The Caribbean Development Bank (CDB) has approved loans of US$25 million to Antigua and Barbuda and US$7.5 million to Anguilla to counter COVID-19 fallout and support economic recovery.
“The two loans will buttress socially responsible policies, particularly for the benefit of vulnerable people in Anguilla and Antigua and Barbuda, while backing the reform process in both countries to achieve greater resilience,” said CDB President Dr Gene Leon.
Both countries are heavily affected by the COVID-19 pandemic, which caused a recession in Anguilla where the gross domestic product contracted by 27.4% in 2020, and Antigua and Barbuda where GDP contracted by 16% last year, compared with 2019. Real income per capita decreased significantly last year in Anguilla (27%) and in Antigua and Barbuda (18.5%).
In addition, Anguilla is still reeling from Hurricane Irma, which caused damage equivalent to 97% of the country’s gross domestic product in 2017.
With support from CDB, the Government of Antigua and Barbuda identified essential reforms for stability and sustainability and set up a comprehensive medium-term fiscal strategy to restore debt sustainability and help steer the country towards recovery while keeping the pandemic in check.
“The loan to Antigua and Barbuda aims to achieve three goals, namely to strengthen health emergency preparedness and response capacities, to bolster social safety nets for vulnerable citizens, and to enhance economic and fiscal frameworks for recovery after the pandemic,” Dr Leon highlighted.
Before the onset of COVID-19, the Government of Anguilla made progress in rebuilding critical infrastructure and prudently managed the fiscal costs of Hurricane Irma.
Despite the challenges, brought by the pandemic, the Government made notable progress in strengthening fiscal resilience through the introduction of a new Goods and Services Tax, which is scheduled to be instituted in 2022. Moreover, social policy reforms are being implemented to advance Anguilla’s efforts to achieve the 2030 Sustainable Development Goals.
In addition, Anguilla increased its tropical storm disaster risk insurance coverage and has established an electronic-based land information system.
“The loan to Anguilla will provide much-needed fiscal space to aid the recovery from COVID-19 in 2021 while supporting reform actions to improve resilience to environmental and macroeconomic shocks. Given Anguilla’s high level of vulnerability, these are important prerequisites for improving economic performance and development outcomes over the longer term. The programmatic nature of the operation will help ensure that these reforms remain on track,” CDB President Dr Leon stressed.