Nevis Struggles To Reduce Debt
August 14, 2013
Premier and Minister of Finance the Hon. Vance Amory on Monday, August 12, 2013 said it is commendable that his Government has reduced the debt of the Nevis Island Administration (NIA) by some $3 million in the past six months.
Premier Amory, who was at the time delivering the NIA’s Fiscal Review for the first half of 2013 at a press conference held at the Red Cross Conference Centre, noted that the debt of the NIA as of June 2013 stood at $333 million which was a marginal $3.5 million less than the $336.5 million at which it stood in December 2012.
According to the Finance Minister, for the past six months, the NIA had been working to improve the management of the public debt through the strengthening of its debt management system. He said his administration had concluded debt restructuring negotiations with the Social Security Board and the Bank of Nevis and thanked them for acceding to the NIA’s requests in terms of having favourable consideration for the amounts which were owed to them.
“In the case of the Bank of Nevis, we were able to restructure nearly $50 million dollars in debt by having the interest rate reduced from an average of 8.25 per cent to 3.5 per cent and also extending the maturity from 15 years to 35 years. What that does is it reduces the pressure in terms of the repayment of that debt not only in terms of the interest rate but gives us a longer period to repay the debt and this eases the immediate pressure on our finances.
“Similarly, we were able to restructure about $12.5 million of our debt to Social Security by extending the maturity from 15 years to 40 years and having the interest rate reduced from 7 per cent to 3 per cent for the first five years and then graduating to a 5.5 per cent rate of interest,” he said.
Premier Amory also noted that the NIA is presently in negotiations with the St. Kitts-Nevis-Anguilla National Bank Ltd. to complete the arrangement made by the former administration to have lands sold to cover the whole or part of the debt owed to the institution.
“You will be aware that the debt owed to National Bank is in excess of $120 million so we have scheduled another meeting with the chairman and the senior members of the management of the bank for Friday of this week to further advance this discussion.
“I do believe that we will have favourable outcome because I believe also, I’m convinced that the chairman and his senior management recognise that this administration is serious about managing the finances of this country and that we will do so because it is necessary in any business, and government is really a business, to carefully manage the revenue which is collected, which we hold in trust for the people and to manage the expenditure so that we do not overextend ourselves, thereby, putting pressure on our financiers and having them beginning to wonder whether or not, through any activity of our own, as a large client of the bank would jeopardise the viability of the institution,” he said.
According to Premier Amory, when the total debt restructuring is completed the NIA is expected to see a monthly reduction of at least $1 million in terms of the savings which the Administration could apply to other economic activity in the country.