NASSAU, The Bahamas, Thursday July 27, 2017 – Bahamian Prime Minister Dr Hubert Minnis has announced harsh cuts in Government spending as he embarks on a strategy to remedy the country’s fiscal deficit, which is projected to reach $500 million this year.
In a national address last night, Minnis made it clear the Government had to get its financial house in order, with his administration forced to borrow $722 million to finance its operations this fiscal year.
“In addition to reducing public expenditure, we must move to aggressively stimulate economic growth. One measure I announce this evening is that all government ministries will have expenditure cut by ten per cent. There will be no new public sector hiring at this time.
“We will appoint a special committee to advise on state-owned enterprises, with a view to reducing the burden of such enterprises on public finances,” Dr Minnis said.
Blaming the previous Progressive Liberal Party administration for engaging in what he called “recklessness and massive waste”, the Prime Minister also announced that contracts for emoluments, which exceed $100,000 per year, would not be renewed.
Additionally, Government is also reducing its fleet of vehicles.
Insisting that it could not be business as usual, Dr Minnis said each ministry would be stringently monitored and ministers would have to adhere to their budgets.
“The former practice of bypassing the Ministry of Finance and bringing new spending requests directly to Cabinet, without review by the Ministry of Finance, is over,” he said. “We are in a new era of financial discipline.”
The Prime Minister also declared an end to what he called “luxury travel” which he said obtained under the former Perry Christie government.
“The former administration was addicted to luxury travel, often spending extraordinary sums of money on delegations travelling the world at great expense. We will reduce the amount of money spent on foreign travel by government officials,” he promised.
Minnis revealed that a concerted effort would also be made to recover “the people’s money”, announcing that forensic audits would be carried out in government ministries.
The new measures come as international credit ratings agency Moody’s threatened to downgrade the country after Government reported that the island’s debt to GDP ratio was on track to worsen.