With the national debt above $10 billion, Prime Minister and Minister of Finance Philip Davis yesterday pledged that the government will live up to its obligations to avoid any defaults on loans, as predicted by a well-regarded regional economist.
He was responding to recent pronouncements by leading Caribbean economist Marla Dukharan who last week said The Bahamas would be one of two Caribbean nations to next default on its debt.
Davis, who was sworn in as minister of finance on Friday, said he is strategizing with Financial Secretary Simon Wilson on a debt management strategy.
“I may have mentioned at some other occasion that we have brought Mr. Simon Wilson, who is the substantive financial secretary, back in the office and we are now looking and assessing our debt arrangement to determine how we best approach and how we do avoid any default,” he said during a press conference following his return from speaking at the 76th United Nations General Assembly in New York.
“We intend to live up to our obligations and where we are unable to, we intend to renegotiate terms, so as not to be in default.”
The Central Bank of The Bahamas revealed last week that at the end of June, the government’s debt to gross domestic product (GDP) ratio has breached 100 percent as Bahamian dollar debt constituted 54.2 percent of the total, while foreign currency liabilities accounted for the remaining 45.8 percent.
Debt servicing costs are expected to reach $512 million this fiscal year, accounting for 18 percent of the annual budget and the highest in at least three decades.
Following his swearing-in ceremony on Friday, Davis spoke to his priority as the new minister of finance.
“My first order of business is to stabilize our finances and identify how we can get a debt management strategy implemented as quickly as possible, and that is my immediate goal,” he said.
“I asked the substantive financial secretary, in the person of Simon Wilson, to return to office. He has returned to office and we are now talking about ways and means of stabilizing our economy and at the same time, we want to bring relief to our people that are hurting so badly at this time.”
The prime minister also said the government is trying to craft a strategy to implement the promises that were made on the campaign trail including reducing value-added tax (VAT) to 10 percent and constructing a new hospital, among other things.
The post PM: We intend to live up to our obligations or seek to renegotiate terms to avoid default appeared first on The Nassau Guardian.
source https://thenassauguardian.com/pm-we-intend-to-live-up-to-our-obligations-or-seek-to-renegotiate-terms-to-avoid-default/
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