By Amie Sanneh
Finance and Economic Affairs Minister, Abdou Kolley, has said that 2016 fiscal year is expected to be a difficult period for the execution of the budget, as they continue to grapple with growing levels of public debt, especially the domestic component which accounts for almost half of their debt stock.
Minister Abdou Kolley said this yesterday, Monday, 14 December, as he presented next year’s budget, otherwise known as the Appropriation Bill 2016, to deputies at the National Assembly Chambers in Banjul. This speech outlined government’s priority programs for the said year.
The Finance Minister explained that the 2016 budget will primarily be centered on Fiscal Consolidation as the route to economic growth and sustainable development. He added that recent economic growth in the country has been characterized by A series of external shocks.
He said the impact of the regional Ebola outbreak on tourism and delayed summer rains in 2014, together with government intervention in support of State owned enterprises in difficulty, resulted in the widening of the balance of payment and fiscal deficit. Thus real GDP growth contracted “to 0.9 per cent, down from the initial growth estimate of 5.0 per cent in 2014,” he said.
He said their main objective remains fiscal consolidation through policy reforms in line with the National Development Plan – the Programme for Accelerated Growth and Employment (PAGE). According to him, the PAGE which should have ended in 2015, has been extended for an additional year to allow for the formulation of a successor plan towards the attainment of the national goals outlined in Vision 2020.
External Sector Developments
For external sector developments, Minister Kolley stated that preliminary estimates of the balance of payments for the first six months of 2015 indicated a deficit of US$30.5 million higher than the deficit of US$19.0 million in 2014 largely due to developments in the current and capital and financial accounts. The current deficit he continued, widened to US$65.7 million in 2015 from a deficit of US$11.0 million in 2014, mirroring the larger trade deficit
Agriculture and Natural Resources
Under Agriculture and Natural Resources, Finance Kolley said, this year’s rainfall has registered marked improvement recording 901.4mm compared to 2014 when only 589.3mm was recorded. “The total cultivation area is estimated to be 338,804 hectares, as per the pre harvest survey. According to him, total production for the 2015 cropping season is estimated at 283,853 metric tons which represents a 10 per cent increase compared to the 2014 production of 256,898 metric tons.
Total revenue and grants in 2016 is estimated at 12.20 billion in 2015 representing a growth of 16.0 per cent, he said. Domestic revenue he added is projected to grow by 7.4 per cent from D8.0 billion in 2015 to 8.6 billion in 2016. Minister Kolley noted that Non-tax revenue is estimated to decline to D0.7 billion in 2016 compared to D0.8 billion which represents a decline of 16.5 per cent over the period.
Total expenditure and net lending is projected at D16.9 billion in 2016 from 11.7 billion, in 2015 representing an increase of 44.4 per cent, the bulk of which is directed to recurrent spending.
Revenue Measures 2016
The Minister of Finance said as 1 January 2016 Government will implement the following reform measures:
Corporate tax will be reduced from 31 percent to its final target of 30 percent as envisaged when the measure was introduced in 2011.
Taxation on tobacco products will be increased as follows:
- Specified excise tax on cigarettes from D12 per pack to D15 per pack.
- Environmental tax on cigarettes from D2.20 per pack to D2.42 per pack
- Excise tax on other tobacco products from D200 per kg to D300 per kg and
- Environmental tax on other tobacco products from 110 per kg to 120 per kg.