Nevis Economy On Track

CHARLESTOWN NEVIS (October 31, 2006)
Budget Analyst in the Nevis Island Administration (NIA) Ms. Hazel Brandy, disclosed that Nevis’ fiscal performance was moving in the right direction, her assessment was based on an unofficial report of the International Monetary Fund Mission 2006.

Ms. Brandy was at the time addressing a number of senior civil servants and ministers in the NIA, at a pre estimate budget meeting at the Nevis Co Operative Credit Union Conference Room on Monday October 30, 2006. The meeting was designed to foster closer dialogue between heads of departments, Permanent Secretaries and the Ministry of Finance, to give an updated fiscal position on the government and to address concerns on the preparation of the 2007 Budget which is due in December, 2006.

According to Ms Brandy, the finances for 2006/07 “is set for improvement” relative to those recorded in 2005/06 due to a bolstered economy by stronger then expected revenues. “This foreseen improvement maybe attributed to significant improvement in the efficiency of the revenue collection process,” she said
 
She attributed the improvements to a rigorous restructuring process at the Inland Revenue Department and the Customs Division which resulted in a significant increase in the revenue collected.
 
Notwithstanding, Premier and Minister in the Ministry of Finance the Hon. Joseph Parry stressed the need his Nevis Reformation party-led Administration to look at revenue, widen the tax base to be prudent in fiscal management and called on those present to be good managers and to take their positions seriously, particularly as they were charged with the implementation of government’s programmes.
 
He admonished them to be good team players, exercise discretion, set targets and achieve them, be prepared to work at all times, good time managers, and not be afraid to exercise discipline.
 
 “You are the managers of the service you are the managers of the system function like managers be the best managers you can be we are not here to victimise anybody if you perform well you will be respected for it because we believe in that. You do not have to be afraid, you do not have to worry about anything but if you do not perform do not expect to be treated with respect because you have not respected yourselves,” he said.
 
Mr Parry also took the opportunity to underscore his administration’s focus on people development and added that they would spare no efforts to ensure that the people of Nevis were trained to better position them to take advantage of every opportunity for advancement available to them.
 
Meantime, Mr Collin Dore, Treasurer in the NIA, called on those present to pay greater attention to the accounting methods and the importance of expenditure prioritisation. He said if the proper guidelines were adhered to, it would derive maximum benefits from the limited resources available.
 
“It is therefore imperative as heads of departments and permanent secretaries, that you plan, coordinate and control the resources available to you so as to gain the maximum return.
 
“It is important as well as we move forward, bearing in mind all the obstacles and challenges in the external environment, that we seek to do more within our ministries and departments possibly even with reduced resources simply by planning properly for more efficient operations within the department,” Mr. Dore said.
 
Permanent Secretary in the Ministry of Finance Mr Laurie Lawrence in his address underscored the importance of the Budget process. He said it was of vital importance for the Nevisian public to understand what putting the budget together involved.
 
According to Mr Lawrence, the budget touched everyone’s life and was through that medium, that the vision of leaders was achieved and manifestoes, plans and promises were translated into real and concrete activities which impacted the lives of people. He referred to the budget as the glue that held the economy together.
 
“Poor planning at this stage could have serious economic consequences not only for existing Nevisians but for generations to come. On the other hand some prudent policies could propel the island forward to create wealth and bring success for existing and future generations of Nevisians.
 
“Another reason why the budget process is so important is we are not likely to be able to afford all of the things we may want or need. We (the Administration) therefore have to establish priorities and carefully sequence programmes and activities, to avoid placing too much strain on our limited resources,” he said and noted, that failure to prioritise and sequence could result in large fiscal imbalances, much room in dead stock and ultimately economic collapse.
 
The Financial Secretary disclosed that over the past 12 years, the NIA had carried very large overall fiscal imbalances and cited that the current accounts had performed “fairly well with positive current balances” but the large capital expenditure, though used to develop the infrastructure of Nevis, had resulted in overall deficits.
 
According to Mr. Lawrence, in 2000 the over all deficit was $28.3million, in 2001 $38.6million, in 2002 18.4million, in 2003 $19.6million which resulted in the rapid accumulation of debt and the debt service ratio of about 30 percent.
 
Another area he said that had seen significant growth over the years was in the employment levels in the civil service of which salaries, wages and pensions accounted for over 40 percent of the current revenue at the end of 2005.
 
The Financial Secretary said that when added to the debt service ratio, non discretionary expenditure accounted for over 70 percent of current revenue which gave the NIA very little flexibility in providing goods and services and in funding new initiatives.
 
“In the near future the major challenges will be to increase revenue, control the salary and wage bill and proactively manage the debt. We in the Ministry of Finance have begun the process of analysing the finances so that we could make policy recommendations to improve the fiscal situation,” he said.

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