PM Minnis has a disaster about to happen in Finance!

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Minister of Finance Peter Turnquest speaking on the 12% Vat hike on Bahamians with the press. file

The Editor 2nd July 2020
Bahamas Press
Nassau Bahamas
Dear Sir,

The statements by Marlon Johnson Acting Financial Secretary in today’s Guardian Business shows once more that those responsible for the prudent fiscal management of our country’s affairs are clueless and delusional.

His statement that “borrowing rates are not dependent on the broader market “are not only dangerous but showcases the incompetence of the Ministry of Finance and by extension the Minister who hired him.

Under the inept management of this duo, the sovereign debt of the Bahamas is now rated as junk. Consequently, bondholders will demand higher returns on their investments because according to Investopedia, “borrowers do not have any other options and the junk bonds carry a higher than average risk of default”.

It appears from Mr. Johnsons inane utterances that the government will be relying on loans from multilateral entities such as the IDB, CDB and the World Bank (IMF) for further borrowings.

I wonder if he thinks that these borrowings will be at preferential rates; interest rates afforded to borrowers with pristine credit ratings; I think not. The government is embarking on a borrowing exercise that may be more the most dangerous course since the Wreck of the Hesperus.

The government is warned that this course of action is fraught with danger and financial pain for Bahamians and we urge that it reconsiders its failed fiscal policies.

Misplaced hope Mr. Johnson is not a strategy.

Sincerely,
Michael J. Brown