By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government must give “full disclosure” on the last-minute revisions to months’-old fiscal data that enabled it to almost hit its full-year deficit target, a senior banker urged yesterday.

Gowon Bowe, Fidelity Bank (Bahamas) chief executive, told Tribune Business that the “positive news” generated by the modest $9.1m overshoot of the 2024-2025 deficit forecast will be undermined unless the Davis administration fully explains, and justifies, the removal of $37.3m from spending and deficits incurred between July and November 2024.

Acknowledging that the revisions, first exposed by this newspaper, have “left significant uncertainties” over the “reliability and accuracy” of the Government’s financial figures and fiscal outcome, he warned that this threatens to leave The Bahamas “bogged down in minutiae” and overshadow the recent credit rating upgrade by Standard & Poor’s (S&P).

Calling on the Government to adopt private sector and public company disclosure standards, where financial statement changes are fully disclosed and explained, Mr Bowe told this newspaper that June 2025’s $25.4m surplus was “highly unusual” - and also warrants further explanation - because it is traditionally one of the largest deficit months in the annual Budget cycle.

“Ultimately, there has been so much of what I’m going to call suspicion regarding the deficits reported for the first six months and the significant surplus reported for the first quarter - the financial numbers for the last 12 months going on 15 months - it’s one that, in my view, necessitates full disclosure to allay concerns that this is simply designed to achieve an objective,” the Fidelity chief said of the revisions.

“We have to bear in mind.. was there excessive focus on the deficit? Yes, by both political parties, but the vacillations - we’re up, we’re down, we’re going to make it - with no explanation has certainly left significant uncertainty with regard to the numbers.

“We’ve had too many instances of revisions without explanation, and that’s doing more of a disservice than the actual fiscal outcome. The reality is that the fiscal outcome, although positive news, has very little intrinsic value if there’s no confidence in its reliability and accuracy.”

Tribune Business revealed yesterday that the Government overshot its 2024-2025 full-year deficit target by just $9.1m thanks to last-minute revisions which cut its first-half ‘red ink’ by $37.3m and enabled it to hit Budget goals.

The Ministry of Finance, unveiling the Government’s fiscal performance for June and the full Budget year, revealed that the fiscal deficit only exceeded initial projections by 13 percent to close at $78.9m compared to the originally-targeted $69.8m.

However, a closer inspection of the figures - particularly a comparison of the Ministry of Finance’s May and June fiscal reports - discloses that the Government only came so close to its target because of last-minute changes to monthly expenditure and deficit figures for the first five months of the 2024-2025 fiscal year.

Prime Minister Philip Davis KC yesterday said the last-minute revisions were primarily the result of “late postings” and the realignment of allocations between ministries, which ultimately allowed the administration to meet its fiscal deficit goal for the 2024-2025 Budget year.

“Those revisions will come about as a result of late postings, primarily that and the alignment of various allocations between ministries. We met our targeted numbers,” said Mr Davis.

He maintained that the Government had achieved its stated fiscal goal of keeping the deficit within the forecast range as a percentage of GDP. “We met our target because what we said about our projection was that we’ll be between 0.3 and 0.7 percent to GDP. We came in at 0.5 percent - that’s our target,” he added of the deficit.

However, one financial source, speaking on condition of anonymity, questioned why the revisions were left so late in the 2024-2025 fiscal year and not made months’ earlier given that the changes were almost all associated with events that happened more than six months earlier between July and November 2024.

Asserting that “spending doesn’t disappear”, they questioned whether the spending had been converted into “off-book” loans to state-owned enterprises (SOEs) or pushed back into a prior year. “They have to account for where that $37m has gone,” they said of the Government.

Mr Bowe, meanwhile, warned that the questions over the 2024-2025 fiscal numbers threaten to overshadow more positive economic developments. “There are too many positive developments relating to our upgraded credit rating, analysis by the rating agencies and the multilaterals, for us to be bogged down in the minutiae of whether the numbers are accurate,” he told Tribune Business.

“In the grand scheme of things, $100m one way or another is not worth the credibility of the nation. It should not be taken lightly. It needs the full attention of the Ministry of Finance to demonstrate why these numbers were revised in the first place and what were the extraordinary events that took place in June to produce the surplus they had in that period?

“It doesn’t appear that the June surplus information is readily available in terms of full details on what the actual number is going to be. I’m going to say it’s highly unusual for there to be such a surplus in June, and particularly to have revisions for the earlier months,” he added.

“It’s not worth having this debate where the Government should make it clear what the trigger points are so everyone can see plain as day what led to this outcome.” Mr Bowe suggested the Government adopt private sector and public company practices, where significant changes to previously-published financials are fully clarified, explained and disclosed in a timely fashion.

June has traditionally been a month when the Government’s spending far exceeds revenues due to government agencies, departments and ministries presenting the Ministry of Finance with bills for payment prior to fiscal year-end that it knows nothing about.

The Opposition charged that last year’s moderate June surplus was achieved by the Government kicking its payables over into the 2024-2025 fiscal year, as it is allowed to do under cash-based accounting, to enable it to hit the deficit target.

Mr Bowe, meanwhile, questioned whether June’s outcome resulted from the sale of capital assets, although it was unlikely to have been the Grand Lucayan, or the collection of major tax arrears on previous international transactions that the Government was known to be pursuing.

The May 2025 fiscal report, released just over one month ago towards the end of August, revealed a $141.5m deficit for the first 11 months of the 2024-2025 fiscal year. To reduce that to $78.9m would have required the Government to generate a $62.6m surplus in June, which is traditionally a month when heavy deficit spending is incurred, but yesterday’s report showed just a $25.4m surplus for June.

That would have taken the full-year deficit for 2024-2025 to $116.1m, some $37.2m above the end-June number of $78.9m. A Tribune Business analysis found that the difference, or gap, can be explained by last-minute government revisions to its spending and deficit figures for the first four months of the 2024-2025 fiscal year.

This covers the four months from July to November. In particular, November’s monthly deficit, which was shown in the May fiscal report as standing at $82.8m, ended up being cut by $25.9m or 31.3 percent to $56.9m in the June fiscal report that was released yesterday.

The revised November 2024 deficit figure resulted from a downwards revision to total government spending, which was cut from $336m in the May 2025 report to $310.1m in the latest publication. The near-$26m, or 8.4 percent, reduction resulted largely from a $22.9m drop in capital spending - from $53.7m in the May 2025 report to just $30.8m in its June equivalent.

In particular, November 2024’s ‘transfers N.E.C’, which stands for ‘transfers not elsewhere classified’, were cut from $28.3m in the May 2025 report to just $5.4m one month later in the June report. No explanation was provided for such a substantial, late revision that favours the Government by bringing it in close to its 2024-2025 deficit target.

Smaller revisions, according to Tribune Business’s analysis, also occurred for the Government’s monthly spending and deficit revisions for July 2024 through October 2024. The deficits shown in the May 20205 fiscal report were subsequently revised downwards by $4.6m for July; $0.7m for August; a $3.9m reduction for September; and a $2.2m drop for October.

When added to the November changes, these last-minute revisions for the June and year-end 2024-2025 fiscal report cut the deficit by a combined $37.3m compared to previous monthly reports. This, together with the May and June Budget surpluses, meaning revenue income exceeds the Government’s spending, is what enabled it to come so close to the full-year deficit target.