ST. GEORGE’S, Grenada, January 12, 2018 (CMC) – Chairman of the Fiscal Responsibility Oversight Committee (FROC), Richard Duncan, says steps taken by the government to manage public finances, can best be described as the dawn of a new era.
Duncan told reporters at FROC’s first news conference, on Wednesday, that the country has “turned a new page”.
“We have turned a new page, we have learnt not only from our mistakes,” Duncan said, in making reference to new legislation approved as reform measures, during the Structural Adjustment Program Home grown program, adopted from 2014 to 2016.
“What happened in the days of old, any minister, under which a ministry falls, might authorise borrowing. Under the new legislation you have a more centralised approach.”
The legislation includes: the Fiscal Responsibility Act; the Public Finance Management Act; the Public Debt Management Act and The Public Procurement and Disposal of Property Act
“Here is a better and new way to do things and our role, as limited as it might be, is still a key part of that strategy,” said Duncan, who added, that the responsibility of FROC is for monitoring compliance with the fiscal rules and targets, and reporting to the House of Representatives, annually, on the status of impaction of the Act.
According to Angus Smith, a member of the Committee, the gains made have been recognized as very positive by regional and international financial organisations and lenders.
“We are actually creating history in the region,” he said, pointing out that the only territory with a similar structure, is Jamaica.
The first report covers the year 2016 and the second report, which will cover 2017, is scheduled to be completed in March.
Duncan told reporters that overall, the government started to put measures in place to satisfy the requirement of the fiscal legislation, and progress is being made in a number of areas.
The report revealed that of the six rules and targets, three were compliant, two were non-compliant and the other was described as being compliant – with reservation.
Receiving the label as non compliant was the Public Sector Debt of GDP Ratio and Contingent Liabilities, arising from public-private partnerships, which was set to not exceed five percent of the 2016 budget.
Those falling into the category of compliant were: growth in primary expenditure – not exceeding two percent; Primary Balance with a target of not less that than 3.5 percent of GDP; and National Compensatory primary balance that was set to be no more than three percent of the estimates of estimates of revenue and expenditure.
Compliance with reservation was noted for the wage bill to GDP, which should not exceed nine percent of GDP.