By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition’s finance spokesman last night argued the Government “cannot have it both ways” over its forecast $75.5m Budget surplus and $300m plan to capitalise the National Investment Fund.

Kwasi Thompson, the east Grand Bahama MP, told Tribune Business that the Davis administration’s plans to use $300m from the recent $1.067bn sovereign bond refinancing to provide the Fund with start-up capital do not appear to be included anywhere in its 2025-2026 Budget spending allocations.

And, given that the $300m represents the proceeds of borrowing, he challenged whether it would wipe-out the projected $75.5m surplus for the upcoming fiscal year since it should be included in the Budget as spending if directed to the Fund.

Mr Thompson, and the Opposition, are essentially voicing fears that the Government is going to circumvent the provisions of the Public Debt Management Act by directing the $300m sovereign bond proceeds directly into the National Investment Fund as opposed to first going into the ‘consolidated’ fund as required by the law.

And, in so doing, it will be able to keep this borrowing off-balance sheet and its books, and get around requiring the spending/use of the $300m to first be approved by Parliament. “Any government spending ought to be approved by Parliament,” Mr Thompson told this newspaper.

“The way government spending is appropriated by Parliament is through the Budget process. The law obligates the Government to come to Parliament to get approval to spend government monies. If the Government wants $300m to invest in the National Investment Fund, which we have no difficulty with, it must be approved by Parliament.

“And to be approved by Parliament it must be in the Budget. The Government must explain why we do not see that [$300m] in the Budget and, if the Government intends to invest it in the National Investment Fund, what does that do to the projected surplus?” he asked.

“If that $75m does not take into account the $300m of spending, then what does that do to the projected surplus? The Government must explain that. They cannot have it both ways; if you are predicting a surplus, that’s fine, but you must adhere to the law when it comes to their spending.

“They have announced that $300m is to be invested with the National Investment Fund. As far as we can see, that was not taken into account when it comes to the $75m surplus. The Government must explain what the $300m spending does to the projected $75m surplus,” Mr Thompson continued.

“The Government has to get parliamentary approval to borrow funds and to spend funds. If they are spending the $300m with the National Investment Fund, that must be approved by Parliament. Where has that been approved by Parliament and does the $75m projected surplus take that into account? We do not see it in the national Budget.”

Latrae Rahming, the Prime Minister’s communications director, not respond to a Tribune Business message seeking comment before press time. The Davis administration obtained Parliament’s approval to borrow the $300m during the mid-year Budget back in February 2025.

However, the Opposition is arguing that it does “not yet have legal authority to spend or invest it” as this now has to be obtained by Parliament. And Mr Thompson, in an earlier statement, said the Public Debt Management Act’s section 16(4) requires that all borrowed sums must first go to the consolidated fund rather than the National Investment Fund.

“Once deposited, those funds cannot be used unless they are specifically appropriated by Parliament under an approved budget line item, as mandated by Articles 130 and 131 of the constitution and reinforced by the Public Finance Management Act,” he argued.

“The Government must tell the public where the line item is in the Budget that authorises them to spend or seed the $300m in the National Investment Fund. This borrowed sum, reportedly earmarked for the National Investment Fund, has not been included in the current 2025-2026 Budget.

“Yet, once the National Investment Fund is established, the $300m seed funding - or any portion of it - must legally be recorded as a budgetary expense. And that expense will eliminate the surplus the Government is now claiming, and throw the Budget back to a big deficit,” Mr Thompson said.

“The numbers simply do not add up. A government cannot claim to run a surplus while ignoring a legally required expense that it has already committed to in public statements. Whatever sum is used to seed the National Investment Fund must appear on the books and, when it does, the projected surplus disappears.” Mr Thompson described the result as “a charade”.

Ryan Pinder KC, the attorney general, speaking in the Senate during the 2025-2026 Budget debate, said the National Investment Fund (NIF) will be a fund-of-funds structure with six underlying sub-funds targeted at specific areas with a focus on public improvement and development projects.

He said there will be an Airport Development sub-fund for financing the redevelopment of airports in Long Island and Grand Bahama, adding that the Prime Minister will make an announcement with further details on the latter project shortly.

“My colleagues from Grand Bahama listen carefully…the first one is an Airport Development Fund. This is for the funding for the development of the new Grand Bahama International Airport, which we will hear more on from the Prime Minister soon. The structure of the funding is being put in place Grand Bahama,” said Mr Pinder.

“And for those in the Family Islands, we’re not leaving you out. The funding in the fund for the Airport Development project will be for select Family Island projects as well, Long Island.” Mr Pinder said the $86m financing for Eleuthera’s Glass Window Bridge will come from the Infrastructure sub-fund, while the Real Estate Development sub-fund will hold the shares of government real estate projects.

Mr Pinder said the Equity Holdings sub-fund will hold the Government’s equity interests in companies such as the Bahamas Telecommunications Company (BTC) and the Nassau Cruise Port, while the Natural Resources sub-fund will hold revenue generated from the blue economy such as blue carbon credits.

“We’ll have the Equity Holdings sub-fund,” Mr Pinder said. “This fund will now have an independent governance for all shareholdings of the government, for BTC, for Aliv, Cable Bahamas, the Nassau Cruise Port.

“All the shareholdings of the Government will be held in a sub-fund, now professionally managed with dividends separate from government holdings in this sub-fund, where dividends will now be able to be used for wider purposes of development of the country.”

“We’ll have a Natural Resources sub-fund to receive royalties and other revenues from natural resources in the Commonwealth of the Bahamas. And we will have a Blue Economy sub-fund to receive revenues generated from the blue economy, which includes revenues from the new Maritime Revenue Unit and from blue carbon credits. They will go into this NIF sub-fund.”