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TUESDAY, NOVEMBER 26, 2019
$4.56 Govt urged to explore ‘social’ bonds to fund disaster relief By YOURI KEMP Tribune Business Reporter THE government should explore the creation of “green” bonds to help finance future disaster recovery efforts, an InterAmerican Development Bank (IDB) economist urged yesterday. Dr Allen Wright, addressing a Bahamas Society of Chartered Financial Analysts luncheon, said these debt securities could be marketed to Bahamian nationals living overseas, multinationals with economic interests in this nation, such as the cruise lines, and others who would be willing to invest in this nation’s social and economic well-being. He also backed the International Monetary Fund’s call (IMF) for the government to establish a sustainable disaster relief fund, containing between $200m-$250m - a sum equivalent to 2-2.5 percent of annual Bahamian gross domestic product (GDP) to provide a further cushion against the damages created by Hurricane Dorian-type storms. “If The Bahamas is in a situation where this is the fourth hurricane in the last five years, and there is a 70 to 80 percent chance of being struck by a hurricane in the future based on what happened over the last four or five years, why is there not some development of a sustainable disaster fund that the government can call upon to draw down on resources where they can get persons back to a normal position?” Dr Wright asked. “Now might be the perfect time for the government to look at the possibility of developing a disaster fund of somewhere between 2 or 2.5 percent of GDP, just about $200m or $250m available, so whenever there is a disaster they can draw down on these funds to help with the remediation.” The government’s Fiscal Strategy Report commits it to following this IMF/ IDB suggestion, with the initial seed capital for a Disaster Relief Fund set to come from the $40.1m in dormant bank account balances that the Central Bank is to transfer to the Public Treasury. Some of that sum, though, has already been earmarked for Dorian relief efforts. “Following on an IMF study, which placed the optimal size of a Disaster
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DPM: Opposition ‘working hard’ to attract downgrade
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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HE deputy prime minister yesterday accused the opposition’s leader of “working his hardest” to attract the credit rating agencies’ attention, as he asserted there was “no sign” of a Bahamas downgrade. K P Turnquest, rejecting Philip “Brave” Davis’ fears that the country is “falling off a cliff” post-Hurricane Dorian and facing a “financial crisis”, argued that this was the position when the Minnis administration took office in May 2017 but it had since “made significant progress” towards returning to fiscal health prior to the category five storm’s arrival. He also hit back at Mr Davis’ concerns that the government is failing to pay legitimate value-added tax (VAT) refunds to Bahamian businesses, adding that slight delays were “nothing unusual” and that the administration had “worked very hard” over the past two years to narrow the processing timeline (see other article on Page 1B). Mr Turnquest also voiced optimism that the
• Says ‘no sign’ of imminent rating cut • Argues country was ‘falling off cliff’ in 2017 • Govt may need 2.7% of GDP primary surplus
K PETER TURNQUEST government will hit its projected 2.1 percent gross domestic product (GDP) growth target for 2021, with further expansions of 1.61.7 percent in subsequent years, as he slammed the Opposition leader for effectively seeking to attract - or talk The Bahamas into - a further downgrade of its sovereign creditworthiness following last week’s bleak fiscal outlook. Mr Davis on Sunday argued that “a downgrade is for certain”, alleging that the government had sought to “gloss over and paint a
picture” more optimistic than the reality of a further $1.3bn surge in the national debt to an all-time high of $9.5bn come the 2024-2025 fiscal year. “He is certainly working his hardest to cause a secondary review,” Mr Turnquest responded yesterday, “but we have no indication of that [a further credit rating downgrade] at the moment and believe then fundamentals of the economy remain strong. We are working hard to bring these projects in the pipeline online, which will help us to offset the loss of Abaco and Grand Bahama. “The fiscal cliff was in 2017 when we took over. We’ve made significant progress since then, and continue to work with discipline at consolidation. The trends prior to the storm support that, and we will continue with the same focus as we go forward from this hurricane. “This [Dorian] has been disruptive, but reconstruction and the projects we mentioned should bring us
A CABINET minister yesterday said the government will have to give a “deadline” for several of the Abaco cays that have pledged to finance the provision of underground utility cables post-Dorian. Desmond Bannister, minister of works, told Tribune Business that several of the storm-ravaged islands off Abaco’s mainland - which he declined to name - had indicated a desire to help fund the underground restoration of Bahamas Power & Light’s (BPL) transmission and distribution (T&D) network. Locations such as Treasure Cay, Hope Town and Great Guana Cay are home to wealthy, multi-millionaire investors, but Mr Bannister said the government could not wait for ever for
back into line in terms of growth and we’re optimistic we’ll make those targets.” Neither Standard & Poor’s (S&P) nor Moody’s, the two primary rating agencies that assess The Bahamas’ creditworthiness, have given any public indication that a further downgrade is in the offing. Indeed, S&P in early October gave The Bahamas a much-needed post-Dorian boost by asserting that this nation is “well-positioned to handle the fall-out” from the category five storm. It added that the hurricane’s long-term impact “could be limited” despite it devastating islands that account for between 15-20 percent of gross domestic product (GDP), and said the extent of Dorian’s blow for both the economy and Bahamian sovereign creditworthiness will ultimately depend on how well the government “responds in a timely manner” to all the challenges created by the disaster.
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‘Caught with pants down’ on contractor regulation By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net TWO past Bahamian Contractors Association (BCA) presidents yesterday said Hurricane Dorian had “caught the government with its pants down” when it came to the industry’s self-regulation. Both Leonard Sands and Stephen Wrinkle told Tribune Business that the failure to properly implement the Construction Contractors Act by appointing a board to oversee the licensing of contractors according to their ability threatened to undermine the rebuilding of Abaco and Grand Bahama unless the issue was speedily addressed. They warned that the absence of such a licensing system exposed homeowners and businesses in the disaster-hit areas to potentially defective construction work during the rebuild, while also eroding the
• Ex-BCA presidents fear for Dorian rebuild • ‘No redress’ for bad work, non-Code compliance • Urge govt to swiftly implement licensing regime
LEONARD SANDS
STEPHEN WRINKLE
government’s ambition of ensuring all properties adhere to The Bahamas building code. Non-compliance with the Code was cited as a major factor for why many structures collapsed so easily under Dorian’s category five winds, but both former BCA chiefs said the
continued absence of the self-regulatory licensing regime threatens to cause a repeat during the next major storm as there is nothing to detect - or prevent - the participation of incompetent contractors in the reconstruction. Desmond Bannister, minister of works, told Tribune
Abaco cays in BPL cables funding offer By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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• Want to finance underground infrastructure • Works ministry to ‘significantly boost’ inspectors • Minister: Building permit process ‘too archaic’
DESMOND BANNISTER any promised funding to materialise. “The challenge with the cays is they want underground utilities,” Mr Bannister confirmed to this newspaper, “and the government is going to have to give them a deadline as
that’s an expensive process. “They’ve indicated they want to assist in providing the financing for it. We’re going to have to give them a deadline. If they don’t come through we have to proceed with the electrification process for the cays. They’ve spoken to us in confidence, and it’s best for me not to discuss that further until we have some confirmation from them.” The government anticipates incurring $80m worth of costs to restore BPL’s Abaco electricity supply, with half that sum some $40m - incurred this fiscal year. Mr Bannister said power has now been restored to north and south Abaco, and “one or two of
the cays”, as he identified Marsh Harbour and the island’s central district as the utility’s main “challenge”. Nevertheless, the minister said: “It’s moving at a good pace. They have restored power to the government complex, they have restored power to the clinic, and they are working assiduously to get to the large commercial structures. “BPL has to bring some more workers into Abaco than they currently have. I know they’ve made arrangements to accommodate them in Abaco. That has been one of the major challenges, so I look forward to that aspect of it.”
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Business that the government is in the process of “significantly boosting” its pool of building inspectors, and also looking to involve private sector engineers and architects in the process, to help ensure new and rebuilt properties meet all the building code’s requirements post-Dorian (see other article on Page 1B). He had previously told this newspaper two weeks’ prior to the category five storm’s arrival that the Minnis Cabinet “has made, or is in the process of making”, all the necessary Board appointments. Michael Pratt, the current BCA president, said the industry had submitted its share of nominees, and was
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GOWON BOWE
Businesses ‘not screaming’ over VAT refunds By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net BUSINESSES “have not been screaming like in the past” over delayed VAT refunds, it was argued yesterday, despite the opposition leader’s assertion that the government is not paying legitimate claims. Gowon Bowe, former head of the Bahamas Chamber of Commerce and Bahamas Institute of Chartered Accountants (BICA), told Tribune Business that while this had periodically been a problem in the past it had “not bubbled up” at any recent meetings of the professional organisations he is involved with. “To be perfectly honest it’s not a major issue that’s bubbled up that I’m aware of, and businesses have not been screaming like in the past,” he said. “I’m not aware of any delays in the refunds with the timeline of payments coming back.” Mr Bowe spoke out after Phillip “Brave” Davis accused the government of failing to make timely VAT refund payments to businesses deserving of them, saying that three owed a collective $7m had approached him to complain about the matter. Any undue delays in paying VAT refunds can cause the private sector significant cash flow and liquidity problems, potentially tying-up capital required to cover operational expenses and further investments. While Tribune Business has periodically covered such problems when they have reared their head following VAT’s 2015 introduction, Mr Bowe said it had not been raised as an issue recently during meetings where he was involved. “There continue to be disputes or challenges with various VAT filings because various nuances pop in terms of how things are interpreted,” he told Tribune Business. While the private sector has the ability to challenge the Department of Inland Revenue’s decision through the newlyconstituted VAT Tribunal,
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Freeport-based outsourcer wins top regional honour A CARIBBEAN business process outsourcer, which has an operation in Freeport, has scores a second consecutive award for the Latin American and Caribbean region. itelbpo has received the 2019 Contact centre outsourcing services growth excellence leadership award for the region from Frost & Sullivan, a global consulting firm that sets benchmarks for growth and performance in the outsourcing industry. It said itelbpo had shown consistency in growth throughout the year, and praised the company for demonstrating “how to achieve rapid growth and success, leveraging technology and human capital”. Described by Frost & Sullivan as being a “deeply involved CEO”, Yoni Epstein said: “itelbpo has streamlined its success across multiple verticals and channels. We started
off with seven employees seven years ago, and have managed to increase our global footprint to some 2,700-plus employees since. The growth has been tremendous, and we’re truly honoured and grateful for the recognition from Frost & Sullivan.” itelbpo provides solutions for the ever-growing global services sector. It has been undergoing a massive expansion during 2019 with the opening of additional facilities at their Jamaica (Kingston and Montego Bay) locations, and continued expansion taking place in Monterrey, Mexico. itelbpo last year said its Freeport-based unit will “grow by an additional 100 percent” after securing a contract to serve US-based utilities. Initially known as Island Outsourcers, the company moved into Freeport in 2013 as Grand Bahama’s first business process oursourcing (BPO) operator
when it won the contract to act as the Ministry of Tourism’s call centre. It is also the business who Bahamasair’s reservations department has been outsourced to. itelbpo, which employs 150 persons in Freeport, specialises in handling customer queries through phone and digital services. It has 1,500 employees company-wide. “The Bahamas facility is expected to grow by an additional 100 percent, resulting from a newly-won contract that serves the utilities industry in the US,” the company said in a 2018 statement. “itelbpo’s future plans include an expansion of its global workforce to 5,000 staff members within the next five years, including bringing its work-from-home model into the Caribbean. The planned expansion includes staff increases at its Freeport location, as well a continued diversification of the services offered there.”
Tourism executive gets meeting planner award
LINVILLE Johnson of the Bahamas Ministry of Tourism receives Supplier of the Year award.
A 30-YEAR Ministry of Tourism veteran received a Supplier of the Year award from the National Coalition of Black Meeting Planners (NCBMP) during their recent annual conference in New Orleans. Linville Johnson, who has been in sales and marketing with the ministry for more than three decades, was honoured at the organisation’s annual conference, which was held under the theme Elevate, educate and engage. The award is Mr Johnson’s second in recent months. He was honoured in July this year with an Apex Award presented by Black Meetings and Tourism Magazine during the annual gala of the National Association of Black Hotel Owners, Operators and Developers (NABHOOD) and the International
Multicultural and Heritage Summit and Trade Show. Currently responsible for the Ministry’s multi-cultural and religious groups market, Mr Johnson’s career began in Nassau. He has since been appointed to managerial positions across major US cities including Los Angeles, Chicago, Detroit, New York and Miami/Fort Lauderdale. The National Coalition of Black Meeting Planners is one of many large groups that Mr Johnson has worked with in promoting tourism to The Bahamas. Some of the other major organisations he has worked with closely over the years include Black Enterprise, The National Urban League, the NAACP, National Black Caucus and The National Religious Broadcasters (NRB).
THE TRIBUNE By YOURI KEMP Tribune Business Reporter A US-based environmental firm working on Abaco’s post-Dorian clean-up yesterday said they were in a “holding pattern” over whether to stay in The Bahamas following a clash with Customs. Karl Dix, a representative for Ceres Environmental Services, told Tribune Business that “confusion” over whether it had submitted the correct paperwork to Customs had resulted in a work stoppage for the firm. “The Customs Department was just taking an inventory of our equipment,” he said. “The issue was all over proper documentation. We had submitted all of our information, particularly Form B, prior to our arrival. There was just confusion on their side with regard to proper documentation. “We are just now working through those issues with government. We are in a holding pattern, and hopefully we can revolve the issue. We are working
Govt urged to explore ‘social’ bonds to fund disaster relief
FROM PAGE ONE
Relief Fund for The Bahamas at between two and four percent of GDP, the government committed to seeding the Fund with an initial contribution of $40.1m representing extinguished dormant account funds,” the Fiscal Strategy Report confirmed. “Over time, the Fund, which will be fully established under the framework of the Proposed Disaster Relief Fund Act, will benefit from further transfers of dormant proceeds alongside budgetary contributions and insurance pay-outs under the CCRIF (Caribbean Catastrophe Risk Insurance Fund).” Dr Wright, meanwhile, suggested there were other capital raising options open to the government. “There are a number of instruments that I am sure the government is looking into as well,” he said. “It is the development of green bonds, blue bonds or other bonds related to social issues, such as orange bonds or purple bonds.” The IDB economist explained that such bonds can be bought not only by local Bahamians but also those living overseas. They could also be sold to companies that do business in The Bahamas, with the funds drawn down on a “needs basis” in order to help mitigate the financial fall-out from Dorian-type storms. Hurricane Dorian has has blown the government off its key deficit and debt ratio reduction targets by between five to ten years depending on the indicator. Its 2019 Fiscal Strategy Report, tabled in Parliament last week, now forecasts that nine-figure deficits will persist for the next five years post-Dorian and only come back into line with the Fiscal Responsibility Act’s 0.5 percent of GDP target by
Tuesday, November 26, 2019, PAGE 3
US FIRM’S ‘HOLDING PATTERN’ AFTER RUN-IN WITH CUSTOMS through our local legal representation, Dupuch and Turnquest, to handle the matter on our behalf with the government.” Mr Dix told Tribune Business that Ceres has been in Abaco for about three weeks working with private, non-profit organisations that are all focused on moving debris. He added that there were no police officers accompanying the Customs Department from what he saw when the two parties had their run-in. He added that the firm planned to stay in Abaco and had no intention of leaving any time soon, and said: “Every Wednesday at 10am there is a debris removal workshop held. We
take our lead from these meetings. We had no initial end date and those who organise the meetings didn’t give us one. We have not firmly decided to leave just yet. If we can come to some resolution that would be fantastic.” One source, familiar with the situation but speaking on condition of anonymity, blamed the clash on postDorian disarray at Bahamas Customs. They revealed that Ceres had obtained the necessary approvals to come in with its equipment, and also obtained work permits and a Business Licence. “Customs is all screwed up in Abaco,” the source said. “This [Ceres] is a group that goes all over the world doing this work and
they were hired by a group of Abaco homeowners from Treasure Cay to get the job done. I think they’re going to be alright but it’s created a big ‘hoo-ha’. “Customs, when they realised they’d made a mistake and not done their job in getting a Form B, tried to cover their ‘you know what’. Customs is a mess. The port was so crowded that they told people to take their equipment and go as it was full of cargo. “Customs did not have the wherewithal to do their job, and they were embarrassed they did not have the paperwork done. It’s Customs’ fault. They’re [Ceres] not leaving. They almost left. It’s one of those situations that had to go
up to the Prime Minister’s Office. The organisation is not there to take care of this thing. There’s no local administration.” The source added that it was essential that The Bahamas permit firms such as Ceres to enter the country to assist with postDorian debris removal, remediation and restoration as this nation simply lacked the manpower, resources and expertise necessary to cope with the scale of devastation. However, the Ceres incident has reinforced for some the impression that reconstruction is being hindered by a slow and meddling government bureaucracy. The Department of Inland Revenue’s website
says that under the Exigency Order put in place after Hurricane Dorian on October 3, hurricane relief supplies can be imported into The Bahamas duty-free and VAT-free based on the conditions outlined in the Order. Importers must complete a simple, one-page application form to benefit from these tax breaks. The website also directs persons to the subsequent application forms on their website where it can be downloaded, while a hard copy can also be obtained directly from the Customs Department. The website says that Form A is used to import approved goods, and is processed and approved by Customs at the border. For goods not included on the “approved goods” list, Form B is required to obtain Ministry of Finance approval, and that the individual or business importer that is requesting the tax relief should complete the relevant Exigency Order Form.
2024-2025. The report also shows that the sustained “red ink”, caused by the government having to borrow to cover the gap created by its spending exceeding income, is projected to drive its direct debt from $8.205bn this fiscal year to almost $9.5bn over the same period. This represents a $1.3bn debt surge that will keep the government far away from achieving the Fiscal Responsibility Act target of a 50 percent debt-to-GDP (gross domestic product) ratio. That is projected to still be at 62.9 percent in 20242025, and this ratio will only “resume its downward trajectory” towards 50 percent come 2028-2029. Dr Wright yesterday said The Bahamas is looking at the middle of 2021 or in early 2022 to begin a fiscal adjustment greater than two percent of its GDP, which is when Dorian-related reconstruction spending is expected to taper off. He warned that achieving these goals hinges on improved tax collection efforts, the rationalisation of some spending items and programmes, and greater efficiencies at state-owned enterprises (SOEs) that generate savings to stabilise The Bahamas’ fiscal position. Dr Wright added that it would be difficult to place a timeline on how long it could take The Bahamas to fully rebound from Hurricane Dorian’s devastation, saying he could not put this nation “side by side” and compare it with other Caribbean nations, such as Dominica, and their recoveries from hurricanes Irma and Maria in 2017. Explaining that they were separate nations with different challenges and capabilities in mobilising resources, Dr Wright said recovery on Grand Bahama could be quicker than Abaco’s. He also warned that reconstruction efforts depend on how quickly the government can mobilise resources, both physical and human, and praised both the disaster recovery ministry’s creation and its engagement with bodies such as the IDB and internal government agencies.
Abaco cays in BPL cables funding offer
to be a big increase. “The second component of that is architects and engineers are very interested to be part of the process. You may look forward to us amending the legislation to include more professionals that we are now.” While declining to identify the laws that need to be changed, Mr Bannister said Iram Lewis, the newlyappointed minister of state for disaster preparedness, recovery and reconstruction, was working with a Building Control team and the private sector to ensure persons are no longer able “to get through the net” when it comes to Bahamas Building Code compliance. “People have been building, been doing all kinds of thing, making additions to buildings and getting away with all sorts of things,” he told Tribune Business. “It’s been proven not to be safe.... The whole process [of permitting] we’d started reviewing earlier, and were looking at making
it computerised and a lot quicker. The whole process has to improve; it’s just too archaic.” The assessment of the category five storm’s financial impact, produced by the Inter-American Development Bank (IDB) and other multilateral agencies, estimated that it had left almost 3,000 homes “uninhabitable”, and some 7,339 “severely damaged”, as it inflicted $1.487bn worth of damage on the housing sector in Abaco and Grand Bahama. Housing was identified as the sector most impacted by Dorian with around 9,000 homes - representing more than 11 million square feet of physical property - damaged to some degree by its winds, storm surge, falling trees and flying debris. “Approximately 9,000 homes, and in excess of 11 million square feet of structures, have sustained some damage on the two islands. On Abaco, more than 75 percent of the dwellings
were somehow affected, and approximately 57 percent of the houses were severely damaged. Central Abaco (Marsh Harbour), Treasure Cay, and Hope Town were the most affected locations,” the joint report found. “Damage to the housing sector on the islands of Abaco and Grand Bahama is estimated at $1.48bn, 88.9 percent of which took place on Abaco. Losses in the housing sector are attributed to the interruption of accommodation and rental services due to severe damage or destruction of the house, making it temporarily or permanently uninhabitable. The assessment team estimated losses at $56.8m resulting from 2,894 homes left uninhabitable after the hurricane.” Mr Bannister, meanwhile, pledged that himself and the Ministry of Works will not be distracted by Dorian from infrastructure projects and capital upgrades already earmarked for other islands prior to the storm’s passage.
FROM PAGE ONE Mr Bannister, who visited Abaco late last week to view how debris clearance and reconstruction is progressing, confirmed to Tribune Business that the government was “looking at” the development of a masterplan to guide the rebuilding of Marsh Harbour and all surrounding communities that have been levelled by Dorian. “Looking at that area, The Mudd, it is ideal for creating a new township,” the minister said, referring to the former shanty town flattened during the storm. “We have to look at everything and see how we can ensure development that is orderly and meets the needs of the community.” He added that the government’s ability to cope with all the construction permit and inspection applications that will be generated by postDorian rebuilding was “a reasonable question” given existing concerns over the pace at which the Ministry of Works and its Building Control Department process the present volume of submissions. Besides increasing the number of inspectors, Mr Bannister indicated that the government was open to requests from the Bahamas Society of Engineers (BSE), Institute of Bahamian Architects (IBA) and the Bahamian Contractors Association (BCA) for private sector construction industry expertise to be employed in assisting the Dorian rebuild. Mr Bannister revealed to Tribune Business: “What is happening is that the Building Control Department is in the process of hiring a number of new inspectors throughout the country. We expect we’re going to boost the complement of inspectors significantly. It’s going to have to be done in stages but we anticipate it’s going
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THE TRIBUNE
DPM: Opposition ‘working hard’ to attract downgrade FROM PAGE ONE The Bahamas currently has a (BB+/Stable/B) rating from S&P, which is one notch below so-called “investment grade”. This reflects the “junk” downgrade this nation suffered at S&P’s hands just before Christmas 2016 relating to Baha Mar’s late opening and post-Hurricane Matthew restoration costs. Moody’s still has the country at investment grade, one notch above “junk” status” And Mr Turnquest’s position yesterday received support from Dr Allen Wright, the Inter-American Development Bank’s (IDB) country economist, who agreed that The Bahamas was not in a “fiscal crisis” despite the increased deficits and debt laid out in the Fiscal Strategy Report. He said: “Prior to Dorian,
The Bahamas was performing very well fiscally. We had seen a fiscal surplus for the first time in over a decade. How quick the government goes about in terms of executing their fiscal strategy and rectifying the situation as expected by 2021 will determine the country being in a fiscal crisis. “Some of the things the government can do to contain the deficit and the debt is that careful spending, improved tax collection efforts and looking for increasing efficiency in government agencies.” Still, the government is having to seek Parliamentary approval to borrow an extra $508m to cover the projected post-Dorian deficit of $677.5m for the 2019-2020 fiscal year. That compares to the $137m originally projected, and is close to the $690m worth
of “red ink” said to have been incurred by the Christie administration during its last year in office as a result of Matthew, pre-election spending and unfunded bills. Mr Turnquest yesterday said the Minnis administration had pursued twin goals of fiscal austerity and achieving higher GDP growth, arguing that the latter by itself is not the “panacea” to The Bahamas’ economic woes that some belief. He added that the government had ended “the excessive spending that the previous administration was very much guilty of”, and said: “This is a holistic approach that we’re going to take, working both sides of the ledger to achieve the results we desire as a country.” The Fiscal Strategy
Report, though, makes clear that the government is relying on higher economic growth post-2020, coupled with last year’s upward revision to Bahamian GDP by the Department of Statistics, to keep the country’s direct debt-to-GDP ratio which measures increases in the national debt in proportion to economic output - in check. The report projects that the national debt as a percentage of GDP will rise from 60.4 percent at yearend 2018 to peak at 66.2 percent at year-end 2021, as Dorian reconstruction spending outpaces economic growth, only to drop to 64.7 percent at year-end 2024 as economic expansion picks up. Tabled in Parliament last week, the Fiscal Strategy Report reveals that the government must run a
primary surplus averaging one percent of GDP - some $100m to $130m - per year during the five-year period between 2019-2024 if it is to bring the debt-to-GDP ratio back to the 60 percent range. Given that excessive post-Dorian spending will dominate the first few years of that period, the report says the government will have to “back load” its primary surplus - which measures the difference between its revenue income and non-interest expenditure - towards the end of that period. “If the debt-to-GDP ratio is to converge back to the 60 percent of 2018, a primary surplus averaging one percent of GDP will have to be maintained during the 2019 to 2024 period,” the Fiscal Strategy Report said. “As the government
will inevitably have to increase spending during the next two to three years to respond to the needs of the country following the hurricane, much of the adjustments to achieving the average primary surplus of one percent of GDP would have to be back loaded to the outer years. “Given that the primary balance ratio for the period 2019 to 2021 is estimated to average -0.7 percent of GDP, back loading the adjustment to reach the 60 percent debt ratio by 2024 translates into achieving a higher primary surplus averaging 2.7 percent from 2022 to 2024.” Mr Turnquest declined to comment yesterday when asked by Tribune Business about the feasibility of achieving such a goal, saying: “Let’s not preempt the debate. We’ll get there.”
‘Caught with pants down’ on contractor regulation FROM PAGE ONE “working hard” to bring the process to a conclusion. There has been no formal announcement of the board’s appointment subsequently, though, with Mr Bannister even coming under fire from his controversial registrar of contractors, Omar Archer, for “procrastination” and “inaction” over the board’s appointment. Messrs Sands and Wrinkle yesterday argued that the present situation leaves consumers and the government with little to no redress for shoddy workmanship, which the latter branded “a recipe for disaster” given that 7,339 homes across Abaco and Grand Bahama have been described as “severely damaged” in Dorian’s wake. “This is where the brunt of my concern lies,” Mr Sands told this newspaper in relation to the Board and licensing system. I think the government has missed an opportunity - a little bit by its own fault, but nature swooped in there and it has been caught with pants down. “If the Contractors Board
had been put in place, and the government already approved them, you would have the board making recommendations as to who gains contractor licences based on the criteria set out in the Act, which has been law since 2017, and identity the best professionals in the industry to take on the work. “Because that’s not the case anyone can represent themselves as a good, bona fide contractor. The urgency is now much more pressing than it has ever been before before that the government appoint the board and allow it to regulate the industry. We agree that the government should not want to take that on. Allow professionals to regulate the industry.” The extent of Hurricane Dorian’s devastation is expected to ignite a reconstruction boom in Abaco, especially, and Grand Bahama once work begins in earnest in 2020 and carries on through the next decade. Insurance claims will need to be received by homeowners and businesses, some of whom may elect not to rebuild, while the remaining
Dorian debris will have to be cleared, the security situation improve and utilities/ infrastructure be restored to assist this process. The long-awaited assessment of the category five storm’s financial impact, produced by the InterAmerican Development Bank (IDB) and other multilateral agencies, estimated that it had left almost 3,000 homes “uninhabitable”, and some 7,339 “severely damaged”, as it inflicted $1.487bn worth of damage on the housing sector in Abaco and Grand Bahama. Housing, not surprisingly, was identified as the sector most impacted by Dorian with around 9,000 homes representing more than 11 million square feet of physical property - damaged to some degree by its winds, storm surge, falling trees and flying debris. “Approximately 9,000 homes, and in excess of 11 million square feet of structures, have sustained some damage on the two islands. On Abaco, more than 75 percent of the dwellings were somehow affected, and approximately 57 percent of the houses were severely
damaged. Central Abaco (Marsh Harbour), Treasure Cay, and Hope Town were the most affected locations,” the joint report found. “Damage to the housing sector on the islands of Abaco and Grand Bahama is estimated at $1.48bn, 88.9 percent of which took place on Abaco. Losses in the housing sector are attributed to the interruption of accommodation and rental services due to severe damage or destruction of the house, making it temporarily or permanently uninhabitable. The assessment team estimated losses at $56.8m resulting from 2,894 homes left uninhabitable after the hurricane.” This now presents a major opportunity for legitimate, skilled Bahamian contractors - if the proper regulatory framework is in place. “Freeport, while it has its challenges, is bursting with opportunities,” Mr Sands said. “Abaco, though, is bursting with opportunity because off the mainland, Treasure Cay, Hope Town, are ready to rebuild. You have wealthy people ready to rebuild multi-million dollar homes.
“The challenge is: Who’s the contractor? Can I trust the contractor? Are they a professional licence holder? That should be a matter of public safety and public concern that should cause the government to act speedily. The Act was created out of public concern, and Hurricane Dorian re-established the public concern that they do not want sub-par building.” Mr Sands suggested that a “semi-Ministry of Works” needed to be created in Abaco to oversee the reconstruction process and ensure properties are built back to code. Adding that the rebuild could take ten to 15 years, he said: “We have to start right. Let’s put the policy mechanism in place to allow for scrutiny and ensure every building is built to code.” His concerns were echoed by Mr Wrinkle, who described the self-regulatory licensing regime’s continued absence as a “recipe for disaster” that would lead to defective workmanship and failures to comply with the building code that would go unpunished. Explaining that it was
impossible to determine whether there were sufficient, qualified Bahamian contractors to complete Dorian reconstruction, he said: “Until such time as the government decides to effect the Contractors Bill and licence the contractors we won’t know who’s who./ “I find it remarkable that they’re trying to rebuild the northern end of this country, which was devastated by the hurricane, without licensing the contractors. They talk about enforcing the code, overseeing the builders, but don’t want to licence them. What recourse do they have? Until they licence, they’re not going to. It’s as simple as that. “You don’t have to have a licence to build a residence, hotel or condominium. There’s no way they can police the industry without having the licensing in place. They can’t do it now. That’s why we have the problems we have. It continues to baffle me why we can’t complete the Bill’s implementation, as then you’d have some idea of who’s in the industry and their capability to to do the work. It’s baffling.”
To advertise in The Tribune, contact 502-2394
21st November, 2019
21st December, 2019
THE TRIBUNE
Tuesday, November 26, 2019, PAGE 5
CAN MAKE A DIFFERENCE IN THE LIVES OF THE CHILDREN AT RANFURLY
T
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For more information visit: www.ranfurlyhome.org Please “Like” us on Facebook Ranfurly Home for Children, Mackey Street P.O. Box 1413 Nassau, Bahamas 242-393-3115
PAGE 6, Tuesday, November 26, 2019
THE TRIBUNE
Businesses ‘not screaming’ over VAT refunds FROM PAGE ONE
Mr Bowe said he was unaware of how quickly these cases were being dealt with. “I am aware of a number of matters that have been raised with the VAT Department that are going through the Tribunal process,” he added. “You have to pay your taxes before you can challenge. “There may be concerns with delays at the Tribunal, and having cash tied up. If there are delays it’s not in the best interests of
INTENT TO CHANGE NAME BY DEED POLL
www.bisxbahamas.com
(242) 323-2330
(242) 323-2320
ALL SHARE INDEX: CLOSE: 2,201.18 | CHG: -0.92 | %CHG: -0.04 | YTD: 91.73 | YTD%: 4.35 BISX LISTED & TRADED SECURITIES 52WK HI 4.45 22.65 7.00 6.10 2.60 2.00 5.47 11.75 6.17 4.64 11.25 2.81 3.96 10.21 7.60 16.90 9.40 3.63 14.20
52WK LOW 3.52 20.91 4.90 4.46 1.01 0.22 2.00 9.30 6.15 3.95 6.75 2.35 1.76 7.51 6.10 12.10 6.41 3.01 13.01
SECURITY AML Foods Limited APD Limited Bahamas Property Fund Bahamas Waste Bank of Bahamas Benchmark Cable Bahamas CIBC FirstCaribbean Bank Colina Holdings Commonwealth Bank Commonwealth Brewery Consolidated Water BDRs Doctor's Hospital Emera Incorporated Famguard Fidelity Bank Finco Focol J. S. Johnson
SYMBOL AML APD BPF BWL BOB BBL CAB CIB CHL CBL CBB CWCB DHS EMAB FAM FBB FIN FCL JSJ
1000.00 1000.00 1000.00 1000.00
1000.00 1000.00 1000.00 1000.00
Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Fidelity Bank Class A Focol Class B
CAB6 CAB8 CAB9 CAB10 CHLA FBBA FCLB
PREFERENCE SHARES
1.00 10.00 1.00
1.00 10.00 1.00
CORPORATE DEBT - (percentage pricing) 52WK HI 100.00
52WK LOW 100.00
115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
104.79 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
52WK HI 2.27 4.32 2.08 194.86 158.57 1.65 1.82 1.74 1.21 8.23 10.10 6.85 11.45 12.32 10.74 10.00 8.69 11.79
52WK LOW 1.67 3.04 1.68 164.74 116.70 1.58 1.69 1.66 1.09 6.41 7.62 5.66 8.65 10.54 9.57 9.88 8.45 11.20
SECURITY Fidelity Bank Note 22 (Series B) +
SYMBOL FBB22
Bahamas Note 6.95 (2029) BGS: 2015-1-3Y BGS: 2014-12-5Y BGS: 2015-1-5Y BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-3Y BGS: 2015-6-5Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-3Y BGS: 2015-10-5Y BGS: 2015-10-7Y
BAH29 BG0203 BG0105 BG0205 BG0107 BG0207 BG0130 BG0230 BG0303 BG0305 BG0307 BG0330 BG0403 BG0405 BG0407
BAHAMAS GOVERNMENT STOCK - (percentage pricing)
MUTUAL FUNDS
MARKET TERMS
LAST CLOSE 3.64 17.43 6.00 6.10 2.46 1.80 4.36 11.06 6.16 4.12 8.06 3.23 3.85 10.16 7.60 16.90 9.33 3.51 14.00
CLOSE 3.64 17.43 6.00 6.10 2.46 1.80 4.36 11.06 6.16 4.11 8.06 3.29 3.96 9.99 7.60 16.90 9.33 3.51 14.00
CHANGE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.01 0.00 0.06 0.11 -0.17 0.00 0.00 0.00 0.00 0.00
1000.00 1000.00 1000.00 1000.00 1.00 10.00 1.00
1000.00 1000.00 1000.00 1000.00 1.00 10.00 1.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00
LAST SALE 100.00
CLOSE 100.00
CHANGE 0.00
107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund Leno Preferred Income Fund Leno Growth Fund Leno Diversified Fund Leno Global USD Bond Fund Royal Fidelity Bahamas Opportunities Fund - Secured Balanced Fund Royal Fidelity Bahamas Opportunities Fund - Targeted Equity Fund Royal Fidelity Bahamas Opportunities Fund - Prime Income Fund Royal Fidelity Int'l Fund - Equities Sub Fund Royal Fidelity Int'l Fund - High Yield Fund Royal Fidelity Int'l Fund - Alternative Strategies Fund Colonial Bahamas Fund Class D Colonial Bahamas Fund Class E Colonial Bahamas Fund Class F
BISX ALL SHARE INDEX - 19 Dec 02 = 1,000.00 52wk-Hi - Highest closing price in last 52 weeks 52wk-Low - Lowest closing price in last 52 weeks Previous Close - Previous day's weighted price for daily volume Today's Close - Current day's weighted price for daily volume Change - Change in closing price from day to day Daily Vol. - Number of total shares traded today DIV $ - Dividends per share paid in the last 12 months P/E - Closing price divided by the last 12 month earnings
transparency, they should publish the level of VAT refunds which are approved but not yet paid. “As chairman of the Public Accounts Committee and leader of the opposition, I will be compiling a list of vendors for government or from state-owned enterprises, whether domestic or international, who are owed refunds for long periods and are facing financial hardships as a result. “Through this communication, I am calling these vendors and VAT registrants to present their claims for payment of VAT or other tax refunds to me on a confidential basis and I will seek clarity from the prime minister on the settlement of these claims.”
PUBLIC NOTICE
MARKET REPORT MONDAY, 25 NOVEMBER 2019
companies needing liquidity, but there is nothing that I am aware of that says delays there or delays in payment.” K Peter Turnquest, deputy prime minister, also brushed off Mr Davis’ concerns, saying: “There’s nothing unusual. There are always going to be some delays in refunds due to the nature of the process and cutting the cheque... In the last couple of years we’ve been working very hard to improve the process.” Mr Davis, who said he had been asked to intervene on behalf of aggrieved businesses, said: “I’ve had at least three people do so, and I’m told there are many, many more. If the government is truly committed to
VOLUME
300 20,400 263,840
VOLUME
NAV 2.27 4.32 2.08 193.72 158.42 1.65 1.82 1.74 1.19 8.31 10.26 6.88 11.45 12.32 10.70 9.92 8.68 11.38
EPS$ 0.239 0.932 1.760 0.369 0.070 0.000 -0.438 0.722 0.449 0.184 0.140 0.102 0.467 0.646 0.728 0.816 0.939 0.203 0.631
DIV$ 0.170 1.260 0.000 0.260 0.000 0.020 0.000 0.720 0.220 0.120 0.000 0.434 0.060 0.328 0.240 0.540 0.200 0.120 0.610
0.000 0.000 0.000 0.000 0.000 0.000 0.000
0.000 0.000 0.000 0.000 0.000 0.000 0.000
P/E 15.2 18.7 N/M 16.5 N/M N/M -10.0 15.3 13.7 22.3 57.6 32.3 8.5 15.5 10.4 20.7 9.9 17.3 22.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0
YIELD 4.67% 7.23% 0.00% 4.26% 0.00% 1.11% 0.00% 6.51% 3.57% 2.92% 0.00% 13.19% 1.52% 3.28% 3.16% 3.20% 2.14% 3.42% 4.36% 0.00% 0.00% 0.00% 0.00% 6.25% 7.00% 6.50%
INTEREST Prime + 1.75%
MATURITY 19-Oct-2022
6.95% 4.00% 4.25% 4.25% 4.50% 4.50% 6.25% 6.25% 4.00% 4.25% 4.50% 6.25% 3.50% 3.88% 4.25%
20-Nov-2029 30-Jul-2018 16-Dec-2019 30-Jul-2020 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2018 26-Jun-2020 26-Jun-2022 26-Jun-2045 15-Oct-2018 15-Oct-2020 15-Oct-2022
YTD% 12 MTH% 3.06% 3.81% 1.91% 3.39% 2.23% 2.75% 4.99% 6.20% 7.18% -0.08% 2.88% 3.80% 4.56% 6.50% 3.35% 4.17% 5.77% 7.89% 11.19% 12.08% 18.66% 19.64% 4.33% 5.06% 10.43% 7.24% 5.42% 5.77% 3.11% 0.77% -0.71% 0.16% 7.40% 2.70% 10.20% 1.30%
NAV Date 31-Oct-2019 31-Oct-2019 25-Oct-2019 30-Sep-2019 30-Sep-2019 30-Sep-2019 30-Sep-2019 30-Sep-2019 30-Sep-2019 31-Oct-2019 31-Oct-2019 31-Oct-2019 31-Oct-2019 31-Oct-2019 31-Oct-2019 30-Mar-2019 30-Mar-2019 30-Mar-2019
YIELD - last 12 month dividends divided by closing price Bid $ - Buying price of Colina and Fidelity Ask $ - Selling price of Colina and fidelity Last Price - Last traded over-the-counter price Weekly Vol. - Trading volume of the prior week EPS $ - A company's reported earnings per share for the last 12 mths NAV - Net Asset Value N/M - Not Meaningful
The Public is hereby advised that I, WILLIAM MURPHY NANCE JR. of #4 Mount Moriah Constituency intend to change my name to WALLIAM BAIN. If there are any objections to this change of name by Deed Poll, you may write such objections to the Chief Passport Officer, P.O.Box N-742, Nassau, Bahamas no later than thirty (30) days after the date of publication of this notice.
NOTICE NOTICE is hereby given that RODNEY JEAN-BAPTISTE, of Treasure Cay Abaco, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twentyeight days from the 18th day of November 2019 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
NOTICE NOTICE is hereby given that PIERRECINE PROPHETE MONESTINE, of P.O.Box CR-54802, Faith Avenue North , Nassau, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 25th day of November 2019 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
To advertise in The Tribune, contact 502-2394 TO TRADE CALL: CFAL 242-502-7010 | ROYALFIDELITY 242-356-7764 | COLONIAL 242-502-7525 | LENO 242-396-3225 | BENCHMARK 242-326-7333