by Linda Straker
- IMF restructuring programme approved in 2014 under NNP administration
- NNP administration enacted new legislation toward public financial management reforms
- Dickon Mitchell administration will not remove sustainable fiscal measures
Foreign Affairs Minister Joseph Andall said that although Grenada formally ended the major elements of a 3-year International Monetary Fund (IMF) restructuring programme in 2016, the Dickon Mitchell administration will not remove some of the programme’s measures because they made fiscal sustainable sense.
“Although we can say that formally the programme or the major elements of the programme are over, in a real sense, many of the measures that came into force made sense, and we are keeping them in place,” Andall said while answering questions in a town meeting held in the constituency of St George North-West on Monday, 31 July 2023.
He was at the time responding to a question which queried about the status of the IMF restructuring programme, which was agreed upon and approved in 2014 with the New National Party administration led by Dr Keith Mitchell. Minister Andall explained that Grenada entered that programme out of a need to restructure the country’s fiscal framework.
“We had a high and unsustainable debt, the economy needed some urgent attention, and as a result of that, the government of the day entered into an agreement with the IMF,” he told the meeting which was broadcast live on Facebook.
The main objectives of the programme were to restore fiscal and debt sustainability, boost long-term growth through structural reforms, and safeguard the resilience of the financial sector. The programme’s cornerstone was a strong fiscal adjustment that focused on curbing spending and widening the revenue base, while maintaining space for infrastructure spending and social safety nets.
The fiscal adjustment was complemented by a comprehensive debt restructuring, which secured meaningful debt reduction, addressed financing shortfalls, and put Grenada’s public debt firmly on a downward path towards the Eastern Caribbean Currency Union (ECCU) regional target of 60% of GDP by 2020. The Government then enacted several new pieces of legislation as part of public financial management reforms. These include the Fiscal Responsibility Act, which created the Fiscal Responsibility Oversight Committee, the Public Debt Management Act and the Public Finance Management Act.
