KINGSTOWN, St Vincent, Oct. 25, CMC – The St Vincent and the Grenadines Parliament has approved legislation paving the way for the country to join the Development Bank of Latin America and the Caribbean (CAF), providing access to additional financing for economic development.
Prime Minister and Minister of Finance Godwin Friday, who piloted the legislation on Thursday, said membership would broaden the country’s financing options as the government seeks to address fiscal challenges, stimulate economic growth and protect vulnerable citizens.
“CAF is one more tool in our toolkit to get that done,” Friday told legislators, stressing that membership would not automatically guarantee loans or project financing.
The legislation gives legal effect to two agreements signed with CAF on October 8, covering share subscriptions and the bank’s immunities, exemptions and privileges.
Under the arrangement, St Vincent and the Grenadines will purchase 141 shares valued at US$14,200 each, representing an investment of approximately US$2 million.
Friday said the investment could provide access to an estimated US$8 million in borrowing, although individual financing arrangements would require separate negotiations and approval.
He said the government intended to pursue funding for infrastructure, climate resilience and sustainable development projects.
The prime minister acknowledged that the country’s public debt stood at approximately EC$3.6 billion (US$1.3 billion), equivalent to about 113 per cent of gross domestic product (GDP), placing pressure on government finances.
He said the administration would seek to stabilise the fiscal situation while maintaining social protection programmes and investing in economic expansion.
Friday also pledged that future borrowing would be guided by the government’s medium-term debt strategy, with consultations planned involving the private sector, labour organisations and civil society.
Opposition legislators supported the measure but raised concerns about potential borrowing costs and the projects to be financed.
Opposition Senator Carlos James cautioned that CAF financing was not necessarily concessionary and that interest rates could exceed five per cent.
He urged the government to ensure that loans were directed towards productive investments rather than recurrent expenditure.
Senator Keisal Peters also sought clarification on proposed projects and the timeline for accessing funds, warning that the legislation should not be regarded as a “blank cheque”.
Friday assured Parliament that each financing proposal would be assessed individually to determine whether it served the country’s economic interests.
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