Dominica’s fiscal outlook had deteriorated despite high revenues from the island’s much-touted Citizenship by Investment (CBI) program, a report from the International Monetary Fund (IMF) has stated.
A team from the IMF visited Dominica from March 7 to the 20 to conduct its 2017 Article IV consultation.
“Despite high Citizenship-By-Investment (CBI) revenues, the fiscal outlook has deteriorated largely due to lower projected grant revenues; a downward revision in the projected yields of the fiscal consolidation measures; the increase in social transfers; and the reduction of the corporate income tax rate in January 2017,” the report stated. “As a result, the use of government deposits to cover financing needs would be necessary to reach the regional debt target of 60 percent of GDP by 2030 without increasing the fiscal consolidation effort above the commitments in the RCF disbursement.”
The report also stated that economic activity remained weak in 2016 due to a number of factors but projected growth to accelerate to above 3 percent in 2017-2018.
“Economic activity in 2016 remained weak as capacity constraints and unfavorable weather conditions slowed public investment more than anticipated,” the report said. “Growth is projected to accelerate to above 3 percent in 2017-18 on the back of a pickup in public investment and several large-scale projects, and to stabilize at a potential rate of 1.5 percent over the medium term.”
The report said the island’s external current account deficit, also known as the trade deficit, “is projected to widen due to the increase in imports of goods and services during the execution of reconstruction investment and the large investment projects.”
“In the medium term, the external balance is projected to gradually improve as agriculture, tourism, and manufacturing recover, and geothermal electricity generation reduces oil imports,” the report said.
The report stated that bank’s credit to the private sector remains weak due to “insufficient bankable projects, persisting low profitability, and high non-performing loans (NPLs).”
“The authorities took steps to increase the capital of the National Bank of Dominica, but persistent actions are needed to improve the soundness of financial institutions and to reduce NPLs, including though the operationalization of the Eastern Caribbean Asset Management Company,” it said.
The report warned of government’s significant involvement with credit programs through public financial institutions saying this “reduces the scope for efficient financial intermediation.”
In face of the island’s fiscal outlook, the report made several suggestions.
“The fiscal outlook underscores the importance of a timely implementation of the fiscal consolidation package,” it said. ‘The efforts to improve tax administration should be maintained to make the gains in compliance durable. On the expenditure side, the government should limit the increase in the wage bill and prepare specific plans for the gradual unwinding of the expenditures related to recovery and reconstruction in the aftermath of Erika.”
It said fiscal consolidation “should focus on reducing the underlying primary balance, that is, the primary balance excluding unpredictable revenues, such as CBI flows, and transitory factors.”
“Given the risks to the fiscal outlook, the authorities should also explore contingent fiscal consolidation measures such as developing a formal tax incentives policy for private investment, preparing a revenue enhancing tax reform, and improving spending efficiency through better targeting and means testing of social programs,” the report said. “In addition, strengthening fiscal management is critical for the durability of the fiscal consolidation gains, including through enhancing budget preparation and execution processes, further improving the integrity of the CBI program, and considering the adoption of fiscal responsibility legislation.”
The report also noted that improving the conditions for private investment, especially for export activities, is key to accelerating growth.
“Efforts should, therefore, focus on the removal of costs and barriers that affect investment decisions and profitability,” it noted. “Specifically, the government should enhance labor market legislation and better target education programs in order to improve labor productivity and mobility across sectors; reduce the cost of doing business, especially in terms of resolving insolvency, registering property, paying taxes, and obtaining construction permits; explore the potential for expansion and further diversification of tourism markets; enhance the resilience of public infrastructure to natural disasters; and advance on the development of geothermal generation of electricity.”
The visit was led by Alejandro Guerson. His team met with Prime Minister Roosevelt Skerrit, senior government officials, labor unions, and private sector representatives while on the island.
Why all of a sudden UWP like IMF report lol
u r truly an IDIOT
Remove Lennox and see how fast Skerrit will go. Lennox is another trump
According to the IMF report our economy is sick, yet we have CBI money all over. These funds are not reflecting in the books so where was it stored?
My Dear People, please don’t believe a word about this alleged IMF report. It’s fake news. As you know, the opposition has been promoting lots of propaganda stories lately and this may just be another one. Rather than help us build the country and the toilets we are trying to build to eradicate all pit toilets forever, they are poking their noses into the CBI that is none of their business and trying to sabotage it. This is forcing me to spend hundreds of thousands of dollars doing damage control. You know your government is transparent and we have a solid economic plan. The economic situation is very good. I am working with a lot of good businessmen to create lots of jobs for you. Thank you.
the country need to go in another direction
The report warned of government’s significant involvement with credit programs through public financial institutions saying this “reduces the scope for efficient financial intermediation.”
I hope the government take heed of this warning and tame down their handout policy; invest in factories and other projects that would generate funds as opposed to just giving funds carelessly away to win votes.
Very bad report for a government, who has been in power for sixteen years…so I mean, for sixteen years the government did nothing to generate funds…that’s telling….but most Dominican’s are satisfied with the state Dominica in despite of what they are told, is Labour de voting…who vex lost…dey can get blue vex…Linton too malkasay and Ugly…look at my PM he has dimples..he handsome, yeah….Look sotness , wee!!
This Government is such a waste…wasting CBI money tout pa tout…handing out money to buy votes and to concrete supporter’s alliance like rain; but no production mechanisms, no manufacturing plans…no viable agriculture revamping…it is not surprising that the country’s financial outlook is go gleam under this leadership. The Dominica Bureau of Standards staff has been working at home for over three months now; while money is given to secure votes, the government’ s institution are in deep financial strain and no one is attempting to bail them out.
Frankly speaking, I don’t give a rat’s poom what the IMF guys are saying!
I am not the one who mishandled the State’s money, I am not the one who didn’t re-invest the CBI money appropriately, I am not the one who is conducting Red Clinics every Wednesday and building house for my woman on Government money.
No, I am a faithful tax-payer and my salary is being taxed even before I see my money. So as far as I am concerned I have nothing to do with this. In other words, I am NOT accepting 0,0,0 for three years! No way!!
I suffered enough under the Stabilization Levy, I’m not going through that crap again! Bon!!!
I agree with u. I suffered too. Lord have mercy!!!
The IMF report does not paint a lovley picture for Dominica’s economy and they said why. The nay sayers, those who wish on a daily basis to hear bad news about Dominica as usual have jumped on the negative train and are spinning the news , blue. Surprise though. It is the same IMF – they take to task when it gives a “good report” on Dominica’s economy. This only re-emphasizes my point that they wallow in negative stories about Dominica and that they come to their element whenever those stories appear.
John Simeon, my question to you; if you have had a good report at school, wouldn’t you want to maintain it? Why would you have caused yourself to have done so badly to get such a damming report? Why would you review the reasons for your success, work to ameliorate you weak areas, so that when your examiners comes again your result would remain the same, drop slightly or improved? After you have answered these questions, apply them to DLP’s performance as you have outlined; then, you may perhaps see less red, stop attacking Blues for pointing out the country’s failure after 16 years and think more of country. Remember the report said no viable manufacturing infrastructure or otherwise was done to revamp the economy, but the gov’t continues to spend lavishly on its social programs, and advice them to stop doing so.
The IMF report is really nit surprising ar all. IMF is just expressing the hardship in Dominica in the firm of economic jargon.
When the idea of giving 5-8 thousand dollars to bus drivers school kids, nonbusiness owners in Paux Bouche and claim it is towards small business growth Dominica is destined to go to the pigs.
This is so demoralizing. Businesses are struggling and there is no hope at all.
No suprise there
hehehehehehe…… The Doctor trying a bail out you all. Ship ahoy… ship ahoy… some one is crying ship ahoy….Mayday mayday Captain is attempting to escape.. ship in peril. ship in peril..
Hey Skerro,
The country nice and the youth that you love so much, your government has asked the Youth Development Division to STOP ALL PROGRAMMES untill budget 2017??????
Not even toilet paper they have????
Way papa!
SKerrit MUST GO!
Labour ka twa via . stop giving out cement galvanize, window, and paying the people pay as you go light bills then we might come out of this mess.
Blame all the blind sheep who voted for Skerrit. Why cant they see that this man ? Nothing has improved in Dominica in many years but the pockets of the ministers in this current administration. The only thing that is consistent are the lies & deception. No projects to increase the money flow of the economy have been completed. His projects start but are not finished. Dates for the completion of many projects were mentioned and those dates have passed. For example the high class resorts, vessels for the exportation of produce, chicken processing farm, coffee processing farm, geothermal energy, cheaper gas from petro caribe, all roads fixed including farm roads, better healthcare & modern hospitals… And now this man wants all his sheep to believe him about an international airport? I mean come on! This is wickedness! The sad part about all of this is that those same sheep will still believe his lies. Dominicans please wake up and please ask God for better knowledge & wisdom.
when a country runs on just one source of revenue, that country is in SH%T, especially if that source of revenue is still being mismanaged.
Remember my people : “without vision a people perish” ….. that Skerrit led government has never demonstrated any signs of having a vision for Dominica.
This is the result of too much reliance on CBI. We need to diversify. If not CBI then what? The Government needs to strategize and stop lazing around shouting CBI Laybar kar twavay.
As stated by the imf factors also included a lot of heavy rain fall in 2016, however they have estimate growth in 2017. you people should be happy that no one had to pay more taxes instead you complain like the people who where lead by moses. the pm is doing the correct things. LABOUR ALL THE WAY
All this is stuff that should have been in place from day one. Today we should be picking the fruits. Our prudent psychologist turn finance man, who probably went into psychology because he could not pass a basic account test was prudently running the finance of the country. What do you all expect. As I have said before the PM should have no business running finances of this country and those who sit aside and lied to him make him think he was doing a good job for fear of getting scolded are just as guilty. Too many educated capable Dominicans I Know to have this idiot ruine our country future for all these years. If skerrit was 1/4 of a man honest with himself he would step down tomorrow for sake of the country. He is a failure and the longer he stays around is the worst it will get for himself. Begging, laziness, dependency, lies, devaluing your people will not last forever.
Blame Lennox and UWP still, the country is on a sinking ship, the DLP has FAILED Dominica miserably, Dominicans wake up the piper has played the tune, time for SKERRIT TO GO!!
You have to invest in agriculture ,fishing and kalingo manufacturing.
Did Linton speak with the IMF before compiling their report? Just asking.
Well isn’t he the head of Public Accounts committee. The difference is that IMF won’t print allegations. They have figures to work with….cbi income and expenditure, which Linton claims doesn’t exist. Or just maybe he so illiterate he couldn’t notice the figures are glaring at him.
Folks, it is against this report card Skerrit fooling his usual group about international airport. Minister Darroux told the nation that Skerrit has enough money to build the long overdue international airport. Did Monfared build a secret bank and left it for Skerrit? That’s what we need to get investigated before we send Skerrit home
well they will blame linton now
I listen to Hunter song Dominica in red he say how things are doing good everybody wants to be in your neighborhood haha bunch off fools
The new governor of the central bank cautioned the government about spending too much money on things which are not in the productive sector,yet every day one reads of Skerritt currying favor with the electorate by wanting to be the godfather to every one and every cause.How many times does he have to be advised to pay attention to and focus more attention to efforts which will be sustainable and earn revenue for the country in the long run.One would have thought that with an honorary doctorate Skerritt would have learnt something or two..
Grandbay on Tuesday night
PaixBouche Constituency Wednesday night….MONEY FOR VOTES.Country plummeting downwards..
An honorary doctorate is just that. No learning required.
Skerritt don’t have a honorary doctorate in the real sense of the word he never studied for it he made a donation to another countries to get a piece of paper, by the way do you know that he cannot call or use the title as legit , and when people address him that way he never correct them .
So Skerritt just don’t have the vision for moving the Island he ran out of any sound plans and that’s so sad for Dominica
Skerritt must go !
Check out the last paragraph of the full report:
“Improving the conditions for private investment, especially for export activities, is the key to accelerating growth. Efforts should therefore focus on the removal of costs and barriers that affect investment decisions and profitability. Specifically, the government should enhance labor market legislation and better target education programs in order to improve labor productivity and mobility across sectors; reduce the cost of doing business, especially in terms of resolving insolvency, registering property, paying taxes, and obtaining construction permits; explore the potential for expansion and further diversification of tourism markets; enhance the resilience of public infrastructure to natural disasters; and advance on the development of geothermal generation of electricity.”
That’s the key!
And the first paragraph reads “despite high CBI revenue”. So why the he’ll is UWP trying to sabotage the program. And yes they got figures despite the lies that we have been told. And yes they said where the money goes
mhmm true. In my knowledge though UWP has been asking for transparency not trying to end the program. I for one do support the CBI program and as the report rightly said too, the authorites should continue doing work to ensure that the program runs properly. (Btw I’m not for either party)
Kalibud it appears you cannot read well.
UWP trying to Sabotage programme?.Stop putting you long neck(your coup,) in the doggone sand like an ostrich..Name the UWPites who sold or gave our diplomatic passports to criminals like Monfared,NGLapaseng,Corallo,Madueke,etc..Your doggone beggar..You like stretching your hand?Skerrit is the one who has destroyed the country…NOT UWP!!!
What is your point? Read and understand, the operative word there is ” despite ” so in order words the money from the CBI is not making a difference to economic performance. The measures outlined there are exactly what the UWP have been advocating. Means testing recepieants of social of social programs(red clinic). Catherine Daniel’s recent statement emphasises the point. People paying taxes, duty free given to friends of labour on expensive vehicles. Creating a climate condusive to investment. Should I go on? The bottom line is that skerritt, his cabinet and financial advisors, some of whom got their degrees in 1950 and never updated their knowledge and skills base, haven’t got a clue. Finally, the team can only go by the figures provided by the government however bogus they are.
That paragraph pretty much lays out a clear course for government policy. Idealy the government would focus more on these areas than try to garner more popularity through hand-out style social programs that will only help a few people.
Bad, very bad report card Roosevelt. This boy can do better but does not want to listen to teacher, that is wiser than him. Only one solution, expel him to save the reputation of this school.
The report makes it abundantly clear that the government can not go on splashing money on unregulated, unbudgeted social spending. or handouts for political purposes. Red Clinic is facing a grim future and will have to go. If we can not increase donor donations or continue to generate a steady cash flow from grants or CBI proceeds, we are snookered. Reading this report tells me too that right now government would find it extremely difficult to attract further loan funding from bona fide financial institutions. Maybe mr. Skerrit has another goose up his sleeve to lay more golden eggs?
Erika ,Linton and CBI that do that
You mean to say Linton is that powerful? Wow garcon, no wonder Skerrit insidse turning to, liquid every time he hearing Linton’s name.
Lang Mama a you serious for blaming ” God ” well Dominicans have sink very low, I would suggest you ask the PM what happen to all the monies he said he received from other Countries to help the Island, what happened and why are we in such a state.
As for CBI you should be greatfull to hear because you would never know the amount of money that was not in the Dominica Treasury and what’s in Panama I would say you have a lot to learn instead of blaming others especial God for Ericka and what lessons have you learned.
Boy, we in bad, bad shape. The IMF report also calls for a freezing on wages. Now after years of depending so much on the econ citizenship program and killing industries, how are we going to get out this? CBI revenues alone cannot do it. Mr. Prime Minister, you had better think of something fast, really FAST because passport revenues are already starting to decline. Don’t bail on us now, you got us into this mess, the most decent thing you could do is start to get us out of this stink hole before next election.
CBI or the selling of citizenship/passports cannot sustain the economy! Secondly, the monies generated from CBI does not generate employment as no economic activities can be seen,instead the rogues posing as government distributes the monies to all and sundry in the name of social welfare programs which does not exist! How many people how often and how long can these rogues sustain people with CBI monies being dished out
When a prime mistake at a so-called town hall meeting calls one of his supporters dressed in red and offer her a house,when in fact the lady confesses that she can afford to spend$1,500.00 on a rented property, isn’t this a mismanagement of the governance of the island 
This is in no way helping a poor,but rather the illegal attempt of compensation to a supporter! Therefore, is such is the case, everyone should be entitled to their mortgage payments and rent being paid off by the rogues posing as government! Everyone who does not own a house is entitled to…
The future of Dominica is as cloudy as that of the Trump administration. The sad thing is, those of us familiar with life here will agree that things are getting worse day after day and sadly enough, unlike in the US where the FBI is determined to investigate what went wrong with their election so it could be corrected, in Dominica, no one including the police is willing to investigate what has been going wrong in Dominica for over ten years. To his credit Skerrit has told the nation that most of us do not have a place to run to in the event of a collapse, though we know he was not referring to himself since he has many places to run to. The question that we must ask ourselves now is, how long are we prepared to allow Skerrit to destroy our image nationally, regionally, and internationally before we demand in no uncertain terms that he resigns now? We can’t afford to wait for another election even if he were to call it in the next ninty days. We need him out now
I myself am fed up of hearing about the unsustainable CBI program to be quite honest. There was a time we didn’t know anything about CBI, now every last project in DA is CBI and people are still not smelling a big rat!! What else is the government doing or have they run out of ideas to run the country?
Although I don’t trust the IMF, they made some good points specifically, “…reduce the cost of doing business,…” this is one area where the government needs to focus on.
That is the main way to attract foreign investors. It will be hard because that will involve a culture change in customer service. The banks in DA are the worst. As for AID Bank. You begging for them to get your business. I am so glad with OECS’ further integration I can go elsewhere for financial services.
This bad report card is another reason why Skerrit and his entire cabinet MUST go NOW! In all honesty I did not need an IMF report to tell me things are terribly bad in Dominica and is getting worse day after day despite Skerrit’s secret CBI money that is not disclosed to the nation. So rich that the health minister tells us that Skerrit has enough money for the international airport. That being the case somebody definitely needs to investigate Skerrit to see where that money came from and if it is not money from the proceeds of crime especially with arrest of Aleireza Monfared, who was in Dominica hiding for 6 months.
Skerrit and the gang in the corrupt party, keep telling their fools that things are good..CBI rrwillevenue will continue to fail the country,and misused,because it is being frittered away by the ruling psrty TO BUY VOTES..Who are the ones benefitting?Ask the Labourites..!!! I hope PUBLIC SERVANTS GET ALSO…They are Dominicans too.
CBI revenue
The hard task will be to implement these recommendations. These guys are busy playing politics spreading CBI money all over the place instead of using that money to grow the economy. In other words, plant the seeds now so that you can reap the fruits later. All they are doing is cooking the seeds to make dinner tonight.
This is nothing new.
The UWP has been cautioning the government about the mendicant society that Skerrit has been cultivating and giving people false hope. Lets be real, their is absolutely no viable industry in Dominica today. Agriculture is in the graveyard, Tourism is on life support, manufacturing is at the point of no return. How can we grow an economy like that?
I do hope that the opposition investigates him when the government changes.
I have become sick of this guy ruining our country’s image and making life a living hell for those of us who have no where to run to.
uwp what! please you all doing demage to Dominica image with lies
Oh k sooooo u mean to tell me is from the time this whole CBI talk started to now that cause the country economy to be in ruins…. papa God when will these labourites get some brains????? It’s the mismanagement of the country that hv us so…. the mismanagement over 15 years and the lack of vision by the governing party.
For 15 years he taking us to the next level… this is the next level.
So, to get our fiscal forecast looking good, we will have to increase taxes, drastically reduce on social programs, control govt wage bill and go on a begging campaign to increase grant revenues ..hhhmmm? This might just be a recipe that leads to increase porverty. What we in Dominica should do is produce more and consume more of what we produce, this can have a positive effect on the economy. Let us stop talking and start working.
I would like Dr Thompson to put this in layman’s terms. From my understanding the CBI Program is saving our butt. And how is this that IMF has figures to do these projections? Somebody is being deceitful.
Lol…..thank got for cbi…. otherwise we wud be dragging out bottom on d road
Well well well. People what else do we have to see to take action?
We are in a downward spiral and no one wants to take responsibility and the Government hiding behind the CBI. My God…….
De country nice boy !
Surely, this should not surprise anyone who has been observing Dominica’s continuous decline.
P/S
We examined the financial affairs of the country – DOMINICA – to include both internal and external operations of the governing body and underscored that there is much corruption and mismanagement of business. The kickback that some of the ministers of government receive as a result of one transactional meeting was quite surprising and alarming, and could very well be employed and redirected to building reinforced bridges and making private investment more prospective.
Listening to the PM and his Ministers, one is inclined to think that the country is performing superlatively well. The IMF Report has proven that the present economy is chronically ill. Mr. Sherrie and his colleagues operate outside the circumference of prudent governance and have refused to deviate into reality. From their utterances, one would think that the country is fiscally sound. The country’s economy is being hemorrhaging from the practice of Pork Barrel Politics and “Go to your Minister” syndrome. Wastage is abound . The unnecessary frequent overseas trips, high-priced lawyers and square pegs in round holes only lead to the squandering of government revenue. The country needs the government to see people as human beings and not as votes. Your political allegiance should not matter as one has the inalienable right to choose the party of his/her choice without being discriminated against. A government should be magnanimous. Do well for all the people and not just the Party…
Please note that report did not come from Hon. Lennox Linton or Dr. Thompson Fontaine. We don’t expect the Prime Minister to comment, however, it is going to be interesting to see what kind of spins is going to come from Tony.