Nevis: Country and Foreign Investment
Economy and Currency
The major source of revenue on Nevis is tourism, followed closely by the international financial services sector. Over the years the island has experienced stable, economic development with minimal unemployment. However, the global economic recession hit the island hard, compounded by the closure of the Four Seasons Resort and the resultant laying-off of about 600 workers. This event spilled over into all sectors of the economy with the government’s revenue falling sharply by over 20%, especially in construction and the hotel sector.
After consultation with the federal government, in 2010 the Nevis Island Administration (NIA) approached the St. Kitts-Nevis-Anguilla National Bank with a financial proposal to assist the government in meeting its commitments for the fiscal year, with the expectation that the financial situation will improve in 2011. With the approval of the bank, ECD64m was converted to a long-term loan and a new overdraft facility created with a limit of ECD50m. The NIA also obtained an ECD10m loan from the St. Kitts and Nevis Social Security Board to use as economic stimulus funds. An additional ECD10m has been raised by a new law requiring St. Kitts branches of Nevisian companies to pay their income taxes to the NIA.
The official currency used on the island is the Eastern Caribbean Dollar (ECD), which is shared by eight states throughout the Eastern Caribbean and controlled by the Eastern Caribbean Central Bank. The ECD is pegged to the United States dollar (USD) and fixed at ECD2.70 to USD 1.00. The USD is generally considered to be a second currency and is freely accepted and interchangeable throughout the island. The exchange rate versus other currencies fluctuates according to world money markets. All major credit cards are readily accepted throughout the island.