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2024 – 2025 Estimates debate

Ryan Straughn and Mia Mottley

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The 2024-2025 Barbados Estimates is currently being discussed (debated) in parliament. Not many Barbadians tune in for what should be an important exercise. This is how government plans to allocate monies to run the operations of respective ministries for the financial year.

Immediately catching the eye this year is that total expenditure exceeds revenue by a whopping $943,324,667. Several views are already being shared as to how government plans to finance the shortfall whether by refinancing debt or debt restructure.

2024-2025 Estimates
Click on the image to read 2024-2025 Estimates

We can use this space to share views on the worrying and recurring issue of government running huge annual budget deficits and levels of foreign and domestic debt. The Governor of the Central Bank Kevin Greenidge and government talking heads assure us the economy is operating at a capacity to easily service existing debt – are we happy about the current state of play?

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60 responses to “2024 – 2025 Estimates debate”

  1. William Skinner Avatar
    William Skinner

    @ David
    The term to use for our economic condition is : debt-ridden.

  2. David Avatar
    David

    Brace for backlash

    Analysts: Govt’s $1b spending hike a concern

    by COLVILLE MOUNSEY

    colvillemounsey@nationnews.com

    BARBADIANS ARE BEING TOLD to brace for the possibility of more taxes, given that Government has ramped up its expenditure for the next fiscal year.

    Additionally, economist Jeremy Stephen is of the view that based on this year’s Estimates, Barbados could be looking at another debt refinancing “somewhere down the line”.

    However, Dean of the Faculty of Social Sciences Professor Troy Lorde said while the increased expenditure has the positive impact of spurring economic activity, more Government spending could also have the negative effect of putting additional pressure on inflation.

    The analysis of both economists is shared by Opposition Leader Ralph Thorne who said he was concerned “the wide gap between Government’s revenue and expenditure, the fiscal deficit can be made up only by further borrowing or by taxation”.

    Expenditure

    Stephen said: “The preliminary analysis reveals that Government is ramping up its expenditure primarily on a cash basis. Now that means little to me from an accountant and economic background, in the final analysis it does suggest in both cases that there is going to have to be either an uptick in tax revenue, or if the Government is very resolved in fiscal support in the economy, it suggested to me down the line, some form of debt financing has to come up.”

    Government is estimating that its spending will increase by more than $1 billion in the next financial year starting April 1. This is outlined in the Estimates of Expenditure and Revenue for the financial year 2024-2025, which was laid in Parliament on Tuesday ahead of the start of debate on the Appropriation Bill, 2024, in the House of Assembly next Tuesday.

    The increased expenditure includes an additional $237.3 million which the Ministry of Finance, Economic Affairs and Investment is projecting will have to be spent repaying debt, including interest, in the next financial year. The projected total expenditure represents a $1.1 billion increase in overall spending on the cash method of accounting, which is 31.8 per cent higher than the revised figure of $3.48 billion for the 2023-2024 financial year ending March 31.

    Stephen said there must be concern over interest payments, noting that unless interest rates fall, Government might consider a debt restructuring similar to what was undertaken six years ago.

    “The only major concern is that there are serious debt payments that need to be made around 2025 or 2027 and it is looking more and more that some form of debt restructuring may be necessary, possibly on the local side, which is not what any Government would want to do again so close to what was done in 2018. The alternative is to hope that interest rates become more favourable, and you can finance the debt through issuance of more debt,” he added.

    Lorde, on the other hand, said Government expenditure tends to turn over the economy but comes with the caveat of an uptick in the rate at which prices increase.

    “You may see upward inflation as an effect of this Government’s expense. You will see some good from Government spending in terms of the persons that might be hired whether temporarily or not. The thing is that it is a big jump, it’s an almost 32 per cent increase from what we spent the last financial year.”

    “Apart from that, the BERT targets (Barbados Economic Recovery and Transformation) are good. It is proposed that they would have a primary surplus at the end of the year. From a macroeconomic perspective these are good things, the projected deficit for the current year is 1.8 per cent of GDP. These are good things to report but what persons want to see are the things that will affect them in their pockets and persons are not going to get that psychological effect from hearing these Estimates numbers,” Lorde said.

    Thorne said “Government’s failure to curb its borrowing has placed the economy in a difficult place.

    “The increased spending can spur growth, but then it is also inflationary and has implications for our unhealthy debt situation. Government seems to be in a situation of over-dependence on tourism and must now pay attention to the other productive sectors. It stands to reason that there must be concern over interest payments and amortisation payments as well,” Thorne said.

    Source: Nation

  3. David Avatar
    David

    To be honest William the blogmaster bought into the narrative of this government that stabilization was necessary when it took government in 2018. Therefore there was a resignation some borrowing had to be done as well as refinancing of existing debt, restructure, call it what you want.

    However, the appetite this government continues to show for borrowing foreign dollars which believe it or not is negatively impacting confidence in the domestic market is a concern. Even the Governor of the Central Bank expressed concern the increase in interest cost because of upward movement in interest rates. We need to revamp the approach. The government’s position is that the loans are necessary to undertake its program of transformation and position the economy for growth, laudable but…

  4. 555dubstreet Avatar
    555dubstreet

    All things being equal touch wood fingers crossed Barbados is JAM just about managing, but if things get rougher and tougher there is no wiggle room contingency plans or savings for a rainy day.

    Life is a gamble, Barbados fate is in the hands of Global tides.
    Worldwide rising costs, higher interest and/or less tourism could scupper plans.

  5. David Avatar
    David

    Subscribe to parliament’s YouTube channel and follow the exchanges.

    https://youtube.com/@barbadosparliamentchannel?si=Bqr03ZjlUY2rr50R

  6. William Skinner Avatar
    William Skinner

    @ David
    We were diametrically opposed to going to the IMF but understood why we went. From the very beginning, we were falling for the lies told about a vague ” “home-made” economic policy , that when stripped of the rhetoric , turned out to be the same old IMF program : lay off workers; get rid of state enterprises; increase indirect taxes and so on. In other words , brag about saving foreign reserves and avoiding devaluation, the political spin, while doing nothing to correct the high cost of living or any progressive plan to reduce poverty. We failed to understand that the IMF program , was clear that whatever we did, the targets would not be met until 2035. We behaved as if it was a six weeks fix.
    Along came COVID and we dealt with it quite well. We also realized that it crippled tourism and we needed to really reset rather than come with sweet sounding cliches. We opted to return to the same old playbook and political rubbish , about not how we were running the country but comforting ourselves ,that if others were , it would be worst !
    And here we are today, putting everything into the same vulnerable tourism basket , with its shaky bottom , while refusing to build our manufacturing and small business sectors, that will create sustainable employment. We are now measuring progress, not by how badly we are doing but how badly it could have been.
    We are simply a debt-ridden country.

  7. John A Avatar
    John A

    @ David

    Well there are only 4 ways out of this.

    One is spend less than you earn. NOT GOING HAPPEN

    restructure economy and increase productivity per employee. WUHLOSS I DEADING WITH DAT

    borrow more and brek some new taxes off in the Bajan tail to pay for the financing. MY MONEY ON DAT ONE.

    restructure the debt AGAIN. That would mean 2 defaults though, so I dont see we going there, cause bajan paper would be as valuable then as used toilet paper.

    Pick one wunna like and run wid it.

  8. John A Avatar
    John A

    @ David

    Just for the record did you recall early last me when we were talking about debt i said dont be surprised if we dont run a billion dollar deficit next year? Well the fowls call me doom and gloom etc etc. So remind me now how far off a billion $900 plus million is again?

    I keep telling you numbers dont lie.

  9. David Avatar
    David

    @John A

    It is a matter of record you, William and a few others were not as optimistic as others with government’s plans at the time. The question today is now- how Dow we finance a burgeoning budget deficit.

  10. Terence M Blackett Avatar
    Terence M Blackett

    THE PARADISE PAPERS (BARBADOS) CITED IN THE GUARDIAN (2017)

    “A number of British celebrities have bought holiday homes in Barbados using offshore companies that allow them to avoid paying local taxes when they sell their property, the Paradise Papers reveal.

    The documents show a host of Britons own property on the island via companies set up in the British Virgin Islands (BVI) – a method that has legal tax advantages.

    One of those who appears to have used the arrangement is the Match of the Day host and former England football captain, Gary Lineker.

    Stamp duty is only payable in Barbados when a home is sold, but using this structure, it is possible to avoid paying the tax.

    The issue of giving tax breaks to foreigners is provoking concern in Barbados, with the country in the midst of an economic crisis. Ballooning debt has led to steep and highly divisive tax rises across the board.

    “We plan to institute a system where tax avoidance will be challenging, very, very difficult,” said Grenville Phillips, the founder of Solutions Barbados, a political action group which will field candidates in all 30 parliamentary constituencies in next year’s general election. It has made tax reform a central plank of its election manifesto.”

    https://www.theguardian.com/news/2017/nov/09/revealed-scheme-gary-lineker-tax-barbados-home

    https://taxsummaries.pwc.com/barbados/corporate/taxes-on-corporate-income

    7 YEARS LATER, BARBADOS IS FULL OF MONEY – SADLY, IT IS IN THE HANDS OF THOSE WHO CAN PAY FOR THEIR ANONYMITY…

    So while the #MottleyCrewGOV* borrows to the hilt to pay Peter by taking vast sums from Paul – the maddening intrigue of the “GIANT PONZI SCAM” continues with the working class man at the receiving end of this massive “CON-JOB”!!!

  11. 555dubstreet Avatar
    555dubstreet

    Bankruptcy and Insolvency is one way to relieve debt.
    Debt management services is a longer route and restrictive.
    Obtaining (more) credit is the easiest option and is what most households and nations do to survive.

  12. 555dubstreet Avatar
    555dubstreet

    “Immediately catching the eye this year is that total expenditure exceeds revenue by a whopping $943,324,667. Several views are already being shared as to how government plans to finance the shortfall whether by refinancing debt or debt restructure.”

    what caught my eye is how the words in this paragraph zoom in*

    (*) Special EFX for those who don’t read ‘above the line’ subject matter details

  13. John A Avatar
    John A

    @ David.

    The medicine required to reign in spending will not be perscibed at this stage. Political climate too restless and elections soon here. The debt basically at current levels is unservicable without more borrowing. We will not put a dent in the deficit as long as we travel the road we are on.

    You cant borrow your way out of debt.

  14. David Avatar
    David

    @John A

    Didn’t Mascoll one of the financial gurus on government’s team tell the previous administration the same thing?

  15. Hants Avatar
    Hants

    Beggars must be respectful.

    https://barbadostoday.bb/2024/02/21/indias-commerce-minister-says-countries-cant-expect-help-while-attacking-govt/

  16. 555dubstreet Avatar
    555dubstreet

    “You cant borrow your way out of debt.”

    Economies and personal finance are like the sharks that have to keep moving or they will die, it’s about maintaining momentum. Life is like riding a bike to keep your balance you have to keep moving.

  17. David Avatar
    David

    Give Mottley some marks for trying hard, he she trying as hard to influence behavioral change to reduce conspicuous consumption in Barbados?

    It’s time to cancel debt for climate-stricken nations, Barbados leader says – E&E News by POLITICO

    https://www.eenews.net/articles/its-time-to-cancel-debt-for-climate-stricken-nations-barbados-leader-says/

  18. Pachamama Avatar
    Pachamama

    There is no mystery as to why the GoB will seek to bridge the budgetary gap largely by borrowing, maybe by refinancing old debt in addition.

    The mystery is why some are so reluctant to approach the deeper truth.

    For borrowing by central government is the only game in town.

    The USA for example has a national debt of about 35 trillion. And this does not include unfunded liabilities and others which will have the real indebtedness approaching 250 trillion.

    Indeed, more than 20 trillion of this national debt, as measured by the total of budget deficits over 245 years, was accumulated over the last 20 years or so.

    The USA has never had any intention of repaying any of this and anybody who demands direct repayment will be invaded or killed.

    Therefore Barbados, not unlike the rest of the so-called democracies, operating under neoliberalism, must continue to play this high stakes game of Russian roulette while pretending that it is scientifically based.

    Its not!

    Mottley is gambling that, like America, this merry go around while never stop anytime soon.

    This circular flow is well within the system the USA uses to supply elites everywhere with the USD they need for this USD circular flows to continue.

    None of this is real. It’s all make belief!

  19. John A Avatar
    John A

    @ David

    Mascoll knows there is no way out of this that does not involve pain. Its either cut backs on government spending or increase taxation. Pick you poison!

  20. David Avatar
    David

    Independent Senator says tax no longer needed

    Article by
    Barbados Today

    Published on
    February 22, 2024

    Independent Senator Lindell Nurse has urged the government to reconsider the foreign exchange fee on online transactions, arguing that it has outlived its usefulness and is a burden on the cost of imports.

    In a debate Wednesday on the Financial Institutions (Amendment) Bill, Senator Nurse said that the fee, which was implemented by the Democratic Labour Party administration in 2017 to reduce the amount of foreign currency spent by Barbadians on international goods and services, has already served its purpose given that the country’s finances are now in a more stable position.

    He said: “The foreign exchange fee was introduced at a time when there was real difficulty in foreign reserves. I would have thought that the idea was to try to reduce the demand for use of foreign currencies and also to put a damper on trading in these foreign currencies.

    “We have heard from the Governor of the Central Bank, that since then, things have improved substantially in terms of our foreign reserves balances and so on and that the government’s finances are in really good shape. I would suggest now an opportunity at this time could be taken to look at that fee and see if it can be removed. Therefore also helping to reduce the price of goods that is now paid by consumers.”

    ad

    Given the high cost of living, Senator Nurse said the improved economic climate should also be reflected in the exchange fees that citizens continue to pay.

    He told the Senate: “Of course, it has implications for the overall cost of products which are brought into Barbados and traded locally, and of course, it has implications for the number of people now who go and do their shopping online, [or] overseas at all of the various places across the globe. I would like to think that the time has come when the government perhaps should take another look at it.

    “It’s not my recommendation alone; I’ve seen where the IMF itself has suggested that government should look at it and consider removing it. I hope maybe we will hear something in the upcoming Estimates Of Revenue and Expenditure budget debate, that something good is going to happen in that area.” (SB)

  21. David Avatar
    David

    Estimates format concerns Thorne

    By Colville Mounsey

    colvillemounsey@nationnews.com

    Four days before participating in his first Estimates debate since becoming Opposition Leader, Ralph Thorne is raising concerns about its format.

    Since coming to office, the current administration has opted to bring public servants into the ‘Well’ of Parliament to answer questions pertaining to the Estimates of Expenditure and Revenue for the financial year.

    Thorne told the Weekend Nation he was concerned that these technocrats could be opening themselves up to legal jeopardy. He questioned whether parliamentary privilege applies to the public officers as it does for ministers.

    “On the matter of public servants being called upon to speak in Parliament during the Estimates, further questions must be asked as to whether they enjoy immunity from civil suit in respect of anything that they may say. The minister certainly enjoys immunity against civil suits for anything that he or she says during the Estimates,” he said.

    The new political leader of the Democratic Labour Party said public servants were not accountable to Parliament and therefore should not be required to answer questions posed by that branch of Government. Instead, the minister should be required to field all the questions from Parliament, he added.

    “I continue to be concerned about public servants being called upon to answer questions at a parliamentary sitting. Public servants are not accountable to Parliament. They do service under appointment by the President. It is members of Cabinet who are accountable to Parliament. It has always been my view that the minister should take all questions with permission to do quiet consultation with the public servants who may be present to offer technical support.”

    Not enough time

    Thorne also said the allotted time for ministers to be asked questions was not enough.

    “The number of questions permitted of each minister is not enough. I would hope that a decision can be made to extend to me the privilege of more questions than others who may bowl long hops,” he said.

    This is not the first time such concerns were raised, as former Opposition Leader Bishop Joseph Atherley voiced his objection on more than one occasion.

    Reiterating those concerns yesterday, Atherley said the negatives in the current format outweighed the positives.

    Real executives

    “Public servants who are the real executives get an opportunity to highlight their efforts or speak to their challenges. Additionally, they have greater clarity brought to the intent of the figures. However, they have no parliamentary immunity,” he said.

    He said these officers brought to Parliament might be subject to Government or party influence and intimidation.

    “It must be of concern that ministers are somewhat shielded from scrutiny in the arrangement, and some avoid the moment by passing off questions to the public servants. The reality is that much of the exercise can be staged or managed,” he said. Like Thorne, Atherley said enough time was not given to the Opposition to sufficiently interrogate the issues.

    “An Opposition of one has limited opportunity to ask questions, make comment and input the process. Finally, in the parliamentary House context, the professional public servant can be compromised by this process.”

    Source: Nation

  22. William Skinner Avatar
    William Skinner

    Herein lies the problem : Thorne sat on the government benches and watched the political lynching and ruthless political public relations directed at civil servants, while those who faced the electorate pretended to be prosecutors.
    Forcing the public servants to sit in the Well of parliament was to ensure that they carried the blame for the mishaps and bungling of the administration.
    Thorne, having vacated that side now finds the political humiliation of our public servants distasteful.
    We call it the Mark Maloney Syndrome.
    Criticize in Opposition but do the same thing when in government.

  23. David Avatar
    David

    @William

    Thorne’s dilemma can be explained away as all politicians who switch allegiance do – they were uncomfortable during the time but eventually their philosophical beliefs eventually trumped.

  24. Artax Avatar
    Artax

    David, perhaps ‘politcians who switch allegiance’ should explain their interpretation of ‘philosophical beliefs.’ They become ‘uncomfortable’ with the DEMS and join the BEES. They subsequently become ‘uncomfortable’ among the BEES and re-join the DEMS, against the background there weren’t any significant or fundamental political, philosophical or ideological changes or the core organisational cultures of both political parties, over the duration of time they are ‘on the other side.’

  25. David Avatar
    David

    Barbados off FATF grey list

    https://nationnews.com/2024/02/23/barbados-off-fatf-grey-list/

  26. Hants Avatar
    Hants

    Birth tourism a key concern

    Security, infrastructure upgrades planned for polyclinics

  27. Hants Avatar
    Hants

  28. Hants Avatar
    Hants

  29. TLSN Avatar
    TLSN

    Our poor Palestinian brothers and sisters are reliving their personal nakba. Our our nakba is not too far off. Give it a few more years. I am sure a couple of days ago on CBC news, I witnessed a government minister encouraging Barbadian businesses and Bajans to relocate to the other islands. In order to further their opportunities.

    It is patently evident to the naked eye that Barbadians are being displaced. They have sleep walked themselves into become surplus to requirement on the rock.

    https://www.forbes.com/sites/angelinavillaclarke/2023/04/28/eden-grove-a-new-integrated-resort-with-eco-credentials-is-a-first-for-barbados/

  30. TLSN Avatar
    TLSN

    @ David,

    The island is lost! Register to watch the programme.

    https://www.channel4.com/programmes/the-caribbean-billionaires-paradise/on-demand/72121-001

  31. Hants Avatar
    Hants

    zillionaires,

    https://theimperium.life/featured/a-thriving-empire-in-the-heart-of-the-west-coast

  32. Artax Avatar
    Artax

    @ David, what are your thoughts on the closure of LIAT 1974 Ltd. and the proposed new ferry company of BGI, GUY and T&T? Was in St. Lucia for a few weeks. Many people expressed living in fear as a result of escalating gun violence, especially in Vieux Fort. 17 people have been killed so far for the year, most of which seem to be ‘hits.’

  33. David Avatar
    David

    It is a common theme through the Caribbean Artax, you may recall there was a period St. Kitts was out of control. The automatic 6 months entry will pose an issue for our hapless governments. They are happy to be married to the freedom of movement commitment while unable to develop commensurate security monitoring and screening methods to guard our borders.

  34. Artax Avatar
    Artax

    What I’ve realised is many non-nationals seem to be using ‘automatic 6 month entry’ to find employment and remain in Barbados, thereby circumventing the skills certificate procedures. Haitian artisans are working for some of the island’s large construction firms. I also noticed that Jamaicans are being employed as maids, nannies, care-takers of elderly persons, security guards, sales clerks, gas station attendants, shop and bar assistants. Or, they’re into shop and bar businesses. Another interesting development is many of the shops in Baxters Road are operated by non-nationals. But, David, some will argue that Bajans ‘could do the same’ in other islands as well.

  35. Bush Tea Avatar
    Bush Tea

    some will argue that Bajans ‘could do the same’ in other islands as well.
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    ‘some’ ..could argue any shiite!!

    The level of brassbowlery and self-hatred that characterizes Brassbados does NOT exists elsewhere….

    Recall Julie N’s adventure into St Lucia?
    COW also had his hands full there…
    Go and try to set a major operation like Massy, Sandals or even a major hotel, in Trinidad or Jamaica and see how it goes…
    Not even shiite LIAT could we manage to establish successfully in Antigua – VITAL as it was to everyone…

    ONLY in Brassbados are strangers invited to take the crown heights, …while the brass bowls are content to soak up the scraps while braying loudly on brass tacks and on social media…

    What a place!!
    What a curse!!
    Even our own LEADERS are using the ‘bowls’ as topsies…

    OH!!!…What woe is in store for our donkeys….

  36. 555dubstreet Avatar
    555dubstreet

    Some can’t tell the difference between a Bajan and any other Caribbean Islander, they are all true born African descendants.

    Freedom of Movement is a 2 way street and the God Way.
    Borders and Anti-Immigration are the racist Devil way.

    So don’t be a white blight hypocrite mind.
    Be a woke liberated freed mind.
    Like the sons and daughters of God.
    Afroasiatic unity.
    Selah

  37. Artax Avatar
    Artax

    Automotive Art, Harris Paints, Goddard Enterprises and Williams Industries are examples of Barbadian companies that invested in other regional territories, through wholy owned subsidiaries, or as majority or minority shareholders. C.O Williams continues to well in St. Lucia and Antigua. I remember when Ralph Taylor took the Almond Beach hotel brand to SLU. He recently opened SOCO Hotel which, through its ‘farm to table programme,’ will engage with local fisher folk and farmers. The Sun Group also has a hotel in that island named, Bel Jou. Direct Car Rentals is another company with regional branches.

  38. TLSN Avatar
    TLSN

    Having just watched some of the programmes from the show “The Caribbean: Billionaires’ Paradise”. I believe, I will need to add some extra class categories to Barbados list. We need to add fourth, fifth and sixth class to our beleaguered citizens. Don’t forget the boys from the UAE with their sovereign wealth fund have yet to enter our space. They will be here imminently.

    The foreigners arrive in Barbados and are able to create magnificent structures unimpeded by government intervention. In truth, they are aided by government. Not one of them have use the services of the fabled Mark Maloney to assist them to build their dream empires.

    They achieve; we flounder! Everything we touch turns to sand; whilst theirs turns to gold. One group appears to be impeded whilst the other group is given free licence to thrive. You get the picture.

    What see ye, Bush Tea.

  39. Hants Avatar
    Hants

    Covenants.

  40. Hants Avatar
    Hants

    Bajans in the diaspora are invited to build or buy a house and retire in Barbados.

    Does not seem like a good idea unless you have at least half million dollars in cash and a pension.

    I have to stay in Canada and suffer.lol

  41. David Avatar
    David

    https://youtu.be/9YpUFrWgfyI

  42. David Avatar
    David

    https://youtu.be/i-zIrq8P4XQ

  43. David Avatar
    David

    BORROWING SHIFT

    Government plans to seek more domestic financing

    By Shawn Cumberbatch

    shawncumberbatch @nationnews.com

    Government is planning to reduce its foreign borrowing next financial year and expects local investors to fund the bulk of the budget deficit estimated for that period.

    Since the domestic debt restructuring of 2018, the same year it entered the first International Monetary Fund (IMF) programme, Government has relied mainly on foreign financing from the IMF and other multilateral institutions.

    However, while foreign financing is now projected to reach $780.8 million by the end of the current financial year on March 31, the authorities are forecasting that this will fall to $441.6 million in the new financial year which starts on April 1.

    The overall revised financing need for 2023-2024 is $925.2 million, with the domestic contribution projected to be $144 million.

    Government expects the domestic component to surge to $628.1 million in the next financial year as it banks on Barbadian individuals and institutions regaining more of their appetite for Government securities.

    Of the $441.6 million in foreign money Government estimates it will borrow over the next year, the 789-page Estimates of Revenue and Expenditure 2024-2025 which was laid in Parliament last Tuesday, said most will be non-project financing of $227 million from the IMF. Project funding will come from the Inter-American Development Bank ($102.3 million), EXIM Bank of China ($55.4 million), CAF Development Bank of Latin America and the Caribbean ($44.5 million) and the Caribbean Development Fund ($12.4 million).

    The majority of the funding – the $628.1 million – is estimated to come from the sale of BOSS Bonds Plus ($200 million), a category listed as “other” but not specified ($128.1 million), debentures ($100 million) treasury bills ($100 million), and Series J Bonds ($100 million).

    The Medium Term Debt Management Strategy 2023/2024 to 2025-2026 published by the Ministry of Finance states that Government has an “objective of reigniting the domestic securities market”.

    “The success of this strategy will be heavily dependent on the completion of the necessary reforms to satisfy the structural benchmarks and other conditions precedent to access the funding,” it said.

    “Restarting domestic issuance will be a priority for Government during the strategy period. The Government plans to launch a comprehensive programme in which investors are offered a lengthened set of maturity and trading options.

    “The Government intends to begin with limited volumes of Treasury Bills and Notes with maturities of one to five years; as confidence builds, larger volumes and longer maturities will be offered to meet the redemption profile of the existing debt stock,” the Debt Strategy added.

    Government’s expectation is that “demand for domestic issuance is likely to increase as investor confidence grows and amortisations on the existing stock accelerate. This has been boosted by a show of confidence in the Government’s domestic issuances by some commercial banks”.

    Source: Nation

  44. NorthernObserver Avatar
    NorthernObserver

    Gobbledygook from the Nation?
    This projection for local financing is most Sinckleresque. Even down to the untitled source “Other”.
    The GoB projects they will require the funds, but at this point haven’t a clue exactly where they will be obtained. Fair enough.
    The accounting befuddles me, as to how the various primary and surplus balances the GoCB claimed, can be actualized.

  45. David Avatar
    David

    Enuff will explain in one word, “transformation’.

  46. NorthernObserver Avatar
    NorthernObserver

    David
    It is a useful term.
    I see JBonds mentioned. In the past large amounts owing to the NIS and eminent domain acquisitions were ‘transformed’ from aged Accounts Payable to “PAID” by issuing JBonds as payment.
    That JBonds appears as it does, either means they are other payables in need of transformation, or, some part of JBonds are to be refinanced ( another version of transformation)

  47. David Avatar
    David

    NO do not be surprised if government comes up with a ‘creative’ plan to leverage funds saved by Barbadians in the financial system and or increase statutory requirements by FIs. They have been hinting at it for a long time.

  48. NorthernObserver Avatar
    NorthernObserver

    David
    You may recall I spoke to this prior to the ’18 election. Flipping TBills to mature in weeks, to longer term Bonds, was a way to manufacture cash, while not being invasive beyond those already in the market.
    There is a fine line, to be navigated.
    And if you ‘hit up’ the same ones you already have, the result may not be as peaceful as it was before.

  49. David Avatar
    David

    Marshall sees public finance quandary

    A PUBLIC FINANCE QUANDARY is how head of the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES) Professor Don Marshall has characterised this year’s Estimates.

    He explained that with Government’s expenditure, which includes debt payments, applicability of conventional deficit financing could prove challenging in the current economic climate. He pointed out that Barbados’ total debt obligations, including interest payments, are estimated to be $1.06 billion in 2024/2025.

    “This is cause for great concern, as the foreign dollar component of this debt continues to grow. There, too, is a projected $251.9 million fiscal deficit on the cash basis next year.

    “Normally, governments could rely on taxes and fees, Central Bank financing, borrowing from external sources, and a sale of Government assets to finance its deficits and address debt obligations,” Marshall said.

    “The Barbados Government has no easy recourse to Central Bank financing for institutional investors, and the citizenry remains skittish about purchasing Government bonds and securities following the 2018 haircut experience. The reduction in Government transfers, actual and anticipated with respect to the BAMC (Barbados Agricultural Management Company) and Export Barbados, are to be realised. The clamour against the high cost of living also makes the prospect of increasing taxation politically unbearable,” he added.

    On Tuesday, the Government’s Budget, setting out the Estimates of Expenditure and Revenue for the financial year 2024-2025, was laid in Parliament, together with a projected forecast for the current financial year 2023-2024, with parliamentary debate to begin tomorrow.

    Debt exposure

    Marshall said that for the last five years, the Government had come to rely on the International Monetary Fund (IMF) for financing support to, among other matters, sustain the country’s foreign exchange buffer. He added that while such financing adds to its debt stock, it provides gateway for Government to borrow from other external lenders. All the while, the country compounds its foreign debt exposure.

    “The persistent borrowing also entail commitments to financial sector reform and an ongoing fiscal correction that trespasses on the country’s public policy autonomy. This impacts the budgetary conduct of our public and elected officials.

    “Solutions to our challenges in seeking to diversify the economy, stimulate innovationmediated industry, and encourage value-added, sustainable growth must satisfy objectives set out by financial elites. There is everything about the 2024 Estimates of Expenditure that tells us about our development paradoxes marked by our limited range of policy manoeuver, and the negatively dependent relationship Barbados has forged with the IMF,” Marshall said.

    He contended that Government is constrained by the Barbados Economic Recovery and Transformation plan 2.0. He predicted that the restructuring of state-owned enterprises will be a feature of debate on the Appropriation Bill, 2024.

    “When Parliament commences examination of the Appropriations Bill, 2024, through a series of questions and answers, no doubt the preoccupation will be about expenditure allocations, actual and pending expenditure adjustments in statutory corporations such as the recently closed BAMC and its successor company and Export Barbados, otherwise known as the Barbados Investment Development Corporation,” Marshall noted (CLM)

    Source: Nation

  50. John A Avatar
    John A

    @Hants

    Make sure and check who build the houses or you might need to bring 2 umbrellas and 4 mops with you! LOL

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