BAD INVESTMENTS WITH THE PEOPLE’S MONEY COMING HOME TO ROOST
Hundreds of millions of dollars of the people’s money, Government money and Social Security (SSB) money, have been recklessly squandered on taking over Belize Telemedia Limited (BTL) and Belize Electricity Limited (BEL) without any regard as to the viability of such investments.
In BTL alone, the Government paid out over half a billion dollars, roughly $560 million of mostly borrowed money, drying up our scarce foreign reserves, and in the process causing SSB to purchase millions of dollars’ worth of those shares. It has become painfully clear that with the measly dividends paid out by BTL, not only will we never make back that $560 million given away but every year when we account for the annual interest cost of such borrowed money, we go deeper into the red, suffering a continuing and perpetual loss.
The situation is now even turning out worse for SSB with BEL. While, GOB spent $70 million of borrowed money to hold roughly 36.9% of BEL, Social Security Board also currently owns 26.9% of BEL. Over the last couple years, dividends paid out from BEL have fallen dramatically.
With BEL now suffering an almost $4mn loss in 2018, its Board is now recommending that no dividends be paid out to its shareholders. That spells disaster for SSB in particular which despite falling dividends doubled down and invested in even more BEL shares in 2018. This was done expecting an increase in investment income from BEL for the years 2018, 2019 and 2020 of no less than $0.25 earnings per share or roughly $5mn in dividends from BEL for investment income per year. What instead transpired was an investment of tens of millions of dollars that is now bringing a return to SSB of nothing, ZERO PERCENT.
These questionable investments at the behest of this callous, corrupt and incompetent UDP Government for political expediency and mileage are now coming home to roost. Social Security is running out of the people’s money fast and it is scrambling to get more from you. It is now a certainty that social security contributions will increase for virtually everyone, very likely this year.