The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition yesterday charged that the $29.2m monthly Budget surplus shown for May 2026 is “fiscal engineering at its finest” and “not even worth the paper they are printed on” given the ongoing National Investment Fund (NIF) controversy.

Dr Duane Sands, the Free National Movement (FNM) chairman, told Tribune Business that the Government “can take that surplus… and file it some place where the sun doesn’t shine” after the Ministry of Finance revealed figures showing that total government revenues, including tax income, exceeded all public spending for May.

This helped narrow the deficit for the first 11 months of the now-closed 2025-2026 fiscal year to $91.4m - a sum that leaves it needing to achieve a nine-figure surplus in June to meet its full-year Budget surplus ambitions. To hit the initial $75.5m target would require a $166.9m surplus for June, a month when spending is typically at its peak, or $124.1m to meet the revised surplus of $32.7m that was unveiled at the fiscal year’s end

Publication of the May figures, though, comes amid the ongoing questions surrounding the Government’s use of the National Investment Fund for some $310.9m worth of spending since June 2025. Kwasi Thompson, the Opposition’s finance spokesman, yesterday challenged whether this outlay is included in the $316.2m of capital expenditure shown in yesterday Ministry of Finance’s report for the 11 months to end-May 2026.

Voicing doubt that it is, the east Grand Bahama MP in a statement to Tribune Business asserted that this “creates a much bigger question” of where this $310.9m is recorded in the Government’s financial accounts given that - by its own admission - the National Investment Fund was not legally set-up and operational when this spending occurred.

As a result, Mr Thompson questioned what The Bahamas’ “true fiscal position” is and argued that the $91.4m deficit shown in the Ministry of Finance’s report for the 11 months to May 2026 “cannot be accepted as a complete picture of the Government’s fiscal position”

Dr Sands, though, was more blunt. Asked how much confidence he has in the latest fiscal numbers amid the National Investment Fund concerns, and multiple unanswered questions, he replied to this newspaper: “Not a drop.” Given that the Fund’s Board, which is the only entity that can open bank accounts on its behalf, had yet to convene, the Opposition chair argued that it had been used to disguise “off-the-books” capital expenditure.

“This is fiscal engineering at its finest,” he said. “I don’t think any reasonable person believes the numbers. Given that there was no legal establishment of a National Investment Fund, and the funds in it not reconciled, you can only say that this ought to be an ‘on balance sheet’ issue.

“If it’s an on balance sheet [spending], we can quibble over the extent of then additional deficit as opposed to the so-called surplus. These numbers are not even worth the piece of paper they are written on…. Anyone who understands even basic accounting or basic fiscal management will realise these numbers are absolutely contrived.”

Dr Sands urged the private sector fiscal watchdog, the Fiscal Responsibility Council (FRC), to join the Public Accounts Committee and Auditor General in investigating the National Investment Fund situation before the International Monetary Fund (IMF) and credit rating agencies - Moody’s, Standard & Poor’s (S&P) and Fitch - “get a hold of this”.

“It will take the international credit rating agencies to demonstrate to them this is not a reasonable approach,” he added of the Government. “It will have far-reaching consequences well beyond what they can possibly imagine when you look at credit ratings for banks, insurance companies, financial institutions, for the airport, risk assessments.

“It’s going to have massive implications. The adjudication of risk, access to capital, local ratings and on and on and on. You are only as good as your credit, and they have shot a massive hole in the credit of the sovereign entity of the Government of The Bahamas.”

The Opposition chairman added that the $310.9m spending attributed to the Fund, and any monies that may remain in accounts labelled ‘National Investment Fund’ in name only, represent at present a “black hole” until a full accounting reconciliation is provided by the Ministry of Finance, and an independent audit, to end the speculation and show what the funds were used for.

And Dr Sands, warning that monies spent by the Fund still represent proceeds from government borrowing, voiced concern over the extent of the build-up in debt liabilities that will have to be repaid by current and future generations of Bahamians.

“We haven’t the foggiest idea of the fiscal risks this administration has put on the backs of the Bahamian people,” Dr Sands said, also referring to the numerous public-private partnerships (PPPs) that the Opposition charges are off-the-books loans. “They have been doing off-balance sheet spending purely to make the books look good, and I say that without fear of contradiction.

“The truth is that we are still on the hook for the money that has been spent. I don’t think it’s going to turn out well.” Mr Thompson, meanwhile, said the Ministry of Finance’s May fiscal report “raises a serious question that must be answered” in light of the National Investment Fund situation.

“The report says that total capital expenditure through May was $316.2m, and that the Government recorded an overall deficit of $91.4m,” he told Tribune Business.

“But the Minister of Finance has now told Parliament that $310.9m from the so-called National Investment Fund was used for capital works, including buildings, roads and aviation projects.

“We do not believe, based on the information provided so far, that the $310.9m is included in the $316.2m of capital expenditure reported through May. The Government has not shown that it is. And that creates a much bigger question:  Where is the $310.9m reflected in the Government's fiscal accounts?” he challenged.

“The Government must explain where the $310.9m was recorded and what effect that spending has on the country's true fiscal position. We do not believe the $91.4m figure can be accepted as a complete picture of the Government's fiscal position.

“This is especially important because the minister has said that, before the NIF's governance arrangements were fully operational, these public resources were administered through the Ministry of Finance and the Treasury under the Public Finance Management Act. If that is the Government's position, then the public deserves a straightforward answer. This should not be complicated.”

Mr Thompson continued: “The Government says it spent the money. The Government knows what projects it paid for. The Government keeps the financial records. It should therefore be able to show Parliament and the Bahamian people exactly where those expenditures appear in the fiscal accounts and whether they are included in the reported deficit.

“Until that happens, there is a serious unanswered question about whether the Government's published fiscal reports give the Bahamian people the complete picture.”

The Government’s May 2026 surplus was exactly the same as that recorded for the same month in the prior 2024-2025 fiscal year. Despite this year’s May featuring the tail-end of an election campaign, when government spending is normally higher, both total revenues and spending were flat with the year before.

Total revenues increased by just $2.5m to $271.7m, while spending was also slightly higher at $242.5m as opposed to $238.8m in May 2025. Capital spending, which would normally have been allocated to the aviation, roads, water systems and court projects outlined by Michael Halkitis, minister of finance, as where the Fund’s $311m was spent, fell year-over-year from $13.1m to just $9.3m in May 2026.