by Linda Straker
- Government did not have a loan with the NIS
- Debt to NIS is in the form of interest on treasury bills and bonds
- NIS did not lose money through government debt restructuring programme
Louis Williams, Finance manager at the National Insurance Scheme (NIS) has disclosed that the scheme did not provide the Government of Grenada with a haircut during the debt restructuring period because the National Insurance Board instead opted to restructure with an extended time of repayment.
Williams said that NIS was one of the few to not lose any money through the government debt restructuring programme. The Government of Grenada did not have a loan with the NIS, but the debt to NIS is in the form of interest on treasury bills and bonds invested by the NIS. The total amount is EC$211 million with a maturity date at different years.
Under the restructured arrangement, the maturity date will move the original year to another year. “The money will be recouped down the road,” he told attendees at the first in a series of public consultation aimed at providing information on recommendations from actuary reports which calls for increasing contributions and the retirement age.
Grenada entered a 3-year, IMF supported Homegrown Structural Adjustment Programme (SAP) in January 2014. The main objectives of the programme were to boost inclusive growth and job creation and to restore fiscal and debt sustainability.
Through the programme, a number of debtors re-arranged payment that resulted in the country receiving millions in debt forgiveness or change in the year of repayment. During the SAP, the country also approved several new financial legislation pertaining to the fiscal management of the country.
In February 2019 the International Monetary Fund (IMF) expressed satisfaction with the Grenada economy 5 years after the island had adopted a home-grown structural adjustment programme with the Washington-based financial institution.
IMF deputy managing director, Tao Zhang said that the policy of fiscal discipline instituted by the ruling Keith Mitchell New National Party Government, supported by the Fiscal Responsibility Law, helped to break a pattern of high debt and low growth.
“The fiscal adjustment helped cut the deficit by almost 10 per cent of GDP. It also helped reduce public debt from 108 per cent of GDP in 2013 by more than 40 percentage points by now,” said Zhang, who explained that contrary to popular belief, the significant fiscal adjustment did not negatively impact output.
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