For nearly a decade, Grenada’s Contingency Fund existed only on paper, with no government making contributions despite a legal requirement to do so.
That’s according to Chairman of the Citizenship by Investment Unit Richard Duncan who has revealed that it was not until 2023 that actual deposits began, following a reduction in the mandated allocation from 40% to 10% of revenue from the Citizenship by Investment (CBI) programme’s National Transformation Fund (NTF), shortly after the Congress government of Prime Minister Dickon Mitchell took office in June 2022.
Under Section 45 (2) of the Public Finance Management Act, the government must allocate a portion of CBI revenues to the Contingency Fund. Initially set at 40%, this requirement was reduced allowing for greater flexibility in budgetary spending.
Duncan said: “Previously, the law said 40% must go into that contingency fund; not a black cent went in and that is since 2014.
During this period, the New National Party (NNP) of Keith Mitchell was in charge of the nation’s affairs.
From 2022, it was reduced to 10%, and it has been lodged at the ECCB to the aggregated total now of EC$54.6 million,” Duncan said during an interview with “The Bubb Report” on Sunday.
The fund has grown to EC$54.6 million at the ECCB, reflecting the Congress government’s deposits from the National Transformation Fund (NTF) under the Citizenship by Investment (CBI) programme but strict regulations still limit how it can be used, raising questions about its practical use in times of fiscal pressure.
“It’s a buffer fund; even though Hurricane Beryl was not a sufficient disruption to draw down on that money, it has to be a major economic shock,” Duncan explained.
Grenada’s CBI programme generated EC$472.9 million in 2024, a significant source of government revenue. Of this, 10% was allocated to the Contingency Fund, ensuring a steady buildup of reserves.
The fund can be applied to reducing budget expenditure arrears, debt restructuring, or disaster relief, but it cannot be used to lend money to the government, statutory bodies, or state-owned enterprises.
The restrictions raise concerns about how effectively the fund can support Grenada’s economic stability in times of need.