THIS WEEK IN THE BAHAMAS BY ELCOTT COLEBY
17 – 21 October
Parliament approves $150 million loan to fund Matthew’s recovery
Parliament met on Wednesday of this week and as expected, viagra sales Matthew took center stage with the government moving a resolution for a loan of up to $150m to defray the costs of this country’s recovery and reconstruction efforts as a result of not only Hurricane Matthew, but for last year’s Hurricane Joaquin.
Moving the resolution was State Minister for Finance the Hon. Michael Halkitis.
Prime Minister and Minister of Finance the Rt. Hon. Perry Christie took the opportunity to update the House and the country on the status of the country’s recovery efforts. As expected, the nation’s chief revealed that the losses to The Bahamas from Hurricanes Matthew and Joaquin could total hundreds of millions of dollars.
“Up to the present time, we were indicating that Hurricane Joaquin was over $100 million in cost,” Prime Minister Christie said. “The Ministry of Finance is projecting $200 million as the cost for Hurricane Joaquin.
“In fact we have a running debate between the Financial Secretary and myself, who’s projecting that the loss to the country — combined loss of Matthew and Joaquin — would be some $800 million.” For the sake of clarity, this figure (of $800 million) includes damage and cost of recovery to both public and private properties where private insurance companies will defray most of this cost as claims in the hundreds of millions of dollars are filed, processed and paid. BIA chief Emmanuel Komolafe has already estimated Matthew’s losses at some $400 million.
Commenting on the financing mechanism which will be in the form of a bond issue by the Central Bank, Mr. Christie noted that ordinary citizens and residents of The Bahamas have expressed an interest in participating and as such, the Ministry of Finance has designed a two tranche financing — a tranche for commercial banks of $120 million and tranche for the public of $30 million.
“In addition, the Central Bank has recommended that non-residents with a nexus to The Bahamas be allowed to participate in this offering,” Prime Minister Christie said.
This recommendation by the Central Bank, had been accepted by the Government the day before, he said. Those funds would be exclusively used for the reconstruction effort, he added.
Prime Minister Christie again reviewed the governments 180 days Exigency Order, issued effective October 7, 2016 and expires on the 4th April 20917. The Order allows individuals from New Providence, Grand Bahama, Berry Islands and North and Central Andros to import materials duty and VAT free to repair their dwellings, he said.
“In addition” said Mr. Christie, “it also allowed for the duty free importation of generators, motor vehicles and for the first time bottled water for a two-month period,” he added.
Prime Minister Christie also pointed out that for the first time he had authorized the delegation of approval of duty-free status by the National Emergency Management Agency (NEMA).
This means, he noted, that individuals impacted by the storm upon the completion of the relevant NEMA form can import goods or purchase goods duty or VAT free without the prior approval of NEMA.
“The only exceptions to this rule are for purchases or imports where the value is greater than $10,000 or for those individuals seeking to replace motor vehicles,” he said. “The Exigency Order has also been granted for 180 days a departure from the traditional 90 days.”
The Government has also, for the first time, incentivized the business community by agreeing to give — after talks with the Chamber of Commerce — a mechanism by which businesses can see a reduction in their tax bill if they donate to the Bahamas Disaster Relief Fund, Rebuild Bahamas or any other charity duly recognized by the Government, Prime Minister Christie said. Legislation, he added, would soon be presented to the House to give legal effect to this agreement.
“These steps, impressive as they may be, in the normal course do not provide the direct impetus which we believe is necessary to start the rebuilding effort,” he noted.
He again posed the question (for national consideration) as to whether it was time for the Government to consider some levy to offset the cost of hurricane reconstruction, which had grown exponentially as the country developed and because of climate change which has increased the frequency of negative impacts of the weather on this country.
Mr. Christie also pointed out the need to continue to service the debt in a tax neutral manner despite the borrowing to fund recovery and reconstruction efforts. There should be no change in existing rates said the Prime Minister.
“This assurance was done by the way of study done on behalf of the Ministry by external experts,” Prime Minister Christie said. “This study was commissioned and presented to the Ministry prior to (the) arrival of Hurricane Matthew.”
“The key finding of the study is that with a more structured compliance programme, the revenue base could grow by 10% in the short term and up to 20% in the medium term of 3 to 5 years,” he added.
The loan resolution was unanimously passed by the House. CLICK HERE TO READ MORE…