Positive result Saba for 2021, financial position still fragile

Saba re­alised a positive result of US $1.3 million for the fi­nancial year 2021, which was mostly caused by the incidental additions to the free allowance, which were made available by the various ministries in The Hague during the COV­ID-19 pandemic.

These additional pan­demic-related means were not spent entirely in 2021, because the largest part of this funding was dispensed by the ministries late in the year. In 2021, Saba also re­ceived $1 million from the Ministry of Home Affairs and Kingdom Relations BZK because of Saba’s problematic liquidity posi­tion at that time.

Still, the accountant found Saba’s financial position in late 2021 risky and the resil­ience capacity insufficient, stated the Committee for Financial Supervision CFI’ in a recent reaction to Sa­ba’s 2021 annual report.

With the positive result, Saba improved its reserves to $12.4 million at the end of 2021, a slight increase compared to 2020 when this amount was $11.1 mil­lion. Saba had a liquidity position of $55.5 million at the end of 2021. The finan­cial position of the public entity Saba remains vulner­able, stated the CFT.

“The reserve capacity is too low to absorb financial setbacks and the liquidity position requires improv­ing to be able to repay long-term debts. Based on the multi-annual budget, it is expected that Saba won’t be able to structurally im­prove its liquidity position on its own,” the CFT stated. Financed by incidental al­lowances, Saba carried out a number of (large) invest­ment projects in the past years. However, it is un­clear how the structural ex­penditures stemming from these investment projects will be covered. This mat­ter has been voiced by the Saba government and the CFT multiple times.

The public entity has been talking with the Ministry of BZK for some time about structurally improving Sa­ba’s financial position. The CFT has been urging that a solution be found as well. According to the CFT, it is also important that the trajectories agreed upon in the Saba Package to create structural coverage in the budget are continued.

Saba’s free allowance will be structurally increased in 2022-2023 as part of the agreements between Saba and the Netherlands. “This will relieve some pressure on the budget. However, increasing the free allow­ance in the coming years will not offer a structural solution for Saba’s budget deficits, which are caused by the way in which special allowances are currently being dispensed,” the CFT stated.

Saba realised $24.7 mil­lion in revenues and $23.3 million in expenditures in 2021. In that year, Saba received $6.7 million in special allowances. The largest part of the special allowances is allocated to education, good gover­nance, the harbour project and infrastructure.

The accountant gave the 2021 year report an un­qualified audit opinion in both truthfulness and fi­nancial legitimacy, mean­ing that the year report passed the audit with flying colours, as has been the case for years already. The unqualified audit report of the accountant proves that Saba adequately carries out its financial manage­ment.

The Daily Herald.

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