$80 Million Republic Bank loan returned; Finance Minister announces retirement in Budget Communication

By Dana Malcolm

Staff Writer

TurksandCaicos, May 19, 2022 – With a large surplus and increased cash reserves in the bank the Turks and Caicos Islands Government has given back a loan worth $80 million US dollars to the Republic Bank based in Trinidad and Tobago.

The loan had been secured by the previous administration in the midst of the pandemic to support Recurrent Expenditure. Instead, the TCI economy outperformed expectations and the loan was no longer needed for that specific purpose.

In 2021-2022 financial year the economy produced a surplus of $89.9 million over half of this was put into the TCIs reserves leaving just over $22 million. The budget this year was overall increased by 20 percent thanks to the increased performance of the economy.

“There was a cost to having this [loan] facility in place, even if it was not being utilized. So, as it was in our economic interest to retire it, we did so,” said E. Jay Saunders, Minister of Finance and Deputy Premier.

The Finance Minister said the loan facility was over $16,000 per month.

“When you take out a loan facility.  It’s usually for a fixed period and the payments (including interests) are spread out over that period.  There’s usually a penalty for early payout for loans,” explained Hon Saunders when quizzed by Magnetic Media about the return of the loan, he added, “When taking into consideration, it made more sense to let the loan facility retire than to pay the interests off early.”

Over 12 months, the loan facility cost TCIG $200k, informed the deputy premier.

Minister Saunders did not say whether the loan could have been used for other purposes or whether that had been considered by the TCIG.

In some quarters, it was proposed that the $80 million dollars might have fast tracked improvements in infrastructure, education, sports or health services.

Currently Health Services in the Turks and Caicos Islands are limited, the lack of an intensive care unit on the islands drives up the spending on overseas medical referrals.  This year the National Budget has allocated $78 million dollars to Health, equivalent to the entire 20 percent budget increase.

In the face of these and other possible capital improvements, there was no response to our queries about why the loan facility was abandoned.