The government will borrow $ 127 million to consolidate its debt

By Elesha George

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After hours of debate between MPs on both sides of the lower house, parliamentarians voted in favor of consolidating government loans in the amount of $ 127 million as part of the 2020 Borrowing Bill Bill from of the Commercial Bank of Antigua.

The loan will consolidate all existing public sector borrowings with a long-term obligation and a $ 5 million overdraft facility with the Antigua Commercial Bank (ACB).

The government negotiated a repayment amount of $ 928,000 per month at an interest rate of 6.25% over a period of 20 years. However, Prime Minister Gaston Browne said interest on the overdraft, which is currently 11%, will need to be further reduced.

“I notice they charge an interest rate of 11% which is too high and I will ask the finance people to talk to the bank and bring this rate below 10%,” he said. declared to parliamentarians on Tuesday.

“ACB’s board should reconsider its position and seriously consider reducing the interest rate to 9% or even 8% if it can,” he added.

Meanwhile, government MPs harshly criticized Opposition Leader in Parliament Jamale Pringle, who insisted the government strike a deal with the International Monetary Fund (IMF) instead of consolidating its debt.

He felt it was the best option for the government to meet its obligations and ensure that retirees receive their social security benefits on time.

Pringle, who made his objection to the bill clear, also said that by taking such a large loan from the local bank, the government would put ACB “under pressure” and reduce the amount of money that bank would be making. able to lend. to other borrowers.

His comments sparked an hour-long debate with Minister of State at the Department of Finance and Corporate Governance Lennox Weston, underscoring his lack of understanding of how the economy works.

“The IMF is the institution of last resort. When you are bankrupt and no one will lend you money, you go to the IMF on all fours to save your country because normally you don’t have a dime to pay your bills and therefore you don’t have the money. choice, ”the Minister said.

According to Weston, “When you have declared bankruptcy as an individual or as a country, the damage to your reputation is enormous. No one does business with a bankrupt country, no investor comes to a bankrupt country, all of your financial systems are threatened so when you go to the IMF it’s not just about the interest rate you they will charge you. The biggest cost to the IMF is the deterioration of the reputation of private investment in your economy because people know you are a failed state with no capacity ”.

The prime minister also called Pringle’s argument “irrational” and noted that 90 percent of consolidated loans were taken out by the United Progressive Party administration during his 10-year tenure.

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