by Linda Straker
- Public Finance and Management Act 2015 amended
- Bill approved during 18 April sitting of Lower House
- Economic Development minister called on SOEs to establish investment units
Grenada’s Government has amended the 2015 Public Finance and Management Act for statutory bodies and state-owned enterprises (SOEs) with excess funds to be allowed to invest in regional and international government securities.
“This is ultimately aimed at strengthening entities such as the National Insurance Scheme by allowing them to build portfolio resilience by way of diversification of their investment portfolios. This includes investments in government securities which are currently prohibited,” said Philip Telesford, Leader of Government Business in the House of Representatives. He presented the Bill for debate and approval during the 18 April sitting of the Lower House.
Lennox Andrews, who is the Minister for Economic Development, told the House that the amendment will bring positive results to entities that will be affected because they will become more financially resilient. “For example, there is what is called the Regional Government Securities Exchange, which is operated from the Eastern Caribbean Central Bank, so if a statutory body now wants to invest, they can now invest in regional securities, the law doesn’t allow them to do so now, that is the beauty of this,” he said.
Minister Andrews said, “It allows them to go beyond the local boundary and invest regionally and internationally. So, for example, if the US Government is issuing treasury bill or bond, they can buy it.” Andrews explained to the House that the amendment allows statutory bodies and state-owned enterprises a new option of making money for becoming financially strong and for ensuring financial sustainability.
Andrews, a former Permanent Secretary in the Ministry of Finance, called on the state bodies to establish investment units. “Now that you can invest outside of Grenada, you should seek to establish investment units within your institutions and begin to take advantage of the opportunities that are available for you out there by buying government securities, by buying treasury bills by buying government bonds wherever,” he said.
There are almost 30 state-owned enterprises and statutory bodies, but few are known to be operating and making excess funds or profits or classified as profit-making bodies. Those classified as profit-making include the National Insurance Scheme, the Grenada Development Bank, The National Lottery Authority, the Grenada National Stadium Authority, the Grenada Electricity Services, the Grenada Ports Authority, Grenada Airports Authority, and the National Water and Sewage Authority (Nawasa).