By Amin Kef Sesay
Once again, the MDAs, many of whom are very notorious for using their budgets without controls, have been called upon by the Ministry of Finance to provide their annual budgets. Against this is the fact that every year instead of reporting a budget surplus, the country continues to have huge budget deficits that have to be filled with more borrowing.
This clearly shows that there is still too little investment and productivity in the economy to increase both GDP export revenue and personal incomes; only through which more taxes can be collected by the government to properly finance the budget. Central Bank Governor Professor Kelfala Kallon has made frequent reference to this in terms of the difficulty that he faces in stabilizing the economy and warding off inflation.
Going forward, many people believe that only sound budgeting will allow the country to create a spending plan for the taxes collected, in ensuring that the country will always have enough money for the things we need and the things that are important to us.
Thus, our MDAs following religiously a budget or spending plan will ensure the country stays out of debt or help us work our way out of debt. Budgeting is simply balancing one’s expenses with one’s income. If they can’t balance and you spend more than you make, you will have a problem.
Like our government, many people don’t realize that they spend more than they earn and slowly sink deeper into debt every year. As it stands, there is a great variance between what the government collects as revenue and what it spends. Over time, this cannot be sustainable and can lead to crunching fiscal circumstances; such as increasing taxes to finance the budget deficit.
The budget cannot also be just about income and expenditure on things like wages and salaries, social welfare, etc. The budget in the context of the national development plan has a policy function and a program function. The policy function involves determination of the size of the government budget and of the composition of the outlays.
The program function ensures that the programs and projects in the plan are included in the budget and that results expected from the outlays are actually achieved. The MDAs all complain that the variance between what they budget and actual receipts from ministry of finance is not enough to meet their set objectives.
Again, over the years; the economy has been buffeted by crosscurrents that have required changes in plans – such as what happened during Ebola and what is happening now during COVID-19.An important area in which development planning and the budget are expected to be congruent is development finance, which comprises resource mobilization and resource allocation.
What has been happening in our own case is that the budget does not incorporate the overall policy measures required for the success of the national development plan. This may be due to the fact that the planners are apt to assume that needed efforts would be made to collect revenue but not paid heed to MDAs overspending or adequate revenue not been collected.