As parliamentarians head to the House of Assembly today for the 2021/2022 annual budget presentation, a financial expert yesterday warned that it needs to include a clearly articulated debt management strategy, given the country’s near 100 percent debt-to-GDP ratio.
At the midway point this fiscal year, the value of goods and services in the economy was $9.665 billion in real prices and debt was $9.8 billion – $1.3 billion of which was borrowed this fiscal year alone.
Chief Executive Officer of Fidelity Group Gowon Bowe said this new budget needs to demonstrate exactly how the government intends to meet its obligations to repay its loans and outline how that will impact its operational priorities.
“The government needs to clearly articulate how it sees itself being able to meet its commitments as they come due because there is a tremendous amount of panic, some of it fueled by emotion and mischief makers, but very real in that there is a risk of default. The government needs to clearly articulate that it has looked forward into 2022, 2023 and 2024 and say these are the debt instruments that are coming due, these are our plans in order to make those payments, some of them might roll over, some of them may be paid because the budget is actually projecting sufficient collection in order to meet the payment without having to roll them over,” he said in an interview with Guardian Business yesterday.
“But it needs to be very clear that it’s not just about how do I get to the end of 2022. How do I ensure that all persons are satisfied that I can make payments and meet all of my commitments for the next three years as we come out of this economic recession?
“Secondly, it needs to then articulate that if this is the way I plan on doing that, what does that mean for government priorities in terms of its other expenditure, because I can’t take blood from a stone. So if I am still with limited inflows and resources and I am still having a significant amount of claims on government demanding assistance and demanding concessions, how am I going to balance all of those competing priorities? And what that means is that I have to be very clear as to what my prioritization is, it can’t be that everything under the sun is being done.”
The Ministry of Finance in a statement yesterday said the budget would focus on continuing support for those adversely impacted by Hurricane Dorian and the COVID-19 pandemic, while accelerating economic growth.
Pointing to the accomplishments of his administration’s Resilient Bahamas plan, Prime Minister and Minister of Finance Dr. Hubert Minnis said the government wants Bahamians to not only see that it has a plan, but to clearly understand what that plan has accomplished.
“We have had a strategy to manage the twin crises of Hurricane Dorian and COVID-19 from the very beginning. Through the Resilient Bahamas plan, we channeled significant social support to individuals and communities who needed it most and maintained the country’s economic stability, despite the unprecedented challenges we faced,” he said in the statement.
“We planted the seeds for an accelerated recovery. This new budget will build on the investments we have made over the last year by continuing our social support while implementing new and innovative initiatives that will drive economic growth that is resilient, dynamic and inclusive.”
Minnis continued, “This administration has been dedicated to making public finances more transparent by transforming public finance legislation, instituting critical governance structures and leading on new ways to engage in public outreach. This budget will be no different.”
The government has spent more than $327.7 million on COVID-19 public health and safety measures, unemployment assistance, small business continuity loans and grants, tax credits for small businesses and payroll support under its Resilient Bahamas plan.
According to the Ministry of Finance, to date 72,000 households benefited from the food assistance program; 14,000 workers across 126 businesses were positively impacted by the tax deferral program; 1,020 small businesses were approved for loan and grant financing through the business continuity program; and 1,013 employees across 14 industries were retained or hired by 129 recipients of funding through the Access Accelerator Round 3 grant program.
The post Bowe: Budget must clearly lay out debt management strategy appeared first on The Nassau Guardian.
source https://thenassauguardian.com/bowe-budget-must-clearly-lay-out-debt-management-strategy/
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