The Financial Secretary said that since 2012, the government has not used any of its overdraft facilities at any bank.
But she also stated that the government has had “mass improvement in the affairs of administering the finances of St. Kitts and Nevis.”
Hazel shared the view that on the issue of the short term resolutions passed in parliament on Monday 25th August, (2014), one has to look at what is prescribed by the Finance Administration Act of 2007. She said the Act provides for the control and management of public funds, the authorization of expenditure, the raising of money by government and the control of the public debt and giving guarantees.
Hazel however said though the arrangements are being made for access to the monies, over 500 million, there currently is no need for the funds.
“With that being the case, one may ask the question, why then is the government trying to get authority to raise 75 million. And the simple answer is that St. Kitts and Nevis would not be moved to another geographic region anytime in our lifetime. We happen to live in an area that is prone to natural disaster(s) and so what this is simply doing is providing for precautionary funds so that the government in an emergency can respond in quick time.”
Hazel revealed that resolutions for short term borrowing is nothing new, “it is simply an annual authorization to roll over or to re-new short term borrowings since we are not asking for approval to borrow more in the short term.”
Making reference specifically to the overdraft amounts being provided for the St. Christopher Air & Sea Ports Authority, SCASPA, she said they had in the past been granted a facility of up to 29 million dollars and this was reduced this year to 15 million. And similarly the tourism authority had an overdraft of 8 million previously and that was reduced to 5 million.
“This demonstrates the seriousness in which government has managed its finances and the management of the National Debt,” stated the Financial Secretary.
Responding to recent arguments that the overdraft facilities permitted by the resolution will help to increase the National Debt, Hazel indicated that all the numbers speak to a firm downward trend in relation to the debt. She said government is actively managing its debt.
The chief financial officer made the point that the 46.1 million dollars that was returned to IMF was initially required to help support the banking sector, if something were to have gone wrong.
But Hazel said after being through the 36 months of the IMF program there was no sign that the money was needed. However while it was being held by the country it was counted against the debt and must be repaid, she cited.
“She explained that while “we held it we had to pay interest. And we saw no wisdom in keeping it beyond the period so the decision was taken to return the money. So why saddle the public with a debt that you really don’t need.”
In addition, it was also revealed that government had also refused to draw down on 22.2 million dollars which were also available as part of the IMF program.
She that the Public Debt which stood at 190 percent of GDP in 2009 was 95 percent of GDP as at June 2014.
“We can take a look at the Public Sector debt which in 2006 stood at 185% of GDP. It spiked to 190% of GDP in 2009. Where are we today? In 2014, we saw the debt moving from 190% of GDP in 2009 to 102.6 % of GDP in December 2013. As at June 2014, the debt is recorded at 95.6% of GDP effectively rolling off almost 100% points in relation to GDP,” she told listeners
She said the Federal Government is paying its debts.
“Government is actively managing its debt and by the end of this year our own projections at the Ministry of Finance is that the debt would be recorded at approximately 85% of GDP,” predicted Hazel.