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(CNS): According to the latest unaudited accounts released by the Cayman Islands government earlier this month, the Cayman Islands government currently has a debt of US$429.9 million, of which US$48.1 million will mature within a year. This figure is fully in line with the requirements of the Public Finance and Administration Law, with a net debt ratio of only 17.5%, while the legal limit is 80%.
However, the concern remains about future liabilities, as $2.2 billion in healthcare liabilities are not included in the accounts.
The unfunded pension liability included in the annual accounts stood at $343.5 million at the end of last year, relating to vested benefits under a number of public sector pension schemes.
In addition to its own debts, CIG also loaned money to two government companies. One of these was the Cayman Turtle Farm, which was losing money every year. Redeveloping the original facility into a tourist attraction never paid for itself and cost taxpayers millions of dollars over the years.
The government provided the farm with an interest-free loan of C$10 million on January 17, 2022. The report states that as of June 30, 2024, the full C$10 million has been drawn down, but a repayment start date has not yet been set.
An interest-free loan of C$50 million was also provided to the Cayman Islands Airports Authority for some additional infrastructure works to improve airport facilities. The Cayman Islands Airports Authority has commenced repayment of the principal in accordance with the agreement. As of June 30, 2024, the loan balance was $48.3 million.
In late 2020, CIG reached an agreement with five local banks to guarantee a loan program that ended a year later. The amount of the government guarantee was equal to 50% of the total outstanding principal and unpaid interest.
As of December 31, 2022, 10 loans totaling $5.3 million have been approved, and the outstanding principal of these loans is $4.1 million as of June 30, 2024. However, the government’s maximum exposure is only CI$2 million. During the program, only one bank requested a security of $21,300, which was paid.
The government’s unpaid healthcare debt of CI$2.2 billion remains a major issue and is mentioned several times in the Auditor General’s annual report on the state of government financial reporting. Because this debt is not recorded in the government’s books, a clear audit opinion on the public sector accounts as a whole has not been obtained.
Secretary of the Treasury Kenneth Jefferson and Lieutenant Governor Franz Manderson have repeatedly stated that such responsibility In the bookEspecially when the funds have not yet expired, it will undermine the entire public finances and put the public finances into the hands of the British government.
At a Public Accounts Committee hearing in March this year, Manderson and Jefferson spoke about this ongoing problem, but neither man was able to offer a solution to the issue, which was seen as a political problem that needed to be resolved.
Please refer to CIG’s latest published unaudited accounts CNS Library.
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