WILLEMSTAD - The College of Financial Supervision Curaçao and Sint Maarten (Cft) has provided recommendations to Curaçao following its assessment of the approved budget for 2024. In a letter addressed to Minister Javier Silvania of finance, the Cft highlighted areas of concern and proposed measures to improve the country's financial stability.
The budget for 2024-2027 displays surpluses on the ordinary service, aligning with the central budgetary norm of the Kingdom Act Financial Supervision Curaçao and Sint Maarten (Rft). However, concerns arise regarding the method of covering deficits on the capital service, particularly in relation to loans and refinancing. The Cft advises Curaçao to adjust the budget accordingly and emphasizes the importance of presenting a multi-year liquidity plan.
Recommendations include:
Developing a multi-year liquidity plan to assess loan repayment and refinancing needs.
Addressing financial issues at the Curaçao Medical Center (CMC) and making provisions for the country's loan to the CMC.
Implementing measures to prevent anticipated appropriations to the fluctuation fund.
Revising tax revenue estimates based on recent data.
Adjusting personnel expense projections to align with past performance.
Making reservations for expected debt under the ENNIA solution.
Furthermore, the Cft urges Curaçao to respond within 14 days and incorporate these recommendations into a budget amendment by April 30, 2024.
The assessment notes significant surpluses in the budget, driven by various factors including increased interest expenses and ongoing financial challenges at the CMC. Failure to address these issues could have profound implications for Curaçao's financial stability.
The delayed legislative process regarding gaming providers' licensing fees raises concerns about revenue projections. Prompt implementation of relevant ordinances is crucial to realizing budgeted revenues.
Additionally, there is a structural increase in personnel costs, prompting the need for alignment with past performance.
The Cft underscores the importance of Curaçao's liquidity planning, emphasizing the need for insight into long-term financial strategies to balance investments and debt repayment.
Conclusion:
The recommendations from the Cft underscore the urgency for Curaçao to implement financial reforms and address existing challenges. Failure to do so could jeopardize the country's fiscal health and long-term stability.