On Wednesday 29th April Prime Minister Skerrit met with private sector representatives to discuss the Citizenship by Investment programme as part of the 2015 National Budget, as well as a new banking act to be proposed to Parliament.
The 2015 National Budget
The Prime Minister began by stating that the budget had similarities to previous years, largely due to the wider economic climate. He added that smaller states such as Dominica have to be prepared for the impact of global challenges.
He revealed that Dominica’s GDP grew by an estimated 1.1% in 2014, in part due to tourism and non-banana agriculture. The country’s GDP is expected to grow by 2.4% in 2015, which has been attributed to the construction, agriculture and tourism industries.
In addition, the government has received at least three potentially successful submissions as part of its Citizenship by Investment programme, which have the potential to further increase foreign investment in the economy of Dominica.
PM Skerrit stated that for the economy to consistently grow “productivity must increase in both the public and private sectors” and greater care and attention must be given to public sector projects.
He reiterated that financial measures announced in the 2014 National Budget have helped to create a welcoming environment for private sector investors.
These include, but are not limited to, “a reduction in personal and corporate income tax, increase in exemptions in mortgage interest and special tax deduction for firms which created new jobs.”
The AID Bank will soon be able to offer new loans at reduced interest rates as a result of government talks with partners in low-cost finance.
The New Banking Act
A new banking act to be proposed to Parliament will replace the previous Banking Act of 2005.
The Central Bank will now be directly responsible for the issuing of banking licenses, in order to “ensure that the regulation, supervision and licensing of the banks are in one central location.”
A number of new provisions and amendments will be introduced, including a revision of the conditions under which a license can be received, restrictions on the activities of a licensed institution and a comprehensive register of licensed institutions.
These provisions are intended to “preserve the banking sector and protect the deposits of depositors.” The Prime Minister expressed his hope that “people engaged at the board or management levels of a bank will therefore be held more accountable for the performance of these institutions.”
These changes will give the Eastern Caribbean Central Bank authority in the regulation of financial institutions across the Economic Union and will ensure that banking legislation remains relevant, corrective and proactive.