Government receives authorisation to guarantee loans to AID Bank and Government Housing Loans Board in an effort to assist public officers and
stimulate economic activity
Roseau, Dominica – August 11, 2009….. During the First Meeting of the Fifth Session of the Seventh Parliament, the 2009/2010 Budget was passed. During that Meeting, Parliament gave its approval for Government to guarantee loans to the Dominica Agricultural, Industrial and Development Bank (AID Bank) and the Government Housing Loans Board in furtherance of specific development objectives.
Parliament also gave approval to the Schedule of Supplementary Estimates for the Third Quarter of 2008/2009 amounting to $32.8 million and gave its consent for the Minister of Finance to borrow and guarantee by means of a fluctuating overdraft a sum not exceeding $34.5 million to meet Central Government’s current overdraft requirements and to guarantee overdrafts to statutory boards and public corporations for a further period of one year.
In a statement seeking the authorisation of Parliament for Government to guarantee a loan of $12 million from the Dominica Social Security for the AID Bank, Prime Minister and Minister for Finance and Social Security, Hon. Roosevelt Skerrit said that contracting of the loan “will assist the Bank in providing loans for the establishment of new business ventures and the expansion of existing businesses, support to the small business sector and housing.
The loan has a maturity period of 20 years, a grace period of 5 years and an interest rate of 6%. The Prime Minister said further that these terms “are very concessional terms and allows the AID Bank to un-lend at reasonable rates. With a grace period of five years, the Bank will have some breathing space before beginning its repayments”.
During the First Meeting of the Fifth Session, another resolution was presented to the House for authorisation to guarantee a loan for $16.8 million from the Dominica Social Security for the Government Housing Loans Board. The motion was approved by Parliament.
In a statement to the House of Assembly on the resolution, Prime Minister and Minister for Finance, Hon. Roosevelt Skerrit explained that the monies will be used by the Government Housing Loans Board for debt consolidation and to provide mortgage financing for public officers at a reasonable rate in the Government’s continued thrust to enhance the quality of life of Public Officers.
“The resolution being presented here is consistent with Government’s housing policy which is to provide a minimum standard of housing for all citizens. This loan will allow the GHLB to provide a greater number of public officers with financing under its regular mortgage programme. Part of the loan will be used to refinance an earlier loan which was contracted at a higher rate of interest. This consolidation therefore allows the GHLB to drop its interest rate on all its existing loans from 8.5 percent to 7.25 percent. The debt consolidation will also reduce the cost of debt service to the GHLB.”
During the First Meeting of the Fifth Session, Supplementary Estimates for the third quarter of the 2008/2009 fiscal year totalling thirty-two million, eight hundred and fifty-six thousand, five hundred and twenty-three dollars and thirteen cents (32,856,523.13) were approved by Parliament.
According to Hon. Roosevelt Skerrit, “the legal authority for this Supplementary Estimate can be found in Section 80(1) of the Commonwealth of Dominica Constitution Order 1978, as well as in Section 12 of the Finance and Administration Act, Act 4/94”.
According to the Prime Minister, this additional expenditure was financed as follows: grant funding -eleven million, one hundred and forty-one thousand, six hundred and twenty-one dollars (11,141,621) or 34%; loan funding -one million, six thousand and fifty-three dollars(1,006.053) or 3% and local funding- twenty-million, seven hundred and eight thousand, eight hundred and forty-nine dollars (20,708,849) or 63%. The amounts appropriated were utilized to meet critical and unforeseen expenditure during the period in question.
The largest disbursement in the amount of $13.5 million was in respect of the Ministry of Public Works and Infrastructural Development. This amount included an additional provision made to the tune of $6.6 million for the construction of the second phase of the Soufriere/Scotts Head sea defence wall. An additional sum of $ 5 million from local funds was also used to undertake repairs on roads across the country.
The sum of $5.1 million was spent with respect to the Ministry of Education. An amount of $2.4 million was used to meet commitments to various universities on behalf of Dominican students. Assistance to the Dominica State College amounted to $525,084 and the sum of $640,948 was used to meet expenditure related to provision of school bus service.
The Ministry of Housing was allocated the sum of $2.9 million. This included financing for housing repairs and sanitation. Provision was also made for housing assistance in Bense in the sum of $82,000 while an amount of $385,313 represented Government’s counterpart contribution in respect of the Petro Casa housing projects.
Parliament also gave its approval of a resolution to borrow the sum of $34.5 million by means of a fluctuating overdraft; $29.5 million is to be utilised to finance Central Government’s operations and the sum of $5 million to guarantee overdrafts to Statutory Boards and Public Corporations for a further period of one year, commencing from the 1st day of July, 2009.
The House of Assembly was adjourned Sine Die at just before 12.30am on Friday, August 7, 2009.
For more information contact:
Office of the Prime Minister
Mobile: + 1 767-235-2955
Kennedy Avenue, Roseau
Commonwealth of Dominica
Tel: + 1 767 266-3054
Fax: +1 767- 448-8960