St Vincent Opposition has expressed deep skepticism regarding the reliability of the government’s borrowing plans, characterizing the funding sources as “doubtful” and warning that the government would struggle to raise the projected funds in a timely manner.
Opposition Leader Ralph Gonsalves questioned the government’s plan to raise $200 million in local loans, a figure he noted was “almost double” the approved amount for 2025. He explicitly stated his doubt that the government could successfully raise this full amount, predicting that if they managed to raise even $150 million, they would be “lucky”,. He warned that any money raised would likely arrive only in “drips and drabs” rather than as a reliable lump sum.
The Opposition leader challenged the reliability of the cash flow, arguing that the funds would not be available when needed. The Leader of the Opposition pointed out that the government could not go to the market immediately; the earliest attempt would be “late next month,” meaning the first transfer of funds would not arrive until “late March at the earliest”. Furthermore, he noted that the market is competitive, with “a lot of people queuing up to sell government paper,” which could make it difficult for the government to sell its bonds.
Regarding external borrowing, the Opposition raised concerns about the reliability of securing funds from international bodies. The Leader noted that while there is an expectation of negotiating $60 million US in budget support from the World Bank, this funding is not guaranteed because “there are certain things which have to be done before that before you even draw down any of it”.
Gonsalves stated that because this borrowing is unreliable, the government faces immediate liquidity risks. The Leader predicted that the government would have “problems paying salaries on a monthly basis” because the necessary funds would not be in hand. Additionally, because many capital projects are funded by these local loans, he argued that these initiatives would not be implemented on a timely basis because the funding source is not available upfront,.
The Opposition Leader criticised the structural reliance on this borrowing, pointing out that $160.4 million of the local loans is allocated to the capital budget, yet the government is also forced to use borrowing to cover recurrent expenditure deficits. He concluded that this reliance on doubtful borrowing creates a situation where the government is merely “treading water dangerously”.