2018/19 Budget Communication 2018_2019 BUDGET COMMUNICATION | Page 75

Capital Expenditure during the 2017/18 fiscal
year was also subjected to restraint and is expected to come
in at $153 million, down from the budgeted $230 million.
However, during the year, a detailed review by the Ministry
of Finance, the Central Bank and advisors determined that a
modification of the accounting treatment of payments to
RESOLVE was necessary. These payments related to the
payout on the initial $100 million in promissory notes issued
by the previous government to the Bank of The Bahamas to
transfer non-performing loans. By treating the toxic loans as
receivables, they were considered investment assets and, as
such, the payments were not considered an expenditure item.
Based on RESOLVE’s own conservative estimates for
recoverability, it now would be more appropriate to treat
only 20 per cent of the loans as assets. As such, $80 million
of the full payment of $100 million has been reclassified as a
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