By KEILE CAMPBELL

Tribune Staff Reporter

kcampbell@tribunemedia.net

PRIME Minister Philip Davis announced the government is looking into making amendments to the Public Financial Management Act to ensure it reflects “practical realities” and adapts to the “evolving needs” of the country’s fiscal framework.

The Public Financial Management Act was originally enacted in 2021 under the former Free National Movement (FNM) administration, designed to strengthen transparency, fiscal responsibility, and public procurement practices.

In 2023, the Davis-led administration introduced a consolidation bill that merged the PFMA with the Fiscal Responsibility Act (2018) and the Public Procurement Act (2021) into a single framework. While government officials framed the move as a modernisation effort, critics, including the Opposition, argued it diluted key accountability measures, including independent oversight provisions and spending restrictions. Now, the prime minister’s comments suggest further amendments may be on the horizon.

Mr Davis said the changes are being considered in light of updated economic data published by the Bahamas National Statistical Institute (BNSI) in May. According to the prime minister, the new estimates revealed a higher-than-expected gross domestic product (GDP), indicating stronger economic performance and increased national output.

However, Mr Davis noted that the improved GDP figures created what he described as a “technical challenge” in maintaining previously established fiscal targets, specifically the revenue-to-GDP and expenditure-to-GDP ratios, which were initially set using older economic projections.

Rather than pursue what he termed “artificial revenue increases” or “ill-conceived spending cuts” to stay within outdated benchmarks, the government made what he called a “responsible choice” to revise the targets. He said the adjustment would ensure that fiscal policy remains credible and proportionate to the actual size of the economy.

“This ensures that the fiscal anchors remain realistic, credible and aligned with the actual size of the economy, instead of distorting fiscal policy in a way that could undermine government services or choke off economic momentum,” Mr Davis said during his communication wrapping up the debate on the budget in the House of Assembly yesterday. “This is what responsible governance will do, not make a mockery of fiscal discipline.”

The Opposition has criticised the government’s approach, accusing it of undermining the purpose and integrity of the Public Finance Management Act. East Grand Bahama MP and former Minister of State for Finance Kwasi Thompson argued that the administration is effectively weakening legal fiscal safeguards by adjusting revenue and expenditure targets outside of what he described as the law’s intended emergency-use framework.

He expressed concern that the amendments set a troubling precedent, allowing future governments to alter key fiscal goals at will. He warned that aligning the release of the Fiscal Strategy Report with the Budget process undermines its original purpose of guiding, not retroactively justifying, fiscal decisions.

The prime minister said that while the Public Financial Management Act has been a positive step toward strengthening fiscal accountability, certain provisions within the law may not fully reflect the operational demands of public administration. As a result, he indicated the government plans to propose legislative amendments to enhance the Act’s effectiveness.