The joint committee on Ways, Means, Finance and Budget of the House of Representatives and the Liberian Senate has commenced hearings into the draft fiscal 2016/17 National Budget.
The committee, comprising accountants and financial experts, began with an invitation to revenue generating agencies of government, including the Liberia Revenue Authority and Ministry of Finance and Development Planning to discuss how funding could be sourced for the budget to avoid shortfall as it has always been for the past five years.
The fact sheet of the budget indicated that the government has planned to collect in FY2016/17 the total amount of US$555,993,000 – a decline of almost 11% compared to the original approved budget of US$622,743,420 passed for FY2015/16.
According to the fact sheet, the reduction is mainly because of the difficulties with which the Liberian economy is faced. The world market demand has fallen for iron ore and rubber – two top raw materials Liberia sells to the rest of the world.
The sheet also states that even with the decline in the total resource envelope, the government will continue to deliver critical public goods and services, in addition to providing funds for projects designed to keep on implementing the country’s development plan, as enshrined in the Agenda for Transformation or AfT.
The total resource envelope comprises US$495.6m in revenue raised from domestic sources (taxes and non-tax revenue); US$30.2m in grants; and US$30.1m in contingent revenue.
There are good opportunities for improvement in other sectors in the coming budget years. The expected improvement in tax revenue in FY2016/17 will mainly depend on the ongoing community tax sensitization and awareness campaigns on real estate properties (land, houses and other properties).
Total Non-tax revenue of US$96,876,000 is expected to grow by US$35,484,052 or 57.8% compared to US$61,391,948 approved in FY2015/16 budget. This expected growth will be driven by improvements in the performance of State Owned Enterprises (SOEs) like Liberia Petroleum Refining Company, National Port Authority and others.
Total Core Grants are projected at US$30,260,000 in FY2016/17, which is expected from the European Union under the State Building Contract, USAID-FARA, and the Norwegian Government Forestry Agreement. The factsheet further revealed that these figures represent a decrease of 73.6 percent against the FY2015/16 approved budget.
Total Contingent Revenue of US$30,161,000 will come from our domestic revenue streams, driven by increases in tax rates on tobacco, alcoholic beverages and GSM excise. Contingent revenue is the kind of money that government will receive only when certain conditions are met.
This year’s contingent revenue will be collected if the National Legislature approves certain proposals that have been presented by the Executive. . The gradual departure of UNMIL means government needs to spend more money on security, while the coming elections for President and Representatives in 2017 will also add more stress on the budget.
However, the Government of Liberia is still committed to addressing these challenges through policies and actions that will bring positive results. For example, the Government has introduced changes in the way it provides health services to the people using the lessons learnt from Ebola. Spending on medicines, health workers and ambulances has increased.
Meanwhile, following the conclusion of the hearings, the draft budget will be submitted to the plenary of the House of Representatives and onto the Liberian Senate for possible and subsequently for concurrence.
By E. J. Nathaniel Daygbor-Edited by George Barpeen