Officials from the Washington-based International Monetary Fund (IMF) will soon review Grenada’s first six months of its Structural Adjustment Programme (SAP) initiated by the Keith Mitchell-led government to address a severe fiscal problem facing the island.
According to Minister with responsibility for Economic, Trade, Planning and Cooperatives, Oliver Joseph, the programme will be reviewed every six months by the IMF based on an agreement reached with Grenada.
Joseph said the IMF has disbursed the first trance of US$3.2 from a US$21.7 million-assistance package to government as part of the self-styled homegrown structural programme.
The World Bank has also announced a US$15 million loan to government as part of the agreement reached with the IMF.
According to Minister Joseph, government would receive US$35 million from the World Bank over the three years of SAP.
He said that the original agreement with the World Bank was for disbursements of $10 million, however when the funding institution looked at the structural adjustment programme and what the country had set out to achieve, the World Bank Board of Directors decided to increase the amount to US$15 million.
The loans would be repaid over a 30-year period with five years grace period at a 5-7.5% interest rate.
Joseph said that monies received from both the IMF and the World Bank would be used to finance small business loans facilitated by the Grenada Development Bank, Government’s special projects, needy assistance programme, increase in housing assistance and payment of unpaid claims.
THE NEW TODAY understands that the IMF would be setting up a local office soon to better monitor the performance of the Mitchell government and its spending of the borrowed monies.
Government officials in St. George’s have said that the main objective of the homegrown programme is to create jobs and conditions for higher economic growth.
Last year, government announced a series of austerity measures including a widening of the income tax net, and a doubling of the property tax to help raise revenue for the State.
Government reportedly spends 70 cents of every dollar picked up in taxes on salaries and wages.