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IMF Says Poor Communication Affecting Fiscal Performance of Nevis

The lending agency has said that “the fiscal performance of the Nevis Island Administration could usefully be bolstered and would benefit from improved communication between the twin-island federation,” in a press release dated 25th July under the stand-by arrangement between St. Kitts and Nevis.

The international organization also said that it has approved government’s expenditure of US$ 6.45 million.

In June of this year after the Federal Government turned down the Nevis Island Administration’s (NIA) request for a loan guarantee, the NIA had to seek funding from commercial banks.

In a report issued by the Eastern Caribbean Central Bank (ECCB) in June of this year, the bank announced that the NIA had defaulted on its treasury bonds.

Premier of Nevis, Vance Amory, said that the excuse given by the Federal Government for turning down the request was that it could not provide the loan guarantee although it was made knowing that “the NIA was in very serious financial straits”.

Amory said that the explanation given “was that the Federal Parliament which is required to provide the guarantee could not meet because of the Motion of No Confidence.”

“That was an excuse which we didn’t think was a realistic excuse, but again we are on different wavelengths in this matter,” said Amory.

“In 2012, the Federal Government gave a guarantee to allow the NIA of the former administration which we replaced in January to raise through the RSGM of the Central Bank 20 million dollars worth of financing…when the people of Nevis elected our administration to govern its affairs we began the process as early as February to get the Federal Government through the prime minister to consider granting the federal guarantee,” Amory said.

“We were left hanging on with that excuse,” he said.

Amory said that he wrote again requesting the guarantee but that it was not forthcoming, neither from the Sugar Investment Diversification Foundation (SIDF) or any funds which the government has for the federal government to assist to retire the bonds.

“Again in June we were advised that that would not be forthcoming and that we would have to apply to the commercial banks for it,” Amory said.

Prime Minister Denzil Douglas has agreed that the relationship between the Federal Government and the NIA needs improving. However, Deputy Premier of Nevis, Mark Brantley said that the prime minister has clearly shown his inclination and bias for the Nevis Reformation Party (NRP).

“I do not think that we talk enough. I think that members of the NIA seem to be entrapped with certain notions and actions and positions that they took when they were in opposition and that to me is preventing the normal development and the smooth development that should exist between a new local government in Nevis and the Federal Government,” said Prime Minister Douglas in answering questions about the strained relationship between the Concerned Citizens Movement (CCM) and the Federal Government.

Deputy leader of the CCM, Brantley, disagreed with the prime minister’s statements and charged that the prime minister “aligned himself politically” with the NRP and “engaged himself in the internal politics of Nevis”. Brantley also said that the Prime Minister attended an NRP Rally in the general elections in January of this year clearly showing his partiality.

Brantley also said that the prime minister intended to embarrass the NIA with CCM as the government because of his blatant fondness for the NRP.

The prime minister had deliberately delayed notifying the NIA that it would not be guaranteed a loan causing it to default on its treasury bonds payment, Brantley said.

“When we assumed office on the 23rd January, we realized or discovered that the SIDF was making budgetary support available to the Federal Government on a monthly basis. From the budgetary support, the NIA then constituted by the NRP was getting between 2 and 3 million dollars so there was a sharing mechanism in place. We entered office on the 23rd January—that mechanism was immediately suspended—no reason offered, no explanation given,” said Brantley.

Prime Minister Douglas has accused Brantley on numerous occasions of being a secessionist and has branded the CCM as such. Presently, Patrice Nisbett of the NRP is a member of the Douglas-led administration.

However, despite the strained relationship and financial hurdles, Premier Amory said he will not be shaken by Prime Minister Douglas and his antics.

“I am not daunted…I give the assurance that we are seeking to raise the funds locally from the banks and we believe with the turnaround of the economy and the activity which we are beginning to see and to feel happening that we want to ensure we make good our commitment to those persons who hold treasury bonds for I think we ought not to have been pushed into this position where the RSGM is now saying we’re sorry because we can’t pay,” Amory said.    






 

 

 

 

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