New Category : Finance
Mon, Oct 2nd 2023, 09:26 AM
By the end of November, the Bahamas Development Bank (BDB) will be in a position to begin issuing money to businesses it has held in its funding pipeline thanks to a $30 million capitalization for the bank from the African Export-Import Bank, BDB Chairman Senator Quinton Lightbourne said Friday.
Lightbourne said there are several businesses in the pipeline that will be helped by this first capitalization of the bank in almost two decades.
"Today, I stand before you to address a momentous occasion in the history of The Bahamas, and at the Bahamas Development Bank, an institution that has played a pivotal role in the shaping of the economic landscape of our beloved nation," said Lightbourne.
"... We gather here to witness the historic transformation, a new day at the Bahamas Development Bank.
"It has been a long and arduous journey for the Bahamas Development Bank since the last capitalization approval in 2005."
He said the new management of the bank has "essentially rebuilt" the institution and brought best practices and policies to its operation and governance.
"The impact of this capital infusion will reverberate throughout our beautiful country, not just within New Providence," said Lightbourne.
"The Bahamas Development Bank is a development bank for the entire nation and we are committed to ensuring that every chance at every corner and every island within our archipelago that the benefits of this realization is revitalized.
"We are currently collaborating with partners to create real time opportunities for business growth, particularly focusing on Family Island development.
"We are dedicated to enhancing food security, by investing in smart cultural solutions, reducing our dependency on imports, and increasing our exports by expanding the value-added manufacturing sector.
"Moreover we aim to diversify and expand our tourism product through unforgettable experiences for our visitors."
According to Lightbourne, the bank will also continue with a strong focus on energy efficiency and renewable energy so as to remain aligned with the Progressive Liberal Party's Blueprint for Change, which he said is rooted in the UN's Sustainable Development Goals of 2030.
Fri, Sep 29th 2023, 09:44 AM
Thu, Sep 28th 2023, 10:35 AM
U.S. Embassy Nassau has selected Lakeisha Rolle to receive a $20,000 grant to implementImpact 200: Business Skills for Beginners, Youth Entrepreneurship Program. Rolle’s program was selected amongst 17 applications from U.S. Government exchange program alumni.
Rolle, The Financial Academy founder, is a 2022 alumna of the U.S. Embassy Nassau’s YoungLeaders of the Americas (YLAI) Fellowship.
YLAI promotes U.S. business models, increases trade, encourages job creation, and buildslasting and sustainable networks of young entrepreneurs, business and social leaders acrossLatin America, the Caribbean, Canada, and the United States.
Through Rolle’s Impact 200 program, participants will learn the fundamentals of financialliteracy, the benefits of entrepreneurship and how to take a business idea from concept toreality. The program will utilize the U.S. Junior Achievement (JA) Be Entrepreneurialcurriculum.
“Your project supports young entrepreneurs in The Bahamas. This is something the U.S.Embassy fully supports as well and so it gives me great pleasure that you are the winner ofthe Small Grants Competition,” said U.S. Embassy Chargé d’Affaires, Usha Pitts in making thesurprise announcement to Rolle on Tuesday, September 26, at the Embassy.
As a financial literacy educator, it is important to Rolle to teach children how to earn moneynot only as a worker but also through entrepreneurial pursuits.
“This program is designed to take those students from business startup to the phase wherethey are able to produce their product and make a profit,” said Rolle.
During the seven-week, after school program participants will evaluate their business ideas,map out a business plan, project revenue and expenses and ultimately, establishphilanthropic projects. Lakeisha plans to launch the program in January 2024.
Thu, Sep 21st 2023, 10:30 AM
S&P predicts ongoing economic growth momentum Decline in fiscal deficit expected to continue Debt projected to fall to about 73.4 percent of GDP
In a full analysis of the Bahamian economy and the government's fiscal position, S&P Global Ratings, the credit rating agency, projects that economic growth will support government revenues and help contain government expenditures, leading to smaller fiscal deficits over the next 12 months.
"We expect the domestic market and multilateral lenders will meet the country's relatively large financing needs," S&P said in its latest report.
It said: "The Bahamian economy has shown strong growth through 2023, supported by continued recovery in tourism, although we expect medium-term growth prospects will return to historical levels.
"The Bahamas' (B+/Stable/B) economy has significantly improved since the contraction in 2020, spurred by the important tourism sector, and we expect that GDP per capita will recover to close to 2019 levels by year-end 2023.
"The strong recovery has been supported by its key U.S. source market, where recessionary headwinds did not weigh on growth over the past year. We continue to see a steady flow of tourism-related investments, combined with prospects to expand airline capacity and flights into the country.
"We expect that fiscal deficits will continue to decline and the pace of nominal debt growth will slow, translating into a gradual reduction of our net debt-to-GDP ratio, although the interest burden will remain high.
"The expanding economy is supporting government revenues, which increased almost 12 percent in the most recent fiscal year.
"While some of the pandemic-related programs are ending, the interest burden, combined with other spending rigidities, including state-owned enterprise (SOE) outlays, continue to weigh on expenditures."
S&P expects the deficit reached 4.6 percent of GDP in fiscal year 2022-2023 (ended June 30, 2023) and projects it will further fall to 3.2 percent in fiscal year 2023-2024.
The S&P report, dated September 18, does not constitute a rating action. The Bahamas' rating remains at B+/stable as assigned by S&P on November 12, 2021.
While its outlook for the Bahamian economy is stable, S&P presented a downside scenario.
It said, "We could lower the ratings in the next 12 months should economic performance lag, pointing to GDP per capita remaining below our expectations. We could also lower the ratings if the sovereign's access to external liquidity were to deteriorate unexpectedly."
There was also an upside scenario.
S&P said, "We could raise the ratings in the next 12 months if the government advances faster than we expect to enact meaningful public finance reform, demonstrating an ability to raise revenues and leading to sustained near-balanced financial results and improved economic prospects."
The agency expects a stronger 2023 given continued recovery and expansion in tourism.
S&P said, "The Bahamas' economic recovery during 2022 was robust, with GDP growth estimated at 14.4 percent. The country benefited from its proximity to the U.S., its largest tourism market.
"Total arrivals into the country in 2022 were 7.0 million compared to 2.1 million the year before, which is about 96 percent of 2019 levels.
"Tourists from the U.S. continued to remain the major contributor, with more modest recovery occurring in markets such as Canada and Europe.
"We expect the growth momentum to continue through 2023, backed by continued recovery from the pandemic. The number of inbound arrivals reached five million in the first half of the year, compared to three million during the same period in 2022.
"Furthermore, there are new flights that will be launched from the U.S. to The Bahamas, as well as a continued pipeline of tourism-related projects planned and underway over the next few years."
S&P noted, "Although these projects will continue to support growth, they also reinforce dependence on the volatile tourism sector. The economy remains concentrated in tourism, which typically contributes at least 40 percent of GDP."
The agency added, "We expect real GDP growth next year to return to historical levels of 1.8 percent. GDP per capita will be $36,456 in 2024."
S&P said that in the next 12 months, it does not anticipate material new revenue-generating tax measures, and expects the government to rely on growth to provide enough buoyancy to revenues to support the budgetary outturn.
"Improvements to tax collections (via a dedicated revenue enhancement unit, among other initiatives) and its property tax roll (through which it expects to generate an additional $120 million a year) should support fiscal performance over the next few years," the agency said.
"On the other hand, we believe that material spending cuts will be more difficult to implement.
"Efforts going back many years have failed to reform the country's SOEs, which remain a drain on government finances.
"The government typically spends about 15 percent of its total expenditures on ongoing subventions, while it has also been called on to support guaranteed debt of SOEs.
"At the same time, the increasing interest payments on debt, exacerbated by the pandemic and high interest rates, have weighed on expenditures.
"We expect declining deficits and a growing economy will lead to a slow decline in The Bahamas' net debt burden and financing needs. However, the country remains vulnerable to refinancing risks based on its significant short-term debt, with almost 28 percent of debt maturing in the next year, although the government expects this will be largely rolled over in the domestic market."
S&P expects the government's net debt will fall to about 73.4 percent of GDP by the end of 2024 from 82.6 percent in 2020, while interest payments will remain above 15 percent of government revenues for the next three or more years.
Tue, Sep 19th 2023, 09:50 AM
The Finance in Common Summit recently held in Colombia gathered national development banks (NDBs), including The Bahamas Development Bank (BDB), and emphasized the major role they play as a link between international and domestic finance related to project development financing and micro, small and medium enterprises (MSME) lending.
The event noted that $4-5 trillion is needed annually for the sustainable development goals (SDGs) to be accomplished globally, private finance will be key to sustainable, inclusive development and NBDs can lead in de-risking and structuring opportunities that are attractive to private financiers. It also stressed that the global focus on SDGs related to factors such as inclusion, climate and gender must consider the unique needs of small island developing states (SIDS) such as The Bahamas.
The Bahamas Development Bank’s Manager of Strategic Development and Initiatives, Sumayyah Cargill, was invited to speak on a panel organized by the European Investment Climate Reform Facility at the summit alongside representatives from Belize, South Africa, and France. President of the Caribbean Development Bank, Hyginus Leon, delivered the keynote address. During Ms. Cargill’s presentation on the impact of technical assistance, she underscored the importance of a strong NDB to progress national economic and social goals.
BDB has positioned itself as the bridge to channel international funding to meet national needs. The bank’s steady growth has resulted in the implementation of necessary structures and increased its capacity to engage with international funders and lead in both packaging projects and bundling smaller projects to attract private financing.
Ms. Cargill said, “SIDS have unique vulnerabilities. We are tasked with building resiliency for the increasingly devastating impacts of climate change while also trying to lift the standards of living for our people. These challenges can be transformed into opportunities with the right investments. However, weak project implementation capacity and a deficit in bankable projects are holding back growth. A well-functioning development bank is a robust mechanism to execute policy driven projects and channel financing to sustainable development. BDB is rising to that challenge with the support of the international community. In the last four years, we have created new policies and programs, integrated the SDGs into operations and have committed to climate and gender equitable financing. We are confident that we have laid a foundation that will see us become a regional leader in innovative, sustainable financing.”
BDB’s improved structuring and increased capacity has been supported by partners such as the Caribbean Development Bank, Green Climate Funds’ readiness program, United Nations Women and Investment Climate Reform Facility.
Highlighting the bank’s recent unveiling of international financing opportunities for creatives, Ms. Cargill added, “long term relationships with multilaterals can have rebounding impact. From our experience, there is a direct line between technical assistance from multilateral to real opportunities for entrepreneurs.
“BDB has far to go but already has a lot to share in many areas. We recognize how important it is for us to not just act as a channel for funding but for mainstreaming SDGs, climate, and gender equitable principles into the wider economy. As a NDB, we are learning to lead in transmitting the values set at the international level because we are that critical bridge.”
BDB is seeking accreditation as the first national direct access entity for the Green Climate Fund, is the national coordinating authority for Build Bank Better, a joint SDG fund project, is a member of the National Climate Change Committee, and was elected to chair the SDG Technical Committee for Economic Prosperity in the Office of the Prime Minister.
Ms. Cargill underscored, “Well-executed technical assistance is a major driver of BDB’s growth. Likewise, partnerships are core to who we are and we remain open to collaborating on solutions to the challenges we face, and to do mutually-beneficial business. Strengthening The Bahamas Development Bank strengthens The Bahamas.”