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Last Updated: Feb 13, 2017 - 1:45:37 AM |
 Standards and Poor’s (S&P) issued an analysis of the state of the Bahamian economy on Friday of last week. The news just hit the media over the last few days for us to be alerted to its publishing.
Of course, the non-downgrade- even though the analysis was off-cycle for The Bahamas, because our true assessment cycles for S&P are typically between August to September every year- is nothing to be thrilled about. While we in the DNA are pleased that this current administration is not doing more damage, or apparently doing enough public relations to please some outsiders that they are not inflicting more damage to the Bahamian Treasury and to the economy in general, we still have a lot of work to be done and work we simply must get done.
The sad fact of the matter is in that the S&P’s assessment only speaks in a positive light to what the International Monetary Fund speaks to in the latter’s Article 4 Summary earlier on this year, and that is that this administration is taxing us to the high heavens with no means of generating real value and real returns for Bahamians, whether they are entrepreneurs or regular citizens looking for employment.
Worst off, S&P maintains their negative outlook for the Bahamas. We expected nothing else sadly, because Bahamians on the ground here see nothing else and hear of nothing else tangible on the horizon. Also, even if we had a foreign investor ready to get off the ground and hire five thousand Bahamians on the first day, it still would not indicate to us in the DNA that those workers would be Bahamian or those workers may in fact be stable employees for the next 18 to 24 months at the very least.
We in the DNA find it very, very sad and depressing that the current administration expresses happiness in saying to the public that they are satisfied that we have not been downgraded. It would be foolhardy for us to suggest that they should be working for us to be upgraded and brought back to prosperity.
Furthermore, we do not trust in the S&P’s analysis that the government’s fiscal consolidation is working effectively as stated because of the mere fact that spending is up and the overall debt is projected to increase, in addition to the Jr. Minister for Finance suggesting that there may be an explosion of borrowing leading up to the end of the fiscal year. All of this makes us in the DNA ask the questions about this fiscal consolidation and how can it be holding firm as suggested, when spending is still way out of control, the deficit, while touted to be reduced, may experience a sudden burst in borrowings by the end of the fiscal year and also when it is patently obvious that there is little to no growth to extract taxes from?
The DNA isn’t into Obeah Economics or Sludgy Mathematics. We want the real scoop with words and figures that add up. For example, the S&P analysis speaks about the government collected $535.6 million in revenues, or approximately 6% of the country's GDP, but has not articulated with any firm detail how Customs Duties were offset and relate that to why government debt is still increasing overall if they are having all of this success with VAT! In addition, Expenditures to GDP increased from 24.6 to 28.2 percentage of GDP since 2012 to 2016 and projected to remain over 27.0 well into 2019- on the debt side, the figures are projected to increase steadily well into 2019.
Furthermore, we are still wondering why the legislation for the Central Revenue Agency -the department supposedly being charged with monitoring VAT- is not even near to being completed. So, if this is the case: Who is collecting VAT and who is responsible for providing the information to agencies like S&P and the IMF?
We encourage the government to brief the Bahamian people yet again on the spending it is about to incur before the end of this fiscal year, what it envisions for the new fiscal year, a proper accounting of what has been spent thus far and make this S&P analysis make sense to their projections and analysis because the issues are not adding up and we need accountability from the government now. We are too grown as a country to have anything any other way!
Youri Kemp
DNA Candidate Garden Hills
DNA Spokesperson for the Economy
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