By Yusef Taylor, @FlexDan_YT
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This announcement came three weeks after the Ministry of Health’s request for $2.5 Million US Dollars (D127 Million) to roll out an emergency three months program to confront the pandemic.
Although the Emergency Fund announcement has been welcomed by many, it also raised eyebrows as critics question where D500 Million Dalasis will be raised from to fight the Corona Virus Pandemic. Some critics question if the President has the authority to allocate Emergency Funds without National Assembly (NA) Approval. Considering that the NA has suspended all sittings until further notice, their approval could mean more delays before funds are released to fight the disease which has already claimed one life. To find out if the NA must sit to approve spending, I contacted former Finance Minister Abdou Kolley.
Virement within Budget Entities
According to Mr Kolley, the Government can always use virement to allocate funds from other budget lines into an Emergency Fund. Virement is the process of transferring funds from one budget entity (government department) to another budget entity (government department). This is often done to use one department’s surplus to fund another department’s deficit.
When asked how he would have raised funds urgently for the Emergency Fund if he was the Finance Minister, Mr Kolley explained that he would first approach other Ministries to agree on cuts and then allocate those cuts to the Emergency Fund. For example, some travel expenditure could have been cancelled due to the pandemic. Say if a Ministry was to implement seven (7) projects, they may decide to implement six (6) projects instead and the surplus could be allocated to the Emergency Fund.
Hon. Alhagie Mbow, NA member for Upper Saloum, explained that section 29 (1 to 4) of the Public Finance Act 2014, gives the Finance Minister flexibility to move funds within and between budget entities. According to him, the Act empowers the Finance Minister to move up to 75% of expenditure items within a budget entity and up to 50% between budget entities in consultation with vote controllers in those Ministries.
Where will D500 Million be raised from?
According to the 2020 Approved Budget, the Ministry of Health was allocated D1.5 Billion Dalasis, the third-highest allocation after Debt Services and the Ministry of Basic and Secondary Education. This amounts to less than half (7.13%) of the 15% that African Heads of states pledged to address infectious diseases like HIV/AIDS and tuberculosis to name a few. Had the Government allocated 15% of its Annual Budget to Health, D3.2 Billion Dalasis would have been available to improve The Gambia’s dilapidating health care services.
A lot of people have expressed concerns that the Government intends to use Centralised Services (D1.45 Billion) to fund the D500 Million Dalasis Emergency Fund. Although the Government hasn’t provided any indication where the funds are to be raised from there appeared to be no information on the purpose of the Centralised Services Fund.
Mr Kolley recalled that “in the past Centralised Services was used to pay all utility service bills like NAWEC (water and electricity) and Gamtel (telecommunications) together and this is why that budget entity is called Centralised Services”. However, after a while, all Ministries reverted to pay utility service bills separately but Government can still allocate funds from Centralised Services by using virement from one budget entity to another.
Centralised Services vs Contingency Fund
This begs the question if Centralised Services is being used as intended. Unlike other budget lines which are controlled by the relevant ministries, Centralised Services is controlled by the Finance Minister and is currently being used like a Contingency Fund. Finance experts warn that even though Centralised Services may prove useful to fund the battle against Covid 19, it’s not being used to pay centralised utility service bills. Since the Finance Minister can reallocate funds from Centralised Services without consulting the NA this leaves it open to abuse.
Another option which may be a bit late now is for the Government to enact a Contingency Fund as per provision 154 of the 1997 Constitution. This will allow the President to approve not more than 1% of the annual budget without NA Approval. In the event funds needed is more than 1% the President may cause for a Supplementary Appropriation Bill to be tabled at the NA for debate with the funds being charged to the Contingency Fund.
Shedding light on the status of the Contingency Fund in an exclusive interview with Hon. Alhagie Mbow of Upper Saloum, he explains that Parliament hasn’t enacted a Contingency Fund “which is a special amount of money that will be used by the government in terms of emergencies”.
In any case Hon. Alhagie Mbow “believes there is a need to review expenditures for 2020 to put a check on the deficit as revenues will be affected due to the Covid-19 pandemic”.
National Assembly Appropriation
Both Mr Kolley and Hon. Alhagie Mbow agree that “as long as the Finance Minister is sure there is no need for a supplementary appropriation, in other words, he can agree on cuts with other Ministers which can be used for the Emergency Fund within the limits of the approved budget, then the Minister can go ahead without NA Approval”.
However, if consultations with other ministries do not yield results because they would need to spend their budgets as appropriated by the National Assembly, then the Finance Minister needs to come up with a Supplementary Appropriation Bill for the NA to approve additional funds.
The NA still retains the role of appropriating the Emergency Fund. One of the things that NA can do is to seek expert advice in deciding how much should be spent on testing kits, face masks, personal protective equipment and ventilators. The NA also has an important role in scrutinising the way the Emergency Fund is spent but that can only commence after the funds have been released to the Health Ministry.