November 24, 2024
Once again, the Davis administration has made a major financial move—this time refinancing $300 million in debt as part of a so-called “debt for nature swap.”
They say the plan is to use taxpayer dollars to fund environmental conservation. But, true to form, instead of giving Bahamians the full details of the deal, the Prime Minister has chosen flashy PR and spin over transparency.
This is the perfect moment for the government to address a concern the opposition raised back in September. Why was $200 million from the government’s sinking fund—money meant to pay off this debt and avoid refinancing—used without any prior announcement or explanation?
We made the point at the time that the Prime Minister was in breach of the law, as Section 51(2) of the Public Debt Management Act requires that any planned use of the sinking fund be disclosed by the Minister in parliament during the budget exercise.
Indeed, the Prime Minister must explain why $200 million was used from the sinking fund last fiscal year instead of being left to pay off—and not just refinance—a substantial portion of bonds when nothing in your last year’s annual borrowing plan referenced a drawdown on the sinking fund.
After the Prime Minister explains why we have had to refinance a portion of bond holdings for which money was set aside in the sinking fund to pay off, he then must release the full details of this transaction, inclusive of copies of the related agreements. We remind the government that it is the Bahamian people’s money, and therefore we do not beg a favor when we demand that the government release the full deal.
What is the interest rate, and what is the tenor of this new loan facility?
What was the basis of the $120 million in reported savings that will be channeled to this fund?
What are all the terms and conditions?
What are the terms of reference for the proposed Bahamas Protected Areas Fund?
Who will be responsible for the fund? Which initiatives will be eligible?
How will the funds be accounted for?
How will these activities be reported and audited?
We do not want a repeat of the recent IDB-supported $500 million loan, which according to the government was not to be used to roll over debt but which appears to have absolutely been used for that purpose, consistent with the commentary from the Governor of the Central Bank.
According to the IDB, that loan was also predicated upon the government meeting certain policy initiatives. But the government has so far refused to tell Bahamians which policy initiatives were tied to that financing. Nor have they explained what the $500 million was used for if not to help roll over existing debt.
This administration must end its practice of concealing the people’s business from the very Bahamians who bear the burden of funding these secretive arrangements. Transparency is not optional—it is a duty owed to every citizen of this nation.
Hon Michael C Pintard M.P.
Leader Free National Movement