by Dr Adrian Joseph

A friend in the diaspora recently sent me an article entitled “Two Caribbean countries added to new US travel restrictions.” My friend asked the question, “Can you imagine the local budget without CBI revenue source?”

I read the article and paused, not because Grenada was named, but because the region has reached what some may describe as a tipping point that exposes systematic policy vulnerabilities. The article indicated that Antigua and Barbuda and Dominica were singled out over concerns linked to citizenship by investment arrangements. The message was unmistakable: global tolerance is shrinking, and small states dependent on “exceptional revenues” must prepare for sharper scrutiny and sudden shocks.

This moment should prompt serious reflection here at home.

In a discussion with another local expert, I asked the same question. She quickly responded, “Grenada’s Fiscal Summary for July 2025 paints a picture that is both reassuring and unsettling.” When one examines Grenada’s Fiscal Summary for July 2025, it tells a story that deserves careful, sober consideration. While overall revenue performance for the first 7 months of the year remained broadly on target, it also confirms something more unsettling: IMA/CBI revenues now form a significant part of Grenada’s fiscal architecture, even as the country continues to operate under deficit conditions.

In plain language, money that was once treated as extraordinary is increasingly helping to prop up ordinary, recurring obligations.

Between January and July 2025, IMA revenues amounted to over EC$117 million. That is not pocket change. More troubling, the fiscal report itself acknowledges that higher transfers and subsidies, including IMA-related expenses, were key drivers of recurrent spending during the period. At the same time, the country recorded both a primary deficit and an overall fiscal deficit.

Key Fiscal Data (Jan–July 2025). Image: Adrian Joseph

Total revenue – $540 million. IMA revenue – $117 million. This is where the warning lights begin to flash.

When you look at these numbers in simple terms, the size of the CBI money should make anyone uneasy. About 14 cents of every dollar the government collects now comes from CBI. That means CBI is bringing in almost as much money as import duties, and more than petrol tax, stamp tax, excise tax, and environmental levies put together.

Think of the country’s finances like a household budget. Taxes such as VAT, income tax, and import duties are like a parent’s regular salary. They come in steadily because people work, shop, and do business every day. CBI, however, is more like winning money from a game or getting a big gift from a stranger. It can be a lot of money, but you never know if it will come again next month or next year.

Exceptional revenues, whether from CBI, disaster insurance payouts, or one-off windfalls, are by nature volatile. They can surge one year and evaporate the next, often for reasons entirely outside our control, including geopolitics, regulatory shifts, reputational concerns, or policy decisions taken in distant capitals. The July figures already show how dramatic that volatility can be when compared to the previous year.

So, the question must be asked, calmly but firmly: What happens if the taps slow further, or are abruptly tightened?

Recent regional developments suggest this is not a hypothetical exercise. When major partner countries signal discomfort with how citizenship programmes are structured, monitored, or perceived, the ripple effects extend well beyond the jurisdictions named. The entire Caribbean CBI/IMA space comes under a microscope; banks, correspondent relationships, investors, and international agencies alike.

Grenada may believe its programme is better managed. That may well be true. But prudence demands more than confidence; it demands preparation for what it is.

A responsible fiscal strategy must therefore confront a hard truth: recurrent expenditure should never depend heavily on exceptional income streams. When it does, governments lose room to manoeuvre. Choices become reactive. Adjustment becomes painful.

Scenario
IMA Revenue (EC$ m)
Revenue Loss vs Baseline (EC$ m)
IMA Share of Recurrent Revenue
Change in Total Revenue

Baseline (0%)
165.9
—
13.9%
—

10% reduction
149.3
16.6
12.5%
−1.4%

20% reduction
132.7
33.2
11.1%
−2.8%

50% reduction
83.0
82.9
7.0%
−6.9%

Impact of IMA Revenue Reductions on 2025 Budget. Image: Adrian Joseph

What, then, is the fallback option?

First, Grenada must clearly ring-fence IMA revenues. These funds should primarily support capital investment, resilience-building, debt reduction, and time-bound development priorities, rather than permanent obligations that recur year after year.

Second, the country needs a genuine stabilisation buffer, a savings mechanism that cushions sudden revenue shocks and buys time for orderly adjustment when external conditions change.

Third, domestic revenue mobilisation must improve, not by squeezing the most vulnerable, but by tightening compliance, reducing leakages, and ensuring progressive taxation where contributions align with economic capacity and ability to pay.

Fourth, economic diversification can no longer be a talking point; it must be strategically pursued through deliberate sectoral integration and value chain development. Agriculture and Tourism must become a stronger catalyst of economic diversification and job quality, while agro-processing, manufacturing, and creative industries must become drivers of our New Economy. Simultaneously, digital and professional services must be developed as credible export sectors by leveraging platform economy opportunities and positioning Grenada as a competitive hub for virtual service delivery within the Caribbean and global markets. Imperatively, affordable access to renewable energy and its systematic scaling hold the key not only to reducing fuel import dependency, but to powering economic expansion, enhancing industrial competitiveness, and improving living standards across all income levels

Finally, and this cannot be overstated, credibility is our strongest currency. Transparency, rigorous due diligence, independent audits, and proactive international engagement are not optional. These virtues are both our defensive and offensive armament y are defensive tools in a world that is increasingly unforgiving of perceived risk.

None of this is an argument to abandon the IMA programme. Instead, it is an argument calling for policy introspection and for us to stop leaning on IMA financing it as a fiscal crutch.

The diaspora friend who warned me was right. We should re-imagine the budget without IMA, not because we expect it to vanish tomorrow, but because only then can we honestly assess whether our public finances are resilient or exposed.

A nation that cannot meet its recurrent obligations without exceptional revenue is not fiscally secure. It is living on borrowed certainty.

Grenada still has time to adjust course, quietly, deliberately, and responsibly. The worst mistake would be to wait until external pressure forces our hand.

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