The Ministry of Finance has published two landmark pieces of legislation for public consultation as part of its modernization and reform agenda. The public consultation period for the Draft Public Debt Management (PDM) Bill, 2020 and the Draft Public Financial Management (PFM) Bill, 2020 will continue until mid-October to allow feedback and engagement around these critical legislative reforms.

“One of the pillars of the Resilient Bahamas Plan is to accelerate government reforms and strengthen our systems as we prepare for the reopening of the economy. At the Ministry of Finance, we are doing this by advancing our legislative agenda to strengthen the overall fiscal management framework in the country,” said K. Peter Turnquest, Deputy Prime Minister and Minister of Finance.

“The Government’s debt activities are understandably of great public interest and the legislative reform will strengthen the Government’s capacity to manage public debt effectively and provide mechanisms for more transparency and public accountability. It will bring about some long overdue changes like modernizing the issuance of Government securities and establishing a framework for Government lending and granting of guarantees,” said Minister Turnquest.

Currently, the legal provisions for the management of public debt in The Bahamas are spread across many statutes creating gaps and inconsistencies with international best practices for transparency and accountability in public debt management activities. The new legislation will streamline this structure while institutionalizing the preparation and implementation of a medium-term debt management strategy and the Government’s annual borrowing plan, providing transparency with respect to the debt management function though appropriate reporting, publication, and audit requirements. It will also provide a framework for the establishment of sinking funds and their management.

Regarding the Draft PFM Bill, the key purpose is to promote responsibility, transparency, accountability, and effectiveness in the management of the public finances—which cover the Government’s revenue, expenditure, financing arrangement and its asset and liability management.

“The Financial Administration and Audit Act, 2011 (FAA) is a very outdated framework for public financial management. It does not have provisions governing cash management and forecasting and it has inadequate provisions for public entity accountability, in-year fiscal reporting requirements and even on the specification of roles and responsibilities for fiscal management,” said Minister Turnquest.

In line with emerging international best practices, the sanctions regime under the Draft PFM Bill is more comprehensive—defining financial misconduct, financial offenses and institutional sanctions. The draft bill proposes that Ministries be required to prepare annual plans and annual reports, of a strategic nature, for tabling along with the annual budget in Parliament, and subsequent publication, and preparation of mid-year reports.

“We invite and encourage the public to visit the Ministry of Finance website (www.bahamas.gov.bs/finance) to view the legislation and to provide feedback during this period of public consultation,” said Minister Turnquest.