“We are very concerned that this report does not reflect outstanding commitments”
NASSAU, BAHAMAS — Progressive Liberal Party (PLP) Deputy Leader Chester Cooper yesterday expressed concern that the government’s latest fiscal snapshot does not reflect the true state of government finances as he warned that this nation is coming “very close to a debt crisis”.
Cooper, in a statement on the fiscal year 2020/2021 Q4 snapshot report, noted: “We are pleased that the Minnis administration has met its budget revenue target for the first time since coming to office. It is difficult to trust numbers issued by those who consistently miss the mark.
“However, we are concerned by what else the snapshot does and does not show. From where we stand, these numbers mean very little as they don’t reflect the true state of government finances.
“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 added: “We are very concerned that this report does not reflect outstanding commitments for which there has 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.
“We note the $3.2 billion in new borrowing requirements from 2019/20 to 2020/21. 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 (IMF).
“Our sovereign debt is close to $11 billion to date.”
The Exumas and Ragged Island MP further noted: “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.”
According to the report, as a result of the government’s net borrowing activities, the direct charge on the government — exclusive of exchange rate adjustments — increased by $1.7 billion to $9.9 billion or 86.3 percent of GDP at the end of June 2021 as compared to 66 percent of GDP at the end of June 2020.
The government closed fiscal year 2020/2021 with a budget deficit of $1.3 billion, inclusive of $273.3 million in COVID-19-related expenditures and $68 million approved in June by Parliament to build a major multistory extension to Princess Margaret Hospital (PMH).
