Industry projects to overtake Agriculture on GDP

The minister of Finance and Economic Affairs has said the agricultural sector is anticipated to experience a contraction in 2019 due to poor performance from the most important subsector crops and livestock. He added that both are anticipated to decline to 6.2 and 10.0 percent in 2019, compared to 6.6 and 5.6 percent in the previous year.

Mambury Njie was speaking at the 2020 Budget Speech at the National Assembly on Friday.

He explained that in terms of sector contribution to GDP, agriculture is forecast to account for 18 percent, with industry accounting for 20 percent. “This suggests a structural change in the economy from the previous years as agriculture is now overtaken by industry; the service sector is projected to maintain its lead share to GDP of 55 percent, while the remaining 7 percent is accounted by others,” the minister said.

According to him, growth in the service sector is expected to decline to 3.6 percent in 2019 from 9.9 percent as recorded a year earlier. He added that the major drivers of growth in the sector are anticipated from transport and storage, hotels and restaurants, communication as well as finance and insurance growth for the sector in 2020 is forecast to grow to 4.9 percent, due to wholesale and retail trade, transport and storage hotels and restaurants, communication, finance and insurance.

Mr. Njie said the total revenue and grants for 2020 is estimated at D24.5 billion (25 percent of GDP), 3.2 percent fall from 25.3 billion (29 percent of the GDP) budgeted in 2019.

“Tax revenue is projected to grow in nominal terms to D11.6 billion (11.8 percent of GDP) in 2020, compared to D10.4 billion (11.9 percent of GDP) budgeted in 2019, Non-tax revenue is anticipated to increase to a budget of D2.0 billion in 2019.”

“However, grant inflows is expected to decline during the 2020 fiscal year to D10.8 billion (11 percent of the GDP) in 2020 compared to D13.4 billion (15.3 percent of the GDP) in 2019, in 2020 project grants and budget support are  budgeted at D8.1 billion and D2.7 billion respectively,” he noted.

The minister further stated that total expenditure is expected to decline by 1.7 percent from D28.8 billion in 2019 (33 percent of the GDP) to D28.3 billion (28.8 percent of GDP) in 2020.

He explained that this drop is due to the 9.3 percent decline in the other current expenditure sub-component which was large enough to offset the increases in other expenditure, which is budgeted at D18.2 billion in 2020 compared to D20.1 billion in 2019.

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