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2023 Estimates

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Parliament has approved Estimates of Income and Expenditure of EC$1,445,886,613 for the 2023 fiscal year, an 8.8% increase over the approved budget for 2022.

The estimates were approved even as the opposition complained, for yet another year, that the capital budget is bloated by Other Receipts, which at EC$225.9 million dollars, represents 30% of the capital budget.

With the vote in Parliament, the Minister of Finance Cmaillo Gonsalves can  present the Budget on Jan. 9, 2023.

In presenting the Estimates, Gonsalves said the budget for 2023 is broken into recurrent expenditure, inclusive of amortisation and sinking fund contributions, of EC$974,323,500 and capital expenditure of EC$471,563,113.

Financing is expected to come from current revenue of EC$761,431,200 and capital receipts totalling EC$684,455,414.

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The 2023 current expenditure, exclusive amortisation and sinking fund contributions amounts to EC$771,708,133 and current revenue is estimated at EC$761,431,200.

“Consequently, there is a current deficit projected in the Estimates of EC$10.3 million,” the finance minister told lawmakers.

Current revenue in 2023, is EC$761.4 million — 12.4% or EC$83.9 million above the amount budgeted in 2022.

“The projected improvement in revenue performance for 2023 is indicative of the uptick in real economic activity projected for the year 2023,” Gonsalves said.

He said revenue from tax sources is expected to contribute EC$648.3 million to the Consolidated Fund in 2023 while non-tax revenue is estimated to gross EC$113.2 million.

Camillo Gonsalves
Minister of Finance Camillo Gonsalves presenting the Estimates to Parliament on Wednesday, Dec. 14, 2022.

Tax revenue is expected to increase by 11.3%.

As regards the major tax types, taxes on income and profits are estimated to increase by EC$8.3 million, or 5.3%. Taxes on goods and services by EC$20 million or 10.4%; and taxes on international trade and transactions by 27% or EC$45.7 million.

Non-tax revenue collection in 2023 is estimated at EC$113.2 million — 19.2% more than the amount budgeted in 2022.

Non-tax revenue is expected to come mainly from sales of goods and services, which is projected to generate EC$95.9 million — EC$20.2 million more than the amount collected in 2022.

Revenue from non-tax sources is also expected to come from inflows from other miscellaneous sources in the amount of about EC$12 million, Gonsalves said.

The total estimated recurrent expenditure inclusive of the amortisation and sinking fund contributions is EC$974.3 million — 4.6% or EC$42.5 million above the amount budgeted in 2022.

The recurrent expenditure for 2023 is made up of current expenditure — EC$771.7 million; amortisation –EC$180.6 million; and sinking fund contribution — EC$22 million.

In the 2023 Budget, current expenditure is increased by 6.1%; amortisation is down by 1.2% and sinking fund contributions remain flat.

Gonsalves said compensation of employees increases by EC$19.8 million, or 5.6% and other transfers, including social assistance, training, grants and contributions to local regional international organisations is expected to realise an increase of EC$13 million or 9.6%.

Under recurrent expenditure, the budget allocates EC$373.8 million to compensation of employees; pensions — EC$60.3 million; other transfers — EC$147.6 million; debt service — EC$282.9 million; goods and services — EC$109.7 million.

Transfer payments to local regional and international organisations and individuals, called Other Transfers — are estimated in 2023 at EC$147.3 million — an increase of 9.6% when compared with the approved 2022 budget.

Other Transfers includes grants and contributions — EC$102.1 million; training — EC$21.8 million; and, social assistance — EC$23.4 million. 

It also covers payment of public assistance to the vulnerable, scholarships, and other financial support for tertiary education and grants and contributions to local, regional and international organisations.

The budget for expenditure on goods and services in 2023 is EC$109.7 million — A 5.6% year-on-year increase.

The capital estimates in 2023 amounted to EC$471.6 million — an 18.6% increase or EC$74.1 million over the approved capital budget for 2022.

“The capital budget, which reflects the government’s public sector investment programme, is an important developmental tool, which it uses to translate vision and strategy into tangible project activities,” Gonsalves said.

“The Public Service Improvement Programme outlines the government investment priorities and programmes that are designed to enhance capital formation, build resilience, promote competitiveness and stimulate economic growth.”

He told Parliament that the capital programme was conceptualised in such a way as to facilitate growth over the medium term, and to defend against the impacts of climate change and natural disasters.

“To this end, the 2023 budget and the two forward years will see increased attention being paid to the important sectors of tourism, construction and agriculture.”

Godwin Friday and Terrance Olliverre
Opposition Leader Godwin Friday, left, and Southern Grenadines MP, Terrance Ollivierre during the presentation of the Estimates on Wednesday, Dec. 14, 2022.

He said that as such, the capital budget for 2023 is concentrated in four ministries, which together account for 82% or EC$386.5 million of the total capital estimates.

They are: the Ministry of Transport and Works — EC$97.5 million, the Ministry of Urban Development, etc. — EC$113.8 million; the Ministry of Finance and Economic Planning — EC$146.8 million the Ministry of Tourism, Civil Aviation etc. — EC$28.7 million.

The finance minister said that while a significant amount of the money in the tourism capital budget 2023 is within the Unleashing the Blue Economy of the Caribbean (UBEC) programme, the expenditure is largely agricultural.

He said that because of where the loan is coming from – the World Bank — it is located in the Ministry of Sustainable Development, which is subsumed within the Ministry of Tourism.

He said that as regards functional classification heads 79.8% or EC$376.3 million of the capital budget is accounted for by four of the nine functional heads.

These are: Economic Affairs, which receives 50% of the capital budget for an investment programme, which is estimated at EC$235.9 million and intended to provide the basis to stimulate growth in the main productive sectors of the economy.

Environmental Protection has been provided with EC$69.9 million or 14.8% of the 2023 capital budget aimed at strengthening the country’s resilience to natural disasters.

Health has been provided EC$36.7 million or 7.8% of the capital budget to further enhance the quality of care and sustainable environmental services and social protection receives EC$33.7 million or 7.2% share of the budget to provide assistance to vulnerable individuals and families.

The 2023 capital budget is financed by domestic receipts of EC$100.2 million, or 14.6% of the total, capital revenue of EC$1 million — 0.1% of the total; and, local loans of EC$99.2 million, or 14.5% of the total.

External receipts of EC$584.3 million represent 85% of the total; grants of EC$68.7 million — 10%; external loans of EC$289.7 million, or 42.3%, and other receipts of EC$225.9 million dollars or 30% for a total of EC$684.5 million.

Gonsalves said that in 2023, a total of EC$100.2 million will be raised from domestic sources to finance the capital budget.

Revenue from the sale of government assets, namely Crown lands is budgeted to yield EC$1 million, while local loans of EC$99.2 million will also be raised.

External receipts — a total of EC$68.7 million will be raised from grants, of which EC$45.1 million will come from multilateral organisations and 23.6 million will be received from a number of bilateral sources.

He said that the main multilateral donors in 2023 are as follows the European Union, which will provide EC$5.7 million; the UK CIF – UK Caribbean Infrastructure fund — EC$28 million, which is largely to the port project; the Caribbean Development Bank — EC$7.2 million; and, the Global Environmental Facility will contribute EC$1.3 million.

“The government of St. Vincent and the Grenadines will also receive grants totalling EC$23.6 million from a number of friendly governments,” Gonsalves said.

He said the largest contributors for 2023 of grant financing include Taiwan — EC$15.7 million; Japan — EC$3.4 million; Morocco — EC$1.9 million and India — EC$2.7 million.

“In respect of external loans, a total of EC$289.7 million is expected to be raised in 2023 — EC$234.2 million will come from multilateral creditors, and EC$55.5 million will be raised from bilateral sources,” Gonsalves said.

He said the main sources of multilateral loan financing in 2023 are the Caribbean Development Bank — EC$120.7 million; the International Development Agency of the World Bank — EC$90.3 million; the European Investment Bank — EC$1 million, the OPEC Fund for International Development — EC$3.8 million; the CARICOM Development Fund — EC$5.1 million; ALBA — EC$7.4 million, and Demerara Bank Ltd. of Guyana –EC$6 million.

Also, bilateral loans will be raised from Taiwan — EC$52.2 million — and Kuwait — EC$3.3 million.