The Bahrain Government has announced a comprehensive package of reforms that will secure the kingdom’s long-term fiscal stability to eliminate the budget deficit by 2022.
A newly-announced Fiscal Balance Programme will see the country’s budget deficit eliminated by 2022, with the aim of delivering annual fiscal savings of BD800 million, the Bahrain News Agency report said.
To support the funding requirements of the Fiscal Balance Programme, a financial support agreement worth $10 billion was signed between the Government of Bahrain and the governments of Saudi Arabia, the UAE and Kuwait.
This programme builds on previous fiscal consolidation efforts, where initiatives implemented during the period of 2015-2017 yielded annual fiscal savings amounting to BD854 million.
The programme is centred on six pillars designed to align non-oil government revenues with economic growth, said the Ministry of Finance. They include:
- Public expenditure reductions
- A voluntary retirement scheme for government employees
- Balancing the Electricity and Water Authority (EWA) expenditures and revenues
- Streamlining the distribution of cash subsidies
- Targeting inefficient operational government expenditures
- Simplifying government processes and increasing non-oil revenues
The measures also include the establishment of a series of new units designed to monitor spending, streamline processes, enhance transparency and increase efficiencies across government. These include the establishment of internal audit and central government procurement units within the Ministry of Finance, and a new debt management office.
Bahrain’s Minister of Finance Shaikh Ahmed bin Mohamed Al Khalifa said: “With spending reductions commencing in the short term and the target of eliminating the budget deficit by 2022, the programme secures the foundations of an economy that affords even more opportunity, more jobs, and greater living standards for the Kingdom’s generations of today and tomorrow.”
Source Credit: Trade Arabia