By Caribbean News Now contributor
CHARLESTOWN, Nevis -- A decision on Wednesday by the state-owned St Kitts-Nevis Anguilla National Bank to dishonour salary cheques issued by the Nevis Island Administration (NIA) has resulted in embarrassment for the NIA, outrage on the part of Nevis civil servants and other residents, and allegations of political interference by the federal government.
Junior Minister Troy Liburd
NIA Junior Minister Troy Liburd used social media to express his sentiments, saying that the action by the bank was “a deliberate attack” using the National Bank as a weapon “to cause injury and shame”.
The bank apparently placed a freeze on a $3.2 million deposit made by the NIA to cover $2.8 million in salaries for the month of April, apparently in an effort to put pressure on the administration to address an overdraft of $62 million left by the previous Nevis administration. The overdraft limit at the time was $50 million.
It is widely felt that the Dr Denzil Douglas-led federal government may have orchestrated the action in an effort to discredit the ruling Concerned Citizens Movement (CCM) in Nevis, which has formed an alliance known as Team Unity with two other opposition parties in St Kitts.
Team Unity controls the elected majority in the St Kitts-Nevis Parliament and its leader Dr Timothy Harris commands the majority support of elected parliamentarians in the twin island assembly.
The Douglas administration has been under pressure to bring for debate a 16-month-old motion of no confidence brought by parliamentary opposition leader Mark Brantley, who is also deputy premier of Nevis.
The events leading up to this week’s incident are reported to be as follows:
• The Vance Amory-led CCM assumed office and leadership of the Nevis Island Administration in January 2013. The overdraft balance at the St Kitts-Nevis Anguilla National Bank left by the previous Nevis Reform Party (NRP) administration was then $62 million, which was $12 million over the limit of $50 million.
• Newly elected Premier Amory and the new CCM-led NIA wrote to the bank and asked for the limit to be increased from $50 million to $65 million, in an effort to allow the new NIA to have some room within which to operate. Bank officials informed the NIA that they had unofficially been allowing the previous NRP administration to operate at $60 million and would therefore be minded to formalize that amount with the new CCM administration, after which the CCM administration could apply for a further $5 million increase.
• The CCM administration formalized the $60 million overdraft and then immediately wrote as suggested by the bank for an increased limit of $65 million. Amory stated in an address to the nation that, to date, the SKNA National Bank has yet to respond. Despite the lack of formalization, the government overdraft was allowed to fluctuate between $60 - $65 million.
• On Tuesday, one day before civil service salaries were due, the NIA’s ministry of finance was contacted by bank officials and informed that amounts beyond the formalized $60 million would not be honoured. The balance on the account at the time was $61.8 million. The NIA deposited $3.2 million into the bank, most of it in specific preparation to pay salaries. The total amount frozen by the bank was $2.3 million.
Liburd added, “This was indeed an attack on all Nevisians, irrespective of political affiliation, or any other petty things that divide us at times. It is time we realize that the things that bind us together are far greater than the petty things that we squabble about.”
Premier Vance Amory
In a statement on Wednesday, Amory apologised on behalf of the NIA to Nevis public servants for the inconvenience caused when they did not get their salaries as expected that day.
“It has been a source of embarrassment and concern for all the employees of the government but also of all the people of Nevis and by extension, the people of the federation of St Kitts and Nevis. I want to state that this source of embarrassment to the NIA and the people of Nevis generally, must never be allowed to happen again,” he said.
Amory went on to say that the National Bank had agreed to honour the NIA cheques and to pay the salaries for the month of April.
“The situation, therefore, has been temporarily resolved but it is my fervent hope that we shall be able to have a permanent resolution to the financial arrangements with the National Bank as soon as we are able to meet after Friday 25th April,” he said.
Amory explained that the CCM administration has, over the past 15 months, not increased the overdraft which it inherited in January of 2013. The level of that overdraft was just about $62 million and it is currently $61.8 million.
“The Nevis Island Administration has done all within its power to manage its finances responsibly. We have sought to curtail any excess expenditure to ensure that we pay our major priority obligations and one of those priority obligations is the payment of salaries of public servants,” he said.
“I want to make the people of Nevis aware, again, that in 15 months, having inherited a bad financial situation, that we sought to manage our finances of the country well and our main priority was to ensure that we could pay our people and that we could stay within the accord which the IMF [International Monetary Fund] programme demands from us,” he continued.
Amory also pointed out that the current Nevis Island Administration has not received any financial subvention for budgetary assistance.
“We have made approach to the SIDF [Sugar Industry Diversification Foundation] asking for a similar accommodation which was accorded to the former administration but every attempt has been refused,” he said.
Amory also referred to the 9 million Euros (approximately EC$36 million) received by the federal government in 2014 from the European Union for budgetary assistance.
“From this amount, the federal government has not transferred any of those resources to the NIA, even though it was intimated to me that those 9 million Euros were to be for the support of the budget for the federation which, and I remind all of us, comprises the federal government and the Nevis Island Administration, the Nevis island government,” he said.