Budget 2024: Nine months in

By *Jomo Sanga Thomas

(“Plain Talk” Sept. 13, 2024)

I wanted to gauge where we are as a country and as a people. I thought a good place to start was to go back to Budget 2024 and see how the numbers match our reality. Budget 2024 was an estimated EC$1.6 billion. It was said to be a 12% increase over the 2023 budget. A few things jumped out at me.

The budget is more than 90 pages long and covers the usual areas: health, housing, education, security, etc., but there are a number of glaring omissions. I read in vain for a disclosure of the total debt faced by the country. In light of the series of huge loans taken from the Republic of Taiwan, I wanted to know, as a stand-alone debt burden, how much we owed to the regime in Taipei. The debt must be approaching EC$1 billion. Since the loans were from the Taiwan Import-Export Bank, I have been curious about the interest rate and other terms of payment. Remember, this is a country our prime minister boasts has a “hook in the gill” of our country.

Rather than a discourse about this very important matter, Finance Minister Camillo Gonsalves drivelled on about the 2022 IMF Article IV Consultation, “The debt ratio is projected to peak at 89.2 percent of GDP in 2024 and steadily decline thereafter to fall below 60 percent of GDP before the regional target date of 2035… The IMF goes on to say that ‘The public debt to GDP ratio is expected to remain elevated in the near term before steadily declining afterwards, noticeably as construction of large investment projects is completed.’”

Significantly, Other Transfers amount to EC$156.6 million, Interest Payments and Loan Charges to EC$107.2 million, Amortization to EC$188.6 million, and Sinking Fund Contributions to EC$22.6 million. Taken together, these payments or set-asides come close to one-third of the national budget. Has anyone ever wondered what constitutes other transfers? Year after year, citizens suffer through a five-hour budgetary presentation without ever knowing what many of these terms mean. 

What we do know is that when wages and salaries of EC$389 million and pensions of EC$70 million are added, more than 67% of the budgetary allocations are taken. It means that a very small slice of the budget is left to do everything else that our society needs. A troubling aspect of this situation is that because of the burgeoning debt, the nation collects upwards of 60 cents of each dollar, which goes toward paying the debt. 

This brings us back to the IMF quote offered by Finance Minister Camillo Gonsalves. Can we be satisfied, as the IMF seems to suggest, that this debt is manageable? This situation is alarming and demands fiscal prudence, greater economic management, and efficiency. Should we be grabbing at every big-ticketed project, such as the Kingstown port that cost hundreds of millions of dollars? In 2022, the public debt was EC$833 million or 88% of gross domestic product. Is this sustainable? The next generation is being burdened with debt, which is frightening. Currently, each Vincentian owes the equivalent of about EC$8,500. This average debt per citizen may be much greater considering the amount of borrowing that came as a result of COVID-19, the volcanic eruption and the passage of Hurricane Beryl.

Our government projections are sometimes way off. Budget 2024 allocated EC$15 million to improve cricketing facilities for the T20 cricketing World Cup. Depending on who you believe, by the time the games were played, the expenditure skyrocketed to between EC$38 and EC$50 million. I invited you to imagine a situation where St. Vincent spent approximately EC$50 million on cricket, EC$15 million on the athletic field at Diamonds and allocated only EC$27 million to agriculture and fisheries.

Budget 2024 committed EC$24 million to building 234 new homes and rehabilitating 520 more. An audit of the progress made in this regard will be interestingly revealing. 

Forty EC$43 million was allocated for hotel development at Diamond and Mt Wynne. There has been no movement regarding the hotel at Mt Wynne. Based on where our country’s development stands, one wonders whether the government should be involved in the hotel development business in the first place. Moreover, the funding for these hotels is snatched from the National Insurance Service. Should money from the NIS be taken to build hotels when the pension fund is experiencing tremendous strain? 

Budget 2024 boasts of the construction boom currently taking place in the country. Frankly, this has been a recurring theme budget after budget. Instead of the boast by our finance minister that “big tings a’ gwaan”, would it be unfair to observe that construction is probably the only constant ticker in SVG? Is this why schools and other public facilities are left to run down so that millions of dollars can be spent on rehabilitation? Is that why we allowed the old teachers’ college building at Arnos Vale to run down?  Now, there is a mad rush to spend EC$3 million in three months to fix it to house students from the Southern Grenadines.

According to the finance minister, Budget 2024 proposed upgrading the Mt. Wynne Beach Facility and developing a new tourism site at Troumaca, developing the Brighton Recreational Park, as well as 16 acres of land along the coast into a recreational park and bird-watching retreat. Progress report anyone? 

We were told that a portion of the proceeds from the sale of dredged sand off the coast of Brighton Bay will be used for the development. Now may be a good time for a report back. While the minister is at it, he may willingly tell us how much money the government made by selling the dredged sand and how much Aecon, the company contracted to build the port, saved by dredging our sand rather than buying and transporting the sand from abroad.

It’s almost time for Budget 2025. Vincentians can conclude whether Budget 2024 has met citizens’ expectations.

*Jomo Sanga Thomas is a lawyer, journalist, social commentator and a former senator and Speaker of the House of Assembly in St. Vincent and the Grenadines.

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