DR DREW-LED GOVERNMENT RESCUES DEVELOPMENT BANK AND THE SOCIAL SECURITY FUND FROM FINANCIAL MISMANAGEMENT
BASSETERRE, St. Kitts, August 18, 2023 (SKNIS) – The Government of St. Kitts and Nevis, under the leadership of Prime Minister the Honourable Dr. Terrance Drew, has taken several prudent steps that have steadily led to the stabilization of the Development Bank of St. Kitts and Nevis and the St. Christopher and Nevis Social Security Fund.
Prime Minister Dr. Drew, who holds ministerial portfolios for Finance and Social Security, stated from the onset that there were some improprieties that pointed to the clear mismanagement of funds at the Development Bank under the former Dr. Timothy Harris-led Unity administration.
The honourable prime minister also reported that the hemorrhaging of the Fund by the previous government had put the Social Security Fund in a poor financial state.
While appearing on Freedom FM’s Issues programme on Thursday, August 18, Prime Minister Dr. Drew said the Development Bank of St. Kitts and Nevis borrowed close to $120 million from Social Security “and Development Bank was so badly managed it is not in a position to pay back Social Security.”
“The Development Bank owes Social Security $119,921,959.78, almost $120 million owed to the Social Security. None of this money was borrowed under the new administration. This is what we met. The last time any money was paid to Social Security under the former administration was January 2022 and the amount paid was a meager two hundred thousand dollars ($200,000). So between January and August, not one cent was paid to Social Security for the $120 million…The amount that Social Security is supposed to be paid is six hundred and ninety-seven thousand ($697,000) per month but they were paying $200,000 – less than one-third – to service the debt, and in addition to that the last time anything was paid was January 2022,” Prime Minister Dr. Drew reported.
“This money is serious money that belongs to the people, so when I tell people we had to act to save Social Security this is what I was talking about. I was not going to come out with the information before we had done the proper analysis because as I said I am not on a witch-hunt, but the people deserve to know the truth,” Dr. Drew added.
The finance minister said shortly after taking office that his administration did the responsible thing of making monthly payments to service the Development Bank’s huge loan to Social Security that was left by the former administration.
He said, “We started to pay right away from September, and we started to pay the $200,000. Again, Development Bank had no money. The bank was on the verge of collapse. I couldn’t say that to the country [then] for people to lose confidence and run on the bank and basically sink the bank. That would have been the worst scenario. I had to put the country’s interest above immediate political interest or any other interest. The immediate interest was let us save Development Bank and so we started to make moves to save Development Bank.”
In June 2023, the Government increased its payment to Social Security to $250,000, and according to the prime minister, the payments will be increased further to $300,000 per month.
“We are now presently doing a review with Deloitte out of Barbados so that we can get a plan of how we can restructure things and make sure that the bank continues to be very solid. At the end of the day, Social Security must get back its money. Social Security cannot afford to lose $120 million. People save their money at Social Security through an Act; they do it for when they would have retired or any other circumstances under the Act, such if they get pregnant, if they become disabled, sick leaves, and so forth, they expect Social Security to be there.”
Now Prime Minister Drew said he is proud to declare to the people of St. Kitts and Nevis that “the Development Bank is under good leadership and the Development Bank has been stabilized.”
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