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TUESDAY, SEPTEMBER 21, 2021
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Moody’s throws wrench into PLP’s VAT cut plan • Slash will ‘not hold the line’ with rating agencies • Gov’t warned election promises face ‘stark reality’ • Any initiatives ‘must protect Gov’t revenue base’
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Davis administration’s pledge to slash the VAT rate to 10 percent has been undermined by Moody’s downgrade of The Bahamas’ creditworthiness, Tribune Business was told yesterday. Matt Aubry, the Organisation for Responsible Governance’s (ORG) executive director, said such a cut would “not hold the line with Moody’s and other rating agencies” that are watching very carefully to see how the new government tackles The Bahamas’ fiscal, economic and COVID-19 crises. Agreeing that Moody’s action will at the very least complicate the Government’s efforts to deliver on a key pre-election
(l) GOWON BOWE (r) MATT AUBRY pledge, he added that all such campaign promises now face “a very stark reality” when it comes to delivering and executing on them. Mr Aubry said that while the Progressive Liberal Party (PLP) had placed “a lot of stock” in
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Bahamas GDP rebounds 4-8 months after storms By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Bahamas has returned to pre-hurricane gross domestic product (GDP) levels between four to eight months after each of the last four major storms struck this nation, a study has found. An Inter-American Development Bank (IDB) report, produced by four
authors on the impacts of Dorian, Irma, Matthew and Joaquin, found that this country’s economy rebounded relatively quickly despite the combined $4.4bn worth of damage they inflicted. This, though, is likely explained by the fact that New Providence, which generates roughly 70-75 percent of the country’s economic output (GDP), was not directly impacted
by any of these storms apart from Hurricane Matthew which failed to score a direct hit in October 2016. Measuring the storms’ impact that measured night light intensity, or luminosity, before and after the hurricanes, the IDB report said: “The economic recovery times to achieve pre-hurricane GDP levels took between four and
eight months on average for the hurricanes studied. “The results show that The Bahamas experiences a decrease in the year-toyear nominal growth rate during the month and quarter of a hurricane impact event, but does not show a contraction of GDP in the year of the event. However, this does not mean that the damages are insignificant.
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Financial services group in $12m HQ expansion By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net BAHAMIAN regulators have hailed a financial services group’s expansion into online banking, and its $12m investment in a new head office, as signalling that this nation remains a “viable” jurisdiction for the industry. Christina Rolle, the Securities Commission’s executive director, said in a video accompanying the FxPro Group’s groundbreaking near Lyford Cay that the move showed The Bahamas remains competitive in “niche areas” despite the financial
L-R: CHRISTINA ROLLE, executive director, Securities Commission of The Bahamas; Nicholas Wright, chief operating officer, FxPro; John Rolle, governor, Central Bank of The Bahamas; Andrew Pike, chief executive, BankPro. services industry’s contraction over the past decade. FxPro, which is currently based at the Albany
Financial Centre, has been operating in The Bahamas since 2017 as online broker/dealer focused
primarily on contracts for difference (CFD) - a form of derivative. “This expansion into banking means that people still see The Bahamas as a viable place for financial services,” Ms Rolle said. “I think that’s important especially with the amount of contraction being seen in the industry; that we still have niche areas where The Bahamas has a good product offering, we have a good platform in antimoney laundering/counter terror finance regulation, so we’re still seen as a good place to do business.”
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Environmental nod sought for $100m BPL power plant By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net BAHAMAS Power & Light (BPL) is moving to obtain full environmental clearance for an up to $100m investment in new generation plant at Clifton Pier that is designed to improve energy efficiency and reliability. The Environmental Impact Assessment (EIA) for a project billed as creating between 150200 construction jobs has been released ahead of an October 12 virtual public consultation being organised by the Department of Environmental Planning and Protection (DEPP).
Previous public consultation responses have suggested the new plant, known as ‘Station D’, will be financed from the proceeds of BPL’s proposed $535m rate reduction bond (RRB) that has yet to be placed. Whether the bond will actually be issued remains to be seen, as that decision now rests with the Davis administration, but BPL executives have said “other financing options will then be considered” if the $535m is not raised. Amendments to the bond legislation need to be passed by Parliament before BPL’s mammoth refinancing can take place, which will likely push the exercise into next year. Construction on ‘Station
BPL HEADQUARTERS D’ is supposed to take 14 months once all necessary permits are obtained, and it will provide between 82-108 Mega Watts (MW) of energy via six generators capable of using natural gas, heavy fuel oil (HFO)
or automated diesel oil (ADO). Together with Clifton Pier’s ‘Station A’, the new plant will combine to provide between 200-220
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PHILIP DAVIS
‘Take all nasty decisions during first 12 months’ • Ex-GBPA attorney: Selloff loss-making SOEs • Says pain now as voters have ‘short memories’ • PM: ‘We’re not elected to tinker at the edges’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net AN EX-GRAND Bahama Port Authority (GBPA) counsel has urged the Davis administration to take all “nasty” decisions, such as selling-off loss-making state-owned enterprises (SOEs), during its first two years in office. Carey Leonard told Tribune Business this is critical to both The Bahamas’ future and the administration’s prospects of securing re-election given that many voters “have short memories” and will forgive early
CAREY LEONARD pain if the country’s economic fortunes have turned around. “Whoever came in would have to make very difficult
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