Government Exploring Debt Swaps to Lower Borrowing Costs 

By S.Browne. Updated 9:40 p.m., Tuesday, August 4, 2026, Atlantic Standard Time (GMT-4).

The Government of St. Vincent and the Grenadines is exploring debt refinancing and debt swap arrangements as part of efforts to reduce borrowing costs and improve the country’s long-term fiscal position.

Prime Minister Dr Godwin Friday outlined the strategy during an interview on NBC Radio on Tuesday, August 4, 2026, as he addressed questions on the country’s fiscal outlook following the recent Moody’s Ratings downgrade.

According to Friday, the government is seeking to replace more expensive debt with financing on more favourable terms while strengthening the country’s fiscal position and supporting long-term economic growth.

He said government debt currently stands at about 113 per cent of gross domestic product (GDP), while debt servicing accounts for approximately 39 cents of every dollar earned by the government.

Friday warned that, without corrective measures, the debt-to-GDP ratio is projected to increase further over the coming years.

“We are having now to seek ways in which to swap out some of our more expensive debt to get more better terms and we are exploring those possibilities vigorously.”

The Prime Minister said the government is also seeking to increase its use of concessional financing from international development institutions rather than relying heavily on higher-cost borrowing.

He noted that St. Vincent and the Grenadines has recently joined the Development Bank of Latin America and the Caribbean (CAF), while discussions are continuing with other institutions that provide financing on more favourable terms.

“We are looking at other development financing institutions. We have joined the Central American Development Bank recently, CAF. We are looking at other institutions that are willing to provide concessional funding for development programmes.”

Friday said restoring the country’s financial health would require more than tighter fiscal management.

Instead, he argued that stronger economic growth, driven by increased private sector investment, would be essential to improving government finances over the long term.

“Our standard of living will not improve unless we generate more business activity in the country.”

He said the administration intends to strengthen partnerships with local businesses, regional investors and foreign direct investors while ensuring investment agreements deliver the best possible outcomes for Vincentians.

Friday maintained that attracting investment would create jobs, expand the country’s tax base and generate the revenue needed to sustain public services and social programmes without placing additional strain on the country’s finances.

END