By Ashford Peters
A bill seeking authorisation for the Godwin Friday administration to borrow EC$200 million in local loans drew some fire from the Ralph Gonsalves-led opposition in Parliament.
Friday, whose New Democratic Party (NDP) is into its third month of governance, having thrashed the Gonsalves-led Unity Labour Party (ULP) 14-1 in the November elections, presented the Public Sector Investment Loan (2026) Amendment Bill for authorisation to raise funds to finance the government’s public sector investment programme.
The prime minister said the bill allows the government to raise EC$200 million in local loans to assist in financing the public sector investment programme.
He told lawmakers the funds raised under the authority of this act shall be used for the public sector investment programme.
“These funds, they are a charge on the Consolidated Fund and, of course, the minister responsible under this legislation would be the Minister of Finance. This is the normal process of providing for the funding, the programmes that are set out … in the estimates, and that have been spoken of in the budget debate thus far,” the prime minister told lawmakers as he presented the bill on Friday.
However, opposition senator Carlos James in debating the bill contended that while Friday outlined that it was the usual borrowing in terms of the process in which the government secures its monies to facilitate a number of its capital programmes, as a member of the previous government, he wanted “to highlight and to caution that this is really not the usual”.
James said it was “very unusual” in the sense that the Friday administration was “increasing the sum to $200 million” for financing the public investment programme.
James, anticipating the new government’s response, said he knew the excuse in the rebuttal would be that the previous government went over what the limit was on the last occasion, “from $85 million up to how much more millions”.
James contended that his government exceeded the limit because they were “dealing with a particular situation of a recovery programme from Hurricane Beryl.
“The expenditure which came from that is not of our own making, but to deal with the loss and damage and to deal with some of the mitigating circumstances that came as a result of the hurricane, we had to take those measures,” James told lawmakers.
The opposition senator contended further that the government is so concerned about the public debt and its increase, but it is reducing the debt burden on bilateral and external loans, which are at concessionary financing, with interest rates ranging from 1 to 3%.
“This is where most of our loans are usually secured to roll out a number of our programmes, both in capital in nature and also dealing with emergencies from natural hazards,” James told lawmakers.
James said the immediate-past government established the Contingencies Fund “to facilitate our responses to natural hazards”.
He asked whether borrowing at a domestic rate is going to be “a trend”, with the government reducing borrowing on external loans at concessionary terms where there are important debt clauses.
James told lawmakers that in the event of natural hazards impacting the country, “these debt clauses immediately put a freeze on the interest rate repayment of loans” until there’s a recovery.
James said it would also be of concern to Vincentians who are going to be “saddled with high interest debt repayments at commercial rates at no lower than 6 to 12%”.
‘Disingenuous’ and ‘repetitive’
However, in response, Minister of Agriculture Israel Bruce accused James of being “disingenuous” and repetitive on the point he was making.
Bruce referred to the section on external loans in the 2026 Estimates of Revenue and Expenditure, in an attempt to show how “disingenuous” his argument was.
Bruce told lawmakers the first thing James tried was “to create for themselves a caveat…
“He lumped volcanic eruption, he lumped (Hurricane) Beryl and natural disasters, he called it, as a lump,” Bruce said.
The agriculture minister said that in 2025, under the ULP administration, Parliament approved $103,358,482 as under the local loans envelope, but that “figure was revised” to $187,001,425, the government then, increasing local loans by $84,000,000.
Bruce said James spent “some time in a lovey-dovey conversation” expressing a “simple point” about “15 times in about 10 sentences”, which “the very ordinary economic students understand that if you’re borrowing at concessionary rates, then your payback burden is not going to be so heavy”.
Bruce said the question that has to be asked and answered by John Public is whether or not there was a true appreciation of that fact by James’ administration.
Bruce pointed to the section of the Estimates called Capital Receipts, where external loans are listed.
“That’s the loans that he’s saying that the rates for repayment are concessionary,” Bruce said. “So, let’s skin the cat.”
Bruce contended that in 2025, external loans amounted to EC$495,436,222 revised to EC$549,000,000.
“We are talking a revision of $54,000,000, $54,000,000 on external loans. I want the Form 3 math students to be listening. We’re talking roughly $54,000,000 in external loans by a government that was conscious that when they borrow on the external side that the concessionary rates redound to the benefit of all of us.
“But they borrowed $54,000,000 on the external side… On the local side, they went for an additional $84,000,000 when they knew that the repayment rates were going to be higher,” Bruce told lawmakers.
Bruce said, “… numbers don’t lie. So how come all of a sudden you become so conscious that when you borrow on the local side that the rates are so much higher, but you went and borrowed $30 million more than you borrowed on the external side in 2025?
“Explain that to the Form 3 math student. You’re talking and don’t understand basic mathematics? The numbers are clear: $103,000,000 approved in 2025. Revised estimate $187,000,000. That’s on the local side,” Bruce said.
The Public Sector Investment Loan (2026) Bill went through all stages and was passed on Friday.