Parliamentarians in the Lower House have approved a bill authorising the government to borrow XCD$1.2 billion (USD$$450M) to manage the national debt in 2025.

Debt remains one of the government’s largest financial burdens, consuming nearly 40 percent of its annual budget. Of the XCD$2 billion fiscal budget unveiled by Prime Minister and Minister of Finance Gaston Browne last Thursday, $798.1 million—the single largest allocation—has been set aside for debt servicing.

The Borrowing Authorisation 2025 Budget Bill passed unanimously on Wednesday. The bill proposes authorisation for borrowing up to XCD$1.2 billion to refinance existing treasury bills and bonds, which have been routinely rolled over since 2006 under successive administrations. According to prime minister & finance minister Gaston Browne this measure aims to streamline liability management, reduce high-interest debt, and establish a longer repayment timeline.

Browne explained that the proposal does not increase the country’s aggregate debt but seeks to lower the government’s debt service ratio. Currently, interest rates on some domestic loans are as high as 8–9 percent. The government hopes to secure lower rates through renegotiation with commercial banks or via the proposed bond issuance.

“This will create fiscal space, allowing us to address pressing financial obligations, such as clearing arrears owed to creditors,” he explained. “We aim to ensure that this process is conducted transparently, with Parliament kept informed at every stage.”

The bill also aims to facilitate repayment of long-standing debts to creditors, some of whom have waited decades for resolution. Additionally, it mandates parliamentary approval for future rollovers of treasury bills and bonds, ensuring continued oversight.

In addition to refinancing, the bill would enable the government to pay off high-interest domestic debts, potentially at rates around 5 percent if successful negotiations materialise. Browne however cautioned domestic banks that failure to engage proactively on reducing interest rates could disrupt the financial sector, as the bond issuance would likely redirect significant funds.

“So maybe what the domestic banks need to do, especially considering that this matter has now reached a Parliament, it’s for them to now engage finance officials and to discuss a reduction in interest rates” he suggested.

While the government remains in active discussions with international and regional financial institutions, no formal offers for the bond have been secured. The bill, if approved by the Senate, would allow preliminary negotiations to proceed, with Parliament reviewing the final terms before implementation.