Progressive Liberal Party (PLP) Leader Philip Brave Davis said The Bahamas is “headed toward disaster” as the government plans to borrow nearly $600 million, pushing the country’s debt to $8.2 billion by the end of this fiscal year.
His criticism of the Minnis administration’s fiscal performance was in spite of the government’s announcement that revenue intake increased by nearly $92 million during the first six months of the 2019/2020 fiscal year.
“It was just admission and a confession of their terrible handling of the fiscal affairs of this country,” Davis said.
“It is just a complete mess and we are headed toward disaster.”
Earlier this week, the Ministry of Finance released its Six Months Fiscal Snapshot and Report on Budgetary Performance. It revealed the government collected roughly $1.1 billion in revenue, a 9.1 percent increase over the previous year.
Despite the increase, the figures still indicate a significant shortfall for the halfway point in a fiscal year in which the government had originally projected to collect $2.6 billion.
In the House of Assembly on Wednesday, Minister of Finance Peter Turnquest said a combination of lost revenue from Abaco and Grand Bahama due to Hurricane Dorian, along with associated spending and unbudgeted items not related to the storm, is projected to push the country’s fiscal deficit for 2019/2020 to a record $677.5 million.
Turnquest added that the government is projected to borrow an additional $587.9 million to cover the revenue shortfall and expenditure increase.
However, Davis said he is doubtful the government will be able to raise the funds it is hoping to, due to a lack of trust from lenders.
“You can talk about borrowing, but the lenders have to be satisfied that you, as a borrower, will be able to pay back those funds,” he said.
“And one of the elements they look at is the confidence that they can have in those who are managing the fiscal affairs of the entity that is borrowing.
“In this instance, who is managing the fiscal affairs of our country? Are they instilling sufficient confidence in the money market to be able to access the funding that is required? It seems to me that they are being challenged in the money market to raise the kind of funds that they are proposing to raise.”