FPAC Urges Finance Ministry to Enforce Public Finance Act as SOEs Owe Government D266.2 Million in Unpaid Loans

By Fatou Sillah

The National Assembly’s Finance and Public Accounts Committee (FPAC) has called on the Ministry of Finance and Economic Affairs (MoFEA) to strengthen oversight and ensure strict compliance with the Public Finance Act following concerns over the failure of several State-Owned Enterprises (SOEs) to repay government on-lent loans totaling more than D266.2 million.

The recommendation is contained in the committee’s review of the Auditor General’s reports on government accounts and public institutions covering the 2021–2024 financial years. The review revealed persistent non-payment of both principal and interest by a number of SOEs that benefited from government lending arrangements.

According to the committee, government lending to SOEs currently stands at D6.9 billion. However, FPAC found no evidence that the Ministry of Finance conducted the required 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.

The committee recommends that the Permanent Secretary of the Ministry of Finance ensure that, before approving lending, the dictates of the Public Finance Act are adhered to.

“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 says.

In response, the committee recommended that the Permanent Secretary at the Ministry of Finance ensure that all future lending arrangements comply fully with the provisions of the Public Finance Act before approval is granted.

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

Among the projects cited were 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 these entities and projects had repeatedly failed to honor repayment schedules for government on-lent loans.

“Non-repayment of state lending by State-Owned Enterprises (SOEs): The Committee observed that listed State-Owned Enterprises (SOEs) consistently failed to repay on-lent loans on both principal and interest on their respective due dates to the government, totaling D 266,208,476.71,” the report stated.

To address the issue, FPAC recommended that the Ministry of Finance establish and enforce adequate policies and procedures governing the repayment of loans extended to SOEs.

The committee further urged the Minister of Finance to comply with Section 52 of the Public Finance Act, which requires the submission of an annual draft report to the National Assembly detailing state debt management operations, government guarantees, lending activities, and other financial arrangements undertaken during the preceding financial year.

FPAC emphasized that improved fiscal oversight, risk assessment, and accountability mechanisms are essential to safeguarding public resources and ensuring that state lending arrangements do not expose the government to unnecessary financial risks.