01202025 BUSINESS

Property and rents out-pace Bahamian wages seven-fold

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

PROPERTY prices and rental rates outpaced growth in Bahamian wages seven-fold during the decade to 2022 to deepen the housing affordability crisis, the International Monetary Fund (IMF) has revealed.

The Washington D.C. based Fund, in a paper accompanying its full Article IV report on this nation’s economy, said the “most vulnerable” persons in Bahamian society will have suffered most from real estate-related costs outstripping earnings and incomes. While property and rental prices were said to have increased by 14 percent between 2012 and 2022, in contrast per capita wages in this country rose by just 2 percent.

“Though the population in The Bahamas has expanded swiftly since 2010, the stock and affordability of new housing has not kept pace due to limited

wage growth and financing constraints,” the IMF said in its assessment of housing affordability in The Bahamas. “Limited growth in wages may have impacted housing affordability over the past decade.

“Between 2012 and 2022, the implied price of real estate, owner-occupied and actual rents activities increased by 14 percent compared to just 2 percent for employee compensation per capita. The effect is likely to have been the greatest among the most vulnerable, with 58 percent of the poor living in privately-rented housing that is subject to changes in annual rental rates, compared to 34 percent across the country.”

Housing affordability, and the ability of many Bahamians to realise their dream of home ownership, has been a growing concern for many years given the relatively low annual economic growth pre-COVID together with stagnant

‘Business ease fix just not so simple’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

DISCUSSIONS on improving The Bahamas’ ‘ease of doing business’ are “hopelessly simplistic”, Arawak Homes chairman is arguing, with the conduct of commerce set to become “more complex, not less”.

Sir Franklyn Wilson told Tribune Business “the world has fundamentally changed” since he started in business some five decades ago while citing the ever-growing intricacies involved with VAT and Business Licence fee calculation as just one factor set to further complicate operations for many businesses.

Speaking after the Prime Minister last week made a renewed pledge “to create an environment where entrepreneurs don’t feel like they’re fighting the

system to succeed”, and asserted that agencies such as the Department of Inland Revenue “must move at the speed of the economy, not the other way around”, the Sunshine Holdings chief said there were certain realities that the private sector must accept.

While Philip Davis KC zeroed in on the time required to open bank accounts as one area requiring immediate

change, Sir Franklyn told this newspaper that the Bahamian business community must distinguish between what is quickly achievable in ‘ease of doing’ business reform and other areas where it may prove much harder to effect change.

“This matter of ease of doing business, the world has changed,” he said. “I hear the talk. When I started my accounting firm in 1971, shortly after that

I recruited an accountant from Trinidad. When I met that accountant he couldn’t believe how easy it was to do business in The Bahamas.

“He said it was different in Trinidad for two reasons. I said that in Trinidad, every business decisionseparate and apart from the substance of what was being discussed - the businessman has to consider two things: Taxation and foreign exchange. In The Bahamas, you could make a decision and that was it.” Sir Franklyn, though, said The Bahamas has since moved far beyond a relatively simple tax regime that was dominated largely by Customs duties imposed on goods at the border. “With VAT

IMF: Bahamas’ debt ‘distress high risk’ with no new taxes

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE Bahamas faces a “high risk of sovereign [debt] stress” as it continues to reject proposed International Monetary Fund (IMF) reforms such as imposing a personal income tax on the top 10 percent of earners. The Washington D. C-based Fund, unveiling its full 2024 Article IV report on the Bahamian economy, estimated its suggested package of taxation and spending adjustments could generate a net revenue increase for the Public Treasury of close to

2 percent of gross domestic product (GDP) - around $300m per year - if fully enacted.

For while again hailing The Bahamas’ “remarkable” economic and tourism rebound from the devastation inflicted by Hurricane Dorian and COVID-19, the Fund pointed out that growth is “expected to slow” to this nation’s historical average of around 1.5 percent “as capacity constraints in the tourism sector become binding”. That refers to the lack of new hotel rooms under construction, with supply unable to meet demand.

By NEIL HARTNELL Tribune Business Editor

THE Government had maxed out its legal ability to borrow from the Central Bank as at October 2024, the IMF has revealed, due to increased reliance on this funding source with private capital deployed elsewhere. The International Monetary Fund (IMF), in its just-released 2024 Article IV report on the Bahamian economy, said there had been an “upswing” in the Government’s reliance on Central Bank advances during the 2024-2025 fiscal year’s first quarter because the private investors that typically fund the bulk of its deficit were instead

directing capital to alternative investments with higher returns. In particular, the Fund said these higher-yielding investments included the $130m in financing solicited by Bahamas Grid Company, the special purpose vehicle (SPV) that was formed to transform New Providence’s electricity grid. This entity, which is 40 percent owned by the Government via Bahamas Power & Light (BPL), raised $30m in equity capital and placed an over-subscribed $100m bond issue last summer. With private investors tapped out, the Government was thus forced to turn to the Central Bank

BUILD SMARTER TO MAKE HOME OWNERSHIP MORE AFFORDABLE

By ANNELIA NIXON

BAHAMIANS must accept reduced property sizes and different home types, such as condominiums and town houses, as a means to reduce costs and solve the affordable housing crisis, an engineer has warned.

Nick Dean, principal and director of risk management and resiliency for Integrated Building Services (IBS), told the Bahamas Business Outlook

conference that persons may have to move away from the concept of ‘owning a piece of the rock’ to make housing more affordable and realise their dreams of home ownership.

Pointing out that there is “a global crisis”, not just a Bahamian one, when it comes to affordable housing, Mr Dean said: “So, for the example of that 1,000 square foot home, if that was a new building, back when they started I would have been able to build that for about $100 a square foot.

“So if you added the cost of land, say at about $80,000, that would have been about $180,000 for that building. Nowadays I’ve seen that go from me building at a $100 a square foot to now at about $180 per square foot. So that same home is going to cost $260,000. So if the average person can afford $170,000, there’s where we get the inability to afford that home.

“I applaud the notion of building more. But if you look at what you gain from increasing the volume, you’re going to get some

economies of scale. You’re going to be able to buy in bulk. You’re going to have a greater ability to negotiate prices and materials with vendors,” he added.

“But that only takes you so far. Vendors are only going to drop their prices by so much because, at the end of the day, they got to make a profit too. So we need to take a really fundamental look at how to change this, and it needs a paradigm shift and a change in how we view the whole notion of affordable housing.”

Mr Dean suggested reducing property sizes,

and choosing alternatives that will help reduce construction costs and, later, maintenance to help makes housing and home ownership affordable to more Bahamians.

“So the average Bahamian, when we think about homes and we think about housing, we’re thinking of building property and Bahamians like plenty land all around the house,” Mr Dean said. “I think we need to kind of step outside of what we’re used to and explore different options.

“The two main ones that I would like to consider this evening is, first of all, the idea of a single detached home versus the idea of multi-residential and attached housing. Because with detached housing, and you know, we travel all the time. We stay in condos, we stay in town homes, we’re getting more adjusted to that type of living.

“You get to reduce your cost per square foot. I’m going to have a sheer wall, I’m going to have less foundation, I’m going to have less roofing, I’m going to have less yard to maintain. So my cost to build is going to decrease. I’m going to have fewer windows, etc,” Mr Dean added.

“The other thing to consider is the size of the average home. So we were talking about a 1,000 square foot home, which is considered small here. Typically, people are looking at 1,200, 1,500, 2,000 square feet. Even in the affordable housing section, people are looking at a 1,500 to 2,000 square foot home, which is actually large.

“So if you look globally, even in developed nations, their actual building footprint for homes is much lower on average. In the UK you are seeing the average home is about 818 square feet, and in Hong Kong it’s 456 square feet. So the whole notion of having that big home, big yard is something that we need to wrap our heads around.

“So automatically, if you reduce the square footage of a home by 20 plus percent, you’re going to reduce the cost of the home,” Mr Dean continued. “None of these things in and of themselves is the entire solution, but a combination of those pushes the cost of building down.

“And if we have a comprehensive discussion on the cost of affordable housing, we can’t just talk about building, we have to talk about the cost of home ownership. Because you’re going to build this house and then you’re going to be in it for the next 20, 40 years.

“So the low-lying route there is building by creative design. High roof, insulated roofs, reduce the amount of cooling needed, reduce your energy cost. In addition to that buy energy efficient appliances, buy LED light bulbs, put timers on water heaters. So the low lying route is trying to reduce your ongoing cost overall as well.”

Sharlyn Smith, attorney at Sharon Wilson & Company, told the Bahamas Business Outlook conference that the country’s real estate market is only as strong as its “weakest link”. This, she explained, means that The Bahamas must ensure a sufficient supply of affordable housing for those with the lowest incomes if its high-end, multi-million dollar properties targeted largely at international buyers is to continue to flourish.

“I think even today there are a few articles in a local newspaper with realtors speaking about the market absolutely booming at the very high end and multiple properties of over $20m, $30m, $40m,” Ms Smith said.

“And, of course, that would have an impact on

affordable housing because going back to social cohesion, we all must live together in this community. And keeping with the link, the weakest link, we need to be sure that the weakest link is still strong if we’re going to enjoy the $20m, $30m, $40m home that you bought.

“I’m not speaking as a sociologist, but we need our weakest link to still be strong. And the fact is that end of the market is booming. Of course that means, perhaps, just under it is also booming or at least the price goes up. And what that does is the entrance to home ownership may be a little higher as a result,” Ms Smith continued.

“For those people who the United Nations is concerned about, when we’re talking about affordable housing, there’s a study that the research was done in the early 2000s, primarily in New Providence. We found out that to meet the demand.... we needed to build between 2000 and 2011 about 28,000 homes at an affordable level. We have not. That would be about 2,400 homes a year and we have not done that.

“But what we do have, according to the research done around the same time, is nearly 14,000 dilapidated homes. So if those homes were not dilapidated, they could be in the inventory to help solve the problem. You’re almost talking about half of what we found that we need could possibly exist.”

Mr Dean, meanwhile, said The Bahamas has a “pretty robust building code” but needs to better map areas prone to flooding and susceptible to major hurricane damage to better protect its people. “Well, it’s not a quick fix, but I think we need to look at what the actual problem is,” he said.

“So in terms of resiliency, we want to primarily consider resiliency to impacts from changes in climate.

“And, to be honest, we have a pretty robust building code when it comes to structures as it is. Even the upgrade in the Building Code is going to fortify that more. So to be honest, in terms of resilience, one of the things that comes to mind first is impact and hurricane. If a building is built in strict accordance with our building code, that building - two to one - is going to fare pretty well in a hurricane event from wind damage.

“Now, what needs to be considered is proper siting of buildings to begin with. One thing that we don’t have, but we should have, is flood plain mapping. Especially in a country where we have high water table average, low land mass, most of the land in this country within say, five feet of sea level. We need to have flood plain mapping,” Mr Dean added.

“People need to know before they purchase the property: Is my property susceptible to flooding? If so, should I even purchase this property and build there? Avoidance is your first course of action in building resiliency. So some places are not suitable for building, such as very low lying land.

“And if you’re talking affordable housing, you probably shouldn’t be building near the coast line as well because I talked about the cost of ownership. In the course of 20, 30 years, if you have to repair your home every single time there’s a major hurricane, you get hit with a $10,000 to $15,000, $20,000 repair effort. And at that level of the market, unfortunately, many people don’t have housing insurance. I mean, cost of ownership gets extremely high.”

IMF BACKS 3% POINT NIB RATE RISE IN ‘MEDIUM TERM’

By NEIL HARTNELL

THE National Insurance Board (NIB) contribution rate has to rise by three percentage points “over the medium-term”, the IMF is urging, while calling for “more holistic” reforms to both public and civil service pensions.

The International Monetary Fund (IMF), in its just-released full Article IV consultation report on the Bahamian economy for 2024, sided with the latest NIB actuarial report in warning that further hikes to the all-in contribution rate - paid by both employers and their workers alike - are inevitable and must be enacted swiftly to preserve the social security scheme’s sustainability for future generations.

Acknowledging the 1.5 percentage point NIB contribution rate increase enacted on July 1, 2024, the Fund also called for social security reforms to be aligned with long-proposed but equally urgent changes to the existing civil service pension scheme if The Bahamas is to maintain its fiscal stability. It noted that unfunded civil service pensions represent a government liability equal to 14 percent of gross domestic product (GDP).

Simon Wilson, the Ministry of Finance’s financial secretary, told Tribune Business last year that these unfunded civil service pension liabilities - expected to hit $3.5bn by 2030 - represent “the top risk” to the stability of the Government’s finances and need to be “dealt with as soon as possible” to reduce the threat that taxpayers will increasingly be called upon to plug this multi-billion dollar hole.

The proposed Pensions Bill will end the present ‘pay-as-you-go’ pension scheme enjoyed by the Government’s near-20,000 existing civil servants through requiring them - for the first time - to contribute to financing their retirement from their own salaries. However, while this will save taxpayers, under this plan the IMF warned: “Pension benefits in the new system will likely be less and more uncertain” for public servants.

“In addition to these changes, the contribution rate for the NIB should be raised over the medium term by an additional three percentage points and a minimum retirement age should be introduced for civil servants aligned with that for the NIB. The retirement age for both systems should be indexed to life expectancy,” the IMF urged in its Article IV report

While the IMF did not explain what it meant by

“medium term”, it is likely referring to a timeframe that does not extend beyond five years. This would mean it is calling for the three percentage point rate increase to be implemented by 2029, bringing its recommendation in line with the last actuarial review of NIB’s financial position which called for the contribution rate to hit 16.9 percent that year to safeguard its sustainability.

The IMF recommendation would come in just shy of that figure, taking the all-in contribution rate to 14.3 percent. It did not break down how that figure is to be split between employers and employees, with the increase last year taking the all-in rate to 11.3 percent and split 50/50. The employer’s portion rose from 5.9 percent to 6.65 percent, and the employee’s from 3.9 percent to 4.65 percent.

Prime Minister Philip Davis KC last year said the Government will take no decision on further NIB rate increases until 2026, which likely pushes it back until after the next general election, although NIB’s last actuarial review conducted by the International Labour Organisation (ILO) called for two percentage point increases every two years to prevent the $1.5bn reserve fund from being exhausted come 2028.

“An increase of the contribution rate by 2 per cent (over the existing 9.8 percent) every two years starting on July 1, 2022, and ending on July 1, 2036, could restore the short and medium-term financial sustainability of the scheme,” the last NIB actuarial report said.

“Starting in 2029, the required annual contribution rate to pay for all expenditures becomes the pay-as-you-go (PAYG) rate.

As an illustration, the contribution rate will have to increase from 9.8 per cent to 16.9 per cent in 2029, and will reach 32.3 per cent in 2078.”

The IMF’s latest Article IV report, meanwhile,

called for NIB and civil service pension reforms to be aligned with each other.

“Proposed reforms to the civil service pension system should be augmented by more holistic changes to the civil service and public pension systems,” it urged.

“A draft proposal to reduce the actuarial imbalance in the civil service pension system would introduce contributions for newer hires, raise the mandatory retirement age from 65 to 67, and eliminate the possibility of early retirement at age 55. Finally, the Government could consider switching all civil servants to the new, defined contribution plan on a forward going basis, while honoring the benefits accrued under the existing plan.

“Pensions and gratuities account for 6 percent of [government] spending. Replacement rates are high and the unfunded liability of the civil service pension system amounts to 14 percent of GDP. The draft Pensions Bill would establish a new defined contribution system that would invest pension contributions through individual accounts managed by an investment manager,” the IMF added.

“Civil servants with less than eight years of employment are required to participate in the new scheme; civil servants with over eight years of pensionable service can continue to participate in the existing scheme. The draft Bill would also increase the retirement age, although with limited savings since benefits at retirement will be higher.

“The introduction of contributions brings the civil servant pensions closer to that of private sector workers but the employer contributions will increase Budget outlays. Pension benefits in the new system will likely be less and more uncertain than the defined benefit scheme which will lower pension costs over the longer term.”

Calling on the new defined contribution civil service

pension to adopt a broadbased investment strategy, the IMF added: “The civil servant pension fund should diversify its investments across asset classes, including possibly in external assets, and not concentrate its investment in Bahamian government bonds.

“The newly-established Public Service Pensions Board will be critical for the fund’s good governance, including to define the fund’s purpose, objectives, investment horizon, risk tolerance and asset allocation policy among other policies and procedures.”

The Ministry of Finance, previously explaining the background to the proposed

legal reforms, revealed that financing the current system will increase the annual burden imposed on Bahamian taxpayers by 32.7 percent or $54m over the next six years as growing numbers of civil servants retire and become pensioneligible. The yearly funding bill is forecast to grow from $165m at present to $219m by 2030. Civil service pensions are currently 100 percent financed by taxpayers through the annual Budget, and the Ministry of Finance said: “During the past two years, the Government’s mission has been to prioritise the containment of growth in relation to pension liabilities, aimed at reducing the burden on public sector finances. Currently, the Government carries an unfunded liability of more than $2bn.

“Pension consultant, KPMG Advisory Services, conducted a pension reform feasibility study on the Government’s pension scheme in 2013 which was revised in 2022. This study estimated pension liabilities for public sector employees would accumulate to $2.2bn between 2013 and 2020, and projected an increase to $3.5bn by 2030.”

As for annual payouts to civil service retirees, the Ministry of Finance added: “Future cash outflows are also projected to increase significantly, from approximately $165m currently to

$219m by 2030 - including both pension payments and gratuities. “In addition, Government-owned corporations have similar defined benefit pensions with annual cash outflows of approximately $10m. Given these alarming statistics, measures must taken to provide a sustainable solution to bring about reforms to the public sector pensions plan.” Pension payments for the 2023-2024 fiscal year were estimated at $134.744m, with gratuities adding a further $33.776m, to bring the total taxpayer-funded outlay to $168.52m. The latter figure is forecast to steadily increase to $173.44m in 2024-2025, and then to $175.413m next fiscal year.

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SENIOR DOCTORS: PM FAILED TO DELIVER ON HIS PROMISES

By ANNELIA NIXON

SENIOR doctors in the public healthcare system have accused the Prime Minister of failing to deliver on health insurance and overtime pay reforms that they allege he agreed to at a late November 2024 meeting.

The Consultant Physicians Staff Association (CPSA), which represents

senior doctors who work at Princess Margaret Hospital (PMH), in a statement suggested that Philip Davis KC confused their concerns with those of the Bahamas Doctors Union (BDU), which acts for the more junior physicians. And it also asserted that its members never neglected their duty of care to patients during last week’s two-day sick-out, when the Public Hospitals Authority (PHA) said around 60 percent of CPSA

doctors did not report for work. The union, though, said it helped make sure PMH was sufficiently staffed to provide “urgent and emergency care to all who needed it” during that 48-hour period. Referring to the November 2024 meeting with Mr Davis, the CPSA said it has “acted in good faith” for the past three years while negotiating a new industrial agreement with the PHA and the Ministry of Health and Wellness.

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However, it added that “negotiations stalled” over financial and health insurance issues. But, at their November meeting, the Prime Minister allegedly “agreed” with the points raised by the CPSA and the union sought written confirmation to seal the deal on their negotiations.

“Our issues go beyond the attacks on our integrity and the misinformation given by the Prime Minister, the managing director (MD) of the Public Hospitals Authority (PHA), Dr Aubynette Rolle, and the minister of health and wellness, Dr Michael Darville, to the public to incite discontent with us physicians,” the CPSA argued.

“In his speech, the Prime Minister confused the concerns of the CPSA with those of the Bahamas Doctors Union (BDU). We are all physicians, but our issues are vastly different. For the past three years the CPSA has acted in good faith to negotiate our new industrial agreement with the PHA and Ministry of Health and Wellness since the previous one expired in 2021.

“Negotiations stalled concerning financial matters, including providing health insurance coverage for the approximately 125 specialist physicians. As he is also the minister of finance, the Prime Minister met with CPSA representatives on November 22, 2024, to again discuss our concerns,” the CPSA said.

“He agreed with us on all points raised. Specifically, he acknowledged that we should be afforded group health insurance just like the uniformed branches and the nurses. He also stated that there should be no gaps in our industrial agreements - the new one should start in 2021, and that gratuities and other monies owed to us should be paid.

“Importantly, he agreed that the CPSA cannot be appropriately compensated for our time worked, and thus would not be expected to ‘clock in’. At no point during that meeting, was our accountability ever called into question.

“The Prime Minister promised to update us in one week. It is now 2025. All we needed from PM Davis was for him to put

his agreement in writing so that our negotiations could finally be completed. Instead, he referred us back to the same entities which have been turning us around for the past three years.”

Mr Davis, in his statement on Thursday, said:

“Three key issues lie at the heart of this impasse, and they must be understood in the context of our collective responsibility as a nation.

“The first issue is the unions’ request for overtime payments without requiring doctors to sign in or out of work. Accountability is central to any organisation, especially one funded by taxpayers. How can we justify paying overtime without verifying who worked and when? This is not just a technicality; it is about protecting the public’s investment in the healthcare system.

“Every Bahamian who pays taxes has a stake in ensuring that public funds are managed responsibly. I ask you, the Bahamian people: Would you agree to pay overtime in your

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‘No intent’ for Bahamas to have China trade deal

By FAY SIMMONS

THE Bahamas Trade Commission’s deputy chair says there are presently “no formal negotiations or intent” for this nation to negotiate and agree a bilateral free trade agreement with China.

Senator Barry Griffin told Tribune Business that, while ties with China represent one of The Bahamas’ “strongest and most enduring trade and economic relationships... at present, there are no formal negotiations or intent to establish a bilateral trade agreement” between the two countries.

Speaking after the Chinese ambassador to The Bahamas floated the possibility of a trade agreement at last week’s Bahamas Business Outlook conference, he said: “However, China remains one of The Bahamas’ strongest and most enduring trade and economic relationships. Both nations continue to engage with each other on a high level on various initiatives to strengthen economic and trade relations.”

Mr Griffin highlighted several trade initiatives the Bahamas has signed with China, including the ChinaCaribbean Economic and Trade Cooperation Forum, Sister Province/Island Relationship and Economic and Technical Cooperation.

“While a formal bilateral trade agreement is not currently being pursued, The Bahamas remains committed to leveraging its strong diplomatic and economic ties with China. These relationships are being utilised to support trade and

investment opportunities that benefit both Bahamian businesses and the broader economy,” said Mr Griffin.

“The Government continues to evaluate opportunities to expand trade relationships globally, always with the aim of ensuring mutual benefits and economic growth for The Bahamas.”

Yan Jiarong, the Chinese ambassador to The Bahamas, told the Bahamas Business Outlook conference China’s trade with The Bahamas had more than doubled in the 11 months to end-November 2024, increasing by 172 percent year-over-year to around $1.24bn.

Disclosing that “normal” goods trade volume between China and The Bahamas is around $500m annually, she acknowledged that this was “not a very high percentage” of this nation’s roughly $3.5bn annual import bill and asserted there are opportunities for trade and investment co-operation between the two countries to be “further strengthened”.

“We’ve learnt the barriers to deepening Bahamas-China trade cooperation,” Ms Jiarong said. “First of all, it’s the long distance, the high transport costs, and time consuming and inconvenient travel between our two countries.

“Secondly, it’s because The Bahamas is not a member of the World Trade Organisation (WTO). The Bahamas is not a member of the WTO, so that makes the tariffs on Bahamian products exported to China very high. For example, both Jamaica and Barbados are WTO members, so their lobster export tariff to

China is 7 percent but, for The Bahamas, the export tariff is 70 percent.”

Suggesting that there need to be discussions between China and The Bahamas at the policymaker level, the Chinese ambassador said that for this nation to become a full WTO member will require “very complicated” negotiations with other countries. She also hinted at uncertainty over “whether the Bahamas can sign a [bilateral] free trade agreement with China.

Mr Griffin, meanwhile, reiterated the Davis administration is not looking at The Bahamas becoming a full member of the World Trade Organisation (WTO) and is instead focused on existing trade agreements to support economic growth

“In May 2023, minister Michael Halkitis stated that full accession to the WTO is presently not a priority for this government. This position remains unchanged, as our focus continues to be on strengthening and optimising the trade frameworks already in place to support Bahamian businesses and the economy at large,” said Mr Griffin

“So, while trade remains a central focus of this government’s agenda, full accession to the WTO is not a current priority. Instead, our efforts are directed towards maximising the benefits of existing trade agreements, educating stakeholders and strengthening bilateral trade relationships to support the growth and development of the Bahamian economy.”

Mr Griffin added that although there are currently no plans to sign on to WTO, local representatives remain “actively engaged” with the rules-based

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authority for global trade and other international organisations to ensure The Bahamas aligns with international best practices in trade policy and execution.

Mr Griffin said The Bahamas is part of the Caribbean Basin Initiative (CBI) with the US, the Economic Partnership Agreement (EPA) with the European Union, the EPA with the United Kingdom, and the Samoa Agreement with Africa and the EU.

He said while the agreements provide “significant opportunities” for Bahamian businesses there is still “substantial untapped potential”, and the Government is prioritising compliance with these agreements and actively educating the public on how to utilise them effectively. Trade workshops and seminars, public awareness campaigns and technical assistance have been launched to assist entrepreneurs seeking to enter international markets.

“In parallel, the Government is also leveraging our strong diplomatic relationships with countries and regions worldwide. By fostering bilateral trade relationships and exploring

markets where there are minimal trade barriers, we aim to increase trade opportunities for Bahamian businesses. This approach not only supports

the private sector but also ensures that Bahamian consumers benefit from diversified and competitive markets,” said Mr Griffin.

BAHA MAR TEAMS WITH TOP ARTIST ON JAZZ CLUB

BAHA Mar has teamed with multi-Grammy and Oscar-winning musician, Jon Batiste, to brand the newly-created Jazz Club at the Cable Beach mega resort.

John Batiste’s Jazz Club marks the first time that the artist has lent his name to such a venue. “As with every element at Baha Mar, we are pushing the boundaries of luxury and creativity, and Jon Batiste’s Jazz Club is the culmination of our vision to set a new

Senior

benchmark in entertainment,” said Graeme Davis, Baha Mar’s president. “Our partnership with Jon Batiste, an artist whose vision knows no bounds, was essential to crafting a club that radiates soul. Together, we’ve created a venue poised to become an iconic highlight for our guests and a cultural beacon for The Bahamas.”

Mr Batiste added: “Music has always been my way of bridging worlds, and I’m beyond excited to debut

my first jazz club here at Baha Mar. I love that this space will pay tribute to the Caribbean’s storied musical heritage while inviting a whole new generation to discover jazz. It’s a dream realised, and I can’t wait to share it with the world.”

Drawing inspiration from The Bahamas’ musical history, where African, European and Caribbean sounds intertwine, the jazz club is designed as a homage to local nightlife and the legacy of venues

doctors: PM failed to deliver on his promises

such as The Cat and Fiddle, The Silver Slipper, The Banana Boat and The Buena Vista Club. These names will feature in the club’s VIP rooms, which will showcase images, paraphernalia and publications from the eras when those locations flourished. The venue’s 12,900 square foot, 278-seat space will incorporate design features such as rich stone, decorative metal work and flowing drapery that match Baha Mar’s art collection. An

FROM PAGE B4

business or workplace without proof that the hours were worked? Accountability is not negotiable; it protects the fairness and integrity of the system for everyone.”

Mr Davis then added:

“The second issue involves health insurance. We have offered three comprehensive options to provide healthcare workers with flexibility and choice. These options are designed to address the workers’ needs while ensuring that the system remains financially sustainable.

“Our role as a Government is to find solutions that balance these two priorities. This is not about withholding benefits; it is about offering fair and sustainable options that meet the needs of both workers and the public.

“The third issue is the finalisation of agreements. The Government has shown its readiness to sign agreements and move forward. However, there have been occasions where union representatives have failed to

11-foot LED screen will be positioned at the club’s entrance. Jon Batiste’s Jazz Club will feature a line-up of his favourite local artists as well as renowned international figures. Events and experiences will honour the legacy of Nassau’s historic clubs, celebrating the art and history of music in the Caribbean mixed with Batiste’s career as a curator and multi-genre artist.

Baha Mar said the Jazz Club’s menu will seek to

attend scheduled meetings, causing unnecessary delays. This undermines the process and ultimately prolongs the challenges faced by both workers and the public.”

The CPSA, meanwhile, said it ensured urgent and emergency care was available to those who needed it and it played a vital role in keeping the PMH and Rand Memorial hospitals operational during the 48 hour sick-out that occurred last week.

“The Prime Minister had seen fit to mention our Hippocratic Oath, specifically the principle of non malfeasance, or ‘do no harm’,” the union said. “We the CPSA planned the mitigation strategies to make sure that the hospital was able to provide urgent and emergency care to all who needed it during our recent call-in. We delivered that service because we know our commitment to the Bahamian people.

“This commitment does not mean that we should in any way allow our employers to disrespect and demean us. We are extremely disturbed

combine the flavours of the Caribbean and New Orleans. Highlights will include caviar flights, wagyu beef, bluefin toro and bigeye tuna tacos, alongside Bahamian-inspired bites such as brown butter lobster rolls. Vegan options, such as rice paper tofu wraps with truffle maitake, and desserts like a beignet flight and cherry pie round out the offerings.

by the very suggestion that we are not committed to the care and welfare of our patients, especially when we toil daily in a public system which is consistently plagued with insufficient manpower, equipment and other needed resources.”

Asserting that it will be

“vindicated”, the CPSA said:

“The current state of affairs could have been avoided if PM Davis was a man of his word, and respected our time, expertise and commitment as professionals. Nevertheless, we look forward to the CPSA being vindicated in our upcoming Supreme Court hearing on January 28, 2025.

“Meanwhile, we, the CPSA, wish to thank not only our families, colleagues and affiliates, but also the many members of the public who rallied to our defense in the face of this grave injustice to us as health care providers. We appreciate you, and hope to have your continued understanding and support as we forge ahead.”

JOHN BATISTE’S JAZZ CLUB

JOHN BATISTE

IMF: Gov’t maxed out on Central Bank borrowings

to meet its deficit financing needs for the period between July and September 2024. According to the IMF, this took the Government’s total borrowings from the banking regulator to the equivalent of 2 percent of gross domestic product (GDP) by October 2024 - a sum likely close to $300m.

This, the Fund added, also brought the Government’s Central Bank borrowings to their legal statutory limit of around 15.5 percent of the former’s average or estimated ordinary revenue. This has occurred despite a general policy thrust to reduce the Government’s dependence on credit from the Central Bank.

“Since June, there has been an upswing in the reliance on Central Bank advances - reaching 2 percent of GDP in October - as

financial sector liquidity has been increasingly deployed to lend to the private sector, including through domestic issuances of higher-yielding corporate securities associated with the electricity sector reform,” the IMF’s Article IV report revealed. “As of October, advances from the Central Bank were at the legal ceiling set by the Central Bank Act, which is higher than that of regional peers. The planned fiscal consolidation would allow the Central Bank to reduce its existing holdings of government securities and facilitate a reduction in the ceiling on advances.

“Even then, and considering the small size of new domestic currency financing sought by the central government in fiscal year 2024-2025 ($368.5m), systemic liquidity is expected to remain high with cash and cash reserves held by domestic banks

$2bn above the minimum reserve requirement as of September.” It is unclear whether the Davis administration subsequently reduced its Central Bank reliance after October as no fiscal reports have been released beyond September and the 2024-2025 first quarter. It is now unlikely to release any further fiscalrelated information until the mid-year Budget which is typically presented towards the end of February.

However, the IMF’s revelations are likely to provoke renewed fiscal scrutiny by the Opposition, which last year said it had written to John Rolle, the Central Bank’s governor, seeking confirmation of whether the Government was compliant with legal limits on borrowings from the Central Bank. Mr Rolle confirmed to this newspaper that it was within its restrictions.

Tribune Business last year revealed a sharp $158.9m in net government borrowings from the Central Bank during the 2024-2025 first quarter, based on a Ministry of Finance report. The report said that “among domestic creditors, liabilities to the Central Bank advanced by $118.6m (13.6 percent) for a dominant 1.4 percentage point boost in share to 15.3 percent” of total outstanding domestic or Bahamian dollar debt owed by the Government.

The IMF, meanwhile, suggested that The Bahamas introduce what it described as a “a well-defined ‘escape clause’ to “allow a temporary increase in the limit on Central Bank advances in exceptional, emergency circumstances”.

Noting what it described as previous monetary and fiscal policy recommendations made to the

Government, it said these included reducing “the limit on Central Bank financing of the Government to help strengthen the credibility of the exchange rate regime, perhaps with the introduction of a well-designed ‘escape clause’ that would be triggered in exceptional circumstances”.

When it came to progress towards achieving this goal, the IMF added: “The legal limit on Central Bank financing of the Government was reduced by the amendments to the Central Bank Act in 2023, but it is still higher than the ones in regional peers. A welldesigned ‘escape clause’ has not been introduced yet.”

The Government, in response to the IMF assessment, agreed that reducing Central Bank advances to the Government would reduce the $2bn excess liquidity in the Bahamian banking system but added that this would take time to achieve.

“The authorities concur that reducing the stock of outstanding Central Bank credit to the Government would reduce domestic liquidity. However, this must be managed over the medium-term. They agreed with the need to introduce an ‘escape clause’ to allow for a temporary increase in the limit on Central Bank advances in exceptional, emergency circumstances,” the Fund added.

“High domestic liquidity would limit the usefulness of inter-bank repos (repurchase agreements) and other liquidity management tools in the near-term, but increased private sector credit would reduce systemic liquidity over the mediumterm. Further, better co-ordination between private and public sector borrowers on the timing of debt issuance would permit greater access to available liquidity for both.”

Property and rents out-pace Bahamian wages seven-fold

incomes and wages. Higher construction costs, difficulties in accessing mortgage financing, a reduced supply of land particularly in New Providence, and escalating prices have worsened these fears.

Keith Bell, minister of housing and urban renewal, told last year’s Exuma Business Outlook conference that The Bahamas is suffering from a “12,000-plus” shortage of units and even went so far as to suggest ““there’s no such thing as affordable housing” in present market conditions.

The IMF’s report said there were numerous factors behind this nation’s housing affordability and home ownership issues.

It pointed out that the supply of new residential housing in The Bahamas has declined ever since the 2008-2009 global recession, shrinking to a low of 607 unit completions in 2023. This, the IMF added, represented a 64.4 percent - or almost two-thirds decline - compared to this nation’s 21st century “peak” of 1,705 home completions in 2006.

The ability of Bahamians to access mortgage financing for home construction or purchases has also declined since that same recession, the Fund added. Yet despite this, and a drop in average interest rates for residential mortgages, “average monthly payments” on such loans have risen “more rapidly” since - further worsening affordability woes.

The IMF also implicitly criticised under-investment in affordable housing by the Minnis administration, noting that its investment in this area fell to “a low” equivalent to 0.02 percent of Bahamian gross domestic product (GDP) or economic output in 2021. It compared this unfavourably to the Caribbean’s average 1.3 percent of GDP investment in this sector.

Since then, the Davis administration has touted the development of

communities such as the $20m Renaissance at Carmichael subdivision, as well as others located elsewhere in New Providence, Abaco and Eleuthera. However, this is still insufficient, and the IMF urged the Government to unlock private capital and investment to narrow the housing availability gap via public-private partnerships (PPPs).

However, while acknowledging the explosive growth of short-term vacation rentals, with registered properties having increased in number by 78.2 percent in the six-and-a-half years to August 2024, the IMF stopped short of blaming the sector’s expansion for all The Bahamas’ housing affordability and availability woes.

In particular, it pointed out that short-term vacation rentals accounted for under 5 percent of The Bahamas’ total residential dwellings inventory at year-end 2022. And it acknowledged that vacation rental owners, including Bahamians, have benefited from higher yields and returns that averaged 30 percent between 2018 to 2023 compared to just a 2 percent rise in property prices and long-term rentals for the same period.

The Fund, though, did warn against offering too many incentives for property owners to enter the vacation rental market as over-heating this sector will “crowd out” residential housing investments.

“The Bahamas has witnessed impressive growth in the short-term rental market since 2018 despite slowing growth in the stock of residential housing,” the IMF report found. “As of August 2024, there were 7,265 listings of short-term rentals across The Bahamas - up from 4,076 at January 2018 - spread across the archipelago.

“Moreover, growth has been the strongest for properties classified as apartments, condos or lofts, with the number of listings more than doubling over the same period. This growth has been

NOTICE is hereby given that SHASHANA WILLIAMS of #329A Carmichael Road, New Providence, The Bahamas, 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 13th day of January, 2025 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.

particularly strong in The Bahamas’ most populated islands, with impressive growth in the Exumas, in particular. However, the stock of short-term rental properties accounted for less than 5 percent of the total stock of dwelling units in The Bahamas at the end of 2022.”

The higher rental rates and returns available has encouraged many property owners, especially in the Family Islands, to target the vacation segment and move away from long-term leases to locals. Many resorts have complained that this has resulted in higher prices, and a lack of suitable available accommodation, that has made it difficult to attract the staff they require for efficient operations.

“High rental rates and strong revenue growth have incentivised investment in the short-term rental market. The sharp increase in the supply of short-term tourism accommodation helped to offset the 9 percent decline in hotel room capacity between 2018 and 2023, supporting the sharp rebound in stay-over arrivals post-Hurricane Dorian and the pandemic,” the IMF said.

“At the same time, homeowners have benefited from additional rental income, with the average daily rate on short-term rentals rising faster between 2018 and 2023 (30 percent) than the implied price of real estate, owner occupied and actual rents activities (2 percent) over the same period. Average short-term daily rates vary widely across islands, with particularly high prices in the Exumas.”

Pointing to other housing market bottlenecks, the IMF report identified what it described as “financing constraints”. It added: “The number of new residential mortgage commitments for single dwellings, and duplex

and row dwellings, has trended downward since 2008.

“Moreover, while employee compensation per capita has remained almost unchanged compared to 2012, average monthly payments on residential mortgages have increased more rapidly despite the secular decline in average interest rates for residential mortgages over the same period. Mortgage applications recorded the lowest approval rate of all credit categories in the 2024 first half, standing at 54.3 percent.

“Most application denials were due largely to low credit scores, constraints on banks’ lending outside of internal policy, underemployment, the applicant’s prior history of delinquency on prior loans, higher debt service ratios, insufficient working history in the current job, the bank’s inability to verfiy the applicant’s income and inadequate funds for a down payment.”

And, according to the IMF, housing supply has failed to keep pace with demand and population growth. “The supply of new housing has trended downward since the global financial crisis. An assessment in 2000 on housing needs estimated that, to meet future housing demands, the housing stock would have to rise by 2,378 units annually between 2000 and 2011,” the Fund’s report found.

“The actual stock of dwelling units increased in line with these recommendations during the proposed timeframe. However, since then, the number of residential construction completions contracted sharply, reaching 607 completions in 2023 from a peak of 1,705 in 2006.”

Suggesting there was “room” for greater

PUBLIC NOTICE

TO CHANGE

BY DEED POLL

The Public is hereby advised that I, MARJORIE MACHELL FOX of the Western District of New Providence, The Bahamas, intend to change my name to MARJORIE MICHELLE FOX If there are any objections to this change of name by Deed Poll, you may write such objections to the Chief Passport Offcer, P.O.Box N-742, Nassau, The Bahamas no later than thirty (30) days after the date of publication of this notice.

NOTICE is hereby given that DAVIA JANINE CHAMBERS of P.O. Box EE-15292, #52 Bahama Close, New Providence, The Bahamas, 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 13th day of January, 2025 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.

government involvement and support in addressing residential housing supply and affordability, the IMF acknowledged that the Bahamas Mortgage Corporation’s ability to provide financing for new homeowners is limited due to “high delinquency rates” with its existing portfolio that have “constrained lending capacity”.

“The Government’s spending on housing falls short of that of its regional neighbours. In 2021, central government spending on housing and community amenities declined to a low of just 0.02 percent of GDP, compared to 1.3 percent for an average of Caribbean peers, and down from 0.11 percent of GDP in 2008,” the Fund said.

“Alleviating supply constraints and increasing public spending on affordable public housing may help to improve housing affordability in The Bahamas. Incentivising private investment combined with additional public investment in affordable housing would help to address rising demand in New Providence due to increasing population density.

“It would also alleviate housing shortages in Grand Bahama and the

Family Islands exacerbated by previous natural disasters. However, care should be taken to ensure that additional initiatives meant to encourage growth in short-term rentals do not inadvertently crowd out investments in residential housing. Finally, easing access to credit for residents would also support increased home ownership.”

Pointing out that The Bahamas’ population “increased sharply” through 13 percent growth between 2010 and 2022, the IMF said this expansion was especially pronounced on New Providence at 20 percent while similar rates were enjoyed by Bimini, the Berry Islands and Acklins.

“Despite the rise in total population, the average household size remained relatively unchanged since the last census. However, the average household in New Providence increased from 3.5 to 3.7 persons between 2010 and 2022, with the increases most prominent in the coastal districts of Fort Charlotte and Freetown, and the already-densely populated neighbourhoods of Englerston and Bain & Grants Town,” the Fund added.

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NOTICE is hereby given that GAYNEL JOHNSON of Ridgeland Park, New Providence, The Bahamas, 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 20th day of January, 2025 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.

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NOTICE is hereby given that ANDRE CESAIRE of Rupert Dean Lane, Nassau, The Bahamas, 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 20th day of January, 2025 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.

‘Business ease fix just not so simple’

and Business Licence fees, you come into a real, serious debate about what is revenue and how do you recognise revenue,” he explained.

“These are issues that accountants are arguing about. These issues were not in The Bahamas before VAT, before the Business Licence. These were not issues. Second, the fact of the matter is, in terms of VAT, every decision you make you have to think about VAT.

“The point I’m making is that the Bahamian economy has fundamentally changed. It’s become a lot more complex. We can anticipate it becoming even more so, not less; I don’t care which political party is in power.”

While certain ease of business reforms may appear simple, and easy to effect looking in from the outside, Sir Franklyn said established structures and processes are often more difficult and time-consuming to change.

The Arawak Homes chairman cited land transactions as an example, pointing out that despite the Government’s move to create a system of registered land in The Bahamas this reform will take years to bear fruit. And, in the meantime, parties to such a deal will still

IMF: BAHAMAS’

FROM PAGE B1

And, while describing The Bahamas’ ambitions to achieve a 50 percent debt-toGDP ratio by 2030-2031 as a useful “anchor” or target for fiscal policy, the IMF report again voiced scepticism that this will be achieved purely by tax enforcement/compliance alone and in the absence of further measures that would include new and/ or increased taxes.

require the services of surveyors, attorneys and other professionals to ensure land parcel boundaries are agreed and clear ownership title established.

Referring to Sunshine Holdings, he told Tribune Business: “We’re in the middle of a transaction with a bank. The bank has been ready to close for months. There’s no issue. We are prepared to close, but the process of doing all the stuff, the tax certificates, all of those things, we can’t close. Thank God our corporate group is in a position to function without having to draw down on the bank’s funds.

“It ain’t like someone set out to complicate the system, but the fact is this has to do with some things that ain’t going to get simpler.... I think the discussion on the ‘ease of doing business’ in The Bahamas is hopelessly simplistic, and it’s likely to become more complex, not less, and that’s without reference to any government; no matter who is in power.

“The process of identifying land parcels takes time. It’s not simple. When you hear these discussions on the ease of doing business, in my opinion, lest the private sector not be unrealistically simplistic, there’s no point in harking for the good old days and what we had when

the accountant joined from Trinidad. The world has changed, and it’s not getting simpler by wishing for it or the Government passing an Act.”

Sir Franklyn also cited the Government’s recent move to slash the VAT rate on most food items by 50 percent. While beneficial for consumers, especially those on lower incomes, he added that it will introduce further complexity into a tax the private sector is administering on the Government’s behalf, and represents a further move away from the broad-based, minimal to no exemptions, VAT model introduced in 2015.

BISX-listed FOCOL Holdings, which he also chairs, will now have to adjust its systems and pricing to reflect the VAT change in the convenience store portion of its gas stations. “It’s only getting more complicated,” Sir Franklyn added. “Talk about VAT, a regime where there were few exemptions. Just think about what the announcements made by the Prime Minister last week will do to the system.

“People have to adjust their accounting systems. FOCOL has to make adjustments to the food sold in its convenience stores. It’s a different set of book-keeping.

We now have to adjust our accounting system to reflect that. The auditors have to say we did it right. The auditors have to get involved, the tax people. It may sound simple but it’s not simple. That’s the point.

“For years there was a reason why in The Bahamas most government revenues came in from Customs duties. The fact of the matter is that was simple to administer. Show me your invoice. People cheat on the invoice but that’s a separate matter. That was a simple system to administer,” Sir Franklyn added.

“The more new taxes you introduce, the more exemptions you have in those taxes, the more and very different interpretations you are prepared to accept on those taxes, you make life more complicated. Ain’t no point wishing for the good old days.”

Sir Franklyn, urging the Bahamian private sector to distinguish between ease of business concerns “that I don’t understand and some aspects that I think are more complex than the discussion is allowing us to entertain”, nevertheless said there were some areas on government permitting and approvals where this nation performs better than major first world developed countries.

DEBT ‘DISTRESS HIGH RISK’ WITH NO NEW TAXES

“I had a meeting just last evening with executives from a large international company and the partners from a large Canadian law firm,” he revealed. “One of the partners said he could not believe what he was hearing. We are negotiating a contract, and the length of time to get a permit in The Bahamas is defined in months.

“That partner said the same discussion in Canada, the length of time to get that permit will be years, not months. We are drafting a contract with ‘Partner A’ that gives so many months to get the permit and the parties see that as reasonable.... What would be reasonable to get a permit in The Bahamas is defined in weeks and months, whereas in Canada it’s defined in months and years. This is no simple matter.”

The Bahamas Chamber of Commerce and Employers Confederation (BCCEC), meanwhile, said it was “elated to hear that the Prime Minister would like to meet with us to discuss matters relative to the business community, including the ease of doing business and unfair business practices, among many other things”.

Dr Leo Rolle, its chief executive, said in a statement: “Many of these issues relate to interactions with government agencies or are influenced by government agencies. We are hoping for

a fruitful engagement as we represent the interest of the business community in an effort to improve the ease of doing business for businesses and members of the public.”

He was responding to the Prime Minister’s Bahamas Business Outlook conference pledge to meet with the Chamber “because creating a system that works for everyone requires genuine collaboration. It cannot be done in isolation; it must happen through meaningful partnership,” Mr Davis said.

“I want to hear directly from the business community about the frustrations you face, the roadblocks that slow you down, and the changes you believe are necessary to move us forward. Together, we can identify these issues and decisive steps to remove the barriers standing in the way of Bahamian entrepreneurs and businesses.

“If there are policies or systems we’ve put in place that are not working as intended, I want to know. My door is open to rethinking and improving our approach. This is the kind of partnership I believe in - a government that listens, learns and adapts to meet the needs of those driving our economy. Let’s iron out these challenges together and build a more efficient, business-friendly environment that benefits all Bahamians.”

over the medium-term,” the IMF added.

The Article IV report noted that 40 percent of the Government’s Bahamian dollar is due to be refinanced this year, and added that this nation remains highly exposed to Dorian-type hurricanes that have the ability to blow a hole in any fiscal year Budget.

However, the IMF also forecast that “spreads” on The Bahamas’ external foreign currency bond debt, meaning the difference between the interest rates this nation has to pay overseas investors holding those notes and what the US Treasury pays on its bonds,

The Fund warned especially that “public debt and gross financing needs” of the Government remain high, and it is still exposed to so-called ‘rollover risk’, meaning the possibility that a major institutional investor may elect not to accept refinancing of its existing debt and demand that it be paid out all the principal owed.

could narrow by up to 2.4 percentage points come 2029 if this nation can improve its credit rating via “sustained and credible” fiscal consolidation efforts.

The Government, though, is under no obligation or pressure to accept or adopt the IMF’s recommendations. A number are likely to prove unpalatable, especially any increase in the VAT rate or other new and/ or increased taxes, given the Prime Minister’s focus on reducing the cost of living and how his administration touted its reduction immediately after they took office.

And many observers would argue that implementing any IMF reform package in full comes at great cost

to the living standards and livelihoods enjoyed by a country’s people given that they invariably involve some form of austerity measures based on theory rather than the practical impact of their implementation. And the Davis administration, in response to the IMF’s Article IV assessment, again reiterated its longstanding position against any new and/or increased taxes by holding to the faith that improved tax administration, enforcement and compliance methods will enable it to hit the 25 percent revenue-to-GDP target set for 2025-2026 along with other deficit and related fiscal goals.

“The authorities expect that the implementation of these measures will result in an improvement in the Budgetary balance to a surplus of 2.8 percent of GDP in fiscal year 202526 and a further reduction in the debt-to-GDP ratio below 65 percent of GDP by fiscal year 2026-2027,” said a report to the IMF’s executive Board meeting on January 13, 2025.

“The authorities [The Bahamas] remain firmly committed to achieving their fiscal and debt targets. Encouraged by the revenue generated from recent administrative and compliance efforts, they are optimistic about reaching their medium-term revenue targets without additional policy measures.

“On expenditure, the authorities agree with the need for additional spending in priority areas, including to support climate adaptation efforts. They are confident that planned reforms - including to the civil service pension system - will help to achieve expenditure targets.”

However, the IMF itself is less optimistic than the Government, although the latter has proven it wrong before including on the 2023-2024 deficit outcome. Referring to its proposals, the Fund said: “Under current policies, the risk of sovereign stress remains high with both public debt and gross financing needs high and vulnerable to adverse shocks.

“The recommended fiscal adjustment is, though, feasible and would put debt and gross financing needs on firm downward trajectories.” The IMF forecast that The Bahamas could generate extra revenues, equivalent to 1.5 percent of GDP in 2025-2026 and rising to 3.6 percent in 20282029, through a combination of corporate and personal income tax, reducing real property tax breaks and cutting other tax exemptions.

Besides yielding revenues estimated as equivalent to 0.1 percent of GDP by eliminating the $60,000 real property ‘cap’ on high-end homes, the Fund also suggested it could gain double this sum or 0.2 percent of economic output by ending the VAT exemption for web shops. And it recommended “replacing the Business Licence fee with a 15 percent profits tax on large domestic firms, while allowing for the full expensing of investment and an unlimited carry over of losses”, as this “could raise revenues without disincentivising new investments. It could be expected to yield an additional 1.25 percent of GDP in revenue by fiscal year 2019.

“A new personal income tax with a top marginal rate similar to that of the corporate income tax could be applied on the top 10 percent of the income distribution which would help reduce incentives to reclassify profits as labour income. Such a tax would yield 2 percent of GDP in revenues

Acknowledging that such proposals could be politically difficult to implement with a general election near, as an alternative the Fund recommended raising the VAT rate in line with the Caribbean regional average of 15 percent. While that is estimated to generate a revenue rise equal to 2 percent of GDP, it would probably prove just as unpopular.

“The introduction of corporate and personal income tax regimes would require broad public support and should be complemented with enhancements to administrative and institutional capacity, including training of public sector officials and supporting domestic firms on the transition to profit-based taxation, the IMF added.

“Should these reforms prove difficult to implement, the Government could (as a substitute) raise the VAT rate to 15 percent along with targeted social transfers to compensate the poor.” All these measures have been soundly rejected by the Davis administration already.

However, the Fund said some of these revenue gains also permit public spending increases in “key areas”. For example, expenditure on primary and secondary education could be increased by a sum equal to 0.3 percent of GDP “to train and hire additional teachers including to expand technical and vocational offers, improve student retention rates, and conduct a national learning assessment”.

Other areas that the IMF recommended for spending increases was a 0.3 percent of GDP rise in resources allocated to social services to help “the most vulnerable, including for training and internships of at-risk youth.

And it called for an outlay equal to 1.5 percent of GDP on climate resilient infrastructure “to build more resilient roads, bridges, public buildings and public housing to address rising demand for housing in New Providence and housing shortages in Grand Bahama and the Family Islands that were exacerbated by Hurricane Dorian”.

“[The] proposed fiscal adjustment and implementation of various supply side reforms would reduce debt to 50 percent of GDP by fiscal year 2030-2031 This would reduce sovereign spreads, ease financing conditions and increase the likelihood of a rating upgrade,” the IMF said.

“While real GDP growth would initially slow due to the near-term fiscal consolidation, per capita incomes would be around 1 percent higher than under staff’s baseline by fiscal year 2030-2031. Extending consolidation efforts beyond fiscal year 2030-2031 could unlock additional resources for climate adaptation while keeping central government debt below 50 percent of GDP. “

Tesla. Because they're so massive in size, their movements carry more weight on the S&P 500 and other indexes than other stocks.

By STAN CHOE AP Business Writer

U.S. stock indexes closed their best week in two months with a flourish on Friday.

The S&P 500 climbed 1% to clinch its first winning week in the last three.

The Dow Jones Industrial

Average rose 334 points, or 0.8%, and the Nasdaq composite rallied 1.5%.

SLB helped lead the market after the provider of services to oilfields delivered bigger profit and revenue for the end of 2024 than analysts expected. It jumped 6.1% after it also raised its dividend by 3.6% and said it's returning $2.3 billion to its investors by buying back its own stock.

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NOTICE is hereby given that JERMAINE NICHOLAS BRADSHAW CHAMBERS of P.O. Box EE-15292, #52 Bahama Close, New Providence, The Bahamas, 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 13th day of January, 2025 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.

The most forceful pushes upward came from Big Tech stocks. All the companies in what's come to be known as the " Magnificent Seven " rose: Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and

The Magnificent Seven have been under pressure recently because of criticism their stock prices may have shot too high after leading the market for so many years. Such worries grew after Treasury yields jumped in the bond market. Higher yields hurt prices for all kinds of investments, particularly those seen as the most expensive.

But stocks broadly got a lift this week from an encouraging report on U.S. inflation, which raised hopes that the Federal Reserve may deliver more

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NOTICE is hereby given that RICHARD COOK of #1 Russell Lane Hopetown, Abaco, The Bahamas, 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 17th day of January, 2025 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.

cuts to interest rates this year. More such cuts, which began in September, would ease the brakes off the economy and boost prices for investments, though they can also give inflation more fuel.

Wall Street has been lurching down and up in recent weeks as economic reports pushed traders to revamp their expectations about what the Fed will do with rates. Lower worries about inflation have sent Treasury yields down and stocks up, while worsening worries about inflation have triggered the opposite reaction.

Treasury yields eased sharply this past week, and the 10-year Treasury yield eased further on Friday. It's at 4.61%, down from 4.62% late Thursday and from 4.76% a week earlier.

Still, even with this week's better-than-expected readout on inflation, some on Wall Street remain skeptical about the chances for more cuts. With the U.S. economy in solid overall shape, "you shouldn't fix what's not broken," Bank of America economists Claudio Irigoyen and Antonio Gabriel said in a BofA Global Research report.

They also pointed to the uncertainties created by "Trumponomics 2.0." Policies pushed by President-elect Donald Trump could help push up

inflation, or at least expectations for it, including widespread tariffs and tax cuts for an economy that's already growing.

Prices for all kinds of investments from stocks to cryptocurrencies have swung amid the uncertainty following an initial burst after Election Day. On one hand are hopes for stronger profits for companies and greater acceptance of crypto. On the other are worries about a potentially swelling U.S. government deficit and upward pressure on inflation.

Wall Street still sees banks as some of the biggest beneficiaries from a second Trump administration. Besides a potentially stronger economy, which would boost profits for lending, investors expect another Trump term to mean less regulation on banks.

Truist Financial rose 5.9% Friday after joining the list of banks to report better profits for the end of 2024 than analysts expected. The company said its average deposits rose 1.5% during the quarter, and it followed bigger-than-expected profit reports from large rivals like Wells Fargo, Citigroup and others.

Other smaller, regional banks reported mixed results on Friday. Regions Financial fell 1.3%.

TikTok says it's restoring service to US users based

By HALELUYA HADERO Associated Press

on Trump's promised executive order

TIKTOK said Sunday it was restoring service to users in the United States just hours after the popular video-sharing platform went dark in response to a federal ban, which President-elect Donald Trump said he would try to pause by executive order on his first day in office.

Trump said he planned to issue the order to give TikTok's China-based parent company more time to find an approved buyer before the ban takes full effect. He announced the move on his Truth Social account as millions of U.S. TikTok users awoke to discover they could no longer access the TikTok app or platform.

Google and Apple removed the app from their digital stores to comply with the law, which required them to do so if TikTok parent company ByteDance didn't sell its U.S. operation by Sunday. The law, which passed with wide bipartisan support in April, allows for steep fines.

The company that runs TikTok in the U.S. said in a post on X that Trump's post had provided "the necessary clarity and assurance to our service providers that they will face no penalties providing TikTok to over 170 million Americans."

Some users reported soon after TikTok's statement that the app was working again, and TikTok's website appeared to be functioning for at least some people. Even as TikTok was flickering back on, it remained unavailable for download in Apple and Google's app stores. Neither Apple or Google responded to messages seeking comment Sunday.

The law that took effect Sunday required ByteDance to cut ties with the

platform's U.S. operations due to national security concerns posed by the app's Chinese roots. However, the statute gave the sitting president authority to grant a 90-day extension if a viable sale was underway. Although investors made a few offers, ByteDance previously said it would not sell. Trump said his order would "extend the period of time before the law's prohibitions take effect" and "confirm that there will be no liability for any company that helped keep TikTok from going dark before my order."

"Americans deserve to see our exciting Inauguration on Monday, as well as other events and conversations," Trump wrote.

It was not immediately clear how Trump's promised action would fare from a legal standpoint since the U.S. Supreme Court unanimously upheld the ban on Friday and the statute came into force the day before Trump's return to the White House.

Some lawmakers who voted for the sale-of-ban law, including some of Trump's fellow Republicans, remain in favor of it. Sen. Tom Cotton of Arkansas warned companies Sunday not to provide TikTok with the technical support it needs to function as it did before.

"Any company that hosts, distributes, services, or otherwise facilitates communist-controlled TikTok could face hundreds of billions of dollars of ruinous liability under the law, not just from (the Justice Department), but also under securities law, shareholder lawsuits, and state AGs," Cotton wrote on X.

"Think about it."

The on-and-off availability of TikTok came after the Supreme Court ruled that the risk to national security

“A law banning TikTok has been enacted in the U.S. Unfortunately that means you can’t use TikTok for now.”

TikTok pop-up message

posed by TikTok's ties to China outweighed concerns about limiting speech by the app or its millions of U.S. users.

When TikTok users in the U.S. tried to watch or post videos on the platform as of Saturday night, they saw a pop-up message under the headline, "Sorry, TikTok isn't available right now."

"A law banning TikTok has been enacted in the U.S.," the message said. "Unfortunately that means you can't use TikTok for now." The service interruption TikTok instituted hours early caught many users by surprise. Experts had said the law as written did not require TikTok to take down its platform, only for app stores to remove

it. Current users had been expected to continue to have access to videos until a lack of updates caused the app to stop working.

"The community on TikTok is like nothing else, so it's weird to not have that anymore," content creator Tiffany Watson, 20, said Sunday.

Watson said she had been in denial about the looming shutdown and with the space time on her hands plans to focus on bolstering her presence on Instagram and YouTube.

"There are still people out there who want beauty content," Watson said.

The company's app also was removed late Saturday from prominent app stores. Apple told customers with

its devices that it also took down other apps developed by ByteDance. They included Lemon8, which some influencers had promoted as a TikTok alternative, the popular video editing app CapCut and photo editor Hypic.

"Apple is obligated to follow the laws in the jurisdictions where it operates," the company said.

Trump's plan to spare TikTok on his first day in office reflected the ban's coincidental timing and the unusual mix of political considerations surrounding a social media platform that first gained popularity with often silly videos featuring dances and music clips.

During his first presidential term, Trump in 2020 issued executive orders banning TikTok and the Chinese messaging app WeChat, moves that courts subsequently blocked. When momentum for a ban emerged in Congress last year, however, he opposed the legislation. Trump has

since credited TikTok with helping him win support from young voters in last year's presidential election. Despite its own part in getting the nationwide ban enacted, the Biden administration stressed in recent days that it did not intend to implement or enforce the ban before Trump takes office on Monday. In the nine months since Congress passed the saleor-ban law, no clear buyers emerged, and ByteDance publicly insisted it would not sell TikTok. But Trump said he hoped his administration could facilitate a deal to "save" the app.

TikTok CEO Shou Chew is expected to attend Trump's inauguration with a prime seating location. Chew posted a video late Saturday thanking Trump for his commitment to work with the company to keep the app available in the U.S. and taking a "strong stand for the First Amendment and against arbitrary censorship."

A MESSAGE reading “Sorry, TikTok isn’t available right now” is displayed from the TikTok app on a cell phone screen on Saturday, Jan. 18, 2025, in Los Angeles.

Photo:Andy Bao/AP