- NEWSDAY.CO.TT - A la Une - 29/Jun 08:33

Swaratsingh: Overdraft was $8,257.4m on May 5

MINISTER of Planning, Economic Affairs and Development and Minister in the Ministry of Finance Kennedy Swaratsingh said when the government entered office on May 5, 2025, the overdraft was $8,257.4 million or 76.1 per cent of the maximum advances allowed under the Central Bank Act. He made the statement while answering a question from opposition senator Vishnu Dhanpaul in the Senate on June 27. Swaratsingh said the basis for the calculation of the overdraft utilisation is derived from the requirements of the Central Bank Act. He said advances to the government are made by the Central Bank subject to Section 46 of the Central Bank Act. He said under 46 (2) of the act, the maximum advances allowed cannot exceed 20 per cent of the estimates of annual revenue as per the Parliamentary approved budget. “When we were appointed on Saturday, May 3, 2025, and officially assumed duties on May 5, 2025, the government’s net overdraft opening balance as at the morning of May 5 was $8,257.4 million or 76.1 per cent of the maximum advances. By the close of business the same day, balance stood at $8,112,2 million or 74.8 per cent of maximum advances.” Swaratsingh gave the average government net overdraft balance and the corresponding average balance as a percentage of the maximum advantages for each month during the 2025 calendar year. These were as follows: January 2025, $4,425,172,151 representing 40.8 per cent; February 2025, $6,195,802,788 representing 54.1 per cent; March 2025 $7,862,125,314 representing 72.5 per cent; April 2025 $7,590,473,315 representing 70 per cent; in May 2025 $8,639,445, 932 representing 79.7 per cent; June 2025 (up to June 17) $8,667,891,265 representing 79.9 per cent. Swaratsingh said the former finance minister underfunded critical areas of expenditure deliberately. “The former government recognised that their revenue target was going to be substantially less than budgeted, so they simply stopped meeting their obligations. I once again emphasise on behalf of the Ministry of Finance that this was a deliberate action by the then minister finance as statistical conmanship, kicking the can down the road so that the new government coming in had to find ways and monies to pay. “This practice of underestimating expenditure gives a false narrative. The result has been the accumulation of hundreds of millions in arrears that this government must now settle, in addition to funding its own current fiscal obligations. Given the former administration’s financial mismanagement and degenerative state of the nation’s finances, the overdraft will be continually challenged.” Swaratsingh was also asked what the purpose of the recent bilateral meetings with the Inter-American Development Bank (IDB) and the World Bank Group held in Washington DC, USA. He said he made the trip at the request of the Prime Minister primarily to reset Trinidad and Tobago’s development agenda and strengthen the relationship with the World Bank Group and the IDB. “The World Bank expressed concerns with the country’s operations and sought clarification on procedures for state engagement. The purpose of the visit was to re-engage key multi-lateral development partners, the World Bank and IDB group, with the view to advise them of the new strategic direction for economic transformation. The discussions were centred on presenting the government’s economic reset agenda with aims to reposition the government as an enabler and a regulator and crowd in private sector investment for the development of non-energy revenue generation activities.” He said both institutions responded positively to the express policy direction and indicated strong interest in promoting the transformation. “While rebuilding trust will continue to require sustained effort, our partners recognise the new trajectory and momentum to drive meaningful progress. It is particularly encouraging that this renewed engagement has occurred early in our term and in the term of this government, setting a promising tone for closer collaboration moving forward.” Swaratsingh said he was not accompanied by a delegation but then-Central Bank governor Alvin Hilaire attended virtually. He said the following people participated in the meeting: Delvin Cox, World Bank adviser to the executive director for Brazil, Colombia, Dominican Republic, Ecuador, Haiti, Philippines Suriname, Trinidad and Tobago; IDB Navita Ganoon, executive director for the Caribbean constituency; Omatie Geewan Ramdass, council and representative for Trinidad and Tobago; and Julian Belgrave, IDB country manager for Trinidad and Tobago. He was also asked what his connection to the Development Bank of Latin America (CAF) was. He responded, “The government of Barbados retained my services to do all their work in relation to the Latin American Development Bank. I was an independent consultant who was contracted by the government of Barbados to work on all their CAF projects. CAF paid for my consultancy via the government of Barbados. “Upon completion of my consultancy, my services were contracted to assist Trinidad and Tobago in becoming a full member of CAF. I also had a shortened consultancy to structure policy-based loans and loan options. This consultancy was terminated when the government of Trinidad and Tobago requested I represent the country at the board of directors meeting. “I wish to place on record that, with the approval of the then-government, I represented Trinidad and Tobago as part of the delegation to the 158th board of directors meeting of the Corporación Andina de Fomento, which was held in Bogota, Colombia on December 12 and 13, 2016. This was the first director’s meeting after Trinidad and Tobago attained full membership in that institution.” The post Swaratsingh: Overdraft was $8,257.4m on May 5 appeared first on Trinidad and Tobago Newsday.