State-owned enterprises in Grenada have been mandated to adopt new measures to ensure the success of the three-year Home Grown Structural Adjustment Programme (SAP), which is supported by the Washington-based International Monetary Fund (IMF).
The country is now into its second year under the programme and according to Prime Minister Dr. Keith Mitchell, financial commitments of state-owned entities are included in the new measure to calculate the country’s overall national debt.
The Prime Minister met last week with the Chairpersons and Chief Executive Officers of the statutory bodies on the island.
He used the occasion to outline several procedures to be implemented
under the Public Finance Management Bill of 2014, approved by Parliament in 2014.
This Bill provides for the proper financial management and control of the money, property and other resources of the public sector – including the Consolidated Fund and other public funds under the Consolidated Fund.
It is also aimed at strengthening the overall fiscal framework for the economy as well as to provide proper procedures for transparency and accountability.
Under the Bill, which was recommended by the IMF, state bodies would not be able to make certain decisions without government’s approval.
Dr Mitchell, who is also Minister for Finance explained that the 25 operating state bodies in Grenada will now have to comply with performance monitoring indicators as well as seek directions in writing from the Central Government prior to all wage negotiations.
These bodies are now mandated to take immediate steps to reduce non-personnel expenditure consistent with government goals and provide monthly reports on progress.
They must also put forward a clear plan to deal with all pension liability and provide financial statements and annual reports.
Prime Minister told the statutory bodies that when they default or run into financial problems, taxpayers are affected and government feels the pressure.
“We are the parent…these debts by statutory bodies and state-owned enterprises are a government liability and if anything goes wrong government must pay,” Dr. Mitchell told the meeting, which was held at the National Stadium, St George’s.
“So as we meet every quarter we will have information on those particular variables,” he added.
The Prime Minister also attempted to debunk what he suggested to be “myths” that statutory bodies are independent; that they are well run; and created for the benefit and enjoyment of management and staff.
Dr Mitchell acknowledged that there has also been some mismanagement among the state-owned bodies.
“All these bodies are not ours as government. It’s the people’s property and we have to report to them,” he said pointing out that statutory bodies work in the interest of taxpayers whom they are answerable to.
Dr Mitchell told the meeting that the issue of unnecessary traveling would also be dealt with as he pointed to abuses by government officials, public servants and others in the use of tax payers’ money to fund overseas travel over the years.
“In many cases the real benefits could not be traced to that of the interest of the tax payers…that’s why I am including all of us, from captain down to cook,” he said..
Dr Mitchell announced that a committee comprising representatives from both the private and public sectors will be appointed to oversee proposals from statutory bodies.
A report submitted to government last year by CARTAC, an affiliate of the IMF suggested that several state-owned bodies should either be privatised or closed and specifically identified for privatisation Gravel & Concrete and the Government Printery.