A royal decree has been issued to raise the public debt ceiling in Bahrain to sixteen billion dinars, and it is now on its way to the House of Representatives for approval without any amendment or study debate.
According to the Ministry of Finance figures, the public debt in Bahrain until December 2022 amounted to approximately 16.7 billion dinars. This figure exceeds the limit set in the royal decree by over 700 million dinars. This figure does not include all debts, as the actual debts exceed twenty billion dinars when including the debts of government entities and companies such as the National Oil and Gas Authority and Bahrain Real Estate Company.
Indeed, it seems that the government has exceeded the specified debt ceiling for the past two years, and the House of Representatives does not have real authority to monitor the government’s performance in this regard. Today, the Ministry of Finance justifies its haste in approving the royal decree by the necessity to meet the financial needs to finance the deficit in the budgets for 2023 and 2024. This justification prompts an investigation into the reality of those needs and the size of the deficit occurring in the budget.
Raising the public debt ceiling in Bahrain more than the deficit
“The budget estimates indicate a deficit of approximately 520 million dinars in 2023 and about 161 million dinars in 2024. Therefore, the total deficit for the two years seems to be around 680 million dinars only.
Indeed, there appears to be a contradiction in fiscal policy, as the Ministry of Finance issued financial bonds worth 750 million dinars during the current month of February, an amount exceeding the total estimated deficit for the two years by about 70 million dinars.
Certainly, if we take into account the government’s debts during the past year and the debts issued until the end of the current year, it is likely that the value of these debts will far exceed the estimated deficit. This indicates the financial challenges facing the government and the necessity to better control public debt management to avoid exacerbating the problem in the future.
Why does the government exceed its borrowing needs? And why doesn’t the House of Representatives play its role in monitoring this performance and tracking the expenditure of funds? While the country continues to drown in its debts, and citizens suffer from unemployment and deprivation of social services?”
source: lualuatv
