Ex-Auditor General warns Sri Lanka’s economy at critical risk with daily borrowing of Rs. 660 crores

Sri Lanka’s Former Auditor General Gamini Wijesinghe has provided an explanation regarding the extremely dangerous level at which Sri Lanka’s economy currently stands.

Based on data released by the Ministry of Finance for this year, it was revealed that in the last year (2023), the total revenue of the Sri Lankan government was Rs. 3,037 billion (approximately Rs. 8.320 billion per day). The total expenditure was Rs. 5,437 billion (approximately Rs. 14.895 billion per day). Accordingly, the government borrowed around Rs. 6.575 billion (nearly Rs. 660 crores) per day.

This clarification was made during a press conference held yesterday (August 30) by the Accountants and Auditors Organization of the National People’s Power (NPP).

He further revealed the following details:

“We have never had a platform to talk about many of the experiences we’ve had in our professional lives. We all know how the country has been filled with thieves and corrupt individuals. The primary turning point that led to the country’s bankruptcy was the 2015 bond scam.

The impact of that event continues to be felt and will have repercussions for a long time into the future. However, those responsible are once again on stage, seeking power to rebuild the country.

There is another group identified as culprits in the Supreme Court’s decision on the bankruptcy of the country, who are also asking for a chance to rebuild the country.

For 76 years, those who contributed to bankrupting the country were divided into three groups, each seeking power to develop the country.

Another group claims they saved the country by handing it over to the IMF, and now they are seeking power based on that claim. This has become an astonishing farce.

The Auditor General presented reports to Parliament as early as 2017, warning that the country was heading towards bankruptcy. We clearly pointed out that the path the country was on, especially with the Rs. 6.5 billion bond scam in 2015, was wrong.

Parliament was informed that the country’s financial management had completely failed. However, Parliament did not focus on any of these reports or create any action plans.

Specifically, in 2016, the Auditor General rejected the accounts provided by the Ministry of Finance due to inaccuracies. It was pointed out that the data related to assets and debt amounts in those accounts were incorrect.

Parliament was informed of this, but no action was taken, allowing the country to continue on the path to bankruptcy.

In the 20 minutes available to speak in Parliament during the rejection of the 2016 Finance Ministry accounts, only MP Anura Kumara Dissanayake spoke about it. No one else discussed it, and the accounts were approved by Parliament.

The country went bankrupt in 2022 as a result. We prepared a special report on debt management in 2017. An analysis of 50 years of debt accumulation was conducted, and it was recommended that all related corruption and malpractices be immediately halted. However, those who governed the country over the years did not heed any of this, and the mistakes were repeatedly made.

An example is the misappropriation of funds to build the tomb of D.A. Rajapaksa. A part of the misused funds was repaid due to the revelation in the audit report.

Even the Supreme Court relied on audit reports to make a decision regarding the deforestation of Wilpattu. However, those directives were not implemented, and now, the same people are on stage asking for power to develop the country. I do not believe they will refrain from such actions in the future.

Additionally, the loss incurred by Sathosa from importing rice during 2016-2017 was Rs. 16 billion, and it was recommended that this amount be immediately recovered from those responsible. But this recommendation was completely buried.

Politicians have utterly destroyed the public service and its integrity. Under such circumstances, it is unacceptable to allow the political parties that have governed so far to regain power. We have come to this press conference because of that. The country should be entrusted to someone trustworthy.

Handing the country over to the IMF entirely will never allow it to recover. Countries that have taken such a path have been completely destroyed. Even if our country goes to the IMF for the thousandth or sixteenth time and receives a loan of around USD 3 billion, it will not recover.

The debt bulletin for the first quarter of the Ministry of Finance confirms this. Currently, the country’s debt has exceeded USD 100 billion. Despite claims that the country has been rescued from the abyss, it is clear that nothing of the sort has happened.

The audit report states that the Treasury has a negative balance of Rs. 22 trillion. How can it be said that such a country has been rebuilt? According to data provided by the Ministry of Finance, the government’s daily revenue is Rs. 8.320 billion, but the daily expenditure is Rs. 14.895 billion.

This means the economy is currently borrowing nearly Rs. 660 crores per day. In such a situation, can the statement that public servants’ salaries will be doubled be accepted?

It does not imply that public servants’ salaries should not be increased. No political party that has been in power has managed to reduce the government’s daily expenditure of Rs. 14.895 billion while stopping corruption and fraud.

This can only be done by a force that can completely eliminate corruption, fraud, and waste in the country. The political parties that sustain poverty will never be able to lift this country from its current situation.

We have built up the belief that this change can be achieved under a different alternative plan. It is essential to transform the public sector into a respectable one, free from political influence, where it can stand upright with dignity, and rebuild a country where this can be done.

We strongly urge you to use your postal vote for this purpose.”

(This article is based on the NPP press conference conducted by Auditing & Accounting Professionals on August 30, 2024, with additional inputs from a Lankatruth.com Sinhala article on the same event.)