The newly Elected-Premier of Anguilla, Dr Ellis Webster, issued a press release on Thursday evening, July 9, in which he delivered a comprehensive report on the dire financial situation in Anguilla.
Following is Premier Webster’s press release:
RE: OFFICIAL PRESS RELEASE ON THE FINANCIAL STATE OF AFFAIRS IN ANGUILLA
9th July 2020
Fellow Anguillians.
Let me take this opportunity as your newly elected Premier to thank you for electing the Anguilla Progressive Movement Team to take over the reins of government at this time. We find ourselves at a critical juncture in Anguilla’s history. We made a promise to you the People of Anguilla and we must indeed confess that our first 7 days in office have been both eye opening and revealing. Over the past 7 days, we have been briefed on the state of affairs in Anguilla and as promised during our campaign, this APM Administration will remain transparent and open about all matters of governance, including conditions in the country, at all times.
Your newly elected Government has inherited a very serious and precarious financial situation. As presented to the Ministers and myself by our various technical teams, the Government of Anguilla is projected to experience a detrimental revenue shortfall of over EC$97 million dollars. By all indicators, it is evident that this state of affairs was apparent for quite some time as formal negotiations where fully underway as early as April 2020. Yet, the former Premier and his administration neglected to consult with the electorate on this critical matter, with the full knowledge that the financial position is dire.
This projected EC$97 million dollar shortfall will render the island unable to satisfy its debt obligations and monthly expenditures. In addition, the likelihood of any ability to meet potential revenue targets in the near future is undeniably reduced by the ongoing impact of the COVID-19 pandemic.
We wish to officially draw to your attention the fact that the British Government through the Foreign and Commonwealth Office (FCO) has produced a Memorandum of Understanding (MOU) with 16 conditions to support a proposed aid grant of EC$100 million dollars which is being offered to avert the impending bankruptcy. This MOU has been presented as a ‘fait accompli’ as the reality is that it was signed by our past Premier on June 11th 2020 and also signed by the FCO. This has bound Anguilla to the terms and conditions in the MOU in order to receive the EC$100 million in Aid. It is also noteworthy that this MOU was raised with the former Premier on the 15th of April 2020 which allowed him sufficient time to engage the electorate through public consultation prior to the election.
Ladies and gentlemen, I must be frank about our present financial reality: with most of our alternative cash resources consumed by commitments made in the resolution of our banks, we have all but two options: accept the MOU; or withdraw and go bankrupt in a week. The implication of the latter will also result in our Constitution being suspended which can cause serious consequences.
As it relates to the MOU, the vast majority of the 16 conditions listed, were outstanding commitments previously made by the former Administration which they failed to implement. Several of the commitments which were again agreed to by the former Premier on 11th June 2020, had a deadline of 30th June 2020, the very day after the General Election was held. Notwithstanding this, your APM administration has sought to renegotiate and seek further clarifications on the terms of the contract that are actionable and achievable on the part of Anguilla.
It has been further drawn to our attention that the expectation on the part of the FCO was that the more immediate conditions referred to in the MOU would have been implemented or would have had provision made for in the period between 15th April and June 30th 2020. To a great extent, the referenced conditions and provisions have not been met and some of the deadlines provided in the existing signed MOU have now been breached. These breaches also call for further negotiation and setting of realistic deadlines, a process which we have already commenced.
At present, the newly elected Government is faced with the stark reality that there are limited cash reserves available in the Treasury. It is noted that the cash position of the Government of Anguilla depends heavily on overdraft facilities at NCBA and the ECCB. Unfortunately, we have been advised that these overdraft facilities are significantly reduced.
Within a two-week period, debt payments become due, salaries become payable and the continued functions of the government are placed in jeopardy. Further to this, it is important to note that the British Government has sovereign responsibility and contingent liability for Anguilla’s debts. The British Government is therefore very focused on ensuring that Anguilla can service its current $486 million national debt not just during this period but also in the long term.
Having taken over the reins of Government on June 30th 2020, we have quickly learnt that Anguilla has been operating in crisis mode for quite some time with no indication of this harsh reality being communicated to the People.
The primary objective of the MOU is to;
- Maintain the GoA’s solvency;
- Support the GoA to implement policy measures to prevent widespread social hardship and scarring of the economy;
- Ensure that the Health Authority of Anguilla has essential resources for an effective response to COVID-19;
- Ensure the GoA can sustainably manage debt; and
- Continue to improve the GoA’s public financial management.
While we, the newly elected Government, are not in agreement with all terms and conditions outlined in the MOU, in light of the foregoing and to ensure our solvency and the urgent need to avert further economic scarring and a Constitutional crisis, it will be necessary to secure this aid within short order. We intend to continue to engage dialogue with the FCO and the Governor’s office at which time we will request the relevant amendments to MOU that we consider burdensome. Given the time constraints, we are unable to coordinate public forums prior to making claims for the financial assistance; however we remain committed to keeping you informed as developments arise. We have faced hard times in the past and have overcome. Under your caring APM Administration, we are confident that as a resilient people, notwithstanding the present circumstances, we will rebound together, to build an Anguilla reimagined – proud, strong and free!
It is obvious that we cannot maintain the status quo and conduct business as usual going forward. There will be a need for greater transparency and accountability among governmental departments; a more vibrant and mutual beneficial partnership between the private sector and public sector must be established, and a more productive work ethic must be established in the public sector.
It is an absolute imperative that unnecessary expenditures and wastage must end immediately and cost saving measures must forthwith be implemented across every government department. The Civil Service Association, in their letter to the Deputy Governor dated 7th May 2020, underscored many areas where wastage and leakages could and should be plugged. It is this Government’s intention to immediately embark upon rolling out many of those measures previously recommended by the Civil Service Association with strict compliance guidelines and consequences.
We recognize that many of the Statutory Bodies are a massive drain on Government’s resources where subventions are spent with little or no accountability and with little to show in the form of benefit in correlation to the costs of sustaining them. Again your Government will be undertaking an overhaul of those Statutory Bodies which are still essential. There are millions to be saved in this overhaul and disbanding process. We promised you accountability and we will deliver on that promise.
We must review the very large allocations in the budget for rental of properties and arrive at an amicable formula with our Landlords for adjustments in the rental income for a period of time. We are all in this together.
We must boost our revenue collection from outstanding taxes owed but do so in a way that is measured, fair and balanced to persons and businesses given the high unemployment and a sluggish economy.
Your Government Ministers have agreed to take a 20% cut on salary as a first step and to re-assign these monies to a special fund within the Treasury to assist with community projects, such as a school-feeding program. The same 20% cut shall apply to all Parliamentarians.
Fellow Anguillians, you have elected this APM Administration in tough times to do a tough job and by the grace of God, and the collaboration of each and every Anguillian, we will execute and succeed. We will need the commitment of every Civil Servant as we set out on this journey together. This applies equally to workers in the private sector. This attitude of sacrifice and unity of purpose is essential to getting Anguilla back on firm footing and ensuring sustainable progress.
God bless you and May God bless Anguilla.
Thank You.
