The Ministry of Finance has explained that the gazetted approval for the 2018 Budget Loan Authorisation Act 2017 is a procedural process after every Estimate of Revenue and Expenditure presentation and is the legal approval that provides the government of the day to seek funding to realise projects and initiatives as announce in a budget.
In clearing the air about the online circulation of the gazetted approval of the 2018 Budget Loan Authorisation Act 2017 by political opponents, the ministry said that a budget presentation is always accompanied by a Budget Loan authorisation Bill.
Randal Robinson, Public Relations Officer of the National Democratic Congress (NDC) posted photos of the gazetted approval with the caption “So the NNP Government has given itself Parliamentary authority on Dec 20th 2017 to borrow $100,000,000.00 US to spend in 2018. Imagine the Parliament signing a cheque for $267,000,000.00 EC ($267 million) for the NNP on the eve of an election!!!!”
The post is continuously being shared and has become the topic of discussion on radio and television talk shows.
The 2018 budget loan authorisation provides for the government to seek US$100,000,000 to fund the 2018 budget. The opposition is claiming that the authorisation bill is evidence that government is borrowing US$100 million within months of a general election.
However, the Ministry of Finance in a news release on Friday said it ‘wishes to advise the general public that Section 56(1) of the Public Finance Management Act authorises, by resolution of the House of Representatives, the Minister of Finance to borrow on behalf of the Government of Grenada in any form and from any legitimate source, whether domestic or external and for any fiscal purpose, on terms and conditions to be agreed with any creditor, an amount not exceeding in the aggregate the sum specified in the resolution.’
“This is a legal requirement that must accompany, and has accompanied every annual National Budget, under all governments, should there be a need to borrow at any time during the year,” said the release which explained that the 2018 Budget Loan Authorisation Act is the legal authority for the fiscal year 2018 that allows the Minister of Finance to borrow up to US$100,000,000 from various legitimate creditors to finance capital programmes and projects to advance the socioeconomic development of the country.
Elaborating, the release said that the schedule of the act further states that “all agreements signed pursuant to this Loan Authorisation Act will be tabled in parliament as soon as practicable”. As such, any borrowing undertaken under the authority of the act must be tabled before Parliament.
The ministry says that the amount specified in the Loan Authorisation Act 2018 is a ceiling. “Accordingly, the total of all the borrowings from the various legitimate creditors that may be undertaken by the Government throughout the fiscal year 2018, can tally to less than the amount specified in the act. The act does not in itself constitute borrowing, but merely authorises the minister to borrow within the specified ceiling,” the release said.