By Charminae George
Antigua and Barbuda’s gross domestic product (GDP) is currently valued at EC$5 billion. According to the Eastern Caribbean Central Bank, that amount has the potential to double in the next 10 years.
The question is, how?
On last week’s trip to the twin island nation, ECCB Governor Timothy Antoine acknowledged that the country’s investments in public infrastructure, such as roads and ports of entry, and private infrastructure, like hotels, had greatly contributed to the growth of the economy.
However, he said the country has the lowest tax effort of the eight countries in the Eastern Caribbean Currency Union (ECCU). Tax effort is an index of the ratio between the share of the actual tax collection in GDP and taxable capacity.
Antoine also noted Antigua and Barbuda’s high payables, or debts owed.
“Antigua and Barbuda has the lowest tax effort. While that could be deemed a source of pride, you also have some of the highest payables, as in debts owed to suppliers,” he told reporters on Friday, during a meeting with media held as part of the bank’s 2023 outreach mission to the country.
Antoine highlighted the resulting ripple effect, stating that the suppliers owed by the government face difficulty operating their businesses due to the reduced cash flow. In addition, having high payables restricts the amount of resources that can be channelled into other areas in the economy.
“It affects business, it’s cash flow. Businesses operate on cash flow…You’ll find that the absence of the additional fiscal room constrains what you can do in other areas, the other areas of the economy that need to be serviced,” he explained.
To remedy this, he called for far-reaching discussions on taxation.
“I do feel there needs to be a national conversation on taxation. I feel like it is important for the country to have an honest conversation with all of the numbers on the table,” Antoine stated.
Based on consultations with stakeholders, including members of the public, the government, and members of the opposition in parliament, Antoine indicated that many are willing to have this conversation, adding that the ECCB is also willing to participate.
Another recommendation he made for growing the economy was for Antigua and Barbuda to move towards being sufficient in areas of meat production and agriculture.
“Food and nutrition security…Can we get sufficient in chicken or pork, or pineapples, for example. We can’t do everything, but what are the areas?” he said.
Referencing other countries with robust mentoring programmes in the creative industries, Antoine recommended Antigua and Barbuda utilize citizens in the diaspora to mentor aspiring entrepreneurs.
“In some countries they have started to pull together mentorship programmes, even drawing on the diaspora…We have highly celebrated professionals, across the currency union and across the diaspora, we just need to connect with the network,” he stated.
Additionally, Antoine mentioned the Eastern Caribbean Partial Credit Guarantee Corporation, which helps micro, small and medium business to access finance.
“You have youngsters who are developing apps, who need a little working capital, $30,000, $50,000…to help them get going,” he said.
The ECCU is comprised of Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines.
The ECCB is the monetary authority for those eight countries. It was established in October 1983, with the primary objective to maintain the stability of the Eastern Caribbean currency and the integrity of the banking system.
