Though grateful for a debt suspension under the Paris Club Debt Service Suspension Initiative (DSSI), Grenada was not privileged to receive a waiver on the interest, as well, for the period.
Giving an update on the initiative during Thursday’s post-Cabinet briefing, Trade Minister, Hon Oliver Joseph explained, “What the Paris Club did was to grant an 8-month suspension of payment of interest and capital to Grenada. This is not a waiver of the interest and penalty. After the suspended period we will have to pay the interest that we did not pay for the 8 months.”
Nonetheless, he said Government “welcomes that because we have to had to pay debts and at the same time service our local obligation, any easement of payment is helpful.”
Joseph went on, “Grenada was one of the few countries that got the suspension because of the way we are managing debt and our finances.”
In May, Prime Minister and Minister of Finance, Dr the Right Hon Keith Mitchell, welcomed the suspension of debt service between May and December 2020.
In a May news release, “Dr Mitchell said, “Given the significant decline in Government revenue due to the [COVID-19] pandemic, it is important that we explore all available debt service initiatives and opportunities for concessional financing. With each measure that is approved, Government can then use those resources to further improve the healthcare system and mitigate the economic and social impact of the pandemic. I want to assure the nation that the Government remains committed to making fiscally prudent decisions that will see us through this crisis and create a launch pad for future growth and development.”
In late March, the World Bank and the International Monetary Fund (IMF) called on bilateral creditors to provide debt relief for IDA countries like Grenada, suspending payments on loans and allowing them to use available resources to fight the pandemic. There was subsequent endorsement of this by the G20 and Paris Club.
Approximately, EC $14 million of Grenada’s debt burden was suspended through the arrangement.