Deputy Prime Minister and Minister of Finance Peter Turnquest defended the government’s decision to borrow nearly $600 million, noting that the money is required to help Bahamians who were affected by Hurricane Dorian.
His comments came after Davis said the country is “headed toward disaster” as the government plans to borrow the funds.
“The fact of the matter is we require the financial resources in order to address the challenges that affect Bahamians who have suffered already and we ought not to play politics with that, that ought to be an issue around what we as leaders in the country ought to be able to find consensus,” Davis said on Saturday.
He added, “And so, his opinion, while we certainly pay attention to his observation, is certainly in the minority and is viewed in the light in which it is given, very astute and very partisan which is unfortunate because at this time when many are suffering from loss — personal and family loss — that the opposition would seek to play politics with this.”
Turnquest advised Davis to acknowledge that The Bahamas’ fiscal situation has in fact improved since the Minnis administration took office in 2017.
“The financial results for the last two and a half years from 2017 have given us the fiscal headroom that we needed in order to do what we are contemplating doing with additional borrowing,” he said.
The deputy prime minister added, “So, I hear his view. It is his view. I think the Bahamian people will see it differently and as I said the objective observers of the situation and the plan that we’ve put forth also see it differently.”
Last 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.
It was announced that week that a combination of lost revenue from Abaco and Grand Bahama due to 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.
As a result, 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.”
Turnquest also shot that down.
“Again, it is interesting that a member of the last administration can talk about the lack of trust,” he said.
“That should be the last thing they talk about. But, again, that [is] his opinion. The facts will show whether he is right or whether this government is correct.”