The Tribune

By KHRISNA RUSSELL

Tribune Chief Reporter

krussell@tribunemedia.net

FREE National Movement Chairman Dr Duane Sands says the National Insurance Board’s fund has been in a dangerous position for many years, adding its projected six-year depletion time frame was not surprising.

In an interview with The Tribune yesterday, the former Cabinet minister said not only has NIB been used as a “slush fund” over the years, but it was subject to serious government and quasi-government debt.

To make matters worse, Dr Sands said the Davis administration was spending money “like drunken sailors”, which suggested there was not a cash crunch at play.

The FNM chairman weighed in on the situation the day after Minister of State for NIB Myles Laroda told The Tribune that the 11th actuarial review of the fund said it was possible it could be depleted by 2028.

He said the 11th review predicted depletion one year sooner than the 10th report noted.

“I don’t think there is anything surprising about what was said by the minister with responsibility for NIB,” Dr Sands told The Tribune yesterday. “That’s how grave the situation is with NIB. So, I don’t believe the minister broke any new ground.

“The question is whether this government is going to fix it. We have warned from the inception of NIB how NIB has been used as a slush fund ostensibly to fund government projects. We have seen the 9th actuarial report, the 10th actuarial report with basically the same warning that the fund would be bankrupt certainly by 2030 and now we are hearing 2029 (2028). I don’t think we have broken much new ground.

“The challenge is that we don’t have the intestinal fortitude to do what is necessary.

“NIB is heavily invested in government debt and if it’s not government debt it’s quasi-government debt, so government debt of government owned corporations such as Bahamas Mortgage Corporation and NIB has paid for buildings all over the country.

“If you go back to the former minister with responsibility for National Insurance, Shane Gibson, that speech he gave nine years ago to be exact, he would have been dealing with the sad state of affairs of NIB back then.

“I was chairman of the Mortgage Corporation in 2010, 2011 going into election 2012 and I can tell you that NIB’s exposure was significant way back then. With the recent expenditures through the COVID era I believe that NIB is even more exposed and the question is what will this administration do?”

Dr Sands also said: “So, what we find ourselves in as a country is a very, very serious fiscal situation that threatens one of the basic benefits of the Bahamian people. We have kicked this ball down the field over and over and over and now the chickens have come home to roost.

“I am afraid that we are watching this administration spend money like drunken sailors. They are hiring left, right and centre. They are giving ambassadorships to just about anybody.

“Now their spending suggests that we don’t have a cash crunch either now or in the future, but it belies the fact that in very short order we have tens, if not hundreds of millions of dollars that are guaranteed by the government of The Bahamas and you know the people that are going to suffer from the exposure are the people who need NIB the most.”

During an interview with The Tribune on Monday, Mr Laroda said he was of the view that the situation persisted as NIB had run deficits for nearly six years, compounded by the COVID-19 pandemic.