NASSAU, BAHAMAS — The Economic Recovery Committee (ERC) has recommended the implementation of a national savings scheme as a means of boosting financial resilience among Bahamians and reducing their level of dependence on the state.
The recommendation was highlighted in a summary report by the ERC tabled in Parliament yesterday.
The report read: “There is an apparent need to boost financial resilience among Bahamians, to empower them to be able to withstand times of uncertainty, as is the case in the aftermath of the COVID-19 pandemic. “The greater the level of financial resilience among Bahamians, the less reliant they are on the state, which ultimately creates fiscal space for the Government to address its medium-term prospects for growth. In addition, having a robust level of financial resiliency will mitigate—to some extent—the negative economic impact external shocks can have on the domestic economy, as more people will have financial buffers thereby supporting continued consumption and economic growth.”
It continues: “Through Central Bank and Ministry of Finance efforts, establishing a national savings scheme for incremental retail-level investments in Government bonds. Also, requiring domestic banks to develop a more attractive thrift product, such as limited functionality savings accounts.”
The ERC has also recommended the imposition of economy-wide regulations on maximum leverage and debt service ratios allowed in personal lending ie mortgages and consumer credit, based on the Central Bank’s prescribed prudential limits and allow the credit bureau to replace the current reliance on salary assignments for personal loans. Prime Minister Dr Hubert Minnis previously revealed that the ERC had submitted 163 recommendations.
He told Parliament today that not all recommendations will be accepted.
The ERC was appointed to provide actionable recommendations to address the economic impact of the COVID-19 pandemic on The Bahamas. The committee was co-chaired by Acting Financial Secretary Marlon Johnson and financial services veteran Kenwood Kerr.