The Minnis administration may need to borrow more than the nearly $600 million that it is currently seeking Parliament’s approval for, Attorney General Carl Bethel said yesterday.
However, he suggested that the government hopes to avoid having to go down that route.
“The government is faced with two challenges, one, to restore its infrastructural services and the ability to provide necessary services to the Bahamian people,” Bethel said in the Senate as he led debate on the mid-year budget.
“It’s a long-standing policy that no island is left alone. We are one island nation, one nation in different parts, spread over a large geographical area, and the fundamental policy has always been that those services that one can get in the capital should, so far as is possible, be extended to every island on an equal basis.
“…It is that which burdens us now as we move forward and we must live up to that commitment, we must live up to that standard.
“So, we are faced immediately with the need to raise $157 million, but it is anticipated that there may have to be further borrowings, but each of those, of course, will be brought to the House as and when required and the appropriate resolutions passed in that chamber and here.
“The point being, though, that the time to act is now.”
According to the revised budget, recurrent expenses are projected to be higher by $157.6 million, bringing the revised estimates to $2,687.6 million.
Government spending for the fiscal year of 2019/2020 is projected to be $308.1 million more than was initially forecast.
The government is projected to borrow an additional $587.9 million to cover the revenue shortfall and expenditure increase due to Hurricane Dorian, among other factors. However, noting that The Bahamas suffered unprecedented loss, Bethel said this round of borrowing is modest.
“This is very minimal borrowing, quite frankly,” he said. “The estimated borrowing needs have been indicated to be in excess of $600 million.
“…The Ministry of Finance has exercised great moderation and great discipline in limiting the current borrowing and we’re gonna see how far this…can take us up until the next budget, without adding further to our borrowings. So, we will see what the next budget produces as we go forward.”
The new round of borrowing is projected to push government debt to a record $8.2 billion, or 64.4 percent of gross domestic product.