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BUDGET SPEECH 2004
PROGRAMME BASED BUDGETING FOR EFFICIENT RESOURCE ALLOCATION AND USE WITH A POVERTY REDUCTION DIMENSION
i. Gambia Telecommunication Company (GAMTEL)
Mr. Speaker Sir,
157. Gamtel's total revenue for 2002 showed a significant improvement over the previous year. The audited accounts show total revenue of D594.4, million whilst expenditure totalled D593.9 million, resulting in an after tax profit of around D50,000. This profit is, however, D5 million below the previous year, due to the high interconnection charges (22% of total expenditure) with the two mobile operators. Total investment was D72.9 million mainly for the purchase of telecommunications equipment (D67.2 million) and investment in RASCOM (Regional African Satellite Communications Organization) amounting to D5.75 million.
158. The forecasted revenue for 2004 of D685.03 million exceeds the estimated revenue for 2003 of D612.9 million by D72.0 million, showing an increase of 11.75%. The expenditure expected for 2004 is D578.3 million, compared with estimated expenditure of D509.8 million in 2003, showing an increase of D68.5 million or 13.44%. The increase is largely due to the high cost of foreign exchange to finance the company's operations.
ii. Social Security Housing Finance Corporation (SSHFC)
iii. Gambia Civil Aviation Authority (GCAA)
iv. Gambia International Airline (GIA)
v. Maintenance Service Agency (MSA)
vi. Asset Management Recovery Corporation (AMRC)
163. In the Financial Year Ended 31st December 2002, the Corporation collected D12.8m against budgeted revenue of D12.4m. Although this recovery effort is laudable, the Corporation is experiencing difficulties in recovering unsecured liabilities. Furthermore, there are legal proceedings in the courts involving an amount of over D20 million. It is now evident that about 60% of the outstanding GCDB loans are bad debts, with the remaining 40% representing unsecured debts.
164. Over the years, the AMRC has created a Rents Unit to manage the rented properties forfeited to the State through The Commissions of Inquires. In 2002, the AMRC earned D0.4 million against a budgeted amount of D0.7 million.
vii. Gambia Public Transport Corporation (GPTC)
viii. Gambia Ports Authority (GPA)
166. Turnover of The Gambia Ports Authority operations has risen by 54 percent from D150million in 2001 to D231 million in 2002. Operating profit increased from D61 million in 2001 to D103 million in 2002, representing an increase of 69 percent. Fixed assets as at 2002 stood at D363 million, compared with D346 million in 2001. This represents a 5 percent increase in the acquisition of new assets.
167. Despite the satisfactory financial performance achieved in 2002, increase in debt service charges together with the depreciation of the Dalasi had impacted negatively on GPA`s profitability level. Gross debt increased by 108 percent from D173 million in 2001 to D360 million in 2002. Consequently, profit before tax increased from by 29% from D31 million in 2001 to D40 million in 2002.
ix. National Water and Electricity Company ( NAWEC)
167. The year 2002 has been another difficult period for NAWEC due to the high fuel prices and the depreciation of the Dalasi. Nawec incurred a loss of D191 million for the period, of which D101 million is due to exchange rate losses on external debt payment. The low tariff cannot cover operating expenses and this is amply demonstrated by comparing NAWEC's unit production cost (one unit is equivalent to a kilowatt hour) of electricity of D3.44 to the average tariff at the time of D2.00 per unit. It is worth mentioning that the estimated production cost does not include any element for the cost of the older engines, and no margin.