This is the 2023 mid-year Budget Execution Brief presented to National Assembly members on 4th September 2023 by the Minister of Finance and Economic Affairs, Hon Seedy Keita. The mid-term budget execution brief details the government’s overall revenue and expenditures from the period January to June 2023. Below is the publication submitted to Parliament.
By the Ministry of Finance and Economic Affairs
Introduction
This brief provides an explanation of how our budget has been managed and executed during the first half of the 2023 fiscal year. The brief highlights the key aspects of the budget, such as revenue, expenses, and their variances. Additionally, it includes an analysis of our financial performance against the set targets.
The report aims to offer an overview of the government’s financial operations, allowing proper assessment of the effectiveness of the execution and management of the budget. It helps us make informed decisions and take appropriate actions to ensure fiscal stability.
Summary of Revenue and Expenditure
The Consolidated GLF revenue underperformed by 17.91 per cent below the end of June budget. This underperformance is mainly caused by the non-realization of budget support which is now expected in the second half of the year, and the weak performance of the non-tax component of revenue, which stands at 25.61 per cent less than its projection for the period under review.
GLF Expenditure during the review period stands at GMD 9.8 billion, which is 22.45 per cent below its mid-year budget of GMD 12.71 billion. The cash allocation system that we use dictates that expenditures are met from the revenue generated as far as possible in order to reduce the need for borrowing. This is mainly attributed to GLF Capital and Other Current [sic] lower than budget. Capital expenditure is expected to improve in the 2nd half of the year as we begin to implement the 2nd phase of the Bertil Harding Highway project and health infrastructure project and we aim to improve the expenditure budget execution in the second half when the budget support revenues are realized.
Consolidated Revenue
Consolidated Revenue: The above table analyzed the sources of income and their performance against the mid-year budget. It is important to highlight that while we have achieved significant milestones in some types of taxes such as tax revenue on international trade and VAT on imports, there are certain sources of revenue that fell short of budget for the first half year including non-tax revenue, and tax on income and wealth.
The first half-year revenue performance overall is below budget due to a delay in receipt of budget support from development partners. The activities on the prior actions which are preconditions for the approval and disbursement of the budget support flowed into the second half of the year. And as such disbursement could not be made for the projected revenue in the first half of the year. Tax on income and Wealth is below the expectation with a total of GMD2.19 billion compared to the mid-year target of GMD 2.44 billion. The payroll tax performed better than expected at GMD 48.34 million, which is GMD 3.74 million in excess.
Top Revenue Performers:
- Tax on International Trade: This revenue line has exceeded the mid-year forecast by 29.41 per cent. The success can be credited to Duty and VAT on Imports that have overperformed during the period. Duty collected amounted to GMD 1.72 billion, which is GMD 190.1 million more than its GMD 1.53 billion mid-year target. VAT on Import’s over-performance can be attributed to VAT on Oil Products, which has performed significantly over its GMD 271.16 million estimate by 170.85 per cent.
- Overall, Indirect Tax has been driving revenue performance surpassing its target of GMD 4.39 billion. The success is attributed to the good performance of Tax on International Trade.
Overall expenditure is within the budget for the first half of the year, standing relatively below their end-of-June estimates. Total actual expenditure amounts to GMD9.8 billion while the targeted budget expenditure was GMD 12.7 billion, this translates to 22.45 per cent less than budget.
We have also identified the top performers in terms of efficient expenditure management and cost-saving measures. Expenditure on Personnel Emoluments and Goods and Services exceeded their targets by GMD513.84 million and GMD212.39 million respectively, representing 17.81 per cent and 15.29 per cent above their respective targets. GLF Capital and Subsidies and Transfers were below their targets by 52.52 per cent and 45.36 per cent respectively. However, it should be noted that Capital Expenditure and Subsides respectively consumed 45.97 per cent and 49.56 per cent of their annual budget.
Conclusion
In conclusion, the budget implementation during the first half of the year remains prudent. The overall actual revenue budget fell short of the budget by D1.83 billion but this was offset but a lower actual expenditure than budget by D2.854 Billion leading to a lower financing requirement than budget of more than D2 Billion.
The cash allocation mechanism is an important tool that assisted in the budget implementation process as expenditures were constrained by the revenue generated.
Efforts were exerted to realise the prior actions for the budget support which is an important element of the revenue and already significant milestones were realised in the second half of the year.
Fiscal measures will be instituted to support a prudent budget implementation whilst making the needed expenditure to support growth.
Watch the entire session in the video link below.
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