BASSETERRE, St. Kitts – DURING the most recent meeting of Parliament five related resolutions were tabled seeking the approval of the National Assembly to authorize the Government to access loan financing to the tune of EC $510 million.
Minister of Finance, International Trade and Commerce Hon. Dr. Timothy Harris advanced the resolutions to approve an amount of EC $510 million for short-term borrowing and EC $55 million for guarantees to the Nevis Island Administration and Public Corporations including the St. Kitts Tourism Authority and the Port Authority to assist them in funding operations for this year.
“The NIA is trying to raise finances through the issuance of government bonds on the Regional Government Security Market. However, the NIA cannot raise finances without the blessings of the Federal Government. So we have to go to Parliament and authorize the guarantee; it must be made lawful by resolution of parliament.
“This move is critical because without this facility, these corporations and departments of Government cannot just go to, in this case National Bank, and get money required to finance operations. What has happened is that these entities have experienced cash shortfalls and they are required to show that they are authorized to borrow.”
Dr. Harris informed that the Financial Secretary advised him that the amount of Treasury Bills issued is EC $343 million and the Overdraft of the Central Government is approximately $140 million which would allow the Government to avoid an increase in debt. He asserted that with the fluctuating bank overdraft and the consistent income from government bonds, the existing debt would not be augmented.
“We are in compliance with the provisions of the Finance Administrative Act. We are able to access the fluctuating overdraft which may go up to EC $150 million. But since this does not increase, there would be no increase in the total indebtedness of the Government. We are hoping to maintain the amount at EC $350 million so that we pay one debt by issuing another. This is why the debt is not going to be increased.”
The Finance Administration Act 2007 states that the “Minister may in a financial year, when authorized by resolution of the National Assembly for the purpose of meeting current requirements, borrow money from a bank, any other financial institution or any other entity by means of advances to an amount not exceeding in the aggregate the sum specified in the resolution”.
It also indicates that a guarantee of a financial liability shall not be given by the Government unless it is in accordance with the provisions of an Act authorizing the guarantee or authorized by resolution of the National Assembly.
“This is a significant sum but there is no need for alarm. Let me for the record make clear that these resolutions should not lead to any increase in the national debt,” Dr. Harris avowed.
