Progressive Liberal Party (PLP) Deputy Leader Chester Cooper yesterday said the Ministry of Finance’s recently released Fourth Quarter Fiscal Snapshot and Report does not reflect the true state of government finances.
While he said the PLP is pleased the Minnis administration was able to, for the first time, meet its revenue targets, it is difficult to trust the numbers.
“We have repeatedly asked for the government to give transparent data on the Treasury, cash at hand, the state of our overdraft facilities, our sovereign debt, pandemic spending and all other agreements entered into. Yet, nothing has been produced,” Cooper said in a statement yesterday.
“We are very concerned that this report does not reflect outstanding commitments for which there have been no cash outlay, such as contracts and principal payments on loans that would have been incurred during this period for which there have been no payments.”
At the end of June, the national debt stood at $10.35 billion.
The Ministry of Finance said government’s operational activities last fiscal year included a net increase in liabilities of $1.71 billion and the direct charge to government, exclusive of exchange rate adjustments, increased by $718.1 million to $9.91 billion or 86.3 percent of GDP.
In total, the government borrowed $3.07 billion during fiscal year 2020/2021, the majority of which – 1.53 billion – was funded in foreign currency and pushed government liabilities up to $1.72 billion.
“We note the $3.2 billion in new borrowing requirements from 2019/20 to 2020/21,” Cooper said.
“We see an explosion in foreign currency borrowings that now accounts to close to 50 percent of our national debt. This could be problematic, as it means more of our foreign reserves will go to service this foreign debt.
“This is occurring against the backdrop of looming balloon payments for the $600 million loan agreement we entered into last year as well as the $250 million borrowed from the International Monetary Fund. Our sovereign debt is close to $11 billion, to date. We are close to 100 percent debt to GDP. Optimism about July and August revenue collection is not going to change the underlying severity of the situation.
“We are coming very close to a debt crisis and there appears to be no serious economic growth strategy released by this administration that shows how we will service our debt.”
The Ministry of Finance noted that debt amortization payments were higher at $1.36 billion from $826.9 million in the prior year, boosted by repayments of interim funding transactions.
It said the government repaid the US$248.0 million bridge financing out of the proceeds from the US$600 million bond transaction placed last October, as well as $153 million and $7.6 million in foreign currency and Bahamian dollar loans, respectively.
Those Bahamian Dollar repayments included reductions in Central Bank advances which totaled $349.8 million; bonds which total $462.5 million and Treasury note redemptions and conversions of $136.9 million.
The post Cooper: Fiscal snapshot does not reflect true state of government finances appeared first on The Nassau Guardian.
source https://thenassauguardian.com/cooper-fiscal-snapshot-does-not-reflect-true-state-of-government-finances/
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