By Dana Malcolm
#TurksandCaicos, May 19, 2023 – After five days of delving into over 16 ministries and departments to see whether they were being properly funded, the Appropriations Committee has found that several critical areas in the TCI need immediate attention.
Chairman of the Committee Kyle Knowles brought the shortfalls affecting residents to the attention of the House of Assembly during the Budget Debate on Tuesday May 16th, included on that list are long awaited boats for Grand Turk.
The report presented by Knowles included eight recommendations spread across the Ministries and Departments.
Immigration and Border Security
“The committee noted there are insufficient vessels for the patrolling of the TCI’s waters,” he said plainly. “The committee recommends that there is a need for additional vessels and additional manpower for the enforcement and patrolling of Grand Turk South Caicos and the Cays.”
Residents of these areas have been begging for more patrol vessels for years, not only to protect the rich and varied sea life of which poachers steal hundreds of pounds, sometimes in a single sitting, but for safety against illegal smuggling of people and weapons. That a nation so bisected by water does not have ample patrol boats is a serious gap in security.
A ‘fully functional’ Police Marine Branch has been ordered for Grand Turk as well.
Physical Planning and Infrastructure Development
During the Appropriations, it was revealed that it was standard practice of many departments to draw up plans and budgets for capital projects before meeting with PPID, and then find out only after the budget was passed that their estimates were woefully inadequate; making supplementary budgets necessary and contributing to the syrupy slow pace of capital project completion in the country. Knowles and the other committee members found this inefficient and have recommended that all departments must now meet with PPID months in advance of the budget to discuss any projects to be submitted for consideration.
“This will facilitate adequate funding being allocated for projects and help with the expedition of the procurement process. This will expedite capital projects by helping them to get started and completed in a timely manner,” he said.
Concerns about management of Janitorial services which are to be privatised were also noted.
Ministry of Home Affairs
An Audit has been recommended of all Government owned vehicles with special consideration to security forces. During Appropriations, a myriad of departments presented budgets with allocations for vehicles or stated they simply had none. A general overview of the registrar general’s office with a view to modernise was also recommended.
Ministry of Finance
The Gaming Control Commission, now under the umbrella of the Ministry of Finance is also in need of funding, Knowles said, without which they cannot properly manage the slot machines located around the island. This is essential for a proper regulatory structure without which the TCI will not be able to reach international standards and tap into the multi million dollar gaming industry. TCIG has already signed a memorandum of understanding with the Bahamas’ Gaming Commission to help them along this route.
And finally, a General Contract Unit to oversee all contracts across Government is also recommended. The Committee was faced with a mountain of unfinished projects where deadlines had passed, in some cases multiple times without completion this group would have “the objective of monitoring capital projects progress.”
UK holds steady on interest rates
#UnitedKingdom, September 24, 2023 – For the first time since 2021, the Bank of England has decided to ‘hold steady’ on interest rates rather than increase them.
It means UK consumers’ interest rate remains at 5.25 percent. According to the BOE reports tabled on September 21st, only 5 of the nine members of the Monetary Policy Committee (MPC) voted to keep the rate steady.
The Bank expects the inflation rate, currently at 6.7 percent, to reach the two percent target by mid-2025 and food inflation is going down.
But at the same time, the UK’s Gross Domestic Product GDP declined in July and growth is expected to stay weak, plus, unemployment is on the rise in the country.
“The Labour Force Survey unemployment rate rose to 4.3 percent in the three months to July, higher than expected in the August Report,” the bank explained.
The US also recently held steady on its interest rates after a significant period of increase.
Canadian analysts watching for recession
#Canada, September 9, 2023 – Financial analysts are watching the Canadian economy for the possibility of recession following a contraction in its Gross Domestic Product (GDP) for the second quarter of 2023, and a decision to keep interest rates at 5 percent.
The Bank of Canada decided to ‘hold steady’ on interest rates this Wednesday, a week after Information shared by Statistics Canada revealed the country’s GDP declined last quarter, failing to reach the over 1 percent growth that was predicted by economists.
“The slowdown was attributable to continued declines in housing investment, smaller inventory accumulation, as well as slower international exports and household spending,” Statistics Canada explained.
Central Banks in North American countries like Canada and the US have been hiking interest rates over the past year to balance out inflation. Both countries want inflation levels to remain at 2 percent.
A recession occurs when a market records negative GDP growth for two consecutive quarters. If Canada records another contraction in its GDP for the third quarter of the year, it will officially be considered to be in a recession.
In late 2022, the Royal Bank of Canada had predicted the country would fall into recession early this year because of cooling housing markets and high interest rates.
The country has not recorded a recession since the beginning of the pandemic.
TCI Commercial Banks CAUTIOUS about LENDING, Report reveals
By Dana Malcolm
#TurksandCaicos, August 14, 2023 – Credit risk in the Turks and Caicos is decreasing; however, local banks are still very cautious with their lending practices, according to the latest annual report from the Turks and Caicos Financial Services Commission (2021-22).
The FSC Bank and Trust Department oversees the six banking institutions operating locally, their report indicated that the bank’s liquid assets grew massively because residents began to save more money.
“The increase in the sector’s assets was funded by customers’ deposits, which grew by 26.5 percent,” it said. That pushed assets between the six banks to $2.7 billion. Banks are turning a profit, just not as much as before COVID-19. Still, the cash was good enough that they could shutter loan loss provisions they had made.
Not only were customers depositing more money, but with the improved state of the local economy, residents wishing to borrow were resilient to the impact of COVID-19.
Also, fewer residents were defaulting on their loans, the FSC found, with a 29 percent drop in non-performing loans (loans in default), and because of that banks spent 40 percent less on provisioning (money used to cover loans in default). Only four percent of all the loans in the country were listed as non-performing, a decline from five point four (5.4) percent the period prior.
Despite this, fearing rising inflation, and health crises globally, banks responded with ‘conservative lending practices and risk appetites.’
This was at the height of the COVID-19 pandemic.
Residents locally have complained bitterly about the difficulty they face in securing loans and Washington Misick, TCI Premier, has repeatedly put local banks on blast for de-risking and vowed to have the UK step in, to date there has been no change.
Meanwhile, five of the six banks recorded increases in assets and loan portfolios were smaller for four of them.
The FSC also revealed that with banks holding tight to the purse strings, an unregulated credit market had been allowed to flourish locally, which they said was a cause for concern.
“A growing non-bank lending market has emerged in the TCI, which creates competition for the banking sector. This increases the risk to the financial sector if left unregulated and should credit conditions deteriorate,” they explained.
Another concerning revelation is that Money Sending Businesses (MSBs), which are heavily patronized in the country because of the high level of expatriate workers, are taking a hit as well. This time because of high banking costs, de-risking and the emergence of alternate ways to send cash.
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