Government of Anguilla

RATINGS UPDATE: Government of Anguilla Ratings Upgraded by

one notch to CariA- (Foreign and Local Currency
Ratings) on the regional scale; Outlook
maintained at Stable.

RATING ACTION:
On September 20, 2024, CariCRIS upgraded by one notch the Issuer/Sovereign Credit ratings to CariA- (Foreign and Local
Currency Ratings) on its regional rating scale assigned to the The Government of Anguilla (GOA). A stable outlook was
maintained.

RATING SENSITIVITY FACTORS:

Factors that could lead to an improvement in the Ratings and/ or Outlook include:
• Annual real GDP growth in excess of 5% sustained for at least 2 years.
• A fiscal surplus of more than 5% of GDP recorded for at least 2 consecutive fiscal periods, with no breaches of debt
metrics.
• Meaningful diversification of the economy into sustainable productive sectors (i.e., not directly related to Tourism)
that adds at least 10% to real GDP over two consecutive years.

Factors that could lead to a lowering of the Ratings and/ or Outlook include:
• An increase in debt to GDP ratio to above 50%.
• A change in the country’s status as a British Overseas Territory or a material change in the level of support rendered
to Anguilla.
• The banking sector’s capitalization ratio falling below 8%.

[Link] Analysts’ Contact Info:

info@[Link] Stefan Fortuné Candace Williams
Phone: 1-868-799-6751 (m) Phone : 1-868-713-6973 (m)
sfortune@[Link] cwilliams@[Link]
RATING RATIONALE

Caribbean Information and Credit Rating Services Limited (CariCRIS) has upgraded by
one notch the ratings of the notional debt of USD 25 million of the Government of
Anguilla (GOA) to CariA- (Foreign and Local Currency) on the regional rating scale.
These ratings include a 6-notch uplift for the high likelihood of support from the United
Kingdom (UK). The notched-up regional scale ratings indicate that the level of
creditworthiness of this obligation, adjudged in relation to other obligations in the
Caribbean is good.

CariCRIS has also maintained a stable outlook on the ratings. The stable outlook is
based on the strong fiscal and debt management support from the United Kingdom, in
addition to the ongoing satisfactory recovery path following the impacts of the
coronavirus (COVID-19) pandemic on the tourism industry and wider economic
activity.

The ratings are supported by the following:

RATING DRIVERS
Key Strengths Key Risks
Support from the UK Government as an Overseas Territory Small Island Developing State with significant capacity
constraints

The rebuilding of the economy and infrastructure continues Breached debt management benchmarks albeit improving
following the passage of Hurricane Irma and continued considerably
FDIs, particularly towards tourism.

Fiscal performance remains carefully managed to control Financial sector is characterized by high non-performing loans
debt accumulation and improved debt servicing capacity. and low but improving capitalization levels.

Income and Economic Structure: B+ (Weak)

Anguilla the 2nd smallest economy in the Organization of Eastern Caribbean States
(OECS). In 2023, real GDP (at constant 2006 market prices) increased by 8.2% to EC
$781.2 million from EC $722.4 million in 2022 (Table 1). Real GDP is projected by the
ECCB to increase by 6.9% in 2024 (Chart 1). Export earnings, primarily dependent on
tourism and fiscal revenues, are derived from a narrow base of productive sectors and a
small labour force. These characteristics of the territory impose significant capacity

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constraints and have resulted in large fluctuations in economic growth, underscoring the
country’s vulnerability to external shocks.

Chart 1
Real GDP growth rates (at Constant 2006 Market Prices) (2019-2025)

*Projected
Source: ECCB

The COVID-19 pandemic plunged GDP by 29.9% in 2020. There was significant impact
on the tourism sector, which is the main generator of GDP for the economy, and adverse
knock-on effects for other sectors of the economy. However, strong economic recovery
has been seen. Real GDP in 2023 was 6.4% above pre-COVID-19 output in 2019.
Economic growth is expected to moderate in upcoming years but still remain robust.

The GOA devised a COVID-19 ‘Exit Strategy’, which was approved by the Executive
Council and implemented in April 2021. The full reopening of the economy was
completed in June 2022. The return of tourism owing to pent-up travel demand has
resulted in the high overall GDP growth. Leading the continued recovery of GDP in
2023, were growth in the following sectors: Hotels and Restaurants (↑31.7%),
Construction (↑13.1%), Manufacturing (↑13.1%), Transport, Storage and
Communications (↑10.4%), Agriculture, Livestock and Forestry (↑9.6%), and Fishing
(↑8.6%). Other sector showed smaller increases, with the only sector decreasing in 2023
being Wholesale and Retail Trade (↓5.1%).

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The significant growth in the Hotels and Restaurants sector in 2023 was supported by a
62.6% increase in total number of visitors in 2023 from 20221 (Chart 2). As a result,
visitor expenditure expanded by 21.8% to EC $460.8 million2. This buoyant demand
bodes well for the continued recovery of Anguilla’s tourism industry and by extension,
the performance of the economy.

Table 1
Real GDP (in Constant 2006 Market Prices) (2020-2024)
2020 2021 2022 2023 2024*
% % % % %
EC$M Change EC$M Change EC$M Change EC$M Change EC$M Change
Agriculture, Livestock and Forestry 1.29 -41.36 1.32 2.33 1.25 -5.30 1.37 9.60 1.46 6.57
Fishing 3.22 -79.19 3.72 15.53 3.95 6.18 4.29 8.61 4.42 3.03
Mining & Quarrying 2.79 31.60 3.14 12.54 2.85 -9.24 2.88 1.05 2.88 0.00
Manufacturing 14.49 0.76 15.19 4.83 15.68 3.23 17.74 13.14 19.51 9.98
Electricity & Water 27.29 -6.44 29.57 8.35 31.26 5.72 32.98 5.50 33.34 1.09
Construction 42.49 -19.89 54.30 27.79 57.40 5.71 64.92 13.10 74.66 15.00
Wholesale & Retail Trade 38.73 -32.47 52.43 35.37 60.60 15.58 57.52 -5.08 58.38 1.50
Hotels & Restaurants 45.62 -71.69 51.00 11.79 133.10 160.98 175.34 31.74 210.40 20.00
Transport, Storage and Communications 29.87 -34.65 27.61 -7.57 37.05 34.19 40.90 10.39 43.98 7.53
Financial Intermediation 48.44 -6.40 48.25 -0.39 47.99 -0.54 48.08 0.19 48.40 0.67
Real Estate, Renting and Business Activities 73.60 -15.46 75.85 3.06 83.39 9.94 85.06 2.00 86.35 1.52
Public Administration, Defence & Compulsory Social Security 61.15 2.33 61.18 0.05 61.23 0.08 62.57 2.19 63.82 2.00
Education 17.70 -1.88 17.94 1.36 17.76 -1.00 17.78 0.11 18.06 1.57
Health and Social Work 14.32 -7.25 14.47 1.05 14.29 -1.24 14.40 0.77 14.40 0.00
Other Community, Social & Personal Services 20.11 -2.19 20.31 0.99 20.42 0.54 20.52 0.49 20.62 0.49
Activities of Private Households as Employers 3.54 -0.56 3.55 0.28 3.57 0.56 3.59 0.56 3.61 0.56
Less: FISIM 11.10 4.72 10.58 -4.68 11.50 8.70 15.04 30.78 15.19 1.00

GDP in Market Prices 515.42 -29.87 581.51 12.82 722.44 24.24 781.72 8.21 835.83 6.92
Source: ECCB Data Centre
* Projected

Chart 2
Total Visitor Arrivals and Expenditure 2018 - 2023

Source: ECCB Data Centre

1 Nominal GDP was positively impacted by higher room prices.

2 Source: ECCB; Real Sector Statistics - Selected Tourism Statistics.

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Supporting the rise in tourist arrivals throughout 2023 was the increased accessibility to
the island via greater availability of flights3. A key three-phased4 airport development
project is being undertaken to further improve accessibility to the island. The project is
expected to be completed by the end of 2027. In 2023, total tourist arrivals by air
increased by 23.4 % to 34,039 from 27,582 one year prior. The main source of sea arrivals
is from the ferry into Anguilla from St. Maarten/Martin. The completion of the
restorative construction works to the Blowing Point Ferry Terminal in January 2023
further improved tourist arrival numbers via sea, increasing by 161.8% to 121,693 from
46,471 in 2022.

Chart 3
Visitor Arrival by Air and Sea (2018 to 2023)

Source: Anguilla Statistics Department

3 American Airlines (AA) will continue this winter (December 2024 to March 2025) with its two direct flights a day to
Anguilla from Miami but three on Saturdays. Skyhigh Aviation operates between Anguilla and the Dominican
Republic. WinAir, also offers flights into Anguilla on occasion, while some interest has been received from Caribbean
Airlines. Additionally, GOA is currently exploring opportunities to have flights added to its schedule from Canada,
South American and the Dominican Republic following the completion of airport development works.
4 The 3-phased airport development project includes a) Phase I: Resurfacing of the runway to increase the load-bearing

strength of the runway, addition of parking spaces for vehicles and additional lighting b) Phase II: Preliminary
development & remodelling of the terminal and c) Phase III: Land acquisition and development works for expansion of
the runway by approximately 7000 feet.

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Tourism developments and offering enhancements include marina projects5, heritage
tourism6 product, advancing a well-regulated gaming industry, and offshore tertiary
education7. To attract investments, the GOA will promote available opportunities via the
development of an investment promotion online platform. In the next 12 months, major
tourism works are planned on the following properties: Altamer, Aurora, the Four
Seasons, Frangipani, and ÀNI Private Resorts. Broader diversification efforts include
initiatives in fishing8 , farming and manufacturing. These sectors have benefited from
duty concessions and exemptions from the newly implemented Goods and Services Tax
(GST). Going forward, the GOA expects to further discussions with the UKG to
commence an offshore fishing licensing regime and investments in agricultural
technology to transition its traditional agricultural practices9. Notwithstanding these
diversification efforts, sustained medium-term economic growth will continue to be
heavily dependent on the performance of the tourism industry and investments in
Anguilla’s tourism stock. Meaningful transformation of the economy is also being
planned to be supported by digital transformation of the economy, the development of
the financial services sector10 and special economic zones11, the utilisation of latent
natural resources12 , and impetus to the boat building and maintenance services sector.

5 Marina projects include the Sandy Ground and Rendezvous Bay Marinas.
6 Heritage tourism involves visiting historical or industrial sites on island.
7 Currently, there are interests and discussions ongoing with medical Universities from the US and the EU.
8 The Blue Anguilla (BANG) Task Force was established in February 2021. Building on the work of the BANG Task

Force which produced the Blue Anguilla. Implementation Plan 2022 to 2024, the Ministry of Sustainability,
Innovation and Environment will be joining the United Kingdom’s Blue Belt programme and forging partnerships
with UK and other international agencies to develop a programme of support for Anguilla in the development of its
blue economy. Support provided will focus on local capacity building, scientific research and analysis, marine spatial
planning, and increased protection of marine parks.
9 Given the small size of the country, there is a lack of arable land to practice large-scale agriculture using traditional

techniques.
10 This includes trust services and management of digital assets.
11 Anguilla’s Special Economic Zone is called AZUR. AZUR is designed to attract businesses with a focus on global

trade and aiming to leverage low administrative costs, access to new markets and tax benefits. This includes 0% import
duties and 0% corporation tax for 20 years.
12 This primarily includes solar energy and fish stocks.

6
Fiscal Policy: BB+ (Below Average)

Anguilla’s fiscal position is hampered by a small taxable base. Fiscal planning is

done within the confines of key debt performance metrics agreed with the UKG.
After recording a significant fall in fiscal performance in 2020 due to the COVID-
19 pandemic, the government’s accounts quickly rebounded in the subsequent
three years (Table 2)13. In 2023, the favourable fiscal outturn was the result of a
15.2% increase in total revenue to EC $398.8 million, overshadowing a 13.5%
increase in total expenditure to EC $259.7 million.

Total revenue and grants rose as a result of historically high earnings from non-
tax revenue (↑119.2%) which more than compensated for lower tax revenue
receipts (↓5.1%). Taxes on income, profit and capital gains declined 5.9% to EC
$18.8 million; however, the loss was more than made up for by a 6.4% increase in
receipts from goods and services which returned EC $195.0 million in collections.
Goods & services tax (GST) revenues were the largest component. GST earnings
climbed 167.8% to EC $143.8 million, as 2023’s receipts represented the first full
year of GST collections. Taxes on international trade and transactions fell by
31.8% to EC $51.9 million as citizens benefited from inflation relief concessions.
Non-tax revenue’s stellar 2023 performance was due to earnings from domain
“.ai” registrations. This revenue category contributed EC $120.24 million in 2023.
A national plan for saving this windfall is being devised but currently it is being
used to support significant capital expenditure.

13 Notably, the GOA has reclassified its revenues lines for its fiscal accounts for 2021 and 2022 to better capture its
revenue sources. The GOA’s tax revenue lines were income, property, domestic goods & services, licenses,
international trade & transactions and duties. The new revenue lines include taxes on income, profits & capital gains,
payroll & workforce, property, goods & services and international trade & transactions. Also, its non-tax revenue lines
were fees, fines & permits, rents, interests & dividends, other revenue, and UK grants. This was changed to now
include property income, sales of goods & services, fines & penalties and transfers not elsewhere classified.

7
 Table 2
Fiscal Summary 2020-2023
2021 2022 2023

TOTAL REVENUE 289,481,133 347,639,441 413,695,404

RECURRENT REVENUE 270,510,681 346,804,009 411,722,181

Tax Revenue 201,494,699 291,942,921 290,023,242

Taxes on Income, Profits and Capital Gains 4,251,510 4,525,326 5,690,298
Taxes on Payroll and Workforce 16,021,823 19,241,848 20,226,543
Taxes on Property 11,382,498 12,104,967 11,025,416
Taxes on Goods and Services 122,746,286 200,928,778 199,227,852
Taxes on International Trade and Transactions 47,092,582 55,142,002 53,853,134

Nontax Revenue 52,767,222 54,861,088 121,698,939

Property Income 3,693,737 2,171,549 1,434,126
Sales of Goods and Services 47,924,641 51,558,186 118,576,527
Fines and Penalties 84,547 52,702 148,279
Transfers not elsewhere classified 1,064,297 1,078,651 1,540,008

Grants 18,970,452 835,432 1,973,223

Current - UK Grant 16,248,760
Capital 2,721,692 835,432 1,973,223

TOTAL EXPENDITURE 218,974,388 234,408,681 277,470,551

RECURRENT EXPENDITURE 215,020,015 227,305,896 247,263,809

Wages and Salaries 88,965,327 88,789,322 106,032,299

Wages 6,516,814 6,239,154 6,882,058
Salaries 82,448,513 82,550,168 99,150,242

Retiring Benefits 12,218,279 10,396,675 10,984,484

Interest Payments 13,684,850 13,824,282 14,450,670

Domestic 7,369,305 7,458,954 6,241,717
Foreign 6,315,545 6,365,328 8,208,953

Goods and Services 44,679,209 50,279,510 52,190,042

Travel & Subsistence 639,732 955,640 1,444,975
Utilities 2,835,877 4,327,204 5,631,929
Supplies & Materials 4,371,756 4,380,849 4,578,253
Operating & Maintenance 7,950,153 12,304,918 12,823,755
Rental 7,456,704 6,262,549 6,050,683
Communications 934,321 856,661 1,145,562
Consultancy & Training 7,978,363 8,860,064 9,772,081
Other 12,512,303 12,331,625 10,742,805

Current Transfers 55,472,350 64,016,107 63,606,314

Grants & Contributions 42,955,946 44,549,628 50,062,837
Social Services 12,516,404 19,466,479 13,543,476

TOTAL CAPITAL EXPENDITURE 3,954,373 7,102,785 30,206,743

CURRENT ACCOUNT (Surplus/(Deficit)) 55,490,666 119,498,113 164,458,373

CAPITAL BALANCE (1,232,681) (6,267,353) (28,233,520)

PRIMARY ACCOUNT 67,942,835 127,055,042 150,675,523

OVERALL BALANCE(Surplus/(Deficit)) before

amortization 54,257,985 113,230,760 136,224,853

Debt Amortisation 32,822,584 35,540,835 36,256,474

OVERALL BALANCE(Surplus/(Deficit)) incl. Amortisation 21,435,401 77,689,925 99,968,379

FINANCING: 21,077,982 1,199,312 -

CDB (PBL) 20,250,000
CDB (ACC) 827,982 1,199,312

Opening Consolidated Fund Balance

Cumulative Balance after Financing 42,513,383 78,889,237 99,968,379

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 Source: Ministry of Finance

Current expenditure rose by 18.4% to EC $277.5 million. Wages and Salaries

increased by 19.4% to EC $106.0 million. The uptick in wages and salaries
expenditure represented a reinstitution of salaries to prior years’ levels. This was
done in two phases resulting in the shown year-on-year increase. There was
moderate control over goods and services expenditure, especially given inflation,
and this category of expenditure rose by 3.8% to EC $52.2 million. Current
transfers and subsidies fell by 0.6% to EC $63.6 million, as better economic
conditions meant that less support from the central government was needed.
Interest payments remained a small outlay but increased by 4.5% to EC $14.4
million for the year. Capital expenditure significantly expanded by 325.3% to EC
$30.2 million. Capital expenditure included airport development, road and
school repairs and various security and social programs.

A primary balance of EC $150.7 million (10.4% of GDP) and an overall balance of

EC $136.2 million (9.4% of GDP) was achieved in 2023. These were 18.6% and
20.3% better than achieved in the prior year.

The GOA’s fiscal position remained healthy for the first six months of 2024
(Table 3). Total revenue increased 10.6% over the first six months of 2023. Both
tax and non-tax revenue contributed. The higher revenue allowed for more
expansive capital expenditure while still generating overall and primary
surpluses.

The greater fiscal space is advantageous given that the expected subsumption of
the Water Corporation of Anguilla under the Ministry of Infrastructure,
Communications, Utilities, Housing & Tourism (MICUHT) is likely to create the
need for additional fiscal support to improve the efficiency of the Territory’s
water infrastructure and address accumulated debts. Additionally, it is the
incumbent on the GOA to ensure the continued sustainability of the Social
Security Fund14 which is expected to be depleted by 2037.

14As per the 12th Actuarial Review of the Social Security Fund as of December 2020, it is expected that the fund will be
exhausted by 2037 under the best estimate scenario. It is recommended that an increase in contributions, an increase in
the pensionable age to 67 and/or special transfers from government may be required.

9
 Table 3
Summary Interim 6-month performance of GOA (Jan-Jun 2024)
Total 2024 Actual Actuals 2023
(Jan-Jun) (Jan- Jun)

TOTAL REVENUE 252,406,229 225,674,123

RECURRENT REVENUE 247,229,255 224,340,263

Tax Revenue 175,300,760 171,017,854

Taxes on Income, Profits and Capital Gains 6,398,139 2,627,181
Universal Social Levy 11,367,095 10,520,215
Taxes on Property 5,713,898 8,641,113
Taxes on Goods and Services 124,288,468 122,556,613
Taxes on International Trade and Transactions 27,533,160 26,672,732

Nontax Revenue 71,928,495 53,322,409

Property Income 1,187,555 727,908
Sales of Goods and Services 69,940,123 51,592,624
Fines and Penalties 80,571 73,050
Transfers not elsewhere classified 720,246 928,827

Grants 5,176,974 1,333,860

Current - UK Grant -
Capital 5,176,974 1,333,860

TOTAL EXPENDITURE 149,626,827 113,495,263

RECURRENT EXPENDITURE 125,315,125 108,489,236

Personal Emoluments 54,185,671 42,919,864

Wages 3,933,032 3,126,732
Salaries 50,252,640 39,793,132

Retiring Benefits 6,192,224 5,104,277

Interest Payments 6,593,253 7,474,720

Domestic 2,958,259 3,173,261
Foreign 3,634,994 4,301,459

Goods and Services 30,971,299 21,877,311

Travel & Subsistence 844,673 566,362
Utilities 4,625,996 2,440,177
Supplies & Materials 2,962,872 1,909,500
Operating & Maintenance 5,474,889 5,576,233
Rental 3,398,821 2,718,337
Communications 468,020 528,870
Consultancy & Training 5,747,560 3,902,580
Other 7,448,470 4,235,252

Current Transfers 27,372,678 31,113,064

Grants & Contributions 19,917,027 26,493,720
Social Services 7,455,651 4,619,344

TOTAL CAPITAL EXPENDITURE 24,311,702 5,006,027

CURRENT ACCOUNT (Surplus/(Deficit)) 121,914,129 115,851,027

CAPITAL ACCOUNT (Surplus/Deficit) (19,134,728) (3,672,167)

PRIMARY ACCOUNT 109,372,655 119,653,580

OVERALL BALANCE(Surplus/(Deficit)) before

amortization 102,779,402 112,178,860

Debt Amortisation 19,057,597 17,793,807

OVERALL BALANCE(Surplus/(Deficit)) w/ Amortisation 83,721,804 94,385,053

FINANCING: 866,389 -
Drawdown on Financial Assets -
CDB: (ACC) 866,389

Opening Consolidated Fund Balance 286,472,698

Cumulative Balance after Financing 371,060,891 94,385,053

Source: Ministry of Finance

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In 2023, Anguilla’s Debt to GDP improved significantly to 25.7% from 36.0% one
year prior. Debt to GDP was also lower than the 5-year average of 47.0%15 (Chart
4) and below the ECCB’s recommendation of 60%. The significant fall in the Debt
to GDP ratio was driven by both the expansion of GDP and the reduction in total
debt (↓10.5%).

Chart 4
GOA’s Debt to GDP (2018-2023)

Source: ECCB’s Data Centre, GOA Ministry of Finance

The GOA incurs debt within a debt management framework, set and approved by the
UKG16. Prior to FY2022, the GOA was in breach of all three key performance
benchmarks (Table 4). The GOA is now in compliance with net debt to recurrent
revenue and liquid assets to recurrent expenditure and is anticipating being in
compliance with debt service to recurrent revenue by FY2026. Nevertheless, the timeline
for full compliance was extended from 202517 to 2030. The extension was granted due to
the negative economic impacts from Hurricane Irma.

15 Source: ECCB
16 Fiscal rules, called the Framework for Fiscal Sustainability and Development (FFSD), were enshrined in law in
2013.
17 Original target was 2017 but was extended to 2025 due to the Banking Resolution, and subsequently, in the

aftermath of Hurricane Irma.

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 Table 4
Debt Management Benchmarks for Fiscal Sustainability and Development 2018 – 2024

Debt Indicators (%) Targets 2020 2021 2022 2023 2024*

Net Debt/Recurrent Revenue ≤ 80% 202.53% 165.42% 100.30% 46.34% 13.10%
Debt Service/Recurrent Revenue ≤ 10% 22.24% 18.49% 14.95% 12.70% 11.10%
Liquid Assets/Recurrent Expenditure ≥ 25% 0.2% 0.3% 26.7% 72.7% 86.8%
* Projected based on 2024 Medium Economic Term Fiscal plan
Source: Government of Anguilla

Anguilla’s debt position is expected to continue to improve in 2024 onward. As

the economy continues to recover from the effects of the pandemic and barring
any other major economic shocks, the GOA’s fiscal position should strengthen in
upcoming fiscal periods. It is anticipated that the GOA’s revenue base will
strengthen alongside increased expenditure efficiencies. The GOA anticipates full
compliance with its fiscal sustainability and development benchmarks by 2026,
ahead of its 2030 timeline.

GOA’s debt profile is projected to be relatively stable and sustainable (Table 5).
Currency risks are low as borrowings are primarily in EC and US dollars. The
Anguilla Social Security Board is projected to remain the largest domestic source
of borrowing in 2024, holding 52.3% of GOA’s debt, whereas the Caribbean
Development Bank is expected to continue dominating sources of external debt
at 99.7%. The average time to maturity of the debt stock reduced slightly to 6.23
years in 2023 from 6.58 years in 2022. The percentage of debt with maturities of
more than 5 years has continued a downward trend and is projected at 50.1% in
2024, compared to its 3-year average of 54.1%. The GOA is fairly insulated from
variations in interest rates, as 59.6% of the loans in its debt portfolio have fixed
interest rates.

The country now has moderate reserves (EC $179.8 million as at December 2023) to
support debt repayment, following depletion of reserves in response to hurricane Irma.
Debt amortization structures also are adequate to make repayment manageable for the
GOA.

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 Table 5
Composition of GOA’s Debt (2022-2024)
2022 2023 2024*
%
US$ 45.7 40.8 42.8
Currency EURO$ 0.1 0.1 0.1
EC$ 54.2 51.0 57.1
Domestic 57.8 59.0 60.6
Origin
External 42.2 41.0 39.4
1 Year 9.7 11.0 N/A
Maturity 2 - 5 Years 39.1 44.8 N/A
More than 5 Years 51.2 44.1 N/A
Variable 41.5 40.4 N/A
Interest Rate
Fixed 58.5 59.6 N/A
* Projected
N/A = Not Available
NB: Currency and Origin are proportionate to Total Public Debt
2023's Currency and Origin proportions are updated to reflect the actuals and not initial projections
Source: Government of Anguilla

Anguilla’s fiscal position continues to improve. Additionally, the territory’s debt

management ratios are trending towards sustainable compliance with
benchmarks. These factors underscore improvements in its credit fundamentals
and fiscal capacity to comfortably service its short to medium term obligations as
they come due. We believe that Anguilla’s fiscal position is strong and has
shown drastic improvements over the past few years. We anticipate that this will
continue in the medium term and suggest an upgrade of the parameter.

13
Monetary, Financial and Exchange Rate Policies: B (Weak)

Anguilla’s banking system consists of three offshore banks and two domestic banks. The
offshore Banks are: The Caribbean Commercial Investment Bank Limited (CCIB),
National Bank of Anguilla (Private Banking and Trust) Limited18 and Foreign Commerce
Bank Limited19 (FCB), while the domestic commercial banks are the National
Commercial Bank of Anguilla20 Limited (NCBA) and Republic Bank21 (Anguilla)
Limited. There is also one credit union, Liberty Co-operative Credit Union. Domestic
commercial banks22 in Anguilla are licensed and regulated by the ECCB and supervised
by the Anguilla Financial Services Commission (AFSC)23 for compliance with anti-
money laundering and combating the financing of terrorism (AML/CFT). The ECCB has
established several ‘Core Financial Soundness Indicators for Commercial Banks’. The
sector’s performance in three of these key soundness indicators are given in Table 6:

Table 6
Banking Sector Metrics 2019 – 2023
2019 2020 2021 2022 2023
Liquid assets to total assets 48.5% 45.0% 50.4% 47.2% 55.2%
Nonperforming loans to total gross loans 25.8% 25.1% 21.4% 20.7% 16.2%
Regulatory capital to risk-weighted assets 8.6% 8.6% 8.5% 9.6% 12.7%
Source: ECCB

18Caribbean Commercial Investment Bank Limited (CCIB) is an affiliated offshore bank of Caribbean Commercial Bank
(Anguilla) Limited (CCBA) and similarly National Bank of Anguilla (Private Banking and Trust) Limited is an
affiliated offshore bank of National Bank of Anguilla Limited (NBA). On August 12th, 2013, the Eastern Caribbean
Central Bank (ECCB) assumed the control of these then 2 largest banks which operated in Anguilla: CCBA and NBA.
Since 2018, Caribbean Commercial Investment Bank Limited (CCIB) and the National Bank of Anguilla (Private
Banking and Trust) have been under administration.
19 Foreign Commerce Bank Limited (FCB) is a locally licensed offshore bank in Anguilla. FCB is a captive bank, whose

client base is restricted to the Corporacion Multi-Inversiones (CMI) Group and companies. CMI is a large industrial
and financial group based in Guatemala with operating entities mainly throughout Central America, Dominican
Republic, and the USA. The Group operates two main industrial areas: Foodstuffs, such as milling, poultry and a
restaurant franchise called Pollo Campero, and Capital which includes energy, telecommunications, and finance.
20 NCBA was incorporated in December 2015 and began operations on April 25, 2016. The Bank is an amalgamation of

two former indigenous banks: National Bank of Anguilla and Caribbean Commercial Bank (Anguilla) Limited.
21 Effective 1 November 2019, the Bank of Nova Scotia’s operations in Anguilla, the Commonwealth of Dominica,

Grenada, St Lucia, St Kitts & Nevis, and St Vincent & the Grenadines ceased, and Republic Financial holdings
Limited commenced operations in these countries. Source: ECCB.
22
Including other institutions deemed to be carrying on banking activities.
23 The Anguilla Financial Services commission is an independent body with its own funding source and reports

directly to the Governor.

14
Liquidity remained adequate in the banking system as at December 2023, with an
increase in its liquid assets to total assets ratio to 55.2% from 47.2% one year
prior. The ratio was above the 5-year average of 49.2% and is considerably above
the ECCB’s minimum benchmark of 20.0%. The ratio of non-performing loans
(NPLs) to gross loans showed improvement moving to 16.2% as at December
2023 from 20.7% one year prior. The current NPL ratio is lower than the 5-year
average of 21.8% but remains significantly above ECCB’s 5.0% limit. Driving the
y-o-y improvement was the recovery in tourism and construction related
activities and consequent improving economic conditions in 2023. Further
supporting the improved NPL ratio, was an increased level of financial
intermediation via the disbursement of additional loans alongside improved
credit risk management practices following the implementation of the Treatment
of Impaired Asset Standard24 (TIAS) and the Consolidated Supervision
Standard25 in 2022.

The Regulatory Capital to Risk-Weighted Assets26 (CAR) improved to 12.7% as at

December 2023 from 9.6% as at December 2022. This was higher than the 5-year
average of 9.6% and above the regulatory requirements27. The improvement in
the CAR ratio was driven by a general improvement in the quality of credits held
on the books thus reducing the risk weighting. The increase in the CAR above
the regulatory minimum augers well for building a buffer against black swan
type events and the onset of financial crises.

Furthermore, the longstanding currency peg28 and monetary arrangements with

the ECCB contributed to price stability, attracting foreign direct investments
(FDIs) and facilitating real GDP growth for members of the Organization of
Eastern Caribbean States29 (OECS). As a member of the ECCU, the minimum
savings deposit rate of 2.0% is set by the ECCB, while lending rates are

24 Treatment of Impaired Asset Standard (TIAS) outline standards to guide the treatment of credit risk assessment, and
recognition, measurement, classification, provisioning, and accounting for impaired facilities.
25 The Consolidated Supervision Standard seeks to ensure that the licensee and its affiliated entities in a group

structure are subject to effective consolidated supervision where all the risk of a financial group are accounted for.
26 Source: ECCB website.
27 Basel III requires banks to maintain a minimum Capital Adequacy Ratio (CAR) of 8%.
28 Fixed exchange rate of EC $2.70 to US $1.00, which has been in effect since July 1976.
29 The Organization of Eastern Caribbean States includes 11 members, including the GOA.

15
determined by the market, promoting a stable interest rate environment within
the OECS.

Inflation averaged 3.5% in 2023, down from 5.6% in 2022. Over the next 12-15
months, CariCRIS expects continued recovery in economic performance and
resultant improvements in the financial sector’s asset quality, profitability, and
liquidity. Though some inflationary pressures are expected to persist, the GOA
has implemented policies to curtail the impacts of higher prices on the most
vulnerable such as GST exemptions and electricity subsidies. The
implementation of a minimum wage30 will assist lower income families but can
have negative inflation impacts.

External Sector: BB+ (Below Average)

In 2023, Anguilla’s US dollar earnings improved y-o-y driven by a 125.6% rise in

travel services receipts (Table 7). The significant increase in travel services was
on account of better airlift availability and strong global travel demand.
Tempering the improvement in exports was a 21.8% rise in imports. Imports
increased as a result of higher prices and greater demand associated with
tourism’s and broader economic rebound. The current account deficit improved
by 11.1% to EC $ -341.48 million.

To further improve the current account, the GOA is focused on implementing

several initiatives aimed at stimulating growth in sectors such as fishing, farming
and light manufacturing. These initiatives are hoped to curb the food import bill
and potentially also create export opportunities. Though weaker than in 2021, the
still elevated fuel and shipping costs threaten the gains made on the current
account. Additionally, US and UK economic and weather conditions31 can also
weigh down future performance. Notwithstanding these risks, as current tourist
arrivals continue to rise, coupled with the increased room rates, the services
account earnings are on course to return to pre-pandemic levels. Furthermore,

30 US $6 minimum wage; effective January 2024.

31 Mild winters in these source markets tend to reduce travel demand to tropical destinations.

16
the GOA is also seeking to expand its financial services offerings to include trust
services and the management of digital assets.

Table 7
External Sector Data (2019-2023), EC $ Millions
2019 2020 2021 2022 2023
I. Current Account -441.09 -233.26 -389.36 -298.41 -202.49
Goods -629.38 -336.18 -452.79 -532.92 -534.24
Exports 47.77 16.17 33.63 60.95 51.35
Imports 677.15 352.34 486.42 593.87 585.58
Services 283.15 28.07 48.93 236.81 317.8
Exports 517.05 181.71 217.95 471.4 565.45
Imports 233.9 153.63 169.01 234.6 247.66
of which Travel 417.53 114.6 152.51 375.56 452.54
Primary Income -101.32 35.09 12.61 21.4 32.94
of which:
Compensation of Employees -0.08 -3.28 0.26 0.5 1.76
Investment Income -101.24 38.37 12.35 20.91 31.18
Secondary Income 6.46 39.76 1.89 -23.7 -18.99
of which: Workers' remittances -25.15 -18.66 -17.49 -16.28 -20.8
II. Capital account -1.59 9.54 2.42 1.4 5.6

Net lending (+)/net borrowing (-) (balance on current and capital account) -442.68 -223.71 -386.94 -297.01 -196.89

III. Financial Account -337.61 -108.57 -309 -224.71 -160.56

Direct Investment -381.03 -204.45 -324.71 -270.91 -389.79
Portfolio Investment 230.04 325.03 534.8 537.1 -17.88
Financial derivatives (other than reserves) and employee stock options 0 0 0 0 0
Other investment -168.25 -213.22 -528.45 -542.65 183.41
Imputed Reserve Assets -18.37 -15.93 9.36 51.76 63.7

IV. Net errors and omissions 105.07 115.14 77.94 72.3 36.33
Source: ECCB

The financial account benefitted from inflows for tourism investments such as
development works of Aurora Anguilla Resort & Golf Club32, upgrades to Belmond Cap
Juluca, Quintessence, the Four Seasons, Malliouhana, Zemi Beach House and
Frangipani, as well as the development of a second resort33 in Anguilla by ÀNI Private
Resorts34. Rising tourist arrival numbers will justify continued inflows of FDIs.

GOA’s net official reserves as of December 2023 increased by 61.1% to EC $289.7 million
which provided 3.6 months of import cover.

32Previously Cuisinart.
33 ÀNI Private Resorts currently has a 10-bedroom private resort in Little Bay, Anguilla. The new 15-suite estate will
be located on Shoal Bay and is planned for a 2024 opening. It will have a tennis court, a gym, an ÀNI Spa, a beach-
fronted pavilion for living and dining and experiential pursuits such as a waterslide.
34 ÀNI Private Resorts is the world's first private resort collection with fully staffed, coastal retreats in Thailand, Sri

Lanka, the Dominican Republic, and Anguilla.

17
Political Environment: A- (Good)

Anguilla’s political environment remained stable over the 2023 fiscal year. The
governing Anguilla Progressive Movement (APM)35 is serving its 4th year in office since
winning 7 out of 11 parliamentary seats in the June 202036 general elections. While the
overall political governance was stable over the last year, there was some fallout over
the implementation of the GST in July 2022. Agitation emanated from opposition parties,
members of the general public and, some members of the ruling party. There were two
resignations from the government over the issue37. Cabinet and ministerial portfolios
were redistributed in August 202238 to better align with government’s strategy.
Noteworthy, over the previous three general elections, the incumbent parties were not
re-elected to office. Anguilla’s next general election is constitutionally due in 2025.

In October 2022, the European Union (EU) returned Anguilla to its blacklist of tax-
havens, as the Territory, according to the EU, failed to demonstrate39 adequate controls
to ensure that economic substance requirements can be met40. Additional EU concern
relates to beneficial interests’ disclosures. The GOA is currently engaged in resourcing
the Commercial Registry at the AFSC. The GOA has met the Forum on Harmful Tax
Practices (FHTP) standard but improvements to compliance and monitoring are needed
and are being addressed. Additionally, the Bribery Act has been passed which expands
the coverage of scrutinized persons and circumstances. These actions are expected to
further solidify Anguilla’s creditable ranking of 56 of a total of 207 countries on the
control of corruption metric by the World Bank41. A new Commissioner of Police42 has
been added to Anguilla’s Royal Police Force in May 2023, primarily tasked with

35 Anguilla Progressive Movement (APM), led by Dr. Ellis Webster, was established from the Anguilla United
Movement.
36 General elections are usually held every 5 years.
37 The two members who resigned were the Minister of Economic Development, Commerce, Information Technology

and Natural Resources, and the Minister of Education and Social Development. The Minister of Education accepted
reappointment shortly thereafter.
38 The Government’s new ministries are the Ministry of Finance & Health, Ministry of Home Affairs, Immigration,

Labour, Information and Broadcasting & Physical Planning, Ministry of Infrastructure, Communications, Utilities,
Housing & Tourism, Ministry of Social Development, Education & Library and Ministry of Sustainability,
Innovation & the Environment.
39 Despite implementing its economic substance rules in 2019 which is aimed at promoting transparency and

discouraging harmful tax practices, the EU deemed enforcement of same to be a concern.

40 See: International Business Companies (Economic Substance) Regulations, 2019.
41 Control of Corruption captures perceptions of the extent to which public power is exercised for private gain,

including both petty and grand forms of corruption, as well as "capture" of the state by elites and private interests.
Source: World Bank 2021 (latest available).
42 Mr. Robert Muir Clark has more than 30 years of operational policing experience with extensive firearms command,

public order command, roads, and community policing expertise.

18
improving community policing and the morale of the Royal Anguilla Police Force as
well as arresting the increased gun and gang related crimes and road traffic crimes.
Under his guidance and within the remit of their responsibilities, the Royal Anguilla
Police Force also assists in minimizing instances of white-collar crimes. Regardless,
Anguilla has a low level of criminality as compared to many of its Caribbean peers.

The GOA’s macroeconomic conditions are closely monitored by its UK representative,

the Governor43. The UKG has a broad responsibility to support its Caribbean Overseas
Territories (OTs), including Anguilla, through the provision of technical and
development assistance, particularly in the areas of national security and foreign policy,
and international financial services. As such, there is a strong moral and possibly legal
incentive for the UKG to assist Anguilla in the event of a financial or other national
crises, since to do otherwise could lead to the suspension of Anguilla’s Constitution and
negatively impact the UKG’s international and domestic reputation. Consistent with its
strategy to maximise economic growth and promote self-sufficiency in its OTs, the UKG
has operationalised a debt management framework, geared towards ensuring that its
territories manage their fiscal affairs in a prudent and sustainable manner. Furthermore,
the British Foreign, Commonwealth and Development Office (FCDO), through the
representative Governor, provides effective oversight over all budgetary measures.

Her Excellency, Ms. Julia Crouch was appointed Governor of Anguilla in May 2023, in succession to Ms. Dileeni
43

Daniel-Selvaratnam. Ms. Crouch assumed office in September, 2023.

19
Type of Rating: Sovereign Issuer Credit Rating

Outlook: Stable

Summary Overall Risk Assessment:

Ratings Currently Assigned Ratings Recommended

Income and Economic Structure B+ B+
Fiscal Policy BB BB+
Monetary, Financial and Exchange Rate Policies B B
External Sector BB+ BB+
Political Environment A- A-
OVERALL SOVEREIGN RISK Cari B+ Cari BB-

FINAL RATING (AFTER NOTCH-UP) * Cari BBB+ Cari A-

OUTLOOK Stable Stable

Source: CariCRIS
* Notch up is for the strong likelihood of support from the UK Government, as an overseas territory, which has been demonstrated over the years.

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RATING HISTORY
Date Foreign Currency Instrument/Remarks
September 20, 2024 CariA- USD 25 million Debt Issue (Notional)
September 14, 2023 CariBBB+ USD 25 million Debt Issue (Notional)
September 15, 2022 CariBBB+ USD 25 million Debt Issue (Notional)
September 23, 2021 CariBBB+ USD 25 million Debt Issue (Notional)
September 18, 2020 CariBBB+ USD 25 million Debt Issue (Notional)
September 19, 2019 CariBBB+ USD 25 million Debt Issue (Notional)
September 20, 2018 CariBBB+ USD 25 million Debt Issue (Notional)
September 20, 2013 CariBBB+ USD 25 million Debt Issue (Notional)
September 28, 2012 CariA- USD 25 million Debt Issue (Notional)
November 7, 2011 CariA- USD 25 million Debt Issue (Notional)
October 25, 2010 CariA USD 25 million Debt Issue (Notional)
September 30, 2009 CariA+ USD 25 million Debt Issue (Notional)
September 21, 2007^ CariAA USD 25 million Debt Issue (Notional)
^ Initial rating assigned

Disclaimer: CariCRIS has taken due care and caution in compilation of data for this product. Information has been obtained by
CariCRIS from sources which it considers reliable. However, CariCRIS does not guarantee the accuracy, adequacy or
completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of
such information. No part of this report may be published / reproduced in any form without CariCRIS’ prior written approval.
CariCRIS is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to
the subscribers/ users/ transmitters/ distributors of this product.

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