FOR IMMEDIATE RELEASE
29th August, 2021
Senator, the Honourable J. Kwasi Thompson Minister of State for Finance
on the Pre-Election Economic & Fiscal Update
Today, as we continue to recover from Hurricane Dorian and management COVID 19, we see another first for the country. The government released and published online the Pre-Election Economic & Fiscal Update Report as mandated by the Fiscal Responsibility Act, 2018.
This Minnis administration continues its unprecedented commitment to openness and transparency in the public finances of the country. The new culture of openness has seen the release of the first quarterly budget reports, the first annual fiscal strategy reports, the launch of a dedicated budget website, the first annual borrowing plan, and the passage of a package of new public financial management legislation, including a Debt Management Act.
This administration has totally modernized and transformed the framework for fiscal management in ways that that even the most optimistic could not have contemplated just a few years ago. This report will put the country in a firmer and better position to understand our fiscal position going into an election season and immediately after an election. This is not about party politics but simply good governance.
The latest publication, the Pre-Election Economic & Fiscal Update, summarizes the performance of the last fiscal year, where government revenues were $110 million (or 10 percent) higher than budgeted due to a rebounding economy in the second half of the fiscal year. The provisional budget deficit of $1.348 billion is roughly in line with the budgeted deficit target of $1.327 billion that was approved by Parliament – missing the projected target by just 1.6 percent. This performance was achieved despite the substantially increased pending allocations to extend the unemployment and food assistance programmes, and to secure funding for the expansion to the Princess Margaret Hospital. More details on the performance from last fiscal year will be provided in the Fourth Quarter Report for FY 2020/21 being released in the coming days.
Also importantly, unlike in 2017 where an incoming government had to face over $400 million in immediate unmet payables, and another $360 million in unreported arrears, the government elected by the people of The Bahamas on September 16th will have a transparent report on the arrears and payables of the government. The report shows that whoever is elected will not – like before - have to face the prospect of some $800 million in unknown liabilities. We are proud of the management of the fiscal affairs during the worst natural disaster and the worst pandemic we have ever seen -at the same time providing the most social, economic and employment relief in any government’s one term.
As the report details, the government has $64.3 million left on the undisclosed arrears position it inherited from the previous administration, down from the $362 million we first reported in 2018. In spite of Dorian and Covid we have now paid off just $700 million of the last administration’s undeclared bills and commitments. Further, outstanding payables total some $109 million – the equivalent to just under a half-month’s total expenditure based on average total monthly spending from last fiscal year.
These open invoices are being addressed within the normal cash flow of the Treasury, which since January has been bolstered by monthly revenue coming in ahead of budgetary projections. As mentioned earlier, I will have more to say on last year’s fiscal performance and the preliminary numbers for July 2021 when the fourth quarter report for FY2020/2021is released later this week.
I am proud to be part of a government that has so radically improved the public financial management framework of the country – one that has enhanced not only the fiscal performance, but also the reporting on these matters to the Bahamian people.