Just the Facts

Share the facts about what NNP has has done and will continue to do to ensure that Grenada keeps moving forward.

A quick Health Check on Grenada’s Economy

Neil Ferguson in his book “Why Nations Fail – The Origins of Power, Prosperity and Poverty” analyzed world economies from since the days of the industrial revolution in the Great Britain in the 15th century to the United States in the 20th and 21st century and concluded that the two most important ingredients for successful nations are strong political systems and strong financial institutions.

Analyzing Grenada’s economy over the last 10 years revealed that the current framework for managing the economy under this current NNP Government has created a strong foundation for sustained economic growth which was not the case under the former administration.

During the period 2008 to 2013, the NDC Lead Government with Mr. Nazim Burke as the Finance Minister fashioned economic decline that averaged negative 2% per annum demonstrated through late salaries to public servants, closure of bank branches and withdrawing their services from the rural communities as they experience massive increases in non-performing loans. Foreclosures and sale of properties were in the hundreds whilst numerous private sector  businesses were either reducing staff or placing them on rotation.

On the contrary, during the last 5 years, the financial institutions have been under tremendous pressure to make use of the surplus liquidity within their system. Interest rates for loans are at an all time low, the Grenada economy even during a structural adjustment program grew on average of 4% annually. The Finance Minister Dr. Keith Mitchell and his team were able to foster growth relying on some key sectors such as tourism, construction, education and manufacturing. The fiscal responsibility legislation should be applauded and supported as this current and future Governments are now expected to be more efficient and creative in managing the country’s scarce resources. The mandate to reduce non-personnel expenditure by 10% and consistent achievement of a current account surplus are successes of this current government that must be lauded and encouraged.

This growth in the economy has achieved a reduction in the unemployment rate from approximately 40% to 24% and has presumably also lowered the poverty rate in the country. Additionally, unpaid claims in the treasury above 60 days was fully paid which meant that service providers to Government got paid for their goods and services provided.

There are some sectors however that produced mixed results such as agriculture which grew in 2014 and 2015 and contracted in the last two years.
The challenge I can foresee for any Government over the next 5 years will be to ensure that economic growth is not only consistent and reaches 5% per annum but that it creates more meaningful employment opportunities. This growth will have to be supported by adequate infrastructural development such as roads and utilities with adequate services such as healthcare and an educated workforce.

With democracy being alive and well and the current efficient management of the economy, Grenada can safely say that the two most important institutions to further transform the lives of its population are fully in place and is sound and that this current NNP Government is just more better equip to navigate our economic future.

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