Advancing disaster risk finance in Grenada
The objective of this report is to make recommendations for the Government of Grenada (GoG) for the formulation of a country-specific comprehensive disaster risk finance (DRF) strategy, based on the assessment of the legislative, financial management, fiscal, and insurance market environment in Grenada. This report is envisioned to be used as a planning tool for the potential development of a comprehensive DRF strategy that would equip the Ministry of Finance, Planning, Economic Development, Trade, Energy and Cooperatives (MoF) with information and instruments to manage contingent liabilities posed by natural disasters.
On average, in the long term, the GoG would need to cover losses of approximately USD 3.5 million (EC$ 9.5 million) annually –0.3 percent of Grenada’s gross domestic product (GDP)– to address its contingent liabilities related to hydrometeorological events. This amount is equivalent to 1.3 percent of the GoG’s total expenditure for 2015.2 Hurricane damage to public and private building infrastructure alone will amount to USD 10 million (EC$ 27 million) on average each year in the long run, or 1.1 percent of GDP. For any given year, Grenada has about a 1 percent chance of losses from hurricanes exceeding USD 246 million (EC$ 664 million) for the economy as a whole. In addition to long-term impacts on economic and social development in Grenada, disasters also increase Grenada’s sovereign debt, as more loans are borrowed to finance unplanned post-disaster expenditures.