NASSAU, BAHAMAS – Opposition Shadow Finance Minister Kwasi Thompson has criticized the government’s 2024-2025 mid-year budget review, calling it a ‘carefully crafted illusion’ that fails to address the real financial struggles of Bahamians. According to Thompson, rising costs and increasing crime continue to overshadow the government’s claims of progress.
Thompson stated, “The government’s 2024-2025 mid-year budget review is, in my view, nothing more than a carefully orchestrated illusion designed to mask the harsh reality of struggle, suffering, and stagnation. While the government boasts of progress, families are drowning under the weight of skyrocketing costs, and crime continues to spiral.”
He added, “The government wants us to believe that its fiscal hole is merely the result of front-loading capital spending, but the facts tell a different story. This administration has overspent on recurrent expenditures without any clear strategy to meet its deficit targets. As I recall, this year was supposed to be the year we finally saw a surplus. Instead, the government adjusted the surplus into a deficit. According to the mid-year budget communication, recurrent spending ballooned by $192.3 million year-over-year, while capital spending surged by $86 million. Now, let’s talk about the numbers that, in my view, are not adequately explained. The deficit stands at nearly $400 million—five times the full-year deficit target. The math, as they say, is just not mathing. How is this possible when the government is seeing record revenues? How does the government plan to plug this massive shortfall? Where is the plan to rein in reckless spending? While Bahamians are being asked to control their spending, they are burdened with increased fees and taxes, all while struggling to afford basic necessities. This administration has wasted taxpayers’ dollars.”
Thompson also highlighted the decline in stopover tourism. “The Central Bank’s most recent quarterly economic review, for December 2024, lays bare a grim reality. While total foreign arrivals increased by 15.9 percent, this growth is almost entirely driven by a surge in cruise visitors, who are a lower-spending segment. Meanwhile, the true backbone of our tourism industry—the high-value stopover tourists—plummeted by 3.9 percent, down to just 400,000 passengers in the fourth quarter of 2024. Let me make this point clearer: Yes, overall tourist numbers increased, but that increase was primarily in cruise passengers.”
Thompson argued that while this administration pats itself on the back for the increased cruise arrival numbers, it fails to address the impact of losing high-spending visitors who drive hotel occupancy, fuel the restaurant industry, and sustain Bahamian businesses.
“This government continues to hide behind inflated cruise figures while air arrivals, a direct indicator of economic health, continue to decline. For two years, we have stood in this very place calling on the government to remove VAT from essential food items to combat the cost of living crisis. For two years, we on this side have demanded that VAT be adjusted on food. For two years, we’ve been telling the government that they need to act to address the cost of living crisis, yet they refuse to listen. Two years ago, we warned that the rising cost of food was pushing Bahamian families to the brink,” said Thompson.
He continued: “Now, after years of struggling to put food on their tables, families are told the government has finally decided to reduce VAT on food—but only to five percent. That is not enough. It is simply not enough. The people of this country needed zero VAT on food, and they needed it two years ago. What possible justification could there be for keeping VAT on medication? What possible excuse can you offer to the sick, the elderly, and the most vulnerable in our society who are struggling just to afford their medication?”
