BELIZE CITY, Mon. Feb. 7, 2022– During last week’s sitting of the House of Representatives, the government of Belize presented its third Supplementary Allocation for this fiscal year, through which it sought an additional 70 million dollars to cover unpaid and recurrent expenses incurred by GoB. Of note, 23 million dollars of that amount is being sought to cover costs inside the Ministry of Health and Wellness; this is following Hon. Michel Chebat’s departure from the Ministry at the Prime Minister’s request.
In response to the government’s request for the additional funds, the newly appointed Leader of the Opposition, Hon. Moses “Shyne” Barrow, accused the current administration of gross fiscal mismanagement.
“The last House meeting, they ask for money for the Ministry of Health. The Minister has since been fired, and I can see why, and I am saying to the Prime Minister, this has to stop, this is fiscal hemorrhaging, fiscal bleeding. You set a budget in April, and we understand that things happen and you have to come back, and I appreciate that you come back to the House and you tell us what it is you’re going to spend, but what I don’t appreciate is the gross mismanagement, the negligence, because I will refrain from saying pocket and hustle. I will not accuse anyone of that, but I will say that it is mismanagement, it is negligence, it is incompetence, it is a dire lack of talent. Questions have to be asked when you come into this House and you’re asking the taxpayers to front another 23 million dollars for the Ministry of Health. What is going on?” Shyne outlined.
He had also pointed, prior to his comments, to fiscal mismanagement by former Minister of Health, Hon. Michel Chebat, as the reason that the government had to seek additional monies to cover expenses. However, during an interview following the House meeting, Prime Minister Briceño said, “Minister Chebat had to make some tough decisions when he went in there to try to fix it. I mean, we had millions of dollars in this one year alone of the payment that we are doing for medicine. Currently over 5 million dollars is only for payment that Pablo Marin left; we have to be paying those bills. Secondly, because of the pressures in setting up the budget, if I remember right, they needed about 20 million dollars for medication, especially because of COVID of the testing. I mean, we are doing tens of thousands of testing, something that the UDP was not doing, but I think only 9 million dollars approved, so now they are coming back to Finance to say, well we have to get these medicine. The other day we were running out of testing, and that is why then we have these new appreciation, when it comes to the Ministry of Health,” Hon. Briceno said.
One line item in the supplementary allocations schedule for the Ministry of Health and Wellness listed 15.5 million dollars for Materials and Supplies (Pharmaceuticals and Consumables) and 7.37 million dollars for Contracts and Consultancy for NHI and Hemodialysis. In total, 26.5 million dollars has been allocated to the Health Ministry.
Also listed in these supplementary appropriations is a 20-million dollar capitalization of the Central Bank. In explaining the reasoning behind this decision, the PM said, “The government proposes to capitalize the Central Bank to the sum of 20 million dollars to proactively fortify the balance sheet of the Central Bank as regulator and protector of our financial system and to bolster the bank’s commitment to monetary and financial system stability. The Central Bank of Belize takes some risks, but they are not profit-driven. Their main objectives are maintaining the fixed exchange rate and stability of the finance system.”
He went on to say, “As the chief regulator, the bank acts as the lender of last resort for the domestic banks but finds themselves in financial difficulty or unable to attain adequate liquidity in the inter-bank market. As we all know, the forbearance measures introduced by the Central Bank to temporarily ease the financial challenges faced by many businesses arising from the severe contraction of the economy have come to an end as of the end of December 2021. There is, accordingly, an increased likelihood of nonperforming loans in the system. To prepare for the possible effects of the scenario, the fortification of the Central Bank is imperative in order for the bank to effectively perform its core and non-core functions. “
The PM further pointed out that the Central’s Bank total capital and reserves amount to only 1.3 percent of GDP, while other Caribbean countries report an average of 2 percent.
“This proposed 20-million-dollar capitalization of the Central Bank brings this ratio near to the regional average by increasing it by 1.8 percent, but more importantly it will serve to protect the bank against future losses and enable the bank to meets its mandate of maintaining, monitoring, and financial stability in these challenging times,” the PM said.
Also on the list is 2.5 million dollars for the “Blue Bond Conservation Fund Agreement.” Readers would recall the row made by UDP chairman Hon. Michael Peyrefitte over an additional 15 million dollars sought by the government to cover the cost of this agreement. The PM said the funds were being allocated to start to “pay” for the Blue Bonds.
The government has also allocated around 2.4 million dollars for National Defence and Border Security, 3.1 million dollars toward the replacement of the Haulover Bridge; and funds toward the repair of the damaged stretch of road on the Philip Goldson Highway. Around 1.5 million dollars is being set aside for scholarship and support funds for local and international students and around $750K for the purchase of vehicles.
In total, an additional $33,222,728 is being allocated to cover recurrent expenditure, while additional Capital 2 expenditure amounts to $29,965,247, and Capital 3 expenditure adds up to $7,162,319 in this most recent proposed supplementary appropriation, which altogether amounts to $70,350,294.