Democratic National Alliance (DNA) Leader Arinthia Komolafe contends the government has steered the country into an economic crisis of “epic proportions” given the post-Hurricane Dorian economic state of affairs of the country.
Komolafe said in a press release that she cannot understand how Deputy Prime Minister and Minister of Finance Peter Turnquest considers that the economic situation the country is currently facing is not “grim”.
“The Bahamas under the Free National Movement (FNM) is at crossroads in an economy that has been steered into a crisis of epic proportions,” Komolafe said.
“Just after the government finally admitted that they have presided over an energy crisis with their oversight of Bahama Power and Light (BPL), the economic outlook is dimmer than it has ever been in recent memory.
“The fiscal deficit for 2019/20 is now projected to be $678 million (5.3 percent of GDP) with expected additional borrowing of $507 million, unemployment is projected to increase to over 13 percent, GDP growth for 2019/20 has been cut to 0.9 percent with negative GDP growth projected for 2020/21 and the national debt is expected to rise to $9.5 billion.
“We find it absolutely amazing and unbelievable that the minister of finance is not of the view that The Bahamas’ financial outlook is grim.”
Komolafe blamed past governments for the current fiscal state of the country, explaining that rating downgrades, the lack of a economic growth plan and the lack of a comprehensive disaster risk management plan have placed The Bahamas in the economic position it now faces after the devastating Hurricane Dorian.
“The Democratic National Alliance has reviewed the recently issued Fiscal Strategy Report (FSR) which was heavy on telling us that we are in financial trouble, but deficient in articulating a coherent strategy for navigating us out of this crisis,” she said.
“Once again, the ignored numerous advice to the government by the DNA comes back to the fore. The FNM’s obsession with taxation and fiscal targets without a corresponding economic growth plan and comprehensive disaster risk management plan has proven to be a colossal failure.
“In multiple communications, we warned the minister of finance that one major hurricane could throw the aggressive fiscal targets off without an accompanying comprehensive disaster risk management plan. Our caution was based on the obvious impact of climate change on The Bahamas, with storms becoming stronger and more intense. It seems the government is now, unfortunately post-Dorian, waking up to this reality when it is too late and they have dug us into this deep financial hole.”
According to an Inter-American Development Bank report, Hurricane Dorian caused an estimate $3.4 billion in damages in The Bahamas and set the government’s fiscal targets back four years.
Komolafe contends that the government’s strategies are “superficial and grossly inadequate while displaying the lack of political will to address the risks identified”.
“While it is conceded that the government could not have prevented the landfall of Hurricane Dorian, the impact could have been mitigated with proper planning and strategy,” Komolafe said.
“The significant setback to the fiscal consolidation plan has led the government to accept that we will not return to compliance with set fiscal targets until 2024/25. This is on the premise and hope that there will not be another major hurricane, Abaco and Grand Bahama will be restored as anticipated, oil prices will hold steady, a global recession will not materialize and geopolitical shocks will not further derail these targets and our fragile economy.”