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.