Last Updated on October 11, 2019, 5:40 AM AST by Chris Matthew
In August 2019, PricewaterhouseCoopers LLP (PwC), a world-renowned accountancy firm published a report assessing the local impact of Dominica’s Citizenship by Investment (CBI) Programme from 2013/4-2018/9.
To gather data for its report, PwC travelled to Dominica, where it collected quantitative data from the Government and qualitative data from stakeholders. Indeed, as early as in the second page of its report, PwC specifies that it received the “full cooperation of” and “assistance” from the Government, and in particular Gloria Joseph, Permanent Secretary of the Ministry of Planning and Economic Development.
It is fortunate that PwC’s independent report, drafted by professional auditors, was released at a time when Dominica’s Opposition Leader, Mr Lennox Linton, a journalist and radio presenter with no accounting qualifications, is seeking to undermine the current Government by accusing it of misrepresenting its use of CBI funds.
In the aftermath of the Prime Minister’s Budget, Linton calculated that income from the Programme fell short of EC$1.291 billion (around US$478 million) – suggesting that the Prime Minister is, at the very least, maladministering public funds.
However, Linton’s calculation seems preposterous given the information contained in PwC’s expert report.
PwC states that a total of 2,059 applications were approved in 2018. This includes both applications made under the fund option and the real estate option of the Programme.
Under the fund option, the minimum contribution for a single applicant is US$100,000. However, the cost is reduced for families – for example, a family of four would need to contribute a total of US$200,000 (not US$400,000). Additionally, the Government provides agents with a commission on each of its fund applications, amounting to 10 percent of the contribution paid.
Under the real estate option, applicants must invest at least US$200,000 in pre-approved real estate. This investment goes to the real estate developer to build the real estate, not the Government. In addition, a ‘Government Fee’ must be paid, commencing with US$25,000 for a single applicant, and increasing with the number of applicants. However, the fee does not increase proportionally. A family of four need only pay US$35,000 (not US$100,000), and a family of six need only pay US$50,000 (not US$150,000).
Figure 1 of PwC’s report indicates that, in 2018, fund applications were just above 1,500, and that real estate applications were under 500.
Given the above, the table below shows the amount the Government could have generated in 2018 with single applicant applications.
| Applications (approximated from Figure 1) | Base revenue per application (US$) | Total base revenue (US$) | |
| Applications under the fund | Circa 1,570 | 90,000 | 141,300,000 |
| Applications under real estate | Circa 489 | 25,000 | 12,225,000 |
| Applications under both CBI options | 153,525,000 |
The table below shows the amount the Government could have generated in 2018 with 25 percent of the applications being filed by families of four.
| Applications (approximated from Figure 1) | Base revenue per application (US$) | Total base revenue (US$) | |
| Applications under the fund | Circa 1,570 | 180,000 (25 percent) 90,000 (75 percent) | 70,650,000 + 106,020,000 = 176,670,000 |
| Applications under real estate | Circa 489 | 35,000 (25 percent) 25,000 (75 percent) | 4,270,000 + 9,175,000 = 13,445,000 |
| Applications under both CBI options | 190,115,000 |
“Even when we assume 25% of all applications are by families of four,” says one international finance expert, “Mr Linton’s estimate suggests he is either unable to make a simple calculation or willingly misleading those who are willing to listen to him. Both these traits point toward an individual who should not be leading a nation.”
Earlier this month, Linton indicated his disappointment that the Financial Secretary should insist on proper procedure prior to agreeing to his request for a breakdown of the use of CBI funds in Dominica. Given Linton’s arithmetic however, Dominica should be glad that the information was provided to PwC – a non-political entity with no incentive to misrepresent data – and not politically-motivated, unqualified politicians.
That the Dominica Programme is being run effectively, and to the benefit of Dominican citizens, is clear to all those who care to set foot on the island and observe its recent transformation. Post-Tropical Storm Erika and Hurricane Maria, which devastated Dominica, the Government embarked on an extensive housing project to build climate-resistant homes and infrastructure. This project has resulted in home handovers to displaced families and a commitment to the local population unseen in the Caribbean’s four other CBI nations. “No CBI country in the Caribbean has a Bellevue-Chopin project to point to when they are asked where the money is being spent, but we do,” said one citizen.
Table 3 in PwC’s report indicates that CBI-sponsored housing developments in Dominica will result in 1,016 units (with 353 units in Bellevue-Chopin, 68 in Georgetown, 68 in Cotton Hill, 66 in Delices, 66 in La Plaine, 66 in Castle Bruce, 66 in San Sauveur, 66 in Grand Fond, 32 in Grand Bay, 32 in Stockfarm, 33 in Jimmit, 30 in Upper River Bank, and 70 in River Side). All these projects are due to be completed in 2019, with the exception of Upper River Bank and River Side.
In addition, PwC notes that CBI funds have been used to build and repair roads, bridges, schools, hospitals, and health centres, to enhance business, agriculture, and fisheries, and to support individual growth through the National Employment Programme.
Time and time again, the Government of Dominica is praised for its use of CBI to support Dominicans, reinvigorate the economy, and pursue the goal of becoming the world’s first-ever climate resilient nation. This is something the people of Dominica are proud of, and indeed, should be proud of. Instead of rejoicing in Dominica’s strong socio-economic progress and good governance however, Mr Linton is attempting to damage the very foundation on which the country’s success depends: its CBI Programme.
“Linton should be more careful about who he picks his battles with – one entity is an eminent accountancy firm; the other is Dominica’s celebrated CBI Programme. It would not be surprising if even his constituency got fed up and decided not to vote for him in the next elections,” said another citizen. “Lenox Linton is putting his ego, and political gain, ahead of reasonableness and of the country. He is willing to sabotage Dominica. Perhaps, he should stand down now before he does even more harm to our nation,” he continued.
Chris Matthew is a well-seasoned expert in feature writing, with a strong focus on covering international updates.. He blends his creative thinking with a journalistic mindset to report on events and issues across the world with precision and accuracy.
