Political Leader of the main opposition National Democratic Congress (NDC), Senator Nazim Burke, has raised serious concerns over the decision of the Keith Mitchell-led government to plunge Grenada into another massive borrowing spree.
Burke was referring to the recent passage of a bill authorising the ruling New National Party (NNP) administration to incur an additional US$100 million debt to help finance the 2018 budget.
Speaking to reporters at the weekly Congress press briefing, he said that the decision is particularly “unprecedented and unexplained” especially with the next general election constitutionally due within weeks and the government often boasting of collecting a surplus in revenue.
Responding to questions posed by reporters during the press conference held at the party’s headquarters in St. George’s, Sen. Burke expressed the view that the bill is not necessary at this time, in light of the upcoming general election, which must be held before the end of May.
“We are in a situation where the government has been boasting very loudly that for the first time in years they are making a surplus…a surplus means that you (are) making more than you (are) spending…they are boasting that they are collecting more revenues today than they have ever collected in the history of the country and so the question must be asked – why does the government find it necessary, immediately after passing a budget and in the context of that surplus, to go out and borrow US$100 million, which is (equivalent to) EC$270 million,” he said.
Sen. Burke went on: “The national debt as we understand it at the moment is at about EC$2.1 billion…and this money amounts to about 12.5% of the entire national debt. This one borrowing amounts to 12.5% more or less of the entire national debt (and) about 25% of the entire budget of the country. Don’t forget, the budget is EC$1.1 billion (and) this is EC$270 million in one shot.
“So, the question is – what is this money for? And if you say you (are) making a surplus, why are you borrowing? The further question is this: If you are going to borrow money like this, why now at a time when you are just coming out of a restructuring (and) on the eve of a national election…and only weeks after the budget has been approved?”
The 2018 Budget Loan Authorisation Bill was approved by Parliament following the budget debate and was gazetted on December 20, 2017.
It authorises the Mitchell government to seek US$100 million funding through loans, bonds, promissory notes and other capital ventures to finance capital projects announced in the 2018 budget.
According to the bill, these monies may be obtained from the International Monetary Fund (IMF), International Development Association, International Bank for Reconstruction and Development, Caribbean Development Bank, other companies, banks and or financial institutions.
The legislation also states that “all agreements signed pursuant to this loan authorisation act, will be tabled in Parliament as soon as possible.”
However, Burke took issue that the Bill does not specify who are the other banks and institutions that the government can seek to borrow monies from.
“So, we don’t know who these other people are that the government may borrow that money from … what is the interest rate going to be – that is to be negotiated, what are the terms of the loan going to be – that is to be negotiated.
“So, the real issue that will determine the expense of the country’s liability as a result of that bill, are not contained in the bill itself (but) it leaves open the opportunity for the government to go and borrow these monies on terms which the Parliament will not have a chance to see and approve because the Parliament has already approved the bill.
“What we have here is that the Parliament is giving to the NNP government, a blank cheque of EC$270 million for them to fill out whose names they want on it and go forward from there.
Burke, who is optimistic about becoming the next Prime Minister of the country, chided the Mitchell government for being “highly irresponsible” in passing the bill at this time.
“This is absolutely unbelievable and we believe that it puts the country at tremendous risk at a time when you are talking about lowering the Gross Domestic Product (GDP) ratio and heading into a general election,” he said.
NDC Candidate for the South St. George Constituency, Raymond Roberts added his voice to the issue by expressing fears that some of the money to be borrowed will not be used for the real purpose as outlined in the bill.
Roberts said there are signs that the upcoming election would “be a bought out one” that is “infested with dirty money.”
“I am gravely concerned that some of that money is being utilised for the (NNP) election campaign. It is part of the campaign to me – I am saying that based on (and I am) not calling any business places name but you can check for yourself.
“Hundreds of thousands of dollars in vouchers…stoves and fridges and what have you are being distributed around the country by one group. I am not too sure I want to name any group, (but) that particular group seems to have all the money in the world to distribute just about everything.
NNP insiders have been boasting that millions will be spent by the party in the last weeks of the official campaign to woo the electorate in order to secure another clean sweep of all 15 seats at the polls.