St. Vincent Government Revenues Dip as a Result of COVID-19

Prime Minister of St. Vincent and the Grenadines Dr. Ralph Gonsalves

KINGSTOWN, St. Vincent – The St. Vincent and the Grenadines government says its revenues have not been severely affected by the coronavirus (COVID-19) pandemic even as Prime Minister Dr. Ralph Gonsalves acknowledged that the island was on track for ‘an excellent year’ prior to the virus.

Figures released showed that the government’s revenue for the first six months of this year fell by an estimated EC$400,000 (One EC dollar=US$0.37 cents).

Revenue for April fell 20 percentage points and eight percentage points in June, compared to the same period of 2019. Further, government spending increased in the first half of this year, compared to last year.

Gonsalves, speaking on a radio programme here, said that in June, revenue fell eight per cent compared to last year and for April the numbers were almost “even Steven”.

He said that at the end of March, for the first quarter, the country was almost 9.5 per cent above 2019 revenue collection.

“And we were well poised for an excellent year then COVID came,” he said, noting that revenue fell by EC$3.3 million in June.

“Our expenditure, meanwhile, is up. Our expenditure for the first six months, total expenditure is up 12.1 per cent, recurrent expenditure up four per cent and the capital expenditure is up by about 160 per cent compared with last year,” Gonsalves said.

“And for the first six months of the year, we are just down 0.1 per cent. So that we would have been in a bumper year but we’re kind of holding it. It is difficult, but it is not abysmal, if you understand what I mean.”

In 2019, revenue up to the end of June was EC$283.2 million, compared to EC$282.8 million in 2020.

“But the situation has deteriorated. Clearly May was a bad month, though not as bad as countries that went one-third, 30-something per cent or even, in one case, 50% and even over 50 per cent drop.

“I think it has to do, in part, with the way in which we didn’t completely — we didn’t do the lockdown tight like a drum, we didn’t do the state of emergency, we didn’t do the draconian Chinese method.”

In 2019, capital expenditure for the first half of the year was some EC$16 million, compared to EC$42 million this year,” Gonsalves said.

“Just in case we have an upsurge of COVID and the thing getting even worse regionally and international, if we have to declare a public health emergency of if we have a natural disaster from any of the storms or hurricane ahead, I have about 76 million put aside for that purpose,” Gonsalves said.

He said this is made up of EC$54 million at the World Bank under the catastrophic draw down and EC$22 million in the Contingency Fund.

“What we have been doing in terms of raising capital, we do our rolling-three-month average treasury bills on the regional government securities market. We have been getting very good interest rates and we have been having more people bidding for our instruments than we have money so that’s a good sign and for our longer terms bonds, we have been getting them sold, as distinct from some other countries where neither of those two things is happening,” Gonsalves said.

“I believe that the investors, generally speaking, and the people dealing with the money business, they get the sense that we are both prudent and enterprising and doing things in a very sensible way,” he said.

Meanwhile, Gonsalves said the government will extend the unemployment benefit and other assistance that it has offered as a result of the COVID-19 pandemic.

“There are many benefits, like, for instance, the unemployment benefit for all sets of workers through the NIS (National Insurance Services) system and those which we finance outside of the NIS (National insurance system. Some of them, we have said three month, the three months is coming to an end and it looks as if we would have to extend the three months because we are not yet back to normalcy. It’s a challenging one but we have to do so,” Gonsalves said.

He told radio listeners he had been speaking to the Finance Minister and the Director General of Finance and Planning

“I’ve also been talking to the director of the NIS. So we have to do an extension,” he said.

This year, the NIS offered unemployment benefit because of COVID-19, although such a pay-out is outside of its portfolios and Gonsalves said he had indicated “from day one” that food was going to be a problem during the pandemic.

“Because I saw the falloff in employment as a result of COVID and we have devised the Love Box and we are doing a number of things to keep things ticking over and we really have not locked down like some other places so we haven’t suffered quiet to the same extent but there are real hardship for a number of people,” Gonsalves said.

“Persons who are getting their salaries, the one-quarter of the labour force who getting their salaries from the central government or the state enterprises not feeling it.

“They’re not really feeling it. They may have to help one or two of their family members and, therefore, their own has to stretch. But I am talking in a direct way…” he said.

CMC

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