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Greater accountability needed to determine national debt

Until all statutory bodies and state owned enterprises provide government with more comprehensive data, determining the status of the nation’s debt, amounts to a “rough estimate.”

Members of the Fiscal Responsibility Oversight Committee (FROC), speaking at a press briefing on Wednesday, presented details of their 2019 report, which was tabled in the House of Representatives at its July 29 sitting.

The 2019 public sector debt is roughly estimated by the FROC at $2.4 billion, with the central government debt accounting for $1.8 billion. The debt of statutory bodies and state owned enterprises is estimated at $166.8 million, based on limited data. While the matter of the $372.1 million Petro Caribe debt awaits a “legal opinion” the FROC treats this debt as part of the public sector debt.

Committee member Zanna Barnard, an economist with the Eastern Caribbean Central Bank, acknowledged progress on compliance with fiscal rules and targets, and that 2019 “ended on a very good note.” She qualified that, stating “we have reservations because complete data is unavailable.”

Fellow committee member Anthony MacLeish, business manager and accountant, said there is no “uniform way” for statutory bodies and state owned entities to report information. He acknowledged efforts by the Ministry of Finance to standardise the process.

“Reporting is, sadly, not up to par,” he told media representatives.  

Outgoing chair Richard Duncan said he believes there is technical assistance available to help these entities put mechanisms in place to provide better financial data.

As the country faces continuing economic and social challenges of the coronavirus pandemic, amidst opening its borders to visitors and recent public defiance of COVID-19 protocols, the government is preparing its Recovery Plan. Prime Minister and Minister of Finance Dr Keith Mitchell told the nation on Monday that most Ministries will have to deal with reduced revenues and streamline their expenditures. He said the recommendations from sub-committees that served as part of the National Task Force for Rebuilding the Grenada Economy are under review.

Committee member Shadel Nyack Compton, attorney at law, said it will be “very important to strictly observe the measures” of the anticipated Recovery Plan.

Duncan, who has served as chair for four years, demits office August 22. In expressing appreciation to the committee and secretariat, Duncan said he expects the Recovery Plan will be in keeping with the Fiscal Responsibility Act, and that the rules and objectives of the plan will impact the 2021 budget.

Duncan also asked “where goeth” major reform initiatives, including national health insurance and pension reform. The FROC report notes that at the end of 2019 there were no provisions for the “implicit contingent liabilities associated with these reforms.”

“These need to be planned and accounted for, and there must be a balance between implementing these developmental priorities and maintaining fiscal responsibility and debt sustainability,” the FROC recommends.

The committee points out that fiscal responsibility and reporting frameworks need to extend beyond the central government to the remaining elements of the public sector; namely the National Insurance Scheme and all state owned entities and statutory bodies.

“This is not only essential for greater transparency, but also to better (provide) or mitigate risks with contingent liabilities,” FROC states in its 2019 report.

The following 13 entities are referenced in the FROC 2019 report: Child Protection Authority, Financial Complex Limited, Grenada Investment Development Corporation, Grenada Bureau of Standards, Grenada Cultural Foundation, Grenada Food and Nutrition Council, Grenada National Stadium Authority, Grenada Postal Corporation, Grenada Tourism Authority, Spice Mas Corporation, Public Utilities Regulatory Commission, TA Marryshow Community College, and the Marketing and National Importing Board.

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