An analysis into the 2020 Revised Domestic Revenue by Budget Advocacy Network (BAN) has revealed that government is now spending more than what it is collecting from domestic revenue monthly. The Report launched by BAN analyses that Government spends Le3.85 trillion on operating expenses against Le3.13 trillion from domestic revenue collected for the period January to July 2020. This means that government operating expenses supersedes the domestic revenue by Le 720.2 billion.
Compared to 2019, government spends Le3.43 trillion on operating expenses against Le3.12 trillion from domestic revenue collected for the period January to July 2019. This means that government operating expenses supersedes domestic revenue by Le 308.54billion. As a result they are now adopting other measures to finance the gap through means such as selling of treasury bearer bonds. “Government should try to ensure that it decreases the big difference between operating expenses and domestic revenue, but social sector spending should not be affected as citizens need these services now more than before” it advised.
The figures from the information available from the Accountant General’s Office shows that government’s major expenditure area is on wages and salaries. This is followed by non-salary, non interest recurrent. Apart from domestic revenue collection, donors also provide direct and off budget support to the government. Direct budget supports are funds channeled into government budgets through the normal budgeting and financial management process.
It is typically linked to the PRSP process, given that government’s commitment to a poverty reduction strategy is usually required in order to attain the funds. Off budget support are aid assistance that are spent outside the national budget; in other words, assistance provided by a donor and/or implementing agency that bypasses the core national budget. These are additional resources that come to government apart from the revenue collected.
Furthermore, the figures show that government is spending more on general public services, seconded by economic affairs and education than every other sector. Total sector expenditure outweighs total domestic revenue for all the months under review for 2020, for instance, the total sector expenditure from January to July 2020 is Le 4.18 trillion while the total domestic revenue for the same months is Le 3.1 trillion.
This means that sector expenditure is more than domestic revenue by Le 1.1 trillion. BAN cited that the Health and Education Sectors spending might rise as a direct consequence of COVID 19 given the need to procure medical supplies and drugs to respond to the health emergency at hand The FQE on the other hand is winded with a culture of social distancing and precautionary measures.
ZIJ/23/10/20
By Zainab Iyamide Joaque