GAMBIA: FPAC Raises Alarm Over D266 Million in Unpaid SOE Loans, Calls for Stronger Financial Oversight

According to the report, government lending to State-Owned Enterprises currently stands at D6.9 billion. However, the committee noted that there was no evidence that the Ministry of Finance conducted the mandatory fiscal risk assessments before approving the loans.

“The Committee observed that the Government of The Gambia approved state lending to State-Owned Enterprises totaling D6,905,725,800. However, there was no evidence of a fiscal risk assessment carried out by the Ministry of Finance before granting these on-lending facilities to SOEs,” the report stated.

FPAC stressed that compliance with the Public Finance Act must be strengthened to safeguard public resources and ensure prudent financial management. It recommended that the Permanent Secretary at the Ministry of Finance ensure that all future lending arrangements are approved only after the requirements of the Act have been fully met.

“The Committee recommends that the Permanent Secretary, Ministry of Finance, should ensure that before approving lending, the dictates of the Public Finance Act are adhered to,” the report added.

The committee also expressed concern over mounting arrears resulting from the failure of beneficiary SOEs to meet their repayment obligations. According to FPAC, outstanding principal and interest payments owed to the government have accumulated to D266,208,476.71.

Among the projects identified in the report are the Banjul International Airport Improvement Project, the 20MW Brikama Power Station, the Brikama Power Station Project IDP 1, and the Greater Banjul Area Network Upgrade and Expansion Project. The committee noted that entities associated with these projects had repeatedly failed to honor agreed repayment schedules.

“Non-repayment of state lending by State-Owned Enterprises (SOEs): The Committee observed that listed State-Owned Enterprises consistently failed to repay on-lent loans on both principal and interest on their respective due dates to the government, totaling D266,208,476.71,” the report stated.

To address the issue, FPAC recommended that the Ministry of Finance establish and enforce comprehensive policies and procedures governing the repayment of loans extended to SOEs. The committee said more robust accountability measures were needed to prevent further build-up of debt and protect public finances.

FPAC also urged the Minister of Finance to adhere to the provisions of Section 52 of the Public Finance Act which requires the submission of an annual report to the National Assembly on all state debt management operations to include information on all government guarantees, lending activities and other financial arrangements entered into during the previous financial year.

The committee stressed the need for better fiscal oversight, rigorous risk assessments and stronger accountability mechanisms to ensure that state lending arrangements do not expose the government to unnecessary financial risks, and that public funds are managed prudently.