Leader of the Opposition, Jamale Pringle, wants the government to return to the International Monetary Fund (IMF) to borrow money to meet its shortfall in revenues.
Speaking on the Antigua Commercial Bank (ACB) loan agreement bill in the House of Representatives on Tuesday, Pringle said he did not support the government borrowing the $126 million at an ‘exorbitant interest rate’.
“Why we, the people of Antigua and Barbuda, should look at this facility when the government should be able to borrow monies at concessionary rate? For example, I think, and the government tries to avoid it, to have a relationship with the IMF. We all know the situation; the government’s back is against the wall as it literally has no money. We hear the cry every day: with this pandemic, why not approach the IMF?” he asked.
Pringle added that at one percent interest, the payments over time would save the country money.
He said pursuing an IMF loan at one percent, versus a loan from ACB at 6.5 percent, would net the country $30 million over the life of the loan.
The opposition leader also contends that taking a loan over $127 million from ACB could very well undermine the main.
Additionally, he accused the government of depriving small businesses of loans to finance their operations. He also charged the government with taking a large slice of the loan portfolio.
In response to the opposition leader, Minister of State in the Ministry of Finance, Lennox Weston, said going to the IMF is not in the best interest of Antigua and Barbuda at this time.
He said the IMF is considered ‘lender of last resort’ and countries only approach this institution for assistance when they have nowhere else to turn.
Additionally, IMF loans come with harsh conditions that countries must implement in order to meet the loan obligations.
He also said that the country’s reputation would suffer. “When you declare bankruptcy as a country, the reputational damage is massive.
Nobody does business with a bankrupt country; no investor comes to a bankrupt country. All your financial systems are under threat so that when you go to the IMF it is not only about what interest rate you get.
The biggest cost of going to the IMF is reputational damage and not being able to drive private investment in the economy because people know you can’t manage your finances properly,” he warned.
He noted that going to the IMF for a bail out would be conceding to the world you have no ideas or capacity.
Prime Minister Gaston Browne, who introduced the bill, said the government is using the facility to consolidate several existing loans with ACB into one loan that will be repaid over a longer period of time at a reduced monthly payment.