Grenada seeking to trigger debt suspension clause

St George, Grenada, CMC – Grenada has written to financial agencies and multilateral partners requesting that the debt payment suspension clause in several loan agreements be triggered because of the devastation on the country by Hurricane Beryl earlier this week.

In 2022, the national debt of Grenada amounted to an estimated US$0.77 billion.

“The Minister of Finance has already written to some of our multilateral partners to indicate to them that this catastrophic event has happened and to trigger our debt suspension clause in some of these agreements,” Prime Minister Dickon Mitchell told a news conference.

Following the passage of Hurricane Ivan in 2004, then prime minister Dr Keith Mitchell had advocated and successfully campaigned for a debt suspension to be included in all new loan agreements.

The clause is triggered whenever the country is experiencing hazards from natural disasters, such as hurricanes, earthquakes or a health pandemic. The last time Grenada requested a triggering of that clause was in 2020 when COVID-19 was declared a pandemic.

Prime Minister Mitchell said that the passage of hurricane Beryl is having both fiscal and social impacts on the economy and the country will need significant resources.

He told reporters that the clean-up exercise alone will run into the “tens of millions of dollars,” while announcing there will be a national clean up on the weekend.

Mitchell acknowledged that “it is going to be a mammoth task to rebuild Grenada, Carriacou and Petite Martinique”.

He said that the Cabinet during an emergency meeting on Tuesday evening had agreed to establish several task forces to assess the damage and the impact the category four hurricane has had on the country.

“We have agreed to create a task force to treat with this significant catastrophic event this will have on the 2024 budget, the economy and the current fiscal situation.

“We are going to create a task force to deal with coordinating relief efforts in conjunction with NaDMA (National Disaster Management Agency) as it relates to our foreign partners,” said Prime Minister Mitchell, who is also responsible for National Disaster and chair of the National Emergency Advisory Council.

“The Cabinet also agreed to establish a task force to do a detailed assessment of the loss and damage to know how much the island has suffered in the area of agriculture, fishing, housing, public buildings, private buildings, public infrastructure and the environment as a result of hurricane Beryl,” he said.

“I want to stress that the environment has taken a severe battering as a result of this hurricane, not just the built infrastructure, we need to make sure that we record accurately the loss, the damage and that we are able to quantify this because it has significant implications for the economy of Grenada, for the government’s fiscal situation and for some of our contractual obligations, liabilities as well as benefits,” Mitchell added.

(Jamaica Gleaner)

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