NASSAU,BAHAMAS The Government’s 2026/2027 Budget will be measured not by what it announces, but by whether it begins to change the country’s economic fortunes, according to a financial analyst.
Hubert Edwards who shared his analysis on LinkedIn in a post titled The 2026/27 Budget: What to Expect and What Is Needed, examined the Government’s SOAR framework — Security, Opportunity, Affordability and Reform — introduced by the Prime Minister on election night.
“On election night, the Prime Minister introduced the acronym SOAR, Security, which encompasses national security through to personal safety; Opportunity, which means growing the economy and investing in people; Affordability, which means pushing back on inflation and lowering prices; and Reform, which means modernising governance and the broader policy landscape,” Edwards wrote.
“It is widely anticipated that the upcoming budget will be organised around these four pillars. The critical questions, however, will not be whether the pillars are the right ones, they are, but how the initiatives beneath them are sequenced, how substantive the underlying policy positions prove to be, and whether the commitments made can be implemented and sustained over time.”
Edwards said reform underpins the entire framework. “There is an important structural point worth noting: Security, Opportunity, and Affordability rest fundamentally on Reform.”
“In an ideal setting, reform would come first, it is the foundation that makes the other three durable. But governing is not done in ideal settings.”
He added that competing pressures require simultaneous delivery across all four pillars.
“The budget must therefore walk a difficult line: advancing reform without waiting for it to be complete, while delivering visible progress on security, opportunity, and affordability in the near term.”
Edwards stressed that outcomes matter more than announcements.
“The budget should be judged not by what it announces, but by whether it begins to change the country’s economic fortunes.”
He noted that the administration enters its second term with strong political capital and improved fiscal credibility.
“The administration enters its second term with stronger political capital than any administration since 1997. The upcoming budget arrives against a backdrop of credit upgrades, acknowledged fiscal progress, and a renewed mandate.”
He expects a confidence-driven fiscal presentation focused on reform continuity and stability.
“Expect a budget that conveys confidence, measured in tone, reform-oriented in language, and designed to consolidate gains without disturbing a fragile but improving fiscal trajectory.”
Edwards pointed to major policy directions outlined in the Speech from the Throne, including competition legislation, investment incentive reform, binding SOE business plans, land registry modernisation, energy reform measures, a National Productivity Council, and implementation of the Freedom of Information Act.
“These are not modest proposals. Translated faithfully into budgetary allocations and administrative machinery, they will represent meaningful progress in the reform sequencing of the country’s needs.”
On revenues, Edwards expects continuity in the tax structure.
“On the revenue side, expect continued reliance on VAT, customs duties, and business licence fees, the established pillars of the tax architecture that has served the country well but remains structurally insufficient.”
“There are likely to be increased ‘fees’ in various areas but no direct upward shift in any of the major taxes.”
He added that the Domestic Minimum Top-Up Tax (DMTT) will provide additional revenue but is not structural reform.
“It is an instrument of response, not a structural tax reform.” On expenditure, Edwards expects targeted relief measures.
“These include cost-of-living support, housing initiatives, Family Island infrastructure commitments, energy-related duty reductions and property tax adjustments.”
However, he warned these allocations could limit fiscal flexibility. “These are necessary and politically important but extremely defining allocations, as they have the potential to put at risk the fiscal space necessary for effective reforms.”
Edwards said the broader challenge is structural weakness in growth. “The country needs a budget that honestly confronts a prevailing reality: The Bahamas is fiscally improving but structurally underpowered.”
He cited IMF projections estimating medium-term growth potential at around 1.5 percent.
“Tourism recovery, financial services activity, and construction have performed creditably since the pandemic. They cannot, on their own, eliminate the structural deficit in growth potential.”
Edwards called for a shift in fiscal thinking, particularly around debt targets.
“The hard target of 50 percent debt-to-GDP by FY2030/31 should be revisited.”
“That target, as currently configured, is not viable without either significant new taxation or expenditure compression that would retard the very growth the country needs.”
Instead, he proposed a growth-focused fiscal framework.
“A more pragmatic framework leans into growth rather than surplus accumulation, deploys deficit financing strategically and lays the foundation for productive investment.”
He said fiscal policy should focus on a 10–15-year growth trajectory.
“The Budget should set out a 10 – 15-year growth trajectory as its primary organising principle of fiscal policy.”
Edwards identified state-owned enterprise reform as a key opportunity.
“The public sector SOE portfolio represents approximately five hundred million dollars per year in expenditure. That is a significant reservoir of productivity gains, if managed with serious corporate discipline.”
He called for stronger governance and accountability frameworks.
“This budget should establish precise accountability frameworks and clear timelines for results.”
“Successful SOE reform is among the richest available sources of fiscal space.”
He added that SOE reform must drive broader cultural change in the public sector.
“Critical to SOE reform must be the underlying principle that all initiatives are geared at fundamentally shifting the prevailing culture associated with them and public sector.”
Energy reform, he said, is central to competitiveness.
“Continued energy reform and clarity is arguably the master variable. Cheaper, more reliable electricity is a precondition for almost every economic ambition.”
He pointed to impacts across tourism, households, manufacturing, agriculture, and digital enterprise.
The budget, he said, should include clear energy investment and subsidy reform plans with defined timelines.
Edwards also called for a national conversation on tax reform.
“It should frame the question publicly: what tax base does The Bahamas require to fund its development ambitions sustainably over the next fifteen years?”
He said global tax changes are already reshaping the financial services landscape.
“The budget communiqué should begin that conversation now.”
On execution, Edwards warned that The Bahamas often struggles to convert policy into outcomes.
“The Bahamas is rich with policy ideas but has not always demonstrated the administrative capacity to convert good ideas into lasting outcomes.”
He stressed that key initiatives — including investment policy reforms, FDI compliance systems, land registry modernisation, and development approval timelines — must be properly funded.
“The budget must resource these initiatives concretely.”
“They are part of the path to the new economic architecture the country needs.”
Edwards concluded that stability alone is not enough if growth remains weak.
“A country that is stable at sub-two percent growth potential is not holding steady, it is declining on a managed schedule.”
“The budget should be brutally honest in embracing this, and bold enough to chart credible alternative paths to shift this trajectory.”
