$2-million hike in CDF for COVID-19 fight

The Constituency Development Fund (CDF) allocation for Members of Parliament (MP) is to be bumped up from $20 million to $22 million per parliamentarian in the new fiscal year, to allow them to make interventions related to the novel coronavirus disease (COVID-19) in their constituencies.

Prime Minister Andrew Holness made the announcement in his budget presentation in the House of Representatives yesterday.

He stressed that the funds are to be used exclusively for COVID-19 interventions.

The criteria and guidelines will be issued to each MP, and the funds are to be available by the first week of April, when the new CDF allocation is due.

At the same time, relief is to come for Jamaicans who have been complaining about water shortage, a situation which has been magnified by the presence of COVID-19 in the island.

Portfolio minister Daryl Vaz and Minister of Local Government Desmond McKenzie have been tasked to lead a special task force to implement a water trucking programme for areas that have been experiencing difficulty.

Holness said the Ministry of Labour and Social Security will make an allocation of $1 million available immediately to the 13 municipal corporations, which will administer the trucking of water. The National Water Commission will prepare a schedule for the programme and will be responsible for ensuring that all public sector entities have water. Additionally, measures are being put in place for emergency procurement of water trucks.

Holness also announced more measures to minimise disruptions in the economy from the expected fallout from the coronavirus outbreak. Among them is that the Development Bank of Jamaica (DBJ) has been instructed to cut interest rates for two months on existing loans to the agricultural and renewable energy sectors by 10 per cent.

The DBJ is also to make available an additional $10 billion through approved financial institutions for specified areas in these productive sectors. The prime minister stressed that approved banks and credit unions must pass on the reduction in interest rates to the borrowers in the specified sectors.

“This is not for general access, you have to be in the sectors that we identify as critical,” he said.

“In times of national crises the emotional response is for businesses to pull back because of uncertainty in the future. The current threat will pass. Government, while taking the necessary measures to protect the people, is also taking measures to protect the livelihood of the people,” the prime minister stated.

Additionally, the DBJ will extend to the business process outsourcing (BPO) sector a two-month moratorium on both principal and interest on loans, upon request. “This is to ensure that the BPO sector doesn’t have any fallout during the period,” he said.

Holness noted that the DBJ currently has $10 billion in loan guarantee agreements with seven major banks and financial institutions and has been directed to place advertisements in the national newspapers, explaining how businesses can access these resources.

“These funds are for investment loans, but more importantly, at this time, for liquidity support which is critical for businesses experiencing cash flow interruptions because of the epidemic… it’s a debate that should be had about the role of the DBJ [whether] they should lend directly, but the challenge is the banks are sufficiently liquid, there are market failures so it is best that the DBJ focuses on correcting the market failure rather than competing in the space,” he explained.

Furthermore, the prime minister said he has directed the Ministry of Economic Growth and Job Creation to put forward measures which can be applied to support all businesses for an initial 12 weeks to avoid a total collapse of the economy.