Opposition Leader Dr. Ralph Gonsalves has revealed that over $210 million in approved Treasury payments and vouchers are currently frozen due to an acute cash liquidity crisis at the Ministry of Finance.
Speaking during a political radio broadcast, Gonsalves stated that while vouchers have been processed and approved for payment, the Treasury is unable to issue or dispatch them because state bank accounts lack sufficient funds. The liquidity freeze has left private contractors, state infrastructure agencies, regional institutions, and utility suppliers stranded without payment.
The payment freeze has created severe financial distress across the local business community. Gonsalves highlighted the strain on local transportation and logistics, noting that top private truckers have gone five consecutive weeks with processed government checks remaining unpaid.
The liquidity block affects a broad range of private entities, including suppliers of basic office stationery, paper, ink, computers, and event caterers. In addition, a proposed $13 million housing materials purchase from Jamaican supplier Tangwell stalled because the government was unable to provide a required 40% upfront deposit.
State infrastructure operations have largely ground to a halt due to unfulfilled subventions. The Roads, Buildings and General Services Authority (BRAGSA), which relies on a budgeted annual subvention of $26 million to pay personnel and execute capital works, is receiving barely enough cash to cover basic internal payroll. Consequently, BRAGSA has been unable to undertake public works and owes $4.5 million to private suppliers of hot mix asphalt, with no payments disbursed since April.
State energy obligations are similarly strained. Gonsalves disclosed that the government owes an estimated $22 million primarily to fuel distributor SOL for diesel and gasoline supplies under the national fuel pricing system.
The backlog of obligations extends into social security funds and regional bodies:
- National Insurance Services (NIS): The government is two months behind on statutory contributions to the NIS for August and September, accumulating an estimated $7.4 million in arrears. This includes roughly $3.2 million monthly for civil servants and $500,000 monthly for non-established casual workers. Gonsalves emphasized that while the Treasury continues to deduct NIS contributions directly from public sector employees’ paychecks, it has failed to remit those funds to the NIS.
- Eastern Caribbean Central Bank (ECCB): The administration owes nearly $25 million to the ECCB. Gonsalves noted that finance officials are struggling to make small partial payments amidst recurring inquiries from central bank headquarters in St. Kitts.
- University of the West Indies (UWI): Delinquent government payments to regional educational institutions have resulted in Vincentian students, including medical students at the Mona campus, facing lockout from scheduled examinations.
Gonsalves also warned of mounting risks to the country’s financial standing in regional debt markets due to severe underfunding of the statutory Sinking Fund.
Although the annual national estimates budgeted $25 million in sinking fund contributions to pay principal and interest on maturing government bonds, less than one-quarter of that target has been deposited nine months into the fiscal year. Gonsalves warned that neglecting the sinking fund damages investor confidence, leaving bondholders holding maturing debt instruments that the government may struggle to honor.
