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‘Raising funds locally difficult without NCB’


Opposition Leader Arnhim Eustace has warned that as a result of the privatization of the National Commercial Bank (NCB), Ministers of Finance here will find it difficult raising funds domestically.{{more}}

Eustace expressed the view that the Government no longer has direct access to the coffers of the NCB, and this will affect the sustainability of the National Budget for 2011.

“Any minister of finance in the future from now on is going to have more difficulty raising funds domestically,” said Eustace, while delivering his response to the 2011 National Budget.

He said in 2010, the Government attempted to borrow $30 million from the international banks that operate here, namely First Caribbean International Bank, The Bank of Nova Scotia and RBTT, but the request was turned down.

“I am saying if international banks can’t lend you thirty million dollars, it says something of a lack of credit worthiness,” said Eustace, noting that the request is a small sum of money “relatively speaking”.

He said the NCB under its new owners will not operate different to the other international banking organisations here.

On Friday, November 12, the Government of St. Vincent and the Grenadines closed the deal with East Caribbean Financial Holding Company Ltd. (ECFH) for the divestment of the NCB. This saw the latter purchasing the 51 per cent shares of the NCB for EC$42 million, at EC$8.24 per share.

The bank will now be called the Bank of St.Vincent and the Grenadines Limited.

Eustace said: “We’ve got to watch it with this Government and the NIS when they look for alternative sources of finance to carry out the business of this Government.” He said the funds at the National Insurance Services (NIS) will be one of the Government’s alternative sources of raising finance.

“We had the luxury, Mr. Speaker, over the years of being able to approach the NCB as owners…with a board of directors appointed by Government and we get almost everything we want. That ain’t so anymore,” said Eustace.

He said the funds at the National Insurance Services (NIS) are not the Government’s money. “It is the people’s money and should be used for purposes as set out.”

Meanwhile, Eustace, commenting on the possible consideration of increasing the retirement age in St.Vincent and the Grenadines to age 65, to address the future deterioation of funds at the NIS, warned that it will not be easy financially or politically.

He said he made this assessment against the backdrop of potential threats against the financial viability of the NIS. Eustace listed these threats as: $62 million of NIS funds tied up in the Bristish American Insurance saga; plans by the Government to borrow loans from the NIS now that NCB is no longer owned by the state and an economy in decline with less active contributors. (HN)