Caribbean Development Fund facing financial crunch – member countries could receive less funding

The Barbados-based Caribbean Development Fund (CDF) says regional countries could receive less funding for projects in the future because some countries have not been meeting their financial obligations.

“We have enough resources to continue the programs that we have already agreed to. However, if we do not get all of the subscriptions that were due in the second cycle, there is a possibility that we may need to scale down operations, not projects that are discussed, but scale down new projects that will be anticipated for 2020. We are hoping that this will not be the case,” said the chairman of the CDF board of directors Sherwyn Williams.

In addition, Williams told reporters on the sidelines of the CDF’s 7th annual meeting of contributors and development partners that the fund, established to provide financial and technical assistance to disadvantaged countries in the Caribbean Community (CARICOM), could scale back if owing member states did not meet their financial obligations to the CDF for the 2nd funding cycle.

During 2017, the CDF received contributions from 2 member states, Belize and St. Kitts & Nevis, completing their 2nd cycle commitment, while the outstanding balance was received from Jamaica.

As at December 31, 2017, total fund balance was US$122.42 million or 2 percent above that reported for 2016. This increase reflected payments from the 3 member states which brought the net contribution to US$109.42 million at the end of 2017.

Last year the CDF was owed a total of US$57.2 million, with Barbados owing US$7.4 million and Trinidad & Tobago US$40 million.

For 2017 – Antigua & Barbuda, Belize, Dominica, Grenada, Guyana, St. Lucia, and St. Kitts & Nevis benefited from the fund as 17 disbursements of loans and grants totaling US$4.27 million and US$5.01 million, respectively, were made during the reporting period.

The CDF said that total disbursement of US$9.28 million in 2017 was 28 percent higher than the previous year. In line with this performance, the loan portfolio recorded another year of growth at 8 percent from US$23.6 million in 2016 to US$25.71 million last year.

The fund had an undisbursed balance of US$7.3 million in its coffers on December 31, 2017.

CDF Chief Executive Officer Rodinald Soomer said the response from member states in relation to their payments was not what the fund expected, indicating that they were still too slow in meeting their obligations.

He did not name the countries, but indicated that there were 4 member states still in arrears. But he said given the financial situation facing the region, the CDF was taking a new approach in seeking payment.

“We recognize that they have their fiscal challenges, and the approach they seem to be buying into is that if we can move quickly to design programs that they can benefit from, then we have their subscriptions coming in, do our appraisal and board consideration and turn back the resources as quickly as possible so that there is no significant loss of revenue for the country,” he said.

Soomer said that the CDF was perhaps not the only regional institution having challenges in getting member countries to pay their dues, and that the Guyana-based CARICOM Secretariat was working on a system to ensure for automaticity of financing for regional institutions.

“This is work that CARICOM should really accelerate and focus on so that all the regional institutions that have their mandates to execute can be properly resourced and do the work that they are required to do for the community,” said Soomer. -(CMC)