Prime Minister of St Kitts and Nevis and Minister of Finance, Dr Timothy Harris, on Tuesday, delivered a nearly one-billion-dollar budget that he described as “people-centred,” demonstrated by “significant investments in our people’s safety, health, education and a range of social safety nets”.

The highly anticipated presentation was made at a sitting of the National Assembly at the St Kitts Marriott Resort’s ballroom.

The Prime Minister began the Annual Fiscal Statements and Budgetary Proposals for 2022 by disclosing that government proposed the allocation of $952.2M to support recurrent and capital expenditure, as well as to cover net lending and principal payment in the coming year. 

The following allocations were recommended:

• Governor-General – $1.78M; 
• Parliament – $1.97M;
• Audit Office – $1.27M;
• Justice and Legal Affairs – $12.3M;
• Office of the Prime Minister – $110.6M; 
• National Security – $80.1M; 
• Ministry of International Trade, Industry, Commerce and Consumer Affairs – $5.4M;
• Ministry of Finance – $300.2M;
• Social Development and Gender Affairs – $42.7M;
• Agriculture, Fisheries and Marine Resources – $20.3M; 
• Tourism and Transport – $32.7M; 
• Public Infrastructure, Post and Urban Development – $59.2M; 
• Education – $104.5M;
• Health – $73.7M; 
• Youth, Sports and Culture – $11.7M; 
• Sustainable Development – $25.4M; 
• Foreign Affairs and Aviation – $25.5M; 
• Office of the Attorney General – $12.3M; 
• Labour – $7M;
• Human Settlement, Ecclesiastical Affairs and National Health Insurance – $11.6M; 
• Environment and Cooperatives – $2.95M;
• Entrepreneurship and Communications – $9.03M;.

 

Dr Harris said the proposed allocations would “assist the government to maintain its heavy investment in our people”.

“When we hear $100-plus million to Education, we know we are talking people investment. When we hear $73M for Healthcare, we are talking people investment.”

He said it will also help to build the resilience in response to the pandemic, and noted they are taking a cautiously optimistic outlook for the fiscal year 2022.

“These proposals are setting the wheels in motion to advance our plans for putting St Kitts and Nevis back on track.”

Dr Harris said that in 2022, the global economic output is expected to increase by 4.9%. The global downside risk, he added, includes supply chain disruptions, ongoing social unrest in parts of the world, geopolitical tensions that have emerged from the cyberattacks on critical infrastructure, and the impact of severe natural disasters.

He said that the economies in the Eastern Caribbean Currency Union recorded a decline in real GDP of 14% in 2020. The decline in economic activity, he said, was attributed to significant contractions in key sectors. Tourism fell by 63.2%; Transport, Storage and Communications 25.7%; Construction 17.1%; and Wholesale and Retail 12.4%.

 

“Across the Currency Union, member states suffered a decline in economic activity ranging from 2.7% to 23.8%.

“The 2022 growth prospects within the Currency Union is now being put at 6.9%, and would be contingent on a number of variables, including the rate of uptake of available vaccines, the occurrence of natural disasters, and the emergence of new variants and waves of the virus across the Currency Union and in the tourism and investment source markets.”

Addressing the domestic economy, Prime Minister Harris said as the pandemic continues to test the fortitude and resilience of citizens and residents, and the economy at large, the Team Unity Administration maintained its record of being a good steward of government’s finances.

“That fortitude and resilience were demonstrated in the outturn of the Government’s fiscal operations for the 2020 fiscal year when a Recurrent Account Surplus of $40.8 million was achieved.

He pointed out that substantial stimulus packages and considerable capital programmes remained that would boost economic activity.

The prime minister also noted that the debt-to-GDP ratio increased from 54.3% at the end of 2019 to 67.9% at the end of 2020.

“The 13.6 percentage point decline in economic activity in 2020 was the primary reason for the increase in the debt ratio. As a result of our stimulus packages, we are already seeing a rebound in economic activity, and this will bring a further positive re-alignment of our debt to GDP ratio.”

Construction

The Prime Minister said that overall, the medium term outlook for the Construction Sector is positive with an expected growth rate in the region of 11.7 percent in 2022. 

“We are working to ensure that the Construction Sector is put back on track and we invite the Private Sector to come on board to ensure that this is achieved not only in 2022 but is sustained over the medium term.”

Agriculture

Dr Harris said the government’s goal “to produce more of what we consume”, continues to align with the commitment to making strides in achieving sustainable development goals #2 – zero hunger and #12 – responsible consumption and production.

“The injection of approximately $10M to boost the production of the agricultural sector and ensure greater food security has helped in this regard. Month after month we have had strong, positive returns in crops, in livestock, and in the fisheries sector.

“We are happy that the stimulus package has aided our fisherfolks and farmers in making progress and earning better livelihoods.”

Tourism

Dr Harris said this sector has borne the full brunt of the economic fallout of the pandemic.

He noted experts in the travel industry are hopeful for a return to pre-pandemic global travel levels by 2023.

“My government has initiated a strategy for putting the tourism sector back on track. Our strategy is designed to allow the sector to act as a catalyst for substantial economic growth and development through the creation of employment, spurring entrepreneurship and infrastructure development.”

CBI Programme

Dr Harris noted the ability of the Federation to weather the economic storm caused by the pandemic was significantly influenced by the continued success of the CBI programme.

He added that the CBI programme has maintained its ranking as one of the best in the industry.

The program, he said, received the highest score in the citizenship timeline pillar as a result of its accelerated application process.

“We have transformed our CBI. We have come a long way from the difficult period in 2014. 

“The robust procedures that are embedded in the programme have enabled us to maintain our platinum brand, and have ensured we take a significant share in the major markets around the world.”

National Security

The Prime Minister said that National Security continues to be a top priority of the Team Unity administration.

“We have put forward $80.1M to assist that particular Ministry.”

He expressed hope that the national security heads will use the investment well.

“We will continue our efforts to keep the country safe, and none can deny that St Kitts and Nevis in 2021 is far more at peace, and far safer than it was up to 2014.

“The primary responsibility of the state must be to protect the people from harm. When it comes to national security, preserving the peace, we make no apology for investing.”

Healthcare

The Finance Minister said the money provided for healthcare will help to provide necessary resources to fund additional medical professionals “and we need them”.

“A general surgeon, urologist, oncologist, orthopaedic surgeon, ear nose and throat specialist will all be recruited for the health institutions.

 “We will provide you with diagnostic services with the introduction of a new MRI machine to be installed at the JNF General Hospital for the first time.”

 He said support for health centres will continue, including renovation work at the health centre in Basseterre.

 “The future for our health systems look promising, and we can take comfort that our investments which have been proposed will lead to 2022.”

Cannabis

The prime minister said St. Kitts and Nevis is working hard to seize all opportunities within the cannabis industry.

“Our federation will seek to collaborate with neighbouring islands in the sub-region and wider Caribbean, as well as to establish relationships with global cannabis professionals and entities, to build a thriving cannabis industry here.”

Positive about 2022

Dr Harris said assuredly that they are positive about 2022.

“Positive in the context of the predictions of the IMF and our statistics department, that the country will grow in double-digit terms.”

He noted that “total revenues and grants will be comprised of just over $430M, and from taxes, we will generate about $468M, and $15.5M is being expected via development aid. In other words, all activities taking place in St Kitts and Nevis will be funded from our own governmental resources, and we are not anticipating that we will have to take on debt”.

On the expenditure side, it will be $910 million by the end of 2022 – $728.6M for recurrent expenditure and $180.9M for capital expenditure and net lending.

“If all things remain the same, we anticipate that we will realise an overall surplus of $4M – a primary surplus of $21.8M for the fiscal year 2022.”

He anticipated that they will eliminate the need to borrow, and will allow the government to attain the goal of a 60% debt to GDP ratio by 2023.

The Prime Minister said that so far they are reasonably projecting that for 2021 there will be a strong surplus.

“Over the period 2022 to 2024, it is projected that the fiscal operations of the government would on average result in an overall surplus of about $900,000.”

Recurrent revenue, he said, is projected at around $853.1M per annum and recurrent expenditure is projected at $733.5M.

He said they are on target to realize a comeback in the economy, and it will be in a better place. 

Photo caption: Prime Minister Harris delivering the budget address

 

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