The government of The Gambia has projected a potential revenue loss (GDP) from its initial forecast of 6 percent to a lower 2 percent as a result of the COVID 19 pandemic. We know this from President Adama Barrow’s own words in his fourth State of the Nation address to the National Assembly on Thursday.
According to the president, the country has been experiencing a slowdown of economic growth due to the reduction of economic activities as a direct result of the COVID 19 pandemic “And recent analyst shows that, GDP growth rate this year would decline from 6% to 2%”.
The government is attributing such revenue loss on the decline of import volumes, trade activities correspondently leading to shortfalls in import duties and other tax revenues based on the current situation.
“The total estimated fiscal impact from the declining import duties and other tax revenues is D2.3 billion, that is 2.4% GDP. The ministry of finance and economic affairs projects that, fiscal deficit would widening from 1.5% of GDP to 2.1% GDP” the president added in his state of the nation address.
The global coronavirus pandemic has continues to hit hard every aspect of our economic and livelihoods. This has also draw major setbacks on government revenue generation through tax activities and implementation programs certain programs. The pandemic also means that more attention diverted on health in order to cope further spread of the disease.
“The pandemic had negatively impacted on budget execution as approved by the national assembly. Government had to resolve to cuts and the re-allocation of funds from line items such as travel, training and workshops into much needed areas. This decisions were taken to safe aside D500 million dalasis as emergency funds to cater for prevention, containment and respond to the pandemic“.
However, government projection of revenue lost from 6 to 2 per cent in the period from 2019 to 2020, Marr Nyang Founder of Gambia Participates, an organization championing transparency and accountability said people need to be wary of statistic given by government.
“If you look at the national budget or even the covid 19 funds itself, the improvement they’re given you will realized the ministry of health publish a report which the same report publish by the ministry of finance, so the government of the Gambia actually does not provide accurate financial data. The metric or beach mark that they’re using to measure 6% loss of revenue is something that should be questionable. Is a matter of given us figures that’s one thing but also what is more important for them to explain for physical and financial transparency, is what cause the revenue lost“.
The Gross Domestic Product (GDP) in Gambia was worth 1.76 billion US dollars in 2019, according to official data from the World Bank and projections from Trading Economics. The GDP value of Gambia represents less than 0.01 percent of the world economy.
He however advises government to revisit their expenditure framework and invest into public enterprise in order to recovery from post Covid 19 crisis and level revenue generation.
“The national budget you’ve almost 70 to 80% going into administrative cost, less percentage going into capital development. So what the government most do now is to revise their expenditure framework and also invest into public enterprises to make sure they increase revenue collection without imposing tax or inflating prices to citizens“
The president however said, his government is committed to provide humanitarian assistance and support businesses during this period of economic downturn. According to him, his government has “already devise post pandemic plans to protect lives and livelihoods“