$1.298 billion rebuilding task ahead

Revenue is plummeting; expenditure is soaring and Dominica faces a $1.298 billion task to rebuild infrastructure following the passage of Tropical Storm Erika.

This grim news was disclosed in an address to the nation on September 30, 2015 by Dominica's Prime Minister Roosevelt Skerrit. He said the billion dollar assessment came from a draft report by a World Bank-led team and it covers damage costs plus rebuilding costs.

The team comprised representatives of international organisations such as the Pan American Health Organisation, World Food Programme, Caribbean Development Bank OECS Commission, CDEMA, Food and Agriculture Organisation and the University of the West Indies.

Government's revenue from Value Added Tax (VAT) has been severely affected, the PM said. Up to two days before month-end, only $4.2M in VAT had been collected in September, representing a substantial drop from the $10.3M collected in August.

"That scenario is replicated across Government's revenue stream," PM Skerrit declared.

Furthermore, teams and contractors who provided relief and recovery services in the days immediately following the passage of the storm have begun submitting their invoices.

So far, their claims amount to about $1.8M, but the figure is expected to reach as high as $12M, he said.

As far as direct relief is concerned, Government has recorded "cash receipts" totaling $13.02M, including $5.59M at the Eastern Caribbean Central Bank and $7.3M at the National Bank of Dominica (NBD). He said a sum of $6.5M at the NBD was received as payout from a catastrophe risk insurance fund.

Against this backdrop, Skerrit appealed to members of the private sector to be realistic in their demands on Government over the next few weeks, months and even years.

"I am already in receipt of some mind-boggling requests for tax waivers and concessions that -- were they to be granted -- would effectively bankrupt and shut down this economy of Dominica.

"The Government, my dear people, cannot make blood out of stone," the PM declared.

He pointed out that since production and revenue are down, Government is not in a position to grant across the board tax and duty waivers to "all and sundry".

Moreover, since Dominica is soliciting support from taxpayers in other countries, then would be inappropriate for his Government to be granting tax waivers and concessions "willy nilly".

He said the Government will try to help where possible, but cannot remove taxes on key sectors because the island still has to find $1.2B somehow.

PM Skerrit noted that the road ahead is long and winding, but he is undaunted by the task and will embark on "hectic" overseas travel and speaking itineraries to drum up support for the island.

"Dominica needs $1.2Bln to rebuild. We cannot generate such funds on our own. We need the continued support of the international community," he said.

Meanwhile, the PM said that the International Monetary Fund began a mission on September 25 and the nation's macro-economic framework will be reviewed and updated.

This new framework will take into account the significant level of investment needed for sustainable economic recovery, and it will establish a plan to guide fiscal operations in a recovering economy.