The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

Financial services professionals have cited “missed opportunities” and “glaring deficiencies” in the 2021-2022 budget that has been presented to Parliament for approval.

Lawrence Lewis, accountant and partner at Deloitte & Touche (Bahamas), told the Financial Voice panel discussion of the budget: “The biggest thing that I thought was an open opportunity in terms of being missed is the role of financial services.

“There was a lot of talk about tourism, it was small and medium-sized businesses that are all important to the economy. But there was very little discussion, and very little in there, for financial services.” Mr Lewis added that given financial services’ relative importance to the economy as its second largest industry, he felt it was a “missed opportunity” to “propel financial services forward”.

Gowon Bowe, Fidelity Bank (Bahamas) chief executive, complained about the lack of a debt management strategy for the near-$10bn national debt. He said: “When we talk about nearing $10bn in debt, if we are not talking about a debt management strategy in great detail then that’s a glaring deficiency.

“Because if we are turning to persons, and asking them to have faith in us as an economy, that will be able to rebound and be able to pay our obligations as they come due, then it was incumbent upon the administration to very clearly articulate how it was mapping out the debt that has accumulated to levels that we know are not sustainable, and has to be retarded.”

The government has previously asserted that the debt management strategy requested by Mr Bowe will be released after the Public Debt Management Act takes effect on July 1.

Rupert Pinder, an economist who lectures at the University of The Bahamas (UoB), told the panel discussion organised by The Counsellors that the government has not begun the discussion on fiscal reform. He said: “Interest payments right now are about 18 percent of the overall recurrent expenditure, and that is obviously an unsustainable position.

“While in the in the budget, I think there was a passing reference in terms of looking at the expenditure management. There was some passing reference in terms of taxation or tax reform, just by way of passing.

“I think in terms of the watershed period that we’re in, in terms of what’s happening with respect to the budget, I would expect to see more with respect to overall fiscal reform in terms of how to address some of these issues going forward.”

Pamela Ferguson, CFAL’s vice-president of investments, said the government has not determined an “economic growth strategy”. She added: “The government appears to be doubling down on increases in recurrent expenditure. One of the key priorities to growing any economy is public sector infrastructure investment.

“The prime minister/minister of finance actually admitted that they are cutting back on capital expenditure in order to reduce the overall expenditure so that their deficit can go low. Key to any economic growth strategy is investment in public infrastructure, and that was not outlined in terms of how they plan to get us out of the crisis that we are in.”

Hubert Edwards, principal of Next Level Solutions, a Bahamas-based corporate governance and risk management consultancy, said the government had failed to address the issue of energy and Bahamas Power & Light (BPL) effectively. He agreed with Mrs Ferguson that the government needed to put in place a “a clear and unequivocal growth strategy” because “nothing else can fix us”,

“Moving forward from here, we have two options. We either have austerity or growth, and we have to choose one or the other, it’s as simple as that,” Mr Edwards said.