The Tribune

BY NEIL HARTNELL

TRIBUNE Business Editor

nhartnell@tribunemedia.net

THE BAHAMAS needs to “strengthen governance” over public sector assets given the Government’s “limited ability” to track and value all that it actually owns, an Inter-American Development Bank (IDB) report has warned.

The multilateral lender, unveiling a project to strengthen the Government’s institutional management of the public finances and assets, asserted that “a co-ordinated, prioritised and sequenced reform agenda” must now be implemented to translate multiple identified opportunities for change into actual action.

The Government, too, agrees that its institutional financial management capabilities must be strengthened. Simon Wilson, the Ministry of Finance’s financial secretary, in a July 13, 2026, letter requesting the IDB’s support, wrote: “The initiative will modernise public financial management systems and asset governance through secure digital solutions, interoperability and data-driven approaches, while promoting transparency, integrity and improved expenditure quality to build trust in state institutions.”

The IDB, in a report obtained by Tribune Business, affirmed that “challenges also persist in fiscal reporting, transparency and accountability” drawing on recent findings by The Bahamas’ own fiscal watchdog, the Fiscal Responsibility Council, plus the likes of the International Monetary Fund (IMF) and other outside agencies.

Giving The Bahamas credit for enacting reforms such as the Public Finance Management Act 2023, plus the National Development Planning Institute Bill 2025 to give effect to the Vision 2040 National Development Plan, the IDB report nevertheless asserted: “Despite these advances, important institutional and implementation gaps remain.

These included “persistent weaknesses in results-based planning, programme and project management, public investment management and the use of performance information throughout the policy cycle”.

“While Vision 2040 established long-term sectoral objectives and indicators, the assessment notes that the National Development Plan has not been linked to a medium-term planning framework, its final version has not been formally published, and sectoral plans remain limited across government institutions,” the IDB added.

“The assessment further identified weaknesses in translating strategic priorities into operational programmes, limited institutional arrangements for policy evaluation and insufficient integration of planning, monitoring and decision-making processes. These constraints continue to limit the Government's ability to align resources with priorities, monitor results and strengthen evidence based public management.”

The IDB added that the Fiscal Responsibility Council had identified “limitations in fiscal reporting, monitoring and the information available to assess compliance with fiscal responsibility objectives”, while other studies had exposed “shortcomings in the availability, quality, timeliness and use of data for fiscal analysis and decision making”.

“Although aggregate fiscal management and debt indicators have improved, deficiencies in reporting, accountability and oversight continue to affect expenditure quality and the Government's capacity to identify, monitor and manage fiscal risks across the public sector,” the multilateral lender added, identifying the Government’s management of its own assets as a key area requiring improvement.

“Public asset management and public sector accounting practices represent another important area for strengthening,” the IDB asserted. “Available evidence indicates that public entities do not consistently maintain comprehensive asset registers, inventory systems or supporting documentation for capital assets, limiting the Government's ability to accurately identify, value, monitor and report public assets.

“The Office of the Auditor General has highlighted weaknesses in asset recording, inventory management and supporting documentation, while the Fiscal Responsibility Council has noted the Government's limited capacity to estimate public sector net worth and produce comprehensive balance sheet information.

“In addition, financial reporting remains predominantly cash-based, limiting visibility over public assets, liabilities, contingent obligations and long-term fiscal risks. Although ongoing reforms, including implementation of an Enterprise Resource Planning (ERP) platform and modernisation of the Public Finance Management framework, provide an enabling environment for reform, further efforts are required to strengthen asset governance, improve financial reporting and support a gradual transition toward accrual-based accounting.”

The IDB report has emerged after it was revealed that the Davis administration quietly changed the fiscal forecasts for both the closed 2025-2026 fiscal year, as well as the current 2026-2027 Budget period, at the last minute with no official announcement.

The Davis administration, via revisions unveiled after the House of Assembly had completed its May Budget debate, lowered the size of the predicted surplus for the recently-closed 2025-2026 fiscal year by some $42.8m in a signal that it is likely to miss the original $75.5m target. The move trimmed the forecast surplus, which measures by how much tax and other revenue income exceeds public spending, to some $32.7m.

The narrowed surplus, which would still be a positive achievement if attained, is forecast to result from $239.2m in additional total government spending not factored into the original 2025-2026 Budget. The extra $185.6m in recurrent or fixed-cost expenditure, plus a further $53.6m in unanticipated capital spending, is projected to exceed the extra $196.5m in revenues which will take the Government’s annual income beyond the $4bn mark and beat its original tax target.

However, while the 2025-2026 changes were disclosed, this occurred after the Budget debate had ended thus giving the Opposition little time to assess and challenge them. No explanation for the revisions was provided, and the alterations were not brought to the Bahamian people’s attention, although a 2025-2026 supplementary Budget was posted on the Government’s fiscal website absent any announcement on its release.

The 2025-2026 revisions were compounded by the Government’s move to also adjust projections for the current 2026-2027 fiscal year just one month after the initial forecasts were first revealed by Michael Halkitis, minister of finance, in the aftermath of his end-May Budget presentation.

Research by Tribune Business shows that the Davis administration has increased the Budget surplus projected for the present fiscal year by 30.6 percent, or $68.3m, to $291.4m as compared to the initial $223.1m. This positive outcome is forecast to be achieved despite a less optimistic revenue outturn, with the Government’s total income falling by $103.1m from the initial $4.357bn outturn to $4.254bn, due to a greater drop in public spending.

Recurrent expenditure is now forecast to fall below 2025-2026 levels, hitting $3.58bn as opposed to the now-prior year’s $3.63bn, and representing a $144m reduction from the $3.724bn first predicted for 2026-2027. Capital spending, which is typically dedicated to the Government’s public infrastructure projects, is now pegged at $382.9m - a figure below both the prior year’s revised $420.8m and the $410m originally eyed for 2026-2027.

This newspaper understands that, while the 2025-2026 changes were belatedly disclosed near the end of House of Assembly Budget proceedings, those for the 2026-2027 period were not revealed at all.