Finance Minister Esrom Immanuel said the budget prioritises infrastructure-led growth. [Photo: FILE]
Concerns over government borrowing have been clarified by the Finance Ministry, which says borrowing is being used mainly for infrastructure works and not recurrent expenditure.
Permanent Secretary for Finance Shiri Goundar explained that major capital projects are planned as multi-year programs and they run for up to five years.
He adds that funding is secured before work starts and this is to avoid delays during implementation.
He says about $1.5 billion has already been committed. It covers roads, bridges, water systems and wastewater and health infrastructure.
“However, we have to make sure that the full financing is available for the project before we commence on major projects. So if you look at all the big projects in the water and wastewater sector, the roads and bridges project, for the health project, (0:26) these are all finances that have been secured.”
Funds, Goundar said would be released in phases as projects progress.
According to the PS, the focus is on lifting economic capacity through long-term investment.
He states that infrastructure spending is meant to support growth and productivity over time and borrowing is largely used for capital projects only.
Goundar then explained that it is not used for routine government operations and exceptions were made during crisis periods like COVID-19.
He says operating expenditure has stayed stable compared to last year. This is despite election-related costs and other pressures.
Government, he states is keeping tight control on recurrent spending.
Finance Minister Esrom Immanuel said the budget prioritises infrastructure-led growth.
He said most borrowing was directed to development projects that expand the economy’s capacity.
Immanuel adds that global conditions remain uncertain and this continues to affect fiscal forecasts.
The final deficit outcome, he said would depend on economic performance over the coming months.
