Independent Senator Dr Kristina Hinds has cautioned Barbadians not to leap into new investment opportunities without ascertaining all potential risks, even as she made it clear she was not seeking to discourage Barbadians from buying into new government bonds going on offer.
She gave the advice on the floor of the Senate on Tuesday, during debate on the Barbados Optional Savings Bonds Plus (Offer to the Public) Bill 2022 under which Barbados Optional Savings Scheme (BOSS) bonds will be extended to the general public through a BOSS Plus initiative.
Although praising the new bond offer, saying that the returns on the investment are, on paper, lucrative, Senator Hinds advised citizens to seek guidance from financial experts when considering new investments.
“Whenever you invest there is a risk, and if we are going to be honest with people we have to tell them that any investment carries a risk, and that means protected as they may be there is a risk,” she said.
“How can there be a risk if these [BOSS] bonds are protected? What do we come to this honourable chamber to do? We come often to look at amendments, so this current government may be committed to one thing – protection – but we do not know what will happen in the future.
“So, I would like people to consider the possibility that in the future, legislation could be amended and something could happen to your investment. This is not to say not to invest, but it is to say be aware that any investment carries risk,” Senator Hinds added.
The BOSS is a four-year bond that offers an interest rate of five per cent per annum, with the interest being paid in two half-yearly instalments. That interest is not subject to withholding tax, and bondholders can also opt to cash in their bonds after 24 months, rather than wait the full four years.
The programme was initially only open to public sector workers.
Independent Senator Andrew Mallalieu emphasised the need for more transparency on how exactly the bonds will be paid back.
He said this would make Barbadians more comfortable investing in the new scheme.
“The instrument that it creates is very attractive to Barbadians interested in it, but exactly where does it speak at all to how it will ever be repaid? Where is it that everyone is talking about that this is a sure thing after five years you are going to get your money back? Where is that addressed, where is that plan… where is the plan for us ever to repay any of this attractive debt that we create?
“The reality is we need to have a plan because these bonds will need to be repaid, and how are you doing that? Is it that you are going to borrow again the next time?” he questioned.
