Feb 27, 2023

The November and December 2022 Monthly Fiscal Reports have revealed that the Davis

Administration is squandering the benefits of increasing revenues. Sadly with the increase in revenue, they are increasing spending even more and Bahamians continue to suffer. While we are pleased to see the rise in revenue year-over-year in both November and December it is most concerning that we also saw a rise in deficits totaling over 90 Million over the same period last year. Clearly, the Government has taken more from the people but we are in a worse fiscal position.

By their reports, through the midpoint of the fiscal year, while total revenue has increased some $121 million when compared to the previous year, total spending has gone up by $128 million. So even while things are improving the government through the mid-year has made the deficit position worse when compared to the same point last year, tacking on some $275.6 million to the national debt.

The deficit has also increased year-over-year from 269 million in 2021 to 275.6 million in 2022. Given that the deficit has gotten worse even in an improving economy with no pandemic related spending, the Opposition is concerned that the government will not meet its planned budget deficit target; by fiscal year end, we are concerned that we will end up with a larger than projected debt and a deteriorating fiscal situation that will require even more borrowing and more taxes on the Bahamian people.

We again call on the government to curtail its lavish and extravagant spending and instead put priority on the programmes which provide benefits directly to Bahamian families and

communities. The Government is calling on everyone to sacrifice and is unprepared to do the

same. The Central Bank detailed in its December report the government’s “drawdown” of the $232.3 million IMF SDRs. Why didn’t the Ministry of Finance’s report note this as an advance specifically from the Central Bank which it patently is?

Why try to obscure its origin by labeling it simply a foreign currency loan? How is it now a loan when in January, the press statement from the Ministry of Finance claimed it was not “borrowing money” from the Central Bank.

What are the loan terms – the interest rate, the duration? Was money sourced from the IMF itself to monetize these drawing rights? Where is the MOU that was signed between the Ministry of Finance and the Central Bank? Why is an MOU between two public entities a secret? Now that the Ministry in its own report has acknowledged the obvious truth that it is taking the unprecedented step and borrowing money from the Central Bank external reverses – the Minister of Finance must now explain why he pursued what is clearly an illegal advance of funds from the Central Bank contrary to Section 21 of the Central Bank Act. This is breaking the law plain and simple. Claiming that you are going to bring legislation to fix the breaking of the law after the fact is not an acceptable position.

Finally, we are grateful that the Government has finally gotten around to releasing its tardy

Monthly Fiscal Summary Reports for November 2022 and December 2022. It still has not

released the required 2nd Quarter fiscal report covering the period of July to December 2002 which is also late. The Minister of Finance seems to continuously be in violation of the statutory deadlines mandated in Sections 69 and 70 of the Public Finance Management Act. He has taken out a loan from the Central Bank outline of what is allowed in law. The Prime Minister cannot be admonishing others to follow the law when he refuses to do the same.

J. Kwasi Thompson

Member of Parliament East Grand Bahama/Shadow Minister for Finance February 19, 2023

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