewer development areas.

#5 Net Lending:

What’s net lending? I’m not sure what our government mean by this term. Is a term you will only come across at [Total Expenditures and Net Lending] in the whole budget. This tells us is a cost/an outlay. By definition it’s net of 2 lending’s (lending in/out or out/in). But we know government is no lender – so what’s this and how much are involve. We know government gives out some consumer loans to pubic officials such as NAMs. Is it the difference of what is given out and the repayments (essentially the outstanding loans) they refer to as NET LENDING? DO YOU KNOW PUTTING SOME OF YOUR MONEY INTO A SAVINGS ACCOUNT AT A BANK IS LENDING THE BANK – YET IT DOESN’T TECHNICALLY QUALIFY US FILL OUR JOURNALS AS LENDERS. Not sure less than a million-dalasi lending activities to staff qualifies as lender. They should clearly state the cost center for what is it and have its simply added to TOTAL EXPENDITURES.  In the scheme of national budget is probably of no to little value to pursue this insignificant cost. We conclude a cash-strap government should seize dishing our people’s money to employees for whatever reason. 

What’s the 3-hour reading jamboree on the National Assembly floor for?  

To help NAMs to decide whether to vote yes/no on the budget?

The 3-hour nationally televised reading jamboree on the house floor do not afford NAMs that study. National Assembly Members (NAMs) should work as individuals and as well in committees at the corridors of Finance Ministry, Hallways of State House and in Chambers of National Assembly to know the plan to be able to vote to approve or not to be sign into law or not. Nobody understands the content of a 47-page long document read out loud especially to some of the least impressive of Gambia’s public servants.

To inform/educate the general public?

The PDF copy of 2019 budget is 47 pages long. All the budgets of the last 2 decades or so are about that length. The process is essentially filling in new numbers into a template sitting at the Finance Ministry computers.  It takes the Minister about 3 hours or so to read it all out. This is the least effective way to educate the general public. In fact, the general public cannot conceivably be the target because we know about 40-47% of them cannot read and write in English.  Another 30-35% of those who read/write struggles to understand a paragraph/chapter of an Elementary – High School Story/Literature Book. 

So, what else could be the reason for this lousy 3-hour read-out jamboree?????

My guess! The answer would be this is how we inherit from colonials (or this is how it’s always been done). How it has always been done shouldn’t be a significant factor but how best we can achieve our PURPOSE. Most certainly, the best methods for NAMs to do their job will undoubtedly require a different interface to simply informing/educating the general public on the contents of the budget.

Here under is a matrix I proposed based on the format of a Classic Accounting Income Statement. It captures the essence of every aspect of The National Budget of The Gambia while it won’t vie into irrelevant numbers, for purposes of informing/educating the general public. It takes 30 mins or less to present this on the floor of National Assembly with Flip Chart (and/or Power Point/Keynote).  You may visualize some of the facts with histograms and pie charts to minimize the confusion all those zeros might cause.

National Income Statement of The Gambia
Description Directional sign (plus/minus)
·       Taxes +
·       Non-taxes +
·       Grants +
Overhead Costs  
·       Personnel emoluments
·       Recurring gov’t costs
National Debt Servicing  
·       Principal due
·       Interest due
Government Lending  
Lending Out – various governments loans
Lending In – repayments of government loans +
Development Programs  
·       Health care
·       Education
·       Agriculture
·       Roads
·       Environment/waste management
·       Sports development
·       Etc.



Revenues – Costs of Government – Debt Obligations Servicing ± Net Lending – Development Programs = (±Cash Balance) Or Rs – CG – DOS ± NL – DP = (± CB)


Stay tune for my analysis of the 2020 budget anytime is out. While you do, please crunch the number by yourself in the above matrix format to see if it betters your understanding. It could be a very good exercise for Business Students at UTG (more specifically Finance Majors).

For The Gambia Ever True

Burama FL Jammeh

Economist/Financial Analyst



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