Grenada PM Says COVID-19 Impacting Heavily On Economic Growth, As It Re-Opens Local Economy In Phases

By Linda Straker
CMC Correspondent

ST. GEORGE”S, Grenada, May 11, 2020 (CMC) – Prime Minister, Dr. Keith Mitchell, says the global coronavirus (COVID-19) pandemic has significantly impacted economic growth, here, but he remains optimistic that the phased re-opening of the economy will help negate the situation.

Prime Minister Mitchell, in a radio and television broadcast, last night, said that revenue intake for April for example, had been reduced drastically, but investor confidence in the island remained high, even as the government maintained that the country’s borders would remain closed, as part of the efforts to curb the spread of the COVID-19 pandemic.

Dr. Mitchell said, “every day will be a designated business day, that is, for the businesses already granted permission to operate and those resuming this week”.

He said approved businesses will operate, within the allotted nine-hour period, and that the daily curfew remains in place, from 7:00 pm to 5:00 am (local time).

“Other new areas, slated for re-opening this week, include: real estate services, laundromats, landscapers and gardeners, flower shops, consumer credit stores, and companies offering payday loans,” Mitchell said, urging that the health and safety measures, including social distancing and wearing of masks, should be followed.

Mitchell, who is also the tri-island state’s Minister for Finance, said that by allowing more businesses to resume to pre-COVID-19 operating hours, his administration is anticipating an upsurge in economic activity, with the resumption of work in the construction industry, this week.

“We are also buoyed by the fact that, in the midst of this crisis, investor confidence remains high. The recent acquisition of Port Louis and Mount Cinnamon — with plans to add up to 500 new hotel rooms, in an investment worth more than US$350 million — speaks volumes for the recovery potential of our economy.

“It is important to note that no concessions will be given, until the developer is ready to begin construction of the four hotels,” he promised.

The Finance Minister told the nation that as the government continues to make future projections, critical actions are required now, to bring relief to citizens.

“Cabinet has, therefore, approved, in principle, price-support payments for nutmeg farmers. The terms and conditions are being finalised with the Grenada Cooperative Nutmeg Association. Government is also awaiting an update from the Grenada Cocoa Association, as to what assistance, if any, is required for those farmers.”

He disclosed that the government has also stepped in, to lend support to poultry farmers, moving quickly to approve a trade license, and waive the duties on two emergency shipments of feed, which became necessary, after a shortage, created by the mandatory closure of the main local supplier.

“These and other initiatives, are in addition to the economic stimulus package, I announced, very early in our COVID-19 response effort, and they come at a time, when government, itself, is dealing with the devastating impact of the pandemic.”

Mitchell said that from projections for an eighth consecutive year of growth, the government is now facing the “stark reality of negative growth, triggered, largely, by the significant impact on tourism, construction and education.

“This has resulted in a drastic decline in government revenue. In April for example, the combined revenue collection by Customs and Internal Revenue Division dropped by about EC$30 million, compared to that of 2019; a decline likely to be replicated, across our main revenue generating departments, over the next few months.”

The Prime Minister said that the government is, therefore, utilising its reserves and seeking international help to finance any deficits, and bring relief to citizens, while continuing the fight against the deadly virus.

“Already, we have attracted funding from the International Monetary Fund, the World Bank, the European Union, the government of India, the Eastern Caribbean Central Bank and the Caribbean Development Bank, among others. We continue to look at other sources for grants and soft-loan financing, as well as, to explore options for debt relief.”

He outlined that, notwithstanding, the team at the Ministry of Finance and the newly-established COVID-19 Economic Support Secretariat, along with the relevant stakeholders, have been working, diligently, to fine-tune and implement the relief measures.

“We are still in the very early stages of the roll-out, but, to date, close to 2,000 Grenadians have benefitted from the payroll and income support initiatives. The application and verification process is ongoing and proving to be very time consuming,” Mitchell said, noting that the authorities are “working, day and night and on weekends, to ensure that applications are duly processed, and payments promptly made”.

He said the government is also considering expanding the categories of workers, who are eligible for income support, to bring greater relief to a wider cross-section of the population.

Mitchell said later this month, the National Insurance Scheme (NIS) is expected to begin paying unemployment benefits to eligible persons.

“It is estimated, that more than 5,000 people will receive the benefits, disbursed over six months. The suspension of the two percent increase in NIS payment is already in effect and will cover the period, April to June 2020.”

He added that the monthly, advanced instalment on Corporate Income Tax and instalment payments on the Annual Stamp Tax have been suspended to help businesses ease any cash flow problems, during this period.

“We note, however, that some have opted to proceed with regular payments and we commend them. As promised, government has made additional funding available for disbursement, through the existing small business lending facility at the Grenada Development Bank.”

Prime Minister Mitchell said that the maximum threshold, available under this fund, has been increased to EC$40,000. Additionally, a reduced interest rate, of three percent, is being offered to people, involved in agriculture, fisheries and agro-processing.

Mitchell said electricity consumers will feel less of a pinch from this month, as they start to benefit from the promised 30 percent reduction in bills.

“Government is investing more than seven million dollars, and we are grateful for the cooperation of GRENLEC and WRB Enterprises for contributing three million dollars. These are the types of partnerships needed, as we chart the way forward,” Mitchell said.

Despite allowing more sectors to function, public transportation was not given permission, but Prime Minister Mitchell has promised that it is an area that the government is working towards granting approval.

“With many workers dependent on public transportation, government is working with stakeholders to develop appropriate social distancing and hygienic measures that will guide the resumption of this service. An official announcement will be made in the coming days,” he reported.

Schools and churches continue to be closed, along with a number of small businesses, such as barbershops and hairdressers, nail technicians and spas.

However, there will be a limited ferry, between mainland Grenada and the two Grenadine islands of Carriacou and Petite Martinique, which is governed by Grenada.

“We will continue to work closely with the service providers to ensure that the operational guidelines are adhered to,” Mitchell said.

Mitchell said that while this is imminent, the country is not yet ready to welcome commercial travellers, at the “most recent meetings of CARICOM and OECS leaders, we collectively agreed to start gradually, relaxing the restrictions for travel, as the pandemic in the region has been largely contained.

“Governments, airlines and hotels are now finalising the details of this phased re-opening,” he said, while declaring that once the requisite protocols are in place, Grenada’s anticipated opening of its borders will be in the first week of June 2020.

“I assure you, fellow Grenadians, we will not move unless we are satisfied that adequate health and safety guidelines are in place,” he added.