The bank yesterday announced the grant of a US$300 million loan to be disbursed to the Ministry of Finance for use in a special programme covering the period 2015-2020.
The ministry’s programme, called simply the “Support Programme for the Medium-Term Fiscal Consolidation Strategy”, is designed to bolster tax revenue and to cushion reductions of subsidies. According to a media release from CAF, it will “represent an important input in strengthening tax revenue in the non-energy sector, increasing efficiency in public spending, promoting the optimisation of State assets, and progressively reducing subsidies for fuel and private transportation.” CAF said the measure will complement the efforts made by the Government to increase efficiency in public spending and prompt economic diversification.
“This loan is part of CAF’s countercyclical role and it seeks to maintain stability and increase microeconomic efficiency while at the same time strengthening the country’s institutions for greater efficiency in public administration,” said Enrique Garc?a, executive president of CAF. “With this loan, we are contributing to the consolidation of the conditions necessary to achieve sustainable growth in Trinidad and Tobago,” CAF said the programme tackles the negative impact that falling energy prices and other changes in the global and regional economy have had on the fiscal balance, and it considers the supply of freely available resources for the 2016-2017 tax year.
Minister of Finance Colm Imbert yesterday confirmed the loan but could not provide details on specific areas of expenditure.
A CAF spokesman said terms of the loan “will be provided further ahead.” Word of this loan from the Latin American bank comes on the eve of Imbert’s planned US road show to raise funding. The minister is due to begin his trip on July 25 in Los Angeles. He will then visit New York (July 26-27). Another team will visit London and Boston simultaneously.
CAF was created in 1970. It is made up of 19 countries, 17 Latin American and Caribbean, together with Spain and Portugal, as well as 14 private banks.
TT is listed as being among the bank’s shareholders, as well as Barbados, Jamaica, and Venezuela.
Other shareholders include Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico, Panama, Paraguay, Peru, Portugal, Spain, and Uruguay.
TT’s shareholding dates back to 1994. The bank provided support for the Secretariat of the Fifth Summit of the Americas in 2009, held talks with the Ministry of Foreign Affairs in 2010 and in 2012 then Prime Minister Kamla Persad-Bissessar signed an agreement for TT to become a special member country. During 2014, the Ministry of Finance, the Ministry of Education, the Ministry of Planning and the Ministry of Foreign Affairs received CAF support.
CAF states its aim is to promote sustainable development and regional integration by means of financing projects in the public and private sectors, providing technical cooperation, and other specialised services.