Articles

Fri 14th Jul 2017

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Buy back of BOSVG is financial nonsense

The National Commercial Bank (NCB) was the brain-child of the late Prime Minister Robert Milton Cato. The NCB was the small business bank and very supportive of Vincentian’s trying to better themselves and be entrepreneurial.

Unfortunately, Gonsalves killed the NCB in 2008, with a foolish EC$185 million bank overdraft. It was madness.

According to Warrant Officer Ivan O’Neal BSc (hons), MSc, MBA and Leader of SVG Green Party, the alleged buy back of the NCB / Bank of St. Vincent (BOSVG), as stated in the newspapers on 7th July 2017 and on SVGBC TV news on 3rd July 2017, is nonsense.

In 2010, it is believed that 51% of the NCB was sold to St. Lucia-based Eastern Caribbean Financial Holdings (ECFH) for about EC$42 million.

In July 2017, the ULP government said it will buy back the ECFH’s 31% of the BOSVG for about EC$32 million.

So, when the ULP government sold 51% of the NCB, it received about EC$823,529 for every 1% sold.

Now, when the ULP government is buying back 31% of the BOSVG, it is paying out about EC$1,032,258 for every 1% bought.

The difference is about EC$208,729 for every 1%.

The selling of NCB shares and the buying back of BOSVG shares is another illustration of the ULP government’s financial incompetence. They are paying about 25.35% more for something they originally owned in the first place.

It’s no wonder the SVG economy is in a real mess, when this government chooses to throw away money on senseless financial transactions.

Imagine selling a car, then buying it back a few years later for more. Why would you pay 25.35% more for something you originally owned in the first place?

It appears as if there is no financial advantage in buying back these BOSVG shares at this huge cost, especially as the BOSVG has shown a disappointing financial performance. It is a masterstroke of financial incompetence by the SVG Minister of Finance Gonsalves, who failed the Audit of Public Accounts for 2008, 2009 and 2010.

It is not clear how this purchase will be financed. Therefore, we have to ask, who is Gonsalves trying to fool - himself? Is the BOSVG even making a profit or is the government buying more shares in a dead dog? The public are entitled to know these important facts.

The ULP regime has been unable to create sustainable revenue streams for the SVG Treasury. They have been hopeless in managing the country’s finances. The SVG economy has been devastated by the financial and economic incompetence of the ULP regime.

As a consequence, there’s virtually no money circulating the country, businesses are going bust and unemployment and poverty are rising. Our people are suffering.

Warrant Officer Ivan O’Neal, who has a Masters Degree in Macro Economics, Budgeting, Planning and Policy from Bradford University, England, strongly believes that the people of SVG urgently need a green economy and a financially competent government, to create a fair tax system, jobs and an export-oriented economy for sustainable development.

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