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The publication of the June 2022 fiscal results carries a number of important positives. Despite a deficit of $318M in the month of June, the good news is that the country will realise a smaller annual deficit than was originally projected, by over $200M. I believe that this critical when viewed against the backdrop of where the country is with its debt challenges and the prevailing conversations around the performance of the bonds. While there is no great “new news” in it, the result sends an important signal to the credit markets on the improving performance of government revenue. The main task at hand going forward will be to demonstrate the country’s ability to continue moving beyond this level of fiscal reconsolidation.

A variance analysis on the major footings of the fiscal numbers shows total revenue outperforming budget by 11%, tax revenue by 7%, VAT – the most efficient tax – by 22%. This coupled with expenditure under budget by 3%, augers well for the final numbers maintaining the positive news indicated before. Of significant importance, while these must be taken as preliminary numbers, the trajectory appears to broadly support the Ministry of Finance’s recent projections regarding the ability to move positively in the direction of realizing 25% revenue to GPD.

Debt expanded by $414M. One positive to take away is that the change showed relative stability in the proportion of domestic to foreign debt, with 40% of the new borrowing being local. I would like to see a higher ratio in favour of domestic transaction but I am mindful of the prevailing circumstance. It is noted that new domestic borrowing is essentially replacing old debt. Securing greater proportions of borrowing through domestic sources continues to represent a significant opportunity for government in the management of the current debt portfolio. With continued narrow fiscal space and a high borrowing requirement, the debt management strategy will continue to hold major implications for 2022/23. The firming up of reducing deficits is therefore a welcome output.

It would appear that the Ministry of Finance is lagging in the timely publication of the Fourth Quarter Report (2021/22). This report should have been available together with the June report. While in general these publications are always subject to change, the Fourth Quarter Report provides great context and cross checking of the information contained in the report for the final month of the fiscal year. Consequently, and while based on experience I do not anticipate any significant variation, it is prudent to wait to see that final report.

While it is important to bear in mind that these are historical numbers and that the outcomes must be viewed against subsequent developments, I believe that overall the numbers sends an optimistic signal.

Going forward, as they seek to maintain this trend, policy makers will be required to demonstrate: the soundness of budgeted numbers and the ability to secure revenue growth with the numbers trending positively as projected; execution of an effective debt management strategy, initiation of sound reforms that will lead to more efficient use of financial resources together with securing growth in existing and nascent industries. These elements will be fundamental in not only the reduction of deficits and a move to a balance budget but also, and maybe more importantly, the creation of greater resiliency across all critical aspect of the economy and national life – economic, social, environmental and human capacity.

Hubert Edwards is the Principal of Next Level Solutions Limited (NLS), a management consultancy firm. He can be reached at Hubert specializes in governance, risk and compliance (GRC), Accounting and Finance. NLS provides services in the areas of enterprise risk management, internal audit and policy and procedures development, regulatory consulting, anti-money laundering, accounting and strategic planning. He also chairs the Organization for Responsible Governance’s (ORG) Economic Development Committee. This and other articles are available at

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