The Government is going broke, even with a $59.7 annual budget.
Open conflicts are breaking out among ministers over their inability to fund ongoing projects or launch announced ventures.
Some institutions – such as several Namdevco markets – are being closed because of the lack of recurrent funding.
Others are in danger of being shut down, at least temporarily.
A recent meeting of the Finance and General Purposes (F&GP) Committee, the Cabinet’s action body, turned heated when ministers were told they could not receive certain budgeted funds.
Some ministers grew testy with Finance Minister Colm Imbert.
One minister reportedly used swear words to vent his frustration over the absence of allocations.
According to sources, the minister said he could not face the electorate in the upcoming national polls with major projects under his watch being incomplete.
Other ministers asked when the cash flow problems would improve.
An earlier meeting of the F&GP was cancelled, with no official reason provided.
Irritated ministers are convinced that the dire financial situation was the reason for scrapping the statutory session.
Imbert’s only nod to the state of the treasury was his recent acknowledgement that lack of funds affected Value Added Tax (VAT) payments.
“Cash flow constraints have resulted in a one-month delay in completing the exercise,” he stated.
He added: “As a result of oil and gas production being below estimated levels, coupled with depressed oil and gas prices in the latter half of calendar 2024, the revenue collected by the Government in the last three months of calendar 2024 was lower than expected.”
He said prices have improved and “there is sufficient cash flow” to issue the VAT refunds to Small and Medium-sized Enterprises (SMEs).
The SME sector has been under severe strain as a result of the delayed payments.
Several small businesses have closed because of the VAT issue and lack of foreign exchange.
But the ability to pay VAT refunds does not extend to financing other important and urgent matters.
With the national economy almost 18 per cent smaller than nine years ago, the Government has had to shelve some big infrastructural programmes.
The current budget has a projected deficit of $5.5 billion, which is being funded by borrowings.
Experts suggest that the deficit may become larger than budgeted.
The continued reliance on the energy sector continues to weigh down the Government’s ability to fund its budget programmes.
Imbert and senior Finance Ministry technocrats are stressed over the serious state of affairs, according to informed sources.
There is speculation that 67-year-old Imbert may retire from electoral politics in the forthcoming election.
A mid-year budget review is expected within the next few months, ahead of the general election.
The Government is again likely to borrow to finance the additional budgetary provisions.
Successive PNM administrations have a track record of creating make-work projects and launching new ventures to provide short-term work and employ contractors.
With the current dismal economic circumstances, the Government is unlikely to afford such traditional heavy spending this year.
