Economists call for Govt accountability of HSF drawdowns

An­drea Perez-Sobers

Se­nior Re­porter

an­[email protected]

Econ­o­mists are call­ing for greater trans­paren­cy from the Gov­ern­ment, af­ter the lat­est re­ports on the Her­itage and Sta­bil­i­sa­tion Fund (HSF) re­vealed that more than half a bil­lion US was with­drawn over a six-month pe­ri­od, with ques­tions now be­ing raised about how the mon­ey was used and whether the coun­try's fis­cal po­si­tion has been ful­ly pre­sent­ed.
The lat­est HSF re­ports, pub­lished last Fri­day, show the Gov­ern­ment with­drew a to­tal of $3.46 bil­lion (US$510.78 mil­lion) from the fund dur­ing the pe­ri­ods Ju­ly-Sep­tem­ber 2025 and Oc­to­ber-De­cem­ber 2025.
For­mer min­is­ter in the Min­istry of Fi­nance and econ­o­mist Mar­i­ano Browne yes­ter­day ar­gued that the with­drawals should have formed part of a broad­er ex­pla­na­tion of the coun­try's fis­cal po­si­tion pri­or to now.
"On Fri­day, the bud­get deficit was low­er than it was pro­ject­ed. Now no­tice, the Fi­nance Min­is­ter made no an­nounce­ment in his bud­get speech, nev­er had com­ment­ed or said that he had made with­drawals from the Her­itage and Sta­bil­i­sa­tion Fund dur­ing his first bud­get speech, nor did he make any state­ment dur­ing his mid-year re­view bud­get speech," Browne said.
He con­tend­ed that key fi­nan­cial in­for­ma­tion had been omit­ted.

"The bot­tom line is con­ve­nient­ly leav­ing out num­bers and pre­tend­ing that every­thing is hunky-do­ry. It can't be hunky-do­ry."

Browne al­so took is­sue with state­ments sug­gest­ing the deficit had nar­rowed de­spite low­er en­er­gy rev­enues.

"The state­ment, for ex­am­ple, from the Cen­tral Bank talks about, notwith­stand­ing the re­duc­tion in oil rev­enues, that they were still able to low­er the deficit. So that is to­tal PR."

He ques­tioned the ab­sence of up­dat­ed fig­ures on val­ue-added tax col­lec­tions, pub­lic sec­tor back­pay and oth­er li­a­bil­i­ties.
"He hasn't said what the po­si­tion is with VAT. He hasn't giv­en a num­ber in re­spect of all of the back pay. He just sim­ply said he will re­pay it next year," he said.

Browne ar­gued that ex­pens­es were ef­fec­tive­ly be­ing de­ferred in­to the next fis­cal year un­der the Gov­ern­ment's cash ac­count­ing sys­tem.
"The bot­tom line is un­der­stat­ed ex­pens­es be­cause the Gov­ern­ment op­er­ates on a cash-ac­count­ing ba­sis. If I ex­pense it, it doesn't ex­ist. He's push­ing his ex­pens­es in­to the fol­low­ing year."

He not­ed that while high­er en­er­gy rev­enues may im­prove Gov­ern­ment fi­nances in the next fis­cal year, the cur­rent fi­nan­cial pic­ture was in­com­plete.

"He was not be­ing trans­par­ent with re­gard to the re­al num­bers. So, he's over­stat­ing how good things are. If things were so good, you would not have drawn from the Sta­bil­i­sa­tion Fund."
Browne al­so chal­lenged the Fi­nance Min­is­ter's ex­pla­na­tion that ex­clud­ing cer­tain li­a­bil­i­ties from ear­li­er fis­cal pro­jec­tions rep­re­sent­ed a con­ser­v­a­tive ap­proach.

"How could you do that? You made a con­scious de­ci­sion to give back­pay of 10 per cent to the pub­lic ser­vants. You know that the back­pay fig­ure was about $6.8 bil­lion. How much of that has been paid? How much of that has been post­poned to next year? What hap­pens if you can't pay it next year?"
He added, "If any­thing at all, the Min­is­ter of Fi­nance is gam­bling. He's not be­ing con­ser­v­a­tive."
Browne fur­ther ar­gued that ref­er­ences to a low­er fis­cal deficit failed to ac­knowl­edge the con­tri­bu­tion made by with­drawals from the HSF.
"The Cen­tral Bank state­ment that the deficit is less does not recog­nise that the ex­tra mon­ey came from the Her­itage and Sta­bil­i­sa­tion Fund. The im­pres­sion it gives is that they were man­ag­ing the ex­pens­es bet­ter with­out telling us that they ac­tu­al­ly hit up the fund to take care of the short­fall."
Econ­o­mist Dr Mar­lene Attzs al­so called for a fuller ac­count­ing of the coun­try's fi­nances when Bud­get 2027 is pre­sent­ed lat­er this year.

"The fis­cal year ends in a few months, and Bud­get 2027 will pro­vide the ap­pro­pri­ate op­por­tu­ni­ty for the Gov­ern­ment to present a com­pre­hen­sive pic­ture of the coun­try's fis­cal po­si­tion, in­clud­ing its bor­row­ing pro­gramme, debt oblig­a­tions and with­drawals from the HSF."
She not­ed this was not the first time cit­i­zens had learned of with­drawals with­out a de­tailed ex­pla­na­tion of their pur­pose.
"Cit­i­zens de­serve that lev­el of trans­paren­cy."

Attzs stressed that bor­row­ing and draw­ing on the HSF are not in­her­ent­ly prob­lem­at­ic, but their pur­pose mat­ters.

"The crit­i­cal ques­tion is whether new bor­row­ing and with­drawals from the HSF are fi­nanc­ing in­vest­ments that ex­pand the coun­try's pro­duc­tive ca­pac­i­ty, strength­en fu­ture for­eign ex­change earn­ings and sup­port long-term eco­nom­ic growth, or whether they are in­creas­ing­ly be­ing used to fi­nance re­cur­rent ex­pen­di­ture, in­clud­ing the grow­ing fis­cal oblig­a­tions aris­ing from pub­lic sec­tor wage set­tle­ments and oth­er re­cur­ring com­mit­ments."

She added, "The coun­try's debt is every­one's busi­ness. Bor­row­ing and draw­ing on the HSF can be en­tire­ly ap­pro­pri­ate if these re­sources are strength­en­ing the econ­o­my's fu­ture pro­duc­tive ca­pac­i­ty and re­silience. How­ev­er, cit­i­zens are en­ti­tled to know how these funds are be­ing used and whether to­day's bor­row­ing is cre­at­ing to­mor­row's growth or sim­ply fi­nanc­ing to­day's con­sump­tion."

The HSF re­ports show that US$260.78 mil­lion was with­drawn dur­ing the Ju­ly to Sep­tem­ber 2025 quar­ter un­der Sec­tion 15 of the HSF Act, with as­sets sold from the US Core Do­mes­tic Eq­ui­ty man­date to fa­cil­i­tate the with­draw­al. De­spite this, the fund de­liv­ered a quar­ter­ly re­turn of 4.54 per cent, out­per­form­ing its bench­mark of 3.35 per cent, while its val­ue in­creased slight­ly from US$6.3229 bil­lion to US$6.3413 bil­lion.
A fur­ther US$250 mil­lion was with­drawn dur­ing the Oc­to­ber to De­cem­ber 2025 quar­ter through the sale of as­sets from the US Short Du­ra­tion Fixed In­come man­date. Dur­ing that pe­ri­od, the fund re­turned 2.69 per cent, ex­ceed­ing its bench­mark re­turn of 1.99 per cent, al­though its over­all val­ue de­clined to US$6.2549 bil­lion by De­cem­ber 31, 2025.
More re­cent of­fi­cial fig­ures re­leased by the Min­istry of Fi­nance have in­di­cat­ed that the fund's net as­set val­ue had climbed to US$6.60 bil­lion by ear­ly June 2026, re­flect­ing a re­cov­ery af­ter the with­drawals record­ed in the sec­ond half of 2025.