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Debt Bombshell Sparks Fears of Another Financial Crisis Amidst Record Spending

Basseterre, St. Kitts – In what is being described by economic observers as a debt time bomb in the making, Prime Minister Dr. Hon. Terrance Drew and Minister of Economic Development Hon. Samal Duggins have signed off on an eye-watering EC$300 million loan agreement with the African Export-Import Bank (Afreximbank) — triggering immediate concern about the fiscal direction of the twin-island federation.

The staggering financial commitment — made up of USD $50 million by PM Drew for social infrastructure projects and an additional USD $40 million by Minister Duggins for a massive port development — comes at a time when the country is already grappling with EC$311 million in deficit spending and a projected EC$274 million shortfall for this fiscal year alone.

A Recipe for Return to the IMF?

Economists and financial analysts are raising red flags, calling the borrowing spree a clear recipe for another IMF bailout — a fate the country heroically escaped under the Team Unity Government led by Dr. Timothy Harris between 2015 and 2022. During that era of unprecedented fiscal discipline, the Harris administration:

• Paid off the IMF debt in full
• Never borrowed a cent or signed a single external loan
• Successfully launched and funded PAP, PEACE, and the Nevis Income Support Programme
• Executed major capital projects including the second cruise pier, island-wide road rehabilitation, bus and ferry terminals, and a $120 million COVID-19 relief package — all without borrowing a dime.

Today, however, the narrative has shifted dramatically under the Drew administration.

Lofty Language, Heavy Debt

In a social media post celebrating the loan signing, PM Drew declared:

“I had the honour of signing a transformational USD $50 million agreement… improving schools, hospitals, housing, and infrastructure that touches the lives of every Kittitian and Nevisian.”

He framed the move as personal, referencing his humble upbringing and his passion for uplifting the people.

Meanwhile, Minister Duggins boasted of a USD $40 million Letter of Interest with Afreximbank for what he called the “most ambitious port development in the nation’s modern history,” to be done in partnership with Gemini Integrated Commodities.

“This is how we raise the standard — facility after facility, deal after deal,” Duggins wrote, celebrating the signing as a symbol of visionary progress.

But At What Cost?

Critics argue that the lofty ambitions are being built on unsustainable borrowing, and that the administration is mortgaging the future of the nation to fund projects that are long on fanfare but short on transparency and proven return on investment.

“You cannot run a country like a social media page,” one economist warned.
“You can’t ‘inspire’ your way out of debt. This level of spending with this level of borrowing is a flashing red light — and if it continues, the IMF will be the only option left on the table.”

Political Whiplash

The announcement also reignites the debate about fiscal credibility between the current SKNLP government and the former Team Unity administration. In stark contrast to the zero-loan, high-delivery governance of Harris’ term, PM Drew now presides over an economic model increasingly fueled by debt, deficits, and dangerous dependency.

With national debt ballooning and no clear roadmap for repayment, many are now asking the uncomfortable but necessary question:

Is St. Kitts and Nevis once again heading into the arms of the IMF — just three years after breaking free?

Stay tuned. This story is developing.

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