Barbados Government borrows $35 million to repay previous $35 million loan

Barbados payday loan

Like a drunk going back to buy another bottle

by Rainmaker

Let me try to figure this out. It might take time because even though I went to univercity of de West Indys on guvment money, I’m not the sharpest pencil in the box, I know. Them univercity teashurs let me in to be fair and inclusive and I didn’t have to pay a dollar. Different now though because for some reason the guvment ran outta money for univercity. They should just borrow more and pay it off with other money they borrow.

Also I don’t know too much about guvment financing or stuff like that. I got fired before from Uncle’s store becuase I couldn’t make no good change for peoples. He said for every hour I worked for him on cash it cost him twenty dollars in misteaks.

Wuhloss! I was just doing the best I could but it weren’t no good. Uncle said I shoulda been a politician cause my mathematical skill set and handling of cash was just about like a politician.

I doan know ’bout that buy I know the guvment ministers know alot more about finanshul stuff than I do. So I’m gonna use science-tiffic raisoning to try to figure it.

Here goes…

The Barbados Advocate paper say “GOVERNMENT will today be seeking Parliamentary approval to borrow $35 million from the Republic Bank (Barbados) Limited.”

Okay. Got that. Now why are we borrowing all this $35 million dollars?

The paper say, “According to the Resolution, the money is being sought to repay a $35 million line of credit.”

Okay. Got that. We is borrowing this $35 million to pay off another $35 million that we borrowed before. I guess we filled up or tapped out that line of credit over time and didn’t pay any of it off. I guess we just paid the interest as we went along. I guess. Or maybe there was another loan we took out to pay the interest. The guvment probably does that so the peoples can’t marry up payments and interest charges with specific loans. Or somethin.

How long ago did we borrow this $35 million on a line of credit? Well, the paper doesn’t say, but it probably wasn’t last week. It was probably some time ago so I guess the interest has been paid. Or maybe not, the newspaper doesn’t talk about the old line of credit.

Okay, how much is the new loan going to cost us?

Well, the paper say “Under the terms of the loan, the funds are to be repaid over seven years via quarterly blended payments of principal and interest amounting to $1.5 million. Interest will be at the rate of 2.75 per cent below prime floating, currently eight per cent for an effective rate of 5.25 per cent.”

Okay. Well, let’s see. Quarterly payments over seven years. That’s four time a year, I guess. So four times every year over seven years.

Ah, that makes, ah (just a minute here, I got to take off my shoes so I can use my toes too.) Ah… four times seven is, I think it is twenty eight.

4 payments x 7 years = 28 payments.

Them 28 payments are $1.5 million dollars each, so that is, ah… $42 million dollars we have to pay back.

That means that the interest to borrow the money is $7 million dollars, which is exactly $1 million dollars a year in interest.

“Seeing as how I is unemployed and don’t pay no taxes anyway, I think that interest is okay. I guess.”

That previous $35 million we borrowed on a line of credit… nobody talkin ’bout what interest rate that was at or for how long, but let’s say it was for seven years at the same rate.

That would mean that to borrow that $35 million over 14 years, we paid $14 million in interest – almost half of the money we borrowed – and we haven’t got nothin to show for that $14 million, and we still owe that $35 million.

I get it.

Okay. Now I can be a politician too!

But first, I think I’ll walk up to the Republic Bank an ask for a big loan. I’m not workin’ right now but that doan matter. When them big bank peoples ask how I gonna repay that loan, I’ll just tell ’em to do like they do wid de guvment. Just loan me more money to add onto the original loan.

Yup. I’d make a good Bajan politican. Maybe even Minster of Finanshull stuff.

10 Comments

Filed under Barbados, Economy

10 responses to “Barbados Government borrows $35 million to repay previous $35 million loan

  1. Breadfruit

    Words fail me

  2. anonymous

    words fail me too. smh

  3. Excellent Post!

    Now that is an excellent post.

    Sad.

    But excellent.

    Damn the DLP and BLP to hell anyways.

  4. John Hanson 1781-1782

    Now who getting the 10% for coming up with the loan in Government ?
    All that money moving who the middle man or woman?
    Can do the same for CLICO or Barrack lolol love it when fools show face,
    Unless the other loan was killing them much worse ,
    Did some one do and audit to see to see the loan dept on the books?

  5. Well, you know dem bajans don, have mush cents den only went to one o’ dem second rate schools in bados, so dem think going ta university will educate dem, so chin up boys mo ta come.

  6. Anonymous

    Sound like something the MOF came up with . You know he did not go past 2nd form at Garrison.

  7. gentlejim

    Sounds like something the MOF came up with. Seeing that he did not get past 2nd Form at Garrison.

  8. @gentlejim/anonymous, I resent that!. Lots of bright kids went to Garrison so don’t disparage it just because one of them (if in fact he did go there) should have instead gone to clown school.

  9. I think the minister of Sport is doing an amazing job. By focusing the minds of the nation on sport and culture, there is less chance of anyone waking up to the financial mess that the country is in before it completely disappears down the plug hole. Do the so called Bajans who stream to Face Book know that it is worth more than their own country and better managed?

  10. gentlejim

    @fear play: I was not casting aspersions on the school. I said he did not get past second form. 🙂