In a significant development, the Economic and Finance Committee of the National Assembly has put forth recommendations for the government to address critical issues concerning non-performing State-Owned Enterprises (SOEs), tourism incentives, and credit access.
The Committee’s chairperson, Kinga Penjor, presented these recommendations during a session in the House yesterday, where three key observations were highlighted.
The committee’s primary focus was on examining the macro and micro financial aspects of the post-Covid economy, aiming to identify and address pressing concerns.
Among the observations made, the committee noted that out of the 13 SOEs with direct shareholdings, 10 of them have incurred substantial losses despite receiving a subsidy of Nu 412.3 million in the previous fiscal year (FY2022-2023). Moreover, the tax and dividend contributions from these SOEs have remained strikingly low at Nu 245.5 million.
Recognising these dire circumstances, Kinga Penjor emphasised the need for a rigorous review of non-performing SOEs, calling for the implementation of measures through the retrenchment of the supplementary budget by the government.
In addition to the concerns surrounding SOEs, the Committee also addressed the challenges faced by the tourism industry in the wake of the Covid-19 pandemic.
While the government has taken various mitigation measures to promote tourism, such as the introduction of SDF incentive packages, extended operating hours at border gates, and allowing tourists to stay in sub-three-star hotels, further improvements are needed.
The Committee recommended that the government should continue enhancing incentive packages and explore other viable strategies to attract more tourists, recognising the industry’s potential to contribute significantly to the national exchequer.
The Committee’s review also shed light on the escalating number of Nonperforming Loans (NPLs) among private businesses, including farmers, following the Covid-19 pandemic.
Kinga Penjor expressed concern over the Central Bank’s decision to temporarily suspend private loans in financial institutions like BDBL, RICBL, and CSI Bank. This move has made it difficult for small-scale private businesses and farmers to access finance, hindering their growth and impacting economic activities. The Committee urged the government to reinstate credit access for these economic sectors to ensure it does not have adverse implications on the reserve.
Furthermore, the Committee acknowledged the repercussions of restricted credit access on parents who rely on education loans to finance their children’s higher education. The inability to obtain these loans has caused significant distress for families seeking educational opportunities for their children. The Committee highlighted the urgency of resolving this issue to alleviate the burden on parents and foster educational growth.
However, the Committee faced challenges during its review process, particularly regarding the lack of information and cooperation from certain organisations.
Kinga Penjor expressed frustration with agencies that required written requests for even the most basic data, hindering the committee’s ability to obtain timely information.
As Parliament is time-bound, the Committee emphasised the need for efficient communication channels between agencies and the Committee to ensure the successful execution of its duties.
Under Section 254 of the National Assembly Act 2008, members have the right to access information and inspect relevant documents to fulfill their parliamentary mandates. Kinga Penjor called on agencies to be responsive and cooperative, as their support is crucial for the Committee to carry out comprehensive and effective reporting.
The deliberation on the Committee’s recommendations will continue today, with a keen focus on addressing these critical economic issues and formulating appropriate solutions to drive the country’s financial recovery and prosperity.
