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HOME	APRIL 23rd, 2005

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APR 23

The Keith Mitchell-led New National Party (NNP) government has officially put the island's debt at EC$1.4 billion. The figure was given in parliament by Finance Minister Anthony Boatswain when he delivered the 2005 budget.

Boatswain told the House of Representatives that the significant decline in government revenue over the past year due to Hurricane Ivan has "negatively impacted" on Government's ability to service the public debt. He said that of the debt of EC$1.4 billion, some EC$1.2 billion is central government debt and EC$0.26 billion consist of government guarantees.

He disclosed that in light of the situation, the Mitchell Government in early October 2004 signalled its intention to seek the cooperation of creditors to understand the situation facing the country. In addition, Government advised the capital markets of the imminent appointment of legal and financial advisers to assist Grenada with a debt-restructuring programme.

Boatswain announced that over the past two months, a comprehensive debt sustainability analysis has been undertaken. "At present, the advisers are finalizing their recommendations to Government. Negotiations with creditors will soon commence. We crave the patience of affected creditors", he said. Boatswain was confident that a successful debt-restructuring programme for Grenada would result in lower interest payments, longer repayment periods and other forms of relief thereby reducing government's expenditure and narrowing the fiscal gap.

When Prime Minister Mitchell came to office in June 1995, he inherited a national debt of approximately $373 million dollars from Sir Nicholas Brathwaite's National Democratic Congress (NDC) administration. In less than a decade, the Mitchell regime propelled the national debt by another one billion dollars.

Some of the debts incurred were on the multi-million dollar sporting stadium which collapsed at Queen's Park from Hurricane Ivan, the Ministerial Complex and questionable projects involving loan guarantees to the Ritz Carlton hotel and golf course at Mt. Hartman.