The Tribune

By Fay Simmons

Tribune Business Reporter

jsimmons@tribunemedia.net

Prime Minister Philip Davis said his administration “front-loaded” capital expenditure during the first half of the 2024/2025 fiscal budget leading to record expenditure early in the budget cycle.

During his mid-year budget contribution, Mr Davis said major capital expenditure was used to facilitate the construction of hospitals in Grand Bahama and New Providence, renovate the Princess Margaret Hospital, conduct roadworks, improve housing access and education investments.

He noted that capital expenditure accounted for 63.9 percent of this year’s fiscal budget, more than 60 percent of those funds were spent over the first half of the fiscal year, compared to the 30 percent that is usually spent in that timeframe.

“As a result, major capital spending was front-loaded within the first half of this fiscal year, and has been a key driver for the growth of expenditure. Capital expenditure for the first half of the fiscal year totalled $220.1m, an $86m increase over the same period in the previous year. Capital expenditure accounted for 63.9 percent of the annual budget target,” said Mr Davis.

“Over the last ten years, capital spending has accounted for an average of approximately 30 percent of its budget within the first half of the fiscal year. This year was the first in over a decade where capital spending has been over 60 percent of its budget target in the first half of the year; nearly double the historical norm”

He said the majority of capital spending was done early in the budget cycle to ensure projects are completed on time and he intends to meet all budget targets as the majority of projects have already been funded.

“This administration made it a priority to improve the efficiency of capital funding where we no longer wait until the last moment to start capital projects, causing fiscal distortions,” said Mr Davis.

“Although we have front-loaded capital funding in the first half of the fiscal year to begin and more efficiently execute projects, we intend to remain within the capital expenditure budget target for the remainder of the fiscal year since projects have already been mostly funded or have planned funding arrangements.”

Mr Davis said major capital expenditure during the first half of the fiscal year included: $36.8m for major roadworks; a $26.8m payment for capital subscriptions, inclusive of $25m to the Development Bank of Latin America and the Caribbean (CAF) as the first tranche in a $50m membership fee; $44.5m for building maintenance and repairs of educational facilities and construction of schools, along with an additional $11.4m for building repairs; $26.3m for acquisition of assets for software, digitisation, and government services; $10.6m for machinery and equipment; $9.2m for Family Island development; $5m for sporting infrastructure development; $5m for airport infrastructure investment; $5m equity contribution to the Grand Bahama Health Centre Development Company; $3.4m for the removal of sunken vessels; and $3.2m on land improvement inclusive of parks and school ground improvements.