2006年-世界发展银行全球_The_Gambia_-_Fiscal_Developments_and_the_Agriculture_Sector___Public_Expenditure_Review_Update_49页_414kb

Summary of Report No. 67703-GM: The Gambia - Fiscal Developments and the Agriculture Sector

Core Content

This report provides an analysis of fiscal developments and the agriculture sector in The Gambia, focusing on public expenditure trends, challenges, and opportunities for reform. It outlines the macroeconomic performance, fiscal policy, and specific issues within the agriculture sector, particularly the groundnut industry and extension services.

Main Points

1. Macroeconomic and Fiscal Policy

• Fiscal and Monetary Policies: The Gambia has maintained prudent fiscal and monetary policies since 2002, leading to economic growth, reduced inflation, and stabilized exchange rates.
• Fiscal Performance (2005):
  • The overall fiscal deficit (including grants) reached 8.6% of GDP, surpassing the budget target of 4.7%.
  • The primary fiscal balance was 8.5% of GDP, indicating strong fiscal discipline.
  • Revenue shortfalls and overspending were mainly due to reduced tax on international trade (by 1.2%), increased domestic debt service (by 1.3%), and higher donor-funded development expenditures (by 2.1%).
• 2006 Budget:
  • The overall deficit is targeted at 3.0% of GDP, with a basic primary surplus of 10.0% of GDP.
  • Achieving these targets will require higher domestic revenue, lower interest payments, and reduced externally funded development expenditures.
  • Domestic debt service is expected to decrease from 6.8% to 5.0% of GDP due to lower interest rates.
• Domestic Debt:
  • Domestic public debt reached 35.5% of GDP by the end of 2005, significantly higher than the average of 15% for non-CFA SSA countries.
  • The debt increase was driven by both government borrowing and monetary operations.
  • To reduce domestic debt to 15% of GDP by 2015, sustained domestic savings of 1.4% of GDP are needed, along with potential debt relief mechanisms.

Key Issues in the Agriculture Sector

2. Recurrent Expenditures

• The Department of State for Agriculture (DOSA) receives a share of recurrent expenditures close to the SSA average but lower than the average of all development countries.
• Structural Imbalances in Resource Allocation:
  • Inputs (Fertilizers): The share of inputs in the 2006 budget is 31.1%, the highest in the budget, indicating increased government involvement in supply.
  • Extension Services: The share of extension services dropped from 73.8% in 2001 to 30.3% in 2006, raising concerns about underfunding.
  • Groundnut Sector: Government spending on the groundnut sector reached 134 million dalasis over four years, equivalent to 0.3% of GDP. Despite this, there is no noticeable improvement in sector performance or poverty reduction.

3. Development Expenditures

• Development expenditures for agriculture have declined from 2.1% of total expenditures in 2001 to 0.7% in 2005.
• The decline is attributed to both lower budget allocations and reduced execution rates.
• The 2006 development budget aligns with a strategy of import substitution and export promotion, with a focus on livestock and rice cultivation.

4. Research (NARI)

• Research in the agriculture sector is underfunded and lacks focus, with low funding compared to other SSA countries.
• Personnel costs are high, and the linkages between research and extension services are weak.
• A comprehensive analysis of research impact and effectiveness is recommended.

5. Extension Services

• Staffing levels are adequate according to the ratio of farming households to extension workers.
• However, budget allocations for extension services are below the minimum operating costs.
• The 2006 budget covers only 17.9% of the minimum requirement for crop extension and 20.0% for livestock extension.
• Consolidation of crop and livestock extension services is proposed to reduce costs, but institutional barriers remain.

6. Inputs (Fertilizers)

• The government subsidizes fertilizers by 30–35%, hindering the development of private distribution networks.
• A gradual withdrawal of government involvement in input supply is recommended to allow the private sector to develop.
• Subcontracting fertilizers to private firms is a viable first step.

7. Decentralization

• The Local Government Act (2002) and Local Government Finance and Audit Act (2004) provide a framework for decentralization.
• DOSA has deconcentrated its services, with approximately a third of its staff now working in the field.
• The ultimate goal is to have 60–70% of staff in the field, but local governments lack the capacity to manage increased resources.

Analytical Next Steps

• Agriculture Sector Strategy: The authorities are developing a sector strategy, which should include a comprehensive analysis of constraints.
• Budget Outturn Data: Improved data collection and management are needed, particularly through the implementation of the Integrated Financial Management Information System (IFMIS).
• Civil Service Capacity: A decline in wages and salaries raises concerns about under-resourcing of the public sector. A comprehensive assessment of civil service capacity is recommended.
• Poverty Analysis: The latest household expenditure survey was conducted in 2003, and further analysis is needed to assess poverty impact of public expenditures.

Conclusion

The Gambia has made progress in fiscal and monetary management, but long-term fiscal consolidation is essential to address debt sustainability. The agriculture sector, while receiving adequate recurrent expenditures, faces significant challenges in research, extension services, and input supply. Decentralization efforts are underway, but capacity constraints in local governments remain. A more strategic and efficient allocation of resources is needed to enhance the effectiveness of public expenditures in the agriculture sector and to support sustainable poverty reduction.