The Tribune

By DENISE MAYCOCK

Tribune Freeport Reporter

dmaycock@tribunemedia.net

East Grand Bahama MP Kwasi Thompson urged the government to be transparent with the Bahamian people regarding a $500m loan, insisting explanations provided do not make sense.

“If the government continues to insist that the $500m is all new borrowing and was not used to finance debt refinancing, then the government must provide evidence of the legal authority for them to do so and explain what it was used to pay for,” he said.

According to Mr Thompson, the Prime Minister had told Parliament and the people that the $500m loan proceeds were not by covenant agreement to be used for debt refinancing but for financing budgetary expenditures throughout the year.

However, he said the government’s published public debt statistical bulletin report shows that the government had to use a portion of the $500m loan proceeds for debt rollovers and not just budget expenditures.

He further stated that the report on page 13 states that the government took on a total of $811.9m in foreign currency loans this fiscal year and used most of that to repay a total of $662.4m in existing debt.

Mr Thompson said the amount substantially exceeds parliament’s authorised sum for new borrowing.

“Simple math would demonstrate that a substantial portion of that $500m loan would have had to be used to facilitate this debt refinancing, he stated. It would have been illegal for the government to use the full $500m for general budgetary expenses.”

He pointed out that on page five of its published Annual Borrowing Plan for the current fiscal year, the government only has parliamentary authority for new borrowing totalling $131.1m.

Mr Thompson stated that the primary purpose of that loan had to help refinance or roll over existing debt.

“There was not and still is not any parliamentary authorisation for the government to borrow more than $131million,” he said.

The MP for East Grand Bahama said the country’s economic growth must be improved.

He said the government changed the midterm budget projections from 5.5% economic growth to 1.1% without explanation. When the Davis administration came to office, he said, it met a growth rate of 14 percent.

Mr Thompson said: “This is part of the problem why Bahamians are not feeling these so-called good times. We in the FNM are convinced that the Bahamas has the capacity for sustained three-plus percent economic growth. Indeed the country needs to target this level of growth to accommodate the school graduates and to achieve higher wages and improved standards of living.”

The FNM MP stressed that more than 1.7 and 1.5 percent over the next three years is needed.

He said debt is a big issue for the country. “Truth is that until we expand growth and fix our creditworthiness, we are in trouble. But this budget is not changing that status quo,” he said.

“This is why we need to see the economic growth plan. The growth potential of the country must be changed. Debt must be reduced for real, not transferred to PPPs. Cost of debt must come down. Policies must change to cause this to happen,” he stressed.

Regarding the PPPs, Mr Thompson accused the Davis administration of ignoring government policy, parliamentary approvals, and lack of fiscal prudence.

He said the PLP administration continues to take on secret, hidden, and unauthorised public debt, hiding behind so-called PPP arrangements to deliver infrastructure projects. The Davis administration is entering into more and more secret deals, he said.

Mr Thompson indicated that they are in breach of the present PPP Policy created and published by the FNM in 2018 to ensure transparency. He said: “On your secret off-book deals, you are contracting with the vendors to pay for the work in installments over several years, usually with interest rates much higher than the government would be able to secure from agencies that lend for public infrastructure. And they are no bid and secret!”

The 2018 Bahamas Government Policy indicates information about PPP projects and the programme’s performance is publicly available. The PPP information would be subject to the Freedom of Information Act.