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Government’s Debt Burden Revealed: Millions in Outstanding Liabilities

A recent report by the Public Accounts Committee has shed light on the Saint Lucia government’s debt burden, revealing that millions of dollars are owed to various lenders.

Outstanding Liabilities

According to the report, the Attorney General’s office has identified EC$2.49 million in outstanding liabilities from 12 pending litigations. However, this figure is just a small portion of the total government contingent liabilities, which are not recorded by the Treasury Department.

• The report highlights the importance of guarantee fees being charged as prescribed by the cabinet decision of 2012 to mitigate budget and credit risk.
• It also recommends that the Treasury Department record and report SOE (State-Owned Enterprise) contingent liabilities.

Debt Servicing

Regarding debt servicing, the report notes that a schedule of future payment obligations is reasonably prepared from borrowing agreements. However, not all files had an actual amortization schedule, but most information could be ascertained by examining the files.

• Examples of loan agreements include:
  • A US$14.3 million loan from ABI Bank Limited
  • A EC$174.3 million loan from ABI Bank Limited
  • A EC$58.8 million loan from Antigua Commercial Bank

Payment Commitments and Estimated Repayments

According to the report, annual payment commitments are known and subsequently recorded by the Debt Management Unit. A report provided by the unit shows the scheduled payments by the government on the external and domestic market for 2013.

• Estimated principal repayments: $135.9 million
• Estimated interest payments: [unknown]

Conclusion

The Public Accounts Committee’s findings highlight the need for greater transparency and accountability in the government’s debt management practices. It is essential that the government takes steps to address these outstanding liabilities and ensures that future borrowing is managed responsibly.