PM: “Modest” reopening of the economy already improving government revenues

NASSAU, BAHAMAS — Prime Minister Dr Hubert Minnis said yesterday the “modest” reopening of the economy has already translated into improved revenues for the Treasury in the past month.

During a national address yesterday, Minnis pointed to growing optimism that the economy’s recovery is broadening.

He announced the extension of the unemployment benefit program through January 2021, adding that the government will also extend its food distribution programme for the first quarter of 2021 with an allocation of another $10 million to provide food assistance to the most vulnerable in society.

As he outlined the relaxation of more restrictions heading into the Christmas holiday period, the prime minister said the discipline and collective sacrifices of the majority of Bahamians are translating into fewer COVID-19 cases.

“If we maintain this discipline and if we are able to avoid future major restrictions, it will bode well for an uplift in our economic conditions,” he said.

“Indeed, we have seen that the modest reopening of the economy has already translated into improved revenues for the Treasury in the past month. We have shown that containing the spread of the pandemic, lessens the need for the restrictive containment measures that negatively impact economic activity.”

Minnis continued: “As we enter the holiday season, there is reason for growing optimism that the economic recovery is broadening. The recent decision by major resorts, such as Atlantis, Baha Mar and the Hilton, to reopen their properties will start to restore employment opportunities for the many Bahamians who have either been furloughed or laid off as a result of COVID-19. In addition to restoring incomes and consumption, these re-openings will provide the government with badly needed revenue.”

The prime minister noted that government finances are also under tremendous strain because of “the unplanned unemployment, social and economic support provided by the government to help those in need during this unprecedented time”.

“An improving financial positive outlook is shared by the international capital markets who just last week demonstrated an extremely positive response to the prospects of a reopening Bahamas economy. The recent bond offering was oversubscribed by hundreds of millions of dollars. Because of the strong demand, we were able to secure a 125-basis points reduction in the yield since our last offer. Yet, despite the promising developments, we remain in a very difficult place economically,” said Minnis.

He noted that the government will soon table the 2020 Fiscal Strategy Report, which will highlight the government’s strategic priorities with respect to revenue collection, spending and financing over the upcoming budget and the medium-term horizon.

Minnis said that to help advance his administration’s economic goals and to boost jobs, he will continue to serve as minister of finance for the remainder of this term.

Public Works Minister Desmond Bannister will become deputy prime minister and Senator Kwasi Thompson will become minister of state for finance, he said.

Former banker Nathaniel Beneby will be appointed special advisor in the Office of the Prime Minister to help to drive the recommendations made by the Economic Recovery Committee and to focus on the ease of doing business.