ST GEORGE’S, GRENADA: Local economist Byron Campbell is warning Grenadians to be cautious about buying the shares in Telecommunications Company Cable and Wireless being sold by the government.
He said would-be purchasers should seek advice from independent financial advisors before buying the shares, suggesting that it might not be such a good deal as the government’s promotions are making it out to be.
“We are seeing politics here in operation, there will be a lot of short term non-sustainable development opportunities being created by the government to try and secure an election victory,” opined Campbell who was speaking Monday afternoon on Straight Talk on the Voice of Grenada.
Campbell said the shares might be over priced at a time when there is increasing competition in the telecommunications market. Campbell who is also the manager of Grenada Building and Loan Association has blasted the government for failing to follow the instructions of the International Monetary Fund (IMF), which advised it to use all the money from the sale of the shares to finance its debts.
“The IMF does not support the initiative by the government, its last report said the expected divestment proceeds should be used to finance existing debts not to finance budgetary expenditure or pre election spending”, asserted Campbell.
The government is however insisting that it will be using fifty percent of the net proceeds for development projects within this year’s budget and the remainder will be used to pay off debts.
“Are we being conned?”, “Is the government drawing on the pockets of Grenadians to finance pre election expenditure?” Campbell questioned. He continued: “Wait and don’t proceed to buy these shares until the true value is determined and don’t support a government who is seeking a quick fix to be successful at the polls”.
The economist is also adamant that the $EC12.50 sale price for the government shares is too expensive for ordinary Grenadians. Some other economists and trade unionists including Senator Chester Humphrey have also raised concerns about the high price of the shares, the reason for the sale and the wisdom of the sale in the current economic conditions.
Opposition Spokesman on Finance Nazim Burke had cautioned the government about squandering the money it will be receiving when it sells its two thirds of its shareholding in the telecommunications company.
The government has said the first million of its shares will be sold until May 4th, and if during that time the shares are oversubscribed, the excess will be allotted out of the second tranche at a price to be determined before the remainder is put on sale..
