NASSAU, BAHAMAS — The Opposition’s Shadow Minister for Finance East Grand Bahama MP Kwasi Thompson has called on the Davis administration to confirm whether it has engaged the global financial group Rothschild & Co to provide advisory services on its debt portfolio and if so, to release the terms of the engagement.
Thompson in a statement referred to a report in the Tribune, which claimed that the government has engaged Rothschild & Co to provide advisory services on its debt portfolio.
“Given all the possible implications on the country’s credit risk profile, the government must confirm if it has engaged the services of this company and provide the public with its terms of engagement if so,” said Thompson.
He added: “As always, the Opposition will always support any and all efforts to enhance the country’s debt profile. Nonetheless, we are concerned that we have had no mention of this engagement by the Ministry of Finance in the public sphere, nor did the government indicate its intent to engage private consultants in its 2022 Annual Borrowing Plan just released earlier in July.
“If there is such an engagement, the lack of transparency and clarity on the matter may send an entirely wrong signal to the market. We recognize with concern as well that our listed Bahamian debt bonds continue to trade near historic lows, with the 20/32 series trading at 64.78 cents on the dollar.“
Thompson noted that the bond series have been on a consistent and unrelenting downward trend over the last 10 months.
“None of the announced fiscal plans and strategies of the Davis administration has returned any confidence to the international investor community,” he said.
“This is why we maintain that it is important that the government provide absolute clarity on who it has engaged in respect to the critical issue of debt management, and for what purpose.”
Thompson again called on the government to clearly articulate its medium term fiscal and tax policy plans that provide definitive proposals on how it intends to raise additional revenues and contain public expenditure.
“The government cannot continue to articulate one thing in its fiscal strategy reports and yet do something else completely during the budget exercise,” he said.
“As we have pointed out, doing so is a clear breach of the law as per the Fiscal Responsibility Act. Just as importantly, any discussion about reorganizing and containing debt does not line up to the extravagant spending we see by the PLP with large contingents traveling the globe, high expenditure on new consultants and new staff, and lavish layouts for parties and events.
“Both the Bahamian public and the bond investment community are taking note of the blatant inconsistencies between what the Davis administration says and what the Davis administration does,” Thompson said.
