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By Dr. Assan Jallow
Disclaimer:
The views, thoughts, and opinions expressed in the text of this article are of the author and do not necessarily reflect the official policy or position of the Ministry of Finance or the Government of The Gambia, nor that of the Honorable Minister of Finance. Moreover, this write-up is borne out of professional courtesy to give the devil of its deserved due and not an induced-praise.
Readers may recall of recent that there has been a plethora of debates and discussions regarding the recent actions of the Hon. Minister of Finance’s position on virement in which some members of the Finance and Public Accounts Select Committee (FPASC) of the National Assembly classified it as a flawed process, thus accusing the Hon. Minister of fraud and acting outside the confines of our national laws.
Allow me let me state that I am not a constitutionalist nor am I an expert on legislative matters, but, my interest in academic discourse on public finance will not allow me to remain silence on a matter of great importance that touches a very fundamental pillar in my academic journey. Public finance is a field that requires tenacity and great reasoning abilities to use the judgment of law and economics based on perspectives and facts under the chemistry of economic realities to direct and implement public policies. What this implies is that public finance is not cast in stones but requires people to learn and understand the subject behind its designs in the economy.
The intervention of the government of the Gambia is highly commendable. It is objectively driven as a temporary public safety net to the vulnerable households and poor families affected by the COVID-19 pandemic. It is, therefore, preposterous for an Honorable Member of the National Assembly to use the theatrics of slander and categorically state that virement is a fraud. I am at a loss hearing such expression being made at the legislative floor as it does not conform to the language of the National Assembly. The Honorable Members of the National Assembly and the public must know that the actions of the Hon. Minister of Finance were legitimate and backed by law and not lore. The people’s representatives (NAMs) must note that the virement of funds cannot be classified as a process of fraud and they must withdraw that statement. It is unacceptable in our Republican constitution as utterances of such statements has the negative effects of triggering public anger, particularly to people who do not understand the ABC or workings of the budgeting process on public funds allocation, use, and reallocation. Virement is different from yearly allocation or reallocation of budgetary appropriations. The former does not require parliamentary approval as it is within the expense of the budgetary cycle. And, that the later does as we have seen over the years of government coming back to Parliament with Supplementary Appropriation Bill (SABs) for approval where the need for urgent funds are badly needed to take care of government business.
It is counter-productive to have an approved appropriation be taken back to Parliament for another approval before expense is initiated. That is bureaucratic and illogical as there is no legal base supporting that proposition because it is outside the tenets of legal reasoning, financial governance and parliamentary oversight responsibilities. We must understand that the statutes of parliamentary obligations, duties and responsibilities goes with objective reasoning and not subjective reactionary tendencies under the influenced of political motivations in the execution of duties prescribed by law. Managing our national fiscus requires sound understanding and mastery of the principles of public finance and fiscal policy as it directly relates to financial resource management.
By law and other related matters established, virement is a legitimate financial process and tool used to transfer allocated resources or funds from one department to another or from one vote to another to address an urgent need of that sector of the economy. It can only become a fraud if the virement process is executed in bad faith with the intent to defraud the state of its resources for personal gratification. And, that isn’t the case! Consequently, the chances of a virement process becoming a nesting cow or financial windfalls for government officials and their cronies is impossible and can only be made possible when the National Assembly fails to scrutinize the expense allocation and reallocation of expended funds.
Let me put a little context on the virement process for the benefit of the readers. A government budget is an important tool for public policy. A budget simply is an estimate of planned future expenditure regarding the programs and activities of a government. These planned future expenditures can be disrupted by unforeseen circumstances and evidence of this is the recent outbreak of the novel coronavirus pandemic. It has disrupted the global supply chain with the resultant-effects of a significantly negative impact on national economies, in which The Gambia is no exception.
Virement of funds or resources within (MDAs) is justifiable and allowed by law. In the Gambia, the Public Finance Act, 2014 is the legal and regulatory framework set forth to provide guidance on the virement process. A virement is a transfer of appropriation within the expenditure items of the budget agencies under the same supervising department or from one budget agency to another (PFA, 2014). This statute guarantees the legal basis for the virement of appropriated funds within the budget cycle or year of the government. Saxena and Ylaoutinen (2016) defined virement as “the transfer of budgetary resources between budget items within appropriations. It does not require legislative authorization.” The authors further argued that virement do not affect the total levels of budgeted expenditures and should not fundamentally alter the component of expenditures appropriated by the legislature. What this means is that a virement is a public financial process undertaken when there is the need for an adjustment to be made within the budgetary cycle to allow additional expenditures with the resolved desires of addressing demand led-pressures of unplanned activities or programs. A classic example of such unfortunate event is the COVID-19 pandemic that requires an immediate rapid response contingency reserve from government to support an urgent humanitarian and relief expenditure. This is exactly what the Hon. Minister of Finance has done.
On the other hand, a virement can only be illegal if the process has been earmarked with the purpose to fundamentally alter the allocation of expenditure appropriated by parliament on wasteful spending spree or claiming to have exhausted the appropriated budgets when in fact the claimed expenses does not correspond to what has been presented to and approved by parliament. That is whence; a virement request is required to be presented to parliament for reconsideration and approval before proceeding with any expense spending.
From the perspective of public finance and based on the provisions of the Public Finance Act, 2014, I can say without a shadow of doubt that the action of the Hon. Minister was legal and justifiable. It cannot be classified as an act of financial malfeasance, defiance or contempt of the National Assembly. Though, I commended our Honorable Members of Parliament in taking the Hon Minister to task as it correlates with the proposition of Schick (2002) who stated that the legislature should take a more proactive role by effectively participating in the government’s budget process. This is a positive sign indicating that the National Assembly members are conscious of their duties and responsibilities regarding the managing and controlling of budgeted funds to avoid the reckless spending culture of the Executive. It is definitely encouraging! Schick (2002), further argued that, “the legislature should drive to discipline public finance by constraining fiscal aggregates and expand its role in revenue and spending policies.” That is because the legislature is an important stakeholder in government’s budget and should be at the forefront of the budgetary process as people’s representatives and due to its entrusted oversight responsibilities to drive accountability, transparency, and financial governance in the budgeting process.
Sadly, it beats the logics of prudent public financial management for people who hold a contrary view to that of the Hon. Minister and officials of the Ministry of Finance are engaging in smear campaigns calling for his resignation or dismissal. What would his resignation or dismissal from government benefit you and your ilk? Nothing at all! It is uncalled for, disingenuous and unprofessional to make outright, damning condemnation, and characterization influenced by political motivations, hate or lack of self-esteem or all combined using the ‘crab ontology’ to see the downfall of a fellow citizen. As rightly put by Sean Covey in one of his seminal lectures, “isn’t it kind of silly to think that tearing someone else down builds you up.” Obviously, it does not and never it shall be in the course of history because those that criticize others are worst than the person they are criticizing. They would have acted insanely with the enigma of financial masturbation if they were in the position of power and authority of the person they are criticizing. It is what we called in the Wolof adage “lii doi nah waar paar sah dafa daaw yaaram’ as anger, arrogance, selfishness, hate, cliques, and prejudice has consumed our hearts with the ‘ME Only’ culture and only God knows where we are headed in this time and age.
Based on the afore mentioned, I have no doubt in my mind that the Hon Minister of Finance has acted with good faith and within the ambits of the Public Finance Act, 2014. This act gives him the authority to effect virement of funds from one department to another to address the seemingly intractable public emergency crisis posed by the novel coronavirus. It is obvious that Members of Parliament need to be assisted to understand the complexes or paradoxes as well as technicalities surrounding the budgeting process to provide avital role.
To conclude, I suggest that the citizens, including our NAMS should take interest in learning the budgetary process of government. This is critical because it will help us all to have a good understanding of the process, make well-informed decisions on allocations and reallocations of appropriated budgets, and hold our government to account. To the Hon. Minister, thank you for your continued service to the nation and for showing professional bravado, valor, and acumen to defend your position and for standing like the rock of Gibraltar, unmoved and not allowing intimidation to change your course of action. I want to be like you when I grow up.
Let Justice guide our actions, to The Gambia ever true!
Reference
Public Finance Act, 2014. Retrieved from https://mofea.gm/public-finance-act-2014
Saxena, S. & Ylaoutinen, S. (2016). Managing Budgetary Virement. IMF, FDA, Washington, DC. Retrieved from the https://www.imf.org/en/Publication/TNM/Issues/2016/12/31/Managing-Budgetary-Virements-3850
Schick, A. (2002). Can National Legislatures Regain an Effective Voice in Budget Policy? OECD Journal on Budgeting, OECD Publishing, vol. 1 (3), pages 15-42. Retrieved from https://ideas.repec.org/s/oec/govkaa/5lmqcr2k6tlr.html