Do Government Bonds and Treasury Bills Provide Alternative Investment Opportunities?

PRESS RELEASE – THE Debt and Investment Unit in the Department of Finance believes the level of financial literacy in St. Lucia must be improved significantly to encourage more St. Lucians to take advantage of investment opportunities.

The Unit urges opportunities for investment in government bonds and treasury bills with very attractive interest rates.

St. Lucia’s public debt is an area of significant interest to the citizenry.

Public debt or national debt refers to how much a country owes to lenders outside of itself.

The Debt and Investment Unit in the Department of Finance is mandated to raise the required funding to finance the budget at a minimum cost with a prudent degree of risk.

Deputy Director of Finance responsible for Debt and Investment, Vera John-Emmanuel, said her unit is also responsible for managing and servicing the national debt.

The unit’s operations are manned by six highly-skilled staff who utilize three main instruments to manage the public debt.

She explained, “We utilize the bonds which are instruments from FIVE years in their term up to 10 years and those bonds go at a maximum rate of 7.25% and that depends on how long you go in terms of your investment with this instrument.

“We also have the treasury bills which are shorter term instruments. These go from 91 days to 1 year.

“We also contract loans from multilateral or bilateral creditors. So these are the three instruments that government utilizes in terms of funding their budget.”

She said approximately 25 cents of every dollar from revenue goes to servicing the national debt and the government of St. Lucia has always been able to meet its debt obligations.

“So it’s a significant amount of money which we pay in terms of debt service. That’s why it is so critical that we manage and pay this debt on time,” she added.

The Debt and Investment Unit in collaboration with International Monetary Fund (IMF) and the Eastern Caribbean Central Bank (ECCB) recently conducted an Investor Relations workshop.

The objective was to strengthen Government’s relations with investors of bonds and treasury bills whilst expanding its investor base. Emmanuel noted that public sensitization on other forms of investment ranks high on the unit’s agenda.

According to the Deputy Director, “Take advantage of the opportunities that we have now in terms of government bonds and treasury bills. It’s a good opportunity.”

The Deputy Director added that via these instruments investors can make a contribution to the development of the country while at the same time realize excellent returns.

With a minimum of $5,000 Emmanuel said, anyone can participate in the auction on the Regional Government Securities Market (RGSM) or over the Counter to gain returns as high as 7.25% on their investment. (National Competitiveness and Productivity Council)