NASSAU, BAHAMAS — The Opposition is also voicing concern over the government's recent announcement regarding a $500 million commercial loan secured via an Inter-American Development Bank (IDB) guarantee. 

Kwasi Thompson, the Opposition's Shadow Finance Minister, said that the Ministry of Finance's statement on the matter "fails any reasonable measure of transparency and clarity."

"The Government only has budgetary approval from Parliament to take on $131 million in net new borrowing. So, what is the planned use of the $500 million loan? Is the majority of it – some $369 million – just to be used to roll over existing debts? The Government must provide specific details on the use and drawdown schedule of this loan facility," said Thompson.

"If this loan is going to be used principally to pay off an old loan with a new loan, how is that consistent with the claim in the Ministry's statement that the proceeds' will fund eligible budgetary expenses such as infrastructure, education, and social welfare projects.' The government presently has the authority only to borrow up to $131 million in new funding for any budgetary expenses. So clearly, the majority of the proceeds cannot be used for approved budgetary projects. The government must provide clarity on the matter. Why would the government not provide the interest terms and fees related to this facility in their statement? How are we to evaluate any savings without it?"

Thompson pointed out that the government's statement notes that this is a "policy-based guarantee" by the IDB.

"As the term implies, a policy-based facility from any of the multilateral financial entities would require the Bahamian government to commit to one or more policy measures. The government must provide the full details of any policy commitments and conditions it has agreed to with the IDB as part of this arrangement. This information ought to have been forthcoming to accompany the government's announcement of the loan."

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