Letter of the Day | Evolution of GOJ capital expenditure

THE EDITOR, Madam:

A front-page news report on the 2022-23 Estimates of Expenditure, published in The Gleaner on Friday, February 11, 2022, stated that “…even though the (2022-23) capital budget will grow by 20 per cent to $65 billion, it is still several times smaller than pre-pandemic levels….”; and the news report further stated that “ Historically, the capital budget stood at $291.5 billion in 2017-18, dipped to $220 billion in 2018-19, and dipped further to an estimated $72 billion in 2019-20.”

By comparing ‘apples and oranges’, these statements are misleading and I write to clarify the facts for your readers.

The Capital Budget published in the Estimates of Expenditure for fiscal years 2017-18 and 2018-19 incorporated provisions for the amortization (principal repayments) of debt. The practice up to that time was for amortization payments to be reflected in the capital budget of the ministry with responsibility for finance.

With the institution of a new budget classification system, that practice was fully discontinued by fiscal year 2019-20. Under the new system, expenditure related to amortization of debt is assigned to a dedicated head of estimates (2017) captured under the Recurrent Budget and since then, has been published as such in the annual Estimates of Expenditure.

Notwithstanding, the budgetary allocation for Capital Expenditure (the approved provision and the actual out-turn) for each financial year is always reported in the Fiscal Policy Paper and posted on the ministry’s website. The annual approved provision for Capital Expenditure, incorporating all supplementary budgets during the year, and the actual out-turn for the period 2015-16 to 2021-22, are illustrated in the attached graph. Of course, the actual out-turn for 2021-22 is provisional.

I trust that this clarification will aid public discourse on the evolution of the GOJ’s capital budget and expenditure.

NIGEL CLARKE, D Phil, MP

Minister of Finance and the

Public Service