Like the previous year, FY 1997/98 was a difficult one for the budget and macro economic programme. The need to stabilise and foster confidence in the financial sector while maintaining the gains from macro- economic stability persisted. Significant progress has been made in meeting these challenges but at tremendous cost. Rehabilitating the financial sector has significantly increased the contingent liabilities of the budget while the gains from macro-economic stability have increased debt servicing costs.

The challenge facing the Government in FY 1998/99 is to finance the rehabilitation of the sector, maintain relatively stable prices and facilitate growth and development. If the programme is to get back on track, it will be necessary to maintain tight fiscal management. Emphasis will be placed on careful management of resources. Central Government will be required to operate at minimum cost while ensuring the effective and timely delivery of services. Ministries and departments must therefore be prepared to operate in this mode.

- Written by the Financial Secretary

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