The Government of Antigua and Barbuda has announced plans to employ innovative financial strategies, including debt swaps and buybacks, as part of its ongoing effort to manage public sector debt. This initiative, outlined by Prime Minister Gaston Browne during the 2025 Budget presentation, aims to reduce the debt service burden while maintaining the country’s impressive trajectory toward debt sustainability.
“Our government remains committed to fiscal responsibility and debt reduction,” Browne stated. “The use of innovative mechanisms such as debt swaps and buybacks will allow us to create fiscal space for investments in socio-economic development while meeting our debt obligations.”
Antigua and Barbuda’s debt-to-GDP ratio is projected to decline to 62.3% by the end of 2024, a significant improvement from the 75.3% recorded at the end of 2023. This places the country ahead of the Eastern Caribbean Currency Union (ECCU) target of 60% well before the 2035 deadline.
The Prime Minister attributed this progress to strong economic growth, debt service payments, and effective fiscal management. When the government assumed office in 2014, the debt-to-GDP ratio stood at 100.2%, reflecting unbooked liabilities and legacy debts. Today, the public debt stock is projected to fall from $4.1 billion in 2023 to $3.9 billion by the end of 2024.
“These results demonstrate the soundness of our fiscal policies and our commitment to building a resilient economy,” Browne said.
Debt swaps and buybacks are strategic tools used to restructure debt, reduce liabilities, and improve fiscal health. Under a debt swap arrangement, the government may exchange high-interest debt for lower-interest instruments or allocate debt payments toward specific development projects. Debt buybacks involve repurchasing outstanding debt at a discount, effectively reducing the overall debt stock.
The Ministry of Finance will lead these initiatives in 2025, working to negotiate favorable terms with creditors while ensuring that these strategies align with the country’s broader economic goals.
“These innovative approaches will further enhance our ability to manage debt effectively and support our long-term fiscal sustainability,” Browne explained.
The government has also implemented a comprehensive arrears clearance strategy, using fiscal surpluses generated in 2024 to reduce outstanding obligations to contractors, merchants, and public servants. Approximately $50 million was allocated to clear arrears, including gratuity payments for retired public servants and salary adjustments for teachers.
The fiscal surplus of $86.4 million projected for 2024 underscores the government’s ability to balance debt reduction with economic growth. Total revenue and grants for 2024 are estimated at $1.32 billion, driven by a 22% increase in tax revenue and significant non-tax revenue contributions.
These fiscal gains have enabled the government to maintain critical public services, invest in infrastructure, and provide social benefits such as increases in pensions and public sector wages.
“Our success in managing public sector debt is a testament to the resilience of our economy and the confidence of our people,” Browne concluded. “With these strategies, we are not only reducing our debt but also creating a foundation for sustainable development and shared prosperity.”
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