Financial expert cites challenges in finding finance to mitigate climate change

By Makeida Antonio

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Funding for climate resilience has been a challenge for Antigua and Barbuda, as the small twin island state is considered a high-income territory, according to a financial specialist.

Debt manager at the Department of Finance and Corporate Governance Nadia Spencer-Henry said that although the country is a small island developing state (SIDS), it is viewed by lenders as a country of “High income”.

“One of the challenges we have is accessing what we call concessional financing and that is, most of our debt is borrowed on commercial terms.

“We’re talking about 5% to 10% debt, which is where we usually borrow, even when we borrow from multilateral development banks like the CBD. [Caribbean Development Bank] or the World Bank, ”Spencer-Henry told Observer AM yesterday.

It was recently announced that the country will receive a US $ 46.2 million grant from the Green Climate Fund (GCF) that will go towards building structures capable of withstanding extreme weather events such as hurricanes. .

The government debt manager also said that historically, finding loans to mitigate disasters can be difficult as the country has a history of borrowing and this has implications for accessing new finance.

“Having to borrow over several years also puts our debt at a particularly high level and our debt service at a high level as well. We have debt both on the side of the type of debt we can access and the amount we need to access to tackle climate change and disaster-related events, ”she said.

Spencer-Henry explained that while Prime Minister Gaston Browne – who is also Minister of Corporate Governance – lamented that the country was labeled high income at several high-level international meetings, monetary organizations tend to compare and to contrast countries on the basis of their gross domestic income. product (GDP).

“The issues vary from country to country, but because multilateral organizations sometimes represent more than 200 countries in the world, or more than 180 depending on the organization, they need to consider what each country can access and if reducing access for one country places another country at an unfair advantage. . It all has to be managed, ”she said.

In the meantime, a brief update regarding Antigua and Barbuda’s debt-to-GDP ratio has been given. Spencer-Henry said the government has tried as much as possible to continue borrowing at the same level as before the Covid-19 pandemic.

“Before Covid we would have been in the region with just over 17% debt to GDP and you would realize we wouldn’t have had to borrow so much because we had good economic growth, income were performing well and during the Covid period we tried as much as possible to keep the debt from skyrocketing, ”she added.

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