SVG Budget Estimates For 2022 Amounts To 1.3 Billion Dollars

The Estimates of Revenue and Expenditure for the 2022 fiscal year amounts to one billion, three hundred and twenty-nine million, three hundred and forty thousand, eight hundred and sixty dollars ($1,329,340,860). This figure represents a 9.6 percent increase over the approved budget for 2021.

The budget for 2022 is broken down as follows:

Recurrent Expenditure(inclusive of Amortization and Sinking Fund Contributions) nine hundred and thirty-one million, eight hundred and seventy-seven thousand, six hundred and sixty dollars ($931,877,660); and

Capital Expenditurethree hundred and ninety-seven million, four hundred and sixty-three thousand, eight hundred and sixty dollars ($397,463,860);

Financing for the 2022 budget is expected to come from:

Current Revenue of six hundred and seventy-seven million, five hundred and eighty-six thousand dollars  ($677,508,000); and

Capital Receipts totaling six hundred and fifty-one million, eight hundred and thirty-two thousand, and eight hundred and sixty dollars ($651,832,860);

Supplementary Estimates 2021

The Supplementary Estimates that were approved by this Honourable House on May 11, 2021 in the sum of $117.9 million have been reflected in the “Revised Estimates 2021” column of the 2022 Estimates.

The Current Estimates

The 2022 Current Expenditure (exclusive of Amortization and Sinking Fund Contributions) amounts to is seven hundred and twenty-seven million, seventeen thousand, four hundred and forty-one dollars ($727,017,441).

Current Revenue is estimated at six hundred and seventy-seven million, five hundred and eight thousand dollars ($677,508,000).   Consequently, there is a current deficit of $49.5 million in these estimates.

Current Revenue

The 2022 Current Revenue of $677.5 million is 4.7 percent or $30.1 million above the amount budgeted in 2021. The improvement in Revenue performance in 2022 is reflective of the uptick in real economic activity projected for the year.  Revenue from tax sources is expected to contribute $582.5 million to the consolidated fund in 2022, while Non-tax Revenue is estimated to gross $95.0 million.

Tax Revenue is expected to increase by 5.3 percent as the major tax types are expected to contribute as follows:

Taxes on Income and Profits is estimated to rise by $1.2 million or 0.8 percent;

Taxes on Goods and Services are expected to increase by$4.2 million or 2.2 percent and

Taxes on International Trade and Transactions to go up by 4.1 percent or $6.7 million

Non-Tax Revenue collection in 2022 is estimated at $95.0 million. This figure is 1.7 percent more than the amount budgeted in 2021. The amount in the 2022 budget under Non-Tax Revenue is expected to come mainly from Sales of Goods and Services which is projected to generate $75.7 million in revenue. This amount is estimated to be $0.7 million more than the amount collected in 2021. Revenue from Non-Tax sources is also expected to come from inflows from other miscellaneous sources ($2.1 million).

Recurrent Expenditure

The total estimated recurrent expenditure, inclusive of the amortization and sinking fund contributions is $931.9 million. This figure is 4.1 percent or $36.7 million above the amount budgeted in 2021. The Recurrent Expenditure for 2022 is made up as follows:

The following are the changes recorded in the three sub-components of Total Recurrent Expenditure for the 2022 budget compared to that of 2021:

Current Expenditure increased by 4.1 percent;

Amortization is up 4.4 percent; and

Sinking Fund Contributions remain flat;

Under the rubric of Current Expenditure, the following items account for the budgeted increase in 2022:

Compensation of Employees,  an increase of $8.2 million or 2.4 percent;

Other Transfers, (which includes Social Assistance, Training, Grants and Contributions to local, regional and international organizations) is expected to realize an increase of $7.3 million or 5.7 percent

The summary of the recurrent expenditure budget by economic categories is as follows:

Wages and Salaries

The 2022 budget for Compensation of Employees is comprised of:

Other Transfers

Transfer payments to local, regional, and international organizations, and individuals are estimated at $134.7 million in 2022.   This figure represents an increase of 5.7 percent when compared to the approved 2021 budget.  A summary of the expenditure items that make up this heading are as follows:

This item of spending covers the payment of public assistance to the needy and vulnerable, scholarships and other financial support for tertiary education and grants and contributions to local, regional and international organizations.

Goods and Services

The budget for expenditure on Goods and Services in 2022 is $103.9 million. This represents a 15.4 percent increase in this category of expenditure. The main items of expenditure that contributed to the growth in Goods & Services over the period are:

Supplies & Materials ($29.6 million, increased by 20 percent) – mainly due to Ministry of Health $19m for COVID response.

Operating Expense($12.9 million, increased by 28.4 percent) – mainly on account of the ministries of National Security and Health, due to increased resources for police and health services.

Other notable items of expenditure under this category, includes Utilities, Communication Expenses, Rental of Assets and Professional Consultancy.

More details on Goods and Services can be seen on page Roman Numeral V of the Estimates in the Summary of Recurrent Expenditure by Standard Object Code.

The 2022 budget is concentrated in four main functional areas, which account for 79.9 percent of the recurrent Estimates.

General Public Serviceswhere a total of $377.4 million or 40.5 percent of the budget has been allocated;

Educationwhich accounts for 16.3 percent or $152.1 million of the recurrent budget;

Economic Affairswhere an amount of $108.2 million or 11.6 percent of the recurrent budget has been allocated; and

Social Protection which accounts for 11.5 percent or $107.1 million of the 2022 recurrent estimate;

Other important strategic priorities of the Government are Health and Public Order & Safety where 9.5 percent and 7.9 percent of the budget has been allocated respectively. The full summary of the recurrent budget by functional classification can be found on page Roman Numerals II of the Estimates.

Capital Estimates

The 2022 Capital Estimates amount to $397.5 million. This figure represents a 25.2 percent or $80.1 million increase when compared with the approved capital budget for 2021.  St. Vincent and the Grenadines is a Small Island Developing State and we suffer the impact of climate change. We are highly vulnerable to the impacts of climate-driven shocks and hazards, our geography leaves us exposed to extreme weather events including hurricane and tropical storms. These events, as you are aware, are usually devastating to public infrastructure, but the government is committed to protect its people and infrastructure from the threats of climate change and to build resilience to its impacts. Accordingly the PSIP for 2022 will see the government continue to build upon earlier efforts aimed at improving the resilience of public infrastructure. I spoke earlier about the Coastal and River Protection Unit which will help to complement this effort.

Besides the short term benefits from the PSIP; including employment impacts and the other knock on effects of project spending throughout the economy the government is really banking on the capital infrastructure investment it will be making in 2022 to provide benefits over the medium to long term by increasing the capacity of the economy to deliver increased output i.e. to be growth enhancing. For this reason, in this 2022 budget, increased attention will be paid to the important economic sectors of Tourism, Construction and Agriculture as these sectors are scheduled to receive targeted interventions aimed at stimulating growth. The social sectors of Health, Education, Social Services and National security will also continue to receive the attention of this government as we strive to strengthen the ability of these sectors to deliver improved public service.

The capital budget in 2022 is concentrated in five (5) Ministries which together account for 89.9 percent or $357.1 million of the capital estimates for 2022. These are:

Ministry of Transport and Works$94.8 million

Ministry of Urban Development,  $76.3 million

Ministry of Finance & Economic Planning,$138.3 million

Ministry of Education, $26.7 million

Ministry of Agriculture, etc$21.0 million

An analysis of the capital budget by main functional classification heads reveals that 70.0 percent or $277.9 million of the capital budget is accounted for by three (3) of the nine (9) functional heads. These are as follows:

Economic Affairs –receives a share of 44.6 percent of the capital budget. This investment programme, which is estimated at $177.3 million, is intended to provide the basis to stimulate growth in the main productive sectors of the economy.

Environmental Protectionhas been provided with $71.3 million or 17.9 percent of the 2022 capital budget aimed at strengthening the country’s resilience to natural disasters.

Educationhas been provided with $29.4 million or 7.4 percent of the capital budget to further enhance the quality of academic and technical/vocational education of Vincentians.

Economic Affairs

As stated earlier, this sector accounts for the largest share of the 2022 capital budget. Projects financed under this heading include major infrastructure developments such as roads, bridges, hotels, airport and seaport infrastructure. The productive sectors of Tourism and Agriculture are also included under this heading of Economic Affairs. Some of the larger projects included in this functional area are:

Port Development $42.5 m

Construction of Secondary, Village & Feeder Roads $11.0 m

Diamond Hotel Project $22.4 m 

Wynne Hotel Project $21.0 m

Agricultural Modernization and Development $2.5 m

Agriculture Production Support $1.0 m

Energy Efficiency and Solar PV Plant $6.0 m

Arrowroot Industry Revitalization $4.0 m

Capitalization of Medical Cannabis Authority $2.0 m

Volcano Eruption Emergency Project (VEEP) $24.4m

La Soufriere Eruption Disaster Relief II $2.3 m

Public Access Village Enhancement (PAVE) Proj. $2.5 m

Promoting Youth Microenterprise (PRYME) $1.4 m

Enhancement of Tuna Fishing Industry $1.3 m

Road Rehabilitation and Repair Progarmme II $3.1 m

Caribean Digital Transformation Programme $10.8m

Retrofitting of Building – IRD & FSA $3.5 m 

Environmental Protection

As mentioned earlier St. Vincent and the Grenadines is extremely vulnerable to natural disasters and the impact of climate change. Over the years the government has responded admirably to the effects of several of these weather events. The government intends to continue its response by implementing further adaptation and mitigation measures. This is evident by the number of projects in the capital budget that are linked to addressing environmental protection issues. Below are a few of the Environmental Protection projects that have been included in the 2022 Estimates:

Natural Disaster Management Rehabilitation $21.8 m

Regional Disaster Vulnerability Reduction $ 6.7 m

Sandy Bay Sea Defence Resilience Project $3.5 m

Purchase of Aggregate $1.0 m

Dengue Eradication Campaign $1.3 m

Volcano Recovery and Reconstruction $9.9 m

 Education

The envisioned economic growth that I spoke about earlier depends on the quantity and quality of inputs, including land, labour and technology. The quality of inputs is highly dependent on knowledge and skills, which are the basis for innovation, technology development and transfer, and increased productivity and competitiveness. Therefore in its quest to build a competitive post colonial economy the government is continuing its strategic focus on investment in education for sustainable growth and development; To this end a number of projects have been included in the 2022 Estimates, including the following:

School improvement Programme $12.7 m

Technical and Vocatinal Education and Training $ 5.5 m

Upgrade of School Premises $1.2 m

Redevelopment of Mary Hutchinson Primary School $1.0 m

Book Loan Scheme Phase II $1.0 m

Computer Replacement for Secondary Schools $0.7 m

OECS Program for Educational Advancement $0.9 m

 Other important projects in the areas of Health, Community & Housing, and General Public Services are as follows:

Upgrade of Health Facilities Phase II $1.0 m

Purchase of Equipment MCMH $1.0 m

Human Development Service Delivery Project $6.9 m

Housing Reconstruction/Rehabilitation Projects $6.0 m

Clare Valley Housing Reconstruction Project $0.7 m

Land Purchase III $5.0 m

Modern Parliament $10.5 m

Modern High Court Complex $5.0 m

Community Improvement Project $2.0 m

OECS Regional Tourism Competitiveness Project $4.8 m

Diamond Sporting Facility $4.2m

Diamond Multipurpose Center $1.6m

Capital Receipts

The financing for the 2022 capital budget amounts to $651.8 million and is comprised as follows:

 Domestic Receipts

In 2022, a total of $105.2 million will be raised from domestic sources to finance the capital budget. Revenue from the sale of Government assets, namely Crown Lands will yield $1.0 million while Local Loans in the sum of $104.2 million will also be raised.

External Receipts

A total of $69.7 million will be raised from Grants of which $50.5 million will come from multilateral organizations and $19.2 million will be received from a number of bilateral sources.  Our main multilateral donors in 2022 are as follows:

The European Union, who will provide $14.9 million;

United Kingdom Caribbean Infrastructure Fund (UK-CIF) will make available $20.0 million;

The Caribbean Development Bank is expected to contribute $2.1 million;

CARICOM Development Fund (CDF)  will contribute $3.9 million

Pan American Health Organisation (PAHO)/WHO to contribute $1.1 million

United Nations Development Programme (UNDP) $1.2 million

Global Economic Partnership (GEF)   $1.6 million

United Nations Environment Programme (UNEP) $1.1 million

The Government of St. Vincent and the Grenadines will also receive grants totaling $19.2 million from a number of friendly Governments. The major ones are as follows:

Republic of China on Taiwan (ROC   – $12.9 million

Japan                                            – $1.0 million

Italy – $0.7 million

India – $2.0 million

United Arab Emirates UAE-MASDAR – $2.5 million

In respect of external loans, of total of $211.6 million is expected to be raised in 2022, $171.1 million will come from multilateral creditors and $40.5 million will be raised from bilateral sources. The main sources of multilateral loan financing in 2022 are:

The Caribbean Development Bank with $84.7 million

International Development Agency $64.3 million

European Investment Bank $6.0 million

OPEC Fund for International Development $4.7 million

CARICOM Development Fund $11.4 million

Also, bilateral loans will be raised from the Governments of Republic of China on Taiwan $ 35.7 million and the Government of Kuwait $4.8 million.