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Dates or Sequential Designation: -1969.
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U OF F LIBRARY


THE GAMBIA


SESSIONAL PAPER NO. 3 OF 1969



BUDGET SPEECH
BY

The Honourable S. M. Dibba,
Minister of Finance, Trade and Development


On Tuesday,


17th June,


the House of Representatives



PRICE ONE SHILLING



PRINTED BY THE GOVERNMENT PRINTER. RATHURST.


1969 in










-EX,__ L113MSI
'UNIVEqSjry Of 'IFL0]FDA'











SPEECH

BY


) THE HONOURABLE S. M. DIBBA,

S MR. SPEAKER,
Sir, I have the honour to present the Budget of the Government of The Gambia for the forth-
coming financial year and to move the Second Reading of the Appropriation Bill for 1969/70 for the
consideration of Parliament.

2. The theme of my Budget Speech can be put very briefly and very simply the absolute
necessity to maximize national effort. Quite apart from the obvious desirability that all independent
'> countries should stand upon their own feet, it is absolutely necessary for us in The Gambia to mobihse
and rely more and more upon our own resources so that we can be independent of outside assistance
*I to balance our Recurrent Budget. It is imperative that we should be self-reliant in an inter-dependent
world. Responsibility for economic development must primarily be shouldered by the developing
nations themselves, but what we need is a global strategy of development, an integrated programme of
i international co-operation, which should set out convergent measures to be pursued by every state.

3. The Gambia cannot be complacent with the present rate of economic progress. The Govern-
ment has the power and the determination to press on with the urgent task of improving the economic
Conditions of thepeople. Given the co-operation of the people and the necessary international financial
and technical assistance, I am confident that we shall succeed in this great task that the electorate has
entrusted to the Government.

4. The Annual Budget Session of Parliament is the appropriate time to review the performance
Sof the economy, appraise its achievements and forecast its future trend. The Annual Budget can no
longer be regarded as a mere statement of income and expenditure. It should contribute towards the
maintenance of financial stability, and, in accordance with national development priorities, indicate
to the economy clear directions to follow.

5. The present Development Programme comes to an end in June, 1971 and my Ministry is
currently taking preliminary steps to formulate the Development Plan for the succeeding period.
6. Among the projects which will be included in the next Development Plan will be the
following:
(a) Expansion and modernisation of the Port of Bathurst;
(b) Major improvements to Yundum Airport;
(c) Reconstruction of Lamin Koto/Sandu/Wuli and Kiang West Roads;
(d) Building of a new Court House and Police Headquarters in Bathurst.




A-



3'

2

7. We are at present receiving most of our foreign aid from the United Kingdom. Apart from
technical and budgetary assistance, this aid takes the form of an interest-free loan of 3.2 million for
development expenditure from 1967/68 to 1970/71 and a further 100,000 for the Trans-Gambia Ferry,
thus making a total of 3.3 million. There is some aid from the United States for mixed farming centres,
frdm Taiwan for rice cultivation and from West Germany for fertilizer, but the amount of such aid is
relatively small. There is also the prospect of aid from the World Bank for the Bathurst Port develop-
ment and improvement of rice cultivation.
8. There is no doubt that the flow of external aid to this country should be increased if there is
to be rapid economic development. The growing population, the inability of the subsistence sector to
sustain the younger generation, all emphasise the urgent need to implement development projects with
external assistance. It is in this context that the next Development Plan will be prepared.
ECONOMIC REVIEW THE STATE OF THE DOMESTIC ECONOMY
Gross Capital Formation.
9. I turn now, Sir, to a review of the performance of the domestic economy. Indications are
that the over-all performance of the economy has been good The annual growth rate of gross fixed
capital formation in The Gambia for the four year period of 1963/64-1966/67 has been 9.3% which
is indeed quite good. The annual growth rate compares favourably with those of some of the other
Commonwealth countries. Land, buildings and other construction works have commanded a share of
65% in the formation of national fixed assets during the period whereas plant, machinery and other
equipment have trailed to about 20%, followed by fixed assets, mainly transport equipment, of about
16%.
10. The contribution of the Government in the formation of fixed assets has been a dominant
factor, showing its interest and desire to build fixed capital for the development of the country. Its
share for the four-year period was 48%, followed by Registered (Incorporated) Companies which
contributed 33%. The rest of the private enterprises contributed on an average 11% in the capital
formation. The quasi-government sector has also risen to about 10% during the years, though in
1963/64 its share was only about 1 %.
Agriculture.
11. There has been a general improvement in the economy in 1968/69 in spite of poor rainfall.
The Gambia being an agricultural country, the state of the economy is determined to a very large extent
by rainfall. In 1966/67 season Bathurst received a rainfall of 50 inches, in 1967/68, 54 inches and in
1968/69 only 27 inches or half that of the previous year. The poor rainfall in 1968 adversely affected
the rice crop with the result that we do not expect to purchase local rice under the guaranteed price
scheme in 1968/69, although we purchased 107 tons of paddy in 1967/68.

12. In 1966/67 we had a record crop of groundnuts of 126,000 tons. In 1967/68 however,
mainly as a result of excessive rainfall, groundnut production declined to 117,000 tons. In 1968/69,
in spite of the poor rainfall, groundnut production rose to over 120,000 tons. The producer price of
groundnuts which was 27 per ton in 1967/68 was increased by the Government to 28 in 1968/69.
The higher price, combined with the increased production, would ensure the farmers a higher income
than in 1967/68.












13. Consequent to the Report of The Gambia Oilseeds Marketing Mission in 1966, an expert
bom the Tropical Products Institute in London made a survey early in 1968 of the costs of groundnut
buying in The Gambia, problems arising from road evacuation, congestion at Denton Bridge, and the
question of building intermediate seccos for collecting groundnuts. The recommendations made by
the expert regarding traders' allowances are now being studied by all the parties concerned-G.O.M.B.,,
Licensed Buying Agents and Traders. His proposalsion measures to increase the rate of discharge of
groundnuts at Denton Bridge have been accepted by the G.O.M.B. and action is being taken to im-
plement them. On the question of seccos, it has been decided that there should be a covered store at
Denton Bridge with a capacity of 10,000 tons. With a view to reducing the deterioration of groundnuts
in traders' seccos, the Department of Agriculture is carrying out experiments with plastic sheet coverings
of the floor to find out the best method of achieving this objective.

14. I should also like to mention that the G.O.M.B. has now taken steps to develop hand-
picked and selected groundnuts as an export. The Board has already entered into a contract with a
Dutch firm to sell about 1,000 tons of hand picked and selected nuts this year at a price about 20
higher than the world market price for decorticated groundnuts. This arrangement will not only
diversify our exports to some extent, but also bring us more foreign exchange earnings per unit of
groundnuts than before.

15. Honourable Members will recall that in March of this year The Gambia became host to
the African Groundnut Council which held its 10th Ordinary Session in Bathurst and that I had the
privilege of addressing the Council at its opening Session.

16. I would like briefly to recall the objectives of this very important organization which is
another example of co-operation among African States in the economic field. The Council has a
membership of eight states, all members of the O.A.U. and exporters of groundnuts.

17. The main objectives of the Council include the achievement of remunerative prices for
groundnuts through joint action and the expansion of the consumption of this commodity.

18. It is interesting to note that during its meeting in Bathurst the Council devoted the major
part of its deliberations to the fulfilment of its objectives with special emphasis on marketing and
research The Council hopes very shortly to recruit specialists from member States to run the following
offices:

(a) Common Sales Office in Europe (possibly with the assistance of GATT);

(b) Scientific and Technical Research Centre in Lagos at the Headquarters of the Council.

19. The fulfilment of the above objectives will mark a turning point in tle fieldof groundnut
production and marketing, which will be of considerable benefit to member states.













20. As mentioned earlier, the rice crop this year has been adversely affected by the poor rainfall.
The Givernment is confident that there is vast potential for rice production in The Gambia and that
in the long run the country could not only be self-sufficient in rice, but also be able to export this
commodity to neighboring countries. With a view to establishing a country-wide marketing system
for rice, the Government is now considering a proposal to make the G.O.M.B. and Co-operatives
responsible for purchasing local rice in the same way as groundnuts, with a fixed producer price to the
farmer. In this connection, I must also express our thanks to the Republic of China and its Rice Mission
here for the valuable contribution they are making to increase our rice production.
21. I should also like to draw your attention to the Edgar-Masri cassava project which already
has about 200 acres planted with cassava and is further purchasing cassava produced by farmers at a
guaranteed price of 4. 10s. per ton. Cassava is fast becoming an important cash crop and a source of
income to the farmer. About 2.000 acres have already been planted with cassava by the farmers them-
selves. The firm is working on the basis of advice given by the Tropical Products Institute in London
and has negotiated with a British firm to sell gari. So far, some 60 tons (value 2,000) of fresh produce
have been exported and it is hoped that a further 400 tons will be exported in the second half of 1969
in addition to 300 tons of processed produce. The estimated value of this will be approximately 30,000,
and a target of 75,000 has been set for export in 1970.

22. A total labour force of about 50 men have been engaged since the beginning of 1969 and
this is to increase considerably within the next year.

23. As this is a promising venture, the Government has granted it a loan of 7,500 repayable
within five years. This amount will be paid directly to a manufacturer in the United Kingdom for the
supply of cassava processing plant and machinery. It is noteworthy that the Company itself has pro-
vided over 15,000 as fixed capital for this project in addition to a 2,000 working capital. I should like
to say, at this stage, that the Government will consider assisting other ventures that are loan-worthy
and will similarly contribute to the country's economic development.

24. The Limes Pilot Project which was initiated in 1967 and to which I made reference in my
last Budget Speech is now yielding fruitful results. The Government is determined to give maximum
support for this project, and it is envisaged that over 200 tons of limes would be handled by a new
crushing machine in 1969/70. Already an appreciable quantity of lime juice and oil has been exported.

Livestock and Fisheries.
25. Another important development to which I should lke to draw your attention, Sir, is that
unlike in the past nearly all the cattle slaughtered for beef at Bathurst at present are Gambian. The
Gambia has about 232,695 heads of cattle which is increasing at the rate of 5.2 per cent per annum.
We should therefore not only be able to meet all our beef requirements from local cattle, but also
develop an export market. In this connection, I should like to mention that arrangements are now
being made to export cattle. This you will agree, Sir, is most encouraging.













26. It is hardly necessary for me to point out that The Gambia has a rich fisheries potential.
In March 1968, 2,000 was set aside from the Revolving Loan Fund for fisheries development and 20
loans were approved by the end of that year. The loans were granted mainly to purchase outboard
motors for boats and also for the building of smoking huts. The record of repayment of loans has been
most satisfactory. There are 15 new applications for loans at the moment and the Government has
granted a further allocation of 2,000. There is also growing interest from outside in our fisheries and
the Government is at present conducting negotiations with two parties who wish to make investments
here. If these succeed, we should be able to increase our exports of fish substantially in the near future
through the development of large-scale industrial fishing.

Industry and Tourism.

27. The ILO Regional Adviser for Africa on Small Enterprise Development made a survey of
small enterprises and handicraft industries in The Gambia in November 1968, and has made concrete
recommendations to develop handicrafts and small-scale industries in the country. The Government
is considering his report with a view to implementing his recommendations in the near future.

28. The Government is also considering applications made by potential investors to manu-
facture bakery products, confectionery, iron beds and furniture.

29. In the field of tourism, I am glad to say that work has already started on the new hotel at
Fajara and interest has also been shown by outside investors in another new hotel at Cape St. Mary.
There were about 1,000 tourists from Scandinavia in the last season: in addition, there were one-day
tourists from cruise ships The Government too has taken some measures to develop the tourist industry.
An information office and a curio-dealers market were organised at MacCarthy Square. The Govern-
ment has also accepted the recommendations of a report on tourism by a firm of consultants. I
should also mention that thanks to the efforts of the wife of the American Charge d'Affaires a crafts-
man's village has now been established in the Marina.

Revolving Loan Fund.
30. With the object of financially assisting Gambian small-scale enterprises, the Revolving
Loan Fund was established with 30,000. To date about 23,000 has been lent to 60 persons for various
projects like rice production, jewellery, carpentry, mineral water, transport, motor vehicle repair
workshops, and restaurants. I regret to inform the House, however, that while people have been eager
to borrow money from the Government, their repayment record has been most disappointing. Only
one person has completed all his repayments and the great majority have not even repaid one instalment
of their loans for a number of years. The situation is so serious that the Government is now taking legal
action to recover its dues. The House will readily agree that this is a gloomy picture. The Government
has gone out of its way to help indigenous businessmen but the record so far indicates that the Govern-
ment cannot adopt a liberal loan policy in the future.











6

Trade.
31. The country's exports which rose fiom 5.1 million in 1965/66 to 6.3 million in 1966/67
declined to 5.4 million in 1967/68. Imports on the other hand rose from 5.8 million in 1965/66 to
7.1 million in 1966/67 and to 7.5 million in 1967/68. The Government continues to follow the liberal
trade policy which has been pursued for many years. It is significant to note, however, that the propor-
tion of capital goods and raw materials imported has increased from 14 to 22 per cent of the total
imports between 1964 and 1967/68, indicating that there has been an increase in the tempo of develop-
ment activity in the country.

Prices and Wages.
32. My Ministry has been receiving frequent complaints of price increases, the purpose of
which as far as I could see, can only be to increase profits at the expense of the consumer. I have
appealed several times to our commercial community to exercise restraint. Quite clearly, I cannot
stand-by idle whilst these price increases continue unabated. My Ministry continues to give close
attention to the price level situation and will be instituting action in the near future to control the
prices of a few additional essential commodities. I wish to assure Honourable Members that I am very
much concerned with prices and will not hesitate to extend control four efforts to maintain a continued
price equilibrium and economic stability are threatened.
33. The Bathurst cost of living Index has increased by I I % in the nine years between 1961 and
1969. In recognition of the fact that there has been an increase in the cost of living, Government
awarded an interim wage increase of I/- per day or 12 per annum to daily paid workers and Category
V Officers in the Public Service with effect from Ist February last and at the same time announced its
intention to appoint a Salaries Commission to review salaries of the Public Service. I am pleased to
inform Honourable Members that a Salaries Commissioner, who will be coming from Ghana, will
shortly be appointed.
Co-operative Bank Subsistence Credit and Crop Finance.
34. The finances of the Co-operative Bank are steadily improving, but the record of loan re-
payments remains unsatisfactory. There has been a gradual decline in the levels of credit facilities
sought from the Government and the Currency Board. Between 1967/68 and 1968/69, subsistence
credit requirements fell by 78,000, and a further decrease of 109,000 is envisaged for the 1969/70
season. The requirements of crop finance have also been dwindling mainly as a result of improved
transit arrangements.

35. If co-operative finances are to continue to improve it is imperative that more vigorous
efforts should be made to recover outstanding subsistence loans.
Currency and Banking.
36. Consequent to The Gambia becoming a member of the International Monetary Fund the
Government declared a par value of 2.13281 grams of fine gold for the Gambian pound in May 1968;
and this declaration was approved by the Fund in July of the same year. The declared par value is
incorporated in the Bill entitled an Act to amend the Currency Act.














37. It is the Government's intention to replace the existing Currency Board with a central
bank in this country, to provide a stimulus to economic growth and development. The experience of
practically all ex-British colonies confirms that economic development in these countries was accelerated
after the establishment of their own indigenous commercial and central banks.

38. The central bank envisaged will guide and assist our commercial banks, control the supply,
availability and cost of credit, encourage domestic savings and build up a market for government
loans. It is the Government's intention to seek the advice of the International Monetary Fund on the
establishment of a central bank. As a preliminary step towards the accomplishment of this aim, we
intend to make a few amendments to the Currency Act to give greater flexibility and scope to the
Currency Board. I will be submitting these amendments in the form of a draft bill for Parliament's
consideration at this meeting.

39. In my last Budget Speech, I drew attention to the fact that only one banking company -
the Standard Bank of West Africa -was then in existence in this country and I undertook to keep the
House informed of positive developments relating to the intention of certain banks to establish branches
here. Today, I am happy to say (as Honourable Members are undoubtedly already aware) that a branch
of International Bank for Commerce and Industry has been established in Bathurst since December
1968. This bank, with a present staff of fifteen, twelve of whom are Gambians, has, despite its infancy,
already installed operating sections for Savings Account, Foreign Exchange and Current Account.
It intends to expand its services in due course so as to provide adequate banking facilities to meet the
requirements of the country.

The World Economy Primary Commodities.

40. The economic future of primary producing countries generally continues to be precarious
and a source of grave concern. These countries continue to experience the adverse consequences of the
dynamics of the world economy. The unfavourable terms of trade of developing countries and the need
to stabilise prices of primary products at fair and remunerative levels continue to be discussed in inter-
national forums such as the International Monetary Fund/World Bank, United Nations Conference
on Trade and Development and the Economic Commission for Africa, but little concrete results have
materialized. The Gambia will, however, continue to take part in these conferences with a view to
achieving a satisfactory solution to these problems.

41. World price of groundnuts, like other primary commodities, was subject to much fluctua-
tion in recent years. In the current year, however, the price shows an improvement over the previous
years. As this improvement may only be temporary, it should not cause any complacency on our part
and our efforts to diversify the economic base must be intensified. The prospects in the international
markets for the immediate future appear to be as firm as could be expected for the volatile world
market for primary products.













International Liquidity and General World Economy.
42. I would now make a brief reference to the international monetary sphere. For a consider-
able period now the sterling and the dollar have been universally accepted as a means of international
payment and thus a medium of financing international trade. Apart from the fact that these currencies
are subject to strains and stresses as a result of the balance of payments problems of the U.S.A. and
the United Kingdom, it is the experts' view that these two currencies will be inadequate to meet the
requirements of the increasing international trade in the future; in other words, the crisis in inter-
national liquidity is likely to become more acute in the years to come.


43. With a view to increase international liquidity, the I.M.F. has created a new facility
for international payments called Special Drawing Rights. Special reserve assets would be created
and allocations of special drawing rights will be made to individual participants in proportion to their
quotas in the Fund. Countries will be able to use these facilities whenever they have a balance
of payments deficit or a deficiency in their reserves, in much the same manner as they use their holdings
of traditional reserves. The Government has already welcomed the scheme for Special Drawing Rights
and will take urgent steps to avail itself of this facility when the need arises.


International Monetary Fund, International Bank for Reconstruction and Development, etc.
44. A mission from the International Monetary Fund visited the country early in 1968 and a
Mission from the International Bank for Reconstruction and Development made a survey of the
economy towards the end of 1968. As the latter mission was more concerned with the long-term
development of the country, its report is eagerly awaited. There were also visits by a number of
officials from the International Monetary Fund and the International Bank for Reconstruction and
Development in recent months. Two experts from the International Monetary Fund were in The
Gambia for a few days early this year to help us prepare figures on the country's balance of payments.
As a result of their visit, we have sent an officer from my Ministry to the International Monetary
Fund to be trained in this type of work.


45. The Government has also secured the services of the Statistical Adviser of the Common-
wealth Secretariat for a brief period to advise us on the future orientation of the Statistics Division of
my Ministry and to compile important economic data required for planning and formulation of Govern-
ment policy.


46. In addition we have an ILO Adviser who is working towards the development of more
complete and vahd information about our employment levels, trends and growth rate of the labour
force in the country.










9

Commission on International Development.
47. The President of the International Bank for Reconstruction and Development,
Mr. Robert McNamara, announced at last year's Annual Meeting of the Board of Governors the
appointment of the Lester Peaison Commission on International Development. In announcing this
appointment, Mr McNamara said:
"..........This then was the picture of the development world which I found in my first weeks at the
World Bank. A confused but sharply disappointing picture, in which it was difficult to see
what had gone wrong in the past (though something clearly had), or what was the right path
ahead for us.

In these circumstances, I turned to a suggestion which had been put forward by my pre-
decessor, Mr. George Woods one of his many bits of wise advice from which we all, and I
especially, have benefited. This was that we should establish a commission of men well versed
in world affairs, and accustomed to influencing them who would survey the past aid effort;
seek out the lessons it can teach for the future; and then examine that future to see what needs
to be done by rich and poor, developed and underdeveloped alike to promote the economic
well-being of the great majority of mankind. As you know, Mr. Lester Pearson, formerly
Prime Minister of Canada, has agreed to lead such a survey, which will now proceed indepen-
dently of the Bank.
The Pearson Commission will be turning our eyes to the long future, marking out guide-
lines not just for a decade but for a whole generation of development that will carry us to the
end of this century. But here are we now, living in 1968, with much that we can and
must do today and tomorrow. It is already clear beyond contradiction that during the first
four-fifths of the Development decade the income gap between the developed and the less
developed countries has increased, is increasing and ought to be diminished. But it is equally
clear that the political will to foster development has weakened, is weakening further, and
needs desperately to be strengthened.

What can the Bank do in this situation? I have been determined on one thing: that the
Bank can and will act; it will not share in the general paralysis which is afflicting aid efforts
in so many parts of the world. I do not believe that the Bank can go it alone and do the job
of development that needs to be done around the world by itself; but I do believe that it can
provide leadership m that effort, and can show that it is not resources which are lacking for
the richer countries amongst them have resources in plenty but what is lacking, is the will
to employ those resources on the development of the poorer nations.......
48. The Gambia was represented at a meeting of the Lester Pearson Commission which took
place in Abidjan in March this year. Several countries of the West African sub-region were also repre-
sented. Government attaches the utmost importance to the work of the Commission and hopes its
report will be available before this year's Annual Meeting of the World Bank.













Recurrent Revenue and Expenditure 1968/69.
49. The original estimate of revenue for 1968/69 was 2,762,790 but the out-turn for the
financial year is now likely to be 3,942,585 an increase of 1,179,795. This is due mainly to increased
efficiency in tax collection by Government Departments, the large tonnage and good price of ground-
nuts which have stimulated the demand for imports, and an increased collection of sales tax on ground-
nuts.

50. Mr. Speaker, Sir, I should perhaps point out that in an economy like ours, totally dependent
upon a single primary commodity, there is always present a basic financial instabihty. We are at the
mercy of the fickle weather and also the vagaries of the international primary commodity market.
It is possible therefore, that justas this has been a successful financial year, there could be a very sudden
drop in our revenues in the future through the operation of the factors 1 have just mentioned. We must
not therefore take the buoyancy in our revenues this year as a permanent trend. I am sure that Honour-
able Members on both sides of the House would agree with me that it is incumbent upon us to guard
our future financial solvency.

51. The original estimate of expenditure for 1968/69 was 3,145,006 but the revised expenditure
is 3,668,713 an increase in expenditure of 523,707. The main reasons for this increase were a
transfer of 300,000 from the Consolidated Revenue Fund to the Development Fund, an injection of
100,000 into the Rice Stabilisation Fund to subsidise the consumer price of rice, and a refund of
133,200 British Budgetary grant-m-aid. These additional provisions were approved by supplementary
appropriation during this financial year.

Recurrent Revenue and Expenditure Estimates 1969/70.
52. The total revenue estimated to accrue to the national exchequer in 1969/70 is 3,173,220.
If the groundnut tonnage and world price in 1969/70 are similar to those prevailing this year, the
national income of the country will be sufficiently high to create effective demand for imported goods
and local services to a level that will make it possible for the revenue estimate to be realized.

53. In pursuance of the Government's austerity policy, instructions were given during the
preparation of the draft Estimates of Recurrent Expenditure that any increase in establishment must
have received the prior approval of my Ministry during the present financial year; otherwise, proposed
increases in establishment and/or other charges votes must be shown to arise as a result of the com-
pletion of a development project, orjustified as generating extra revenue. No other increases, save for
the most cogent reasons, were accepted. My Ministry will continue to search for every means to increase
economic and financial efficiency so that better services can be provided for the resources that are
put in.

54. It was against this background that the draft Recurrent Estimates of Expenditure for
1969/70, which show a net increase of 110,784 as compared with the original estimate for 1968/69,
were prepared.












55. Honourable Members will observe at page (ii) of the printed Estimates before Parliament
that it is estimated that there will be a budgetary deficit of the order of 82,570 in 1969/70. I am, how-
ever, happy to announce that for the third year in succession it will not be necessary to seek British
budgetary aid. The Revenue Estimates for 1969/70, together with the balance in the Consolidated
Revenue Fund, will be adequate to meet the estimated deficit of 82,570.
DEVELOPMENT EXPENDITURE
1967/68.
56. The Development Expenditure for 1967/68 was 1,030,310. The original provision for the
year was 943,590, but the actual expenditure exceeded the provision by 9.2%. The principal reason
for the large expenditure in 1967/68 was that work was going ahead of schedule on trunk roads on
which 516,294 was spent. This was half the total development expenditure for the year.
1968/69.
57. The original provision of Development Expenditure for 1968/69 was 1,187,700. The
actual expenditure, however, is now expected to be 983,770, the under-expenditure was mainly due to
delays in the approval of projects. In the current financial year the biggest expenditure will be on main
roads. This is expected to be nearly half the total development expenditure for the year.
1969/70.
58. The total provision for Development Expenditure in 1969/70 is 1,255,060. This is the
highest provision for development expenditure made in recent years. The amount that will be spent on
main roads will be comparatively small, slightly over 100,000, but we propose to spend another
100,000 on a new ferry and ancillary equipment required for the Trans-Gambia Ferry. The important
items of expenditure are the Radio Gambia new studios, maternity ward of the Royal Victoria Hospital,
junior secondary schools, electricity supply to new areas, telephone development in the Provinces and
augmentation of the Bathurst water supply.
59. 1970/71 will be the last year of the current four-year Development Programme. The House
will be glad to know that of the 3.3 million loan granted by Britain, there will be about 670,000 left
for the last year as the bulk of it would have been spent by the end of 1969/70.
Sources of Funds.
60. The following gives the sources of funds for development expenditure from 1967/68
to 1969/70:
Estimate
1967/68 1968/69 1969/70
British Development Grant overspilll) .. 10% 2% 0.5%
British Development Loan .. .. .. .. 73% 96% 88%
LocalFunds .. .. .. .. 17% 2% 11%

These figures indicate that the development expenditure has been mainly financed by the British
Development Loan.










12

61. Expenditure from local funds was not insignificant in 1967/68. About 17% of the develop-
ment expenditure was financed from local funds. Although the expenditure from local funds in the
current financial year is insignificant, it will constitute about 11 % of the total in 1969/70.

Tax Proposals.
62. Mr. Speaker, Sir, I now turn to my proposals for raising additional revenue in the next
financial year. Honourable Members will recall that I mentioned earlier in my speech that it is intended
to spend 3,255,790 in 1969/70. If there were no changes in the rates of taxation, we would expect to
collect 3,051,720 and this would leave us with a deficit of 204,070. To meet all the commitments we
have envisaged and to reduce the size of the deficit, we must raise additional revenue. The additional
revenue which I propose to raise by varying the rates of taxation is 121,500, which is really modest.

63. Before indicating the new tax proposals, I must emphasise that the Government's objective
has been to pass as little a burden as possible on to the public. In fact, the Government has taken great
care to avoid taxes on essential commodities and to tax only what might be described as luxury or
inessential articles.

64. I expect that the indirect taxes which I will shortly announce will be passed on to
the consumer, on the commodities in question that are imported as from the date of the publication of
the Tariff Amendment. Existing stocks should, however, be sold at present prices. I will indicate the
exact price increases that should be passed on to the consumer as a result of the proposed changes in
the rates of taxation. I am aware, Sir, that certain sections of the population will use any excuse to
increase their prices to levels higher than the circumstances justify. I do not advise them to do this, as
the Government will take stern measures against them.
65. My first proposal is that the existing rates of import duty on cigarettes of 3/3d (preferential)
and 3/9d (general) per 100 sticks should go up to 3/8d and 4/2d respectively an increase on import
duty of 5d per 100 sticks. This would have the effect of raising the price of a packet of 20 cigarettes to
the consumer by Id only. The extra revenue that is expected to accrue from cigarettes in a full financial
year is 37,800.
66. The next proposal is that the import duty on beer, ale, stout and porter should go up from
5/6d (preferential) and 6/- (general) per gallon to 6/10d and 7/4d per gallon respectively-an increase
in the duty of l/4d per gallon. This would have the effect of increasing the consumer price of the pint
or big bottle of beer and stout by 2d and the half-pint or small bottle by Id. The extra revenue that is
expected to accrue to Government from this source in a full financial year is 9,100.
67. The present rates of import duty on motor vehicles are 15% (preferential) and 30%
(general). It is considered that the differential between the preferential and the general tariff is too wide
and should be narrowed. It is accordingly proposed that the preferential tariff should go up from 15%
to 25 and the general lariff should remain at 30% advalorem. The extra revenue this is expected to
yield in a full financial year is 14,100.














68. Mr. Speaker, Sir, Honourable Members will recall that in July 1968 the import duty on
rice was abolished in view of the fact that Government considered it necessary to subsidise the consumer
price of rice, in order to avoid the full impact of the high world price being passed on to the consumer.
The subsidy element from Government was further augmented by a transfer of 100,000 from the
Consolidated Revenue Fund to the Rice Stabilisation Fund. Since the beginning of this calendar year,
Mr. Speaker, the world price of rice has been on the downward trend and it is now at a point at which
the import duty can be re-introduced without adverselyaffecting the consumer price. Indeed, there
will be a small surplus to be transferred to the Rice Stabilisation Fund for future subsidy, if the need
arises.

69. Mr. Speaker, Sir, I therefore, propose that the import duty on rice should be re-introduced
at its former level, that is 5/- per 100 Ibs. I would repeat and make it quite clear to the House that the
controlled price of rice to the consumer will remain at its present level. The extra revenue that is expected
to accrue to Government as a result of the re-introduction of the import duty on rice will be of the
order of 57,000 in a full financial year.

70. The tariff proposals I have just mentioned in connection with cigarettes, beer, ale, stout
and porter, motor vehicles and rice will be published tomorrow morning in a Tariff Amendment and
will come into immediate effect. A copy of the Tariff Amendment will be laid before Parliament during
this meeting. At the next meeting, I will move a resolution asking Parliament to confirm the Tariff
Amendment.

71. Between 1964 and 1967/68 an average of 6,000 per annum was collected in pool betting
tax, and over 60,000 leaves this country annually as stakes. It is considered time for the Government
revenue to benefit more from this out-flow of money which is of little benefit to our economy. I will,
therefore, be introducing a bill at this Budget Meeting of Parliament to amend the Pool Betting
(Licensing) Act as follows:


To raise the rate of tax from 10% to 15% under section 6(1) of the principal Act;
In addition to the above, I will publish an Order under section 4(3) of the Act varying the
the licences charged under the Schedule to the Act as follows:


Promoter's Licence .. .. from 50 to 100.
Principal Agent's Licence .. from 25 to 50.
Agent's Licence .. .. from 5 to 7. 10s

The extra revenue that is expected to accrue from pool betting as a result of these changes will be
3,500 in a full financial year,




C:






14

72. Thus you will see, Sir, that the increase on taxes is slight. I do not think any Gambian will
object to paying these slightly increased taxes to contribute to the country's financial stability and
progress.




73. Finally, Sir, Government has not been unmindful of the plight of the lower income
groups. In addition to the wage increase which has already been granted and the proposed wages/salaries
revision, I intend to introduce a bill at the next Meeting to amend the Income Tax Act, in order to
provide for the exemption from tax on income of any person not exceeding 200. Under the present
law any person earning 150 and below per annum is not subject to income tax. It is considered that
this amount is too low in the present circumstances of The Gambia. It is, therefore, proposed that the
exemption limit from income tax should be raised from 150 to 200. This would result in a loss of
revenue of about 1,000 per annum. It will, however, provide some measure of relief to a number of
low wage earners.




74. Mr. Speaker, I wish to take this opportunity to thank all those officials with whose co-
operation the draft Estimates were prepared by my Ministry. The Government Printer and his staff
deserve special mention for the excellent work they have done in getting the Printed Estimates out in
time for the Budget Session.




75. In conclusion, Mr. Speaker, I wish to thank you and Members on both sides of the House
for the patient hearing given to me.


Sir, I beg to move.






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