The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Opposition's finance spokesman said yesterday Moody's latest assessment should serve as a "wake-up" call to the Minnis administration, warning the next few months will be "critical".

Chester Cooper, the Exuma MP, said in a statement: "Despite the hand-wringing of the prime minister, the labelling of Bahamians as corrupt, the back loading of bills to inflate the prior year's deficit, the firing of countless people from the public service, the unnecessary raising of value-added tax (VAT), the hubris of an adrift finance minister, and the clueless inability to accept that it has borrowed excessively with little to nothing to show for it, the credit rating for The Bahamas is unchanged and the outlook of the economy remains negative."

His comments come after the credit ratings agency on Tuesday maintained the country's Baa3 rating with a negative outlook.

"Moody's points out that though deficits have fallen, debt ratios and actual debt have risen under this administration. But we already knew that and have explained that to this government," said Mr Cooper.

"Moody's appears reticent to get behind the government's efforts at fiscal consolidation and raises doubt that the measures put forward by the Minnis administration will bear fruit. We also already knew this and have meticulously pointed it out. Moody's points out that economic growth is low for The Bahamas - a glaring weakness that we have begged this government to address many, many times."

Mr Cooper noted Moody's had highlighted that contingent liabilities in state-owned enterprises and the Bank of The Bahamas pose a great risk to credit worthiness.

"This comes as the government announced its intention to nationalise a barely functioning hotel for tens of millions of dollars, in order to save jobs - though it has yet to articulate any concrete plan to make this a reality. We reiterate that our faith in this administration running any business is perilously low. Concurrently, this administration's handling of BPL, after condemning the Progressive Liberal's Party's (PLP) management of it, has proven to be disastrous.," said Mr Cooper.

He added: "For better or worse, this government has hinged all our fortunes on the collection of increased revenue through a massive hike in value-added tax and gaming taxes; though they still have not fully implemented a tax on patrons as they admit they did not do sufficient research into the impact of such a measure. They continue to undermine their own revenue targets with half-baked policies and concessions.Moody's has saId in clear language that it will downgrade The Bahamas should this fiscal consolidation plan, replete with holes, not pan out. Were it not for Baha Mar, this administration would have nothing but a series of blunders on its hands."

Mr Cooper said government should consider that Moody's has "extended its probation" and the next few months will be critical.

"Any unplanned large expenditures early in the fiscal year such as the Grand Lucayan hotel acquisition or shortfall in revenue targets will be sure to lead to a downgrade," he said.