Leader of the Democratic National Alliance (DNA), Arinthia Komolafe, painted a gloomy picture of the economy of Grand Bahama and the rest of the country while bringing remarks as the key guest of the Rotary Club of Freeport recently. She pointed out though that the increasing ease to do business is positive.
She likened the general situation though to a “perfect storm.”
Komolafe is no stranger to Grand Bahama. She informed of having visited the island several times over the past six months and that much of her youth was spent on the island.Komolafe admitted that she was first unsure of what to speak to Grand Bahamians about, being a resident of New Providence, but decided to address challenges of the Grand Bahamian economy which affects the country as a whole.
Those challenges are already well-documented from devastating hurricanes, to much more in Grand. Bahama which she inferred, affects the rest of the country.
“The entire Bahamas has been trapped in a perfect storm of many decades,” she said.
With one of those issues being “under-employment,” she noted that “currently many Bahamians are unable to find jobs due to the lack of available positions or a lack of the appropriate skill sets.”
“Unfortunately, the age group that is largely impacted by this phenomenon are the young people,” she said.
According to Komolafe approximately one out of every four Bahamians will not be able to find work.
She furthered that another part of this perfect storm is the (lack) of ease on doing business, something the government needs to address.
In January of this year, the Ministry of Finance announced that it would roll out a provisional business license in the New Year to significantly reduce the time it takes to start a new business. This was approved by Parliament during the 2018/2019 budget exercise and was to be implemented by the Department of Inland Revenue in the first quarter of 2019.
The provisional license assured that it would take just five days or less to start a new business. This process will be available to all low-risk businesses. It will be valid for 90 days, which means entrepreneurs can be up and running while they work to complete the full business license.
The fee for starting a new business was also removed, eliminating another barrier for entrepreneurs.
In November 2018 The Bahamas stood at 118 of the 190 countries that are rated each year in the World Bank’s Ease of doing Business ranking.
There was gradual improvement, year over year, from 119 in 2017, and 121 in 2016.
Overall, The Bahamas improved its percentage score on the 10 areas assessed for the ease of doing business.
On the other hand, Komolafe said that other aspects of this “perfect storm” include a growing national debt, government inefficiency and lack of transparency in governance as well as the high cost of energy.
She also gave a perspective of Value Added Tax (VAT) which was first implemented in January 2015. VAT is a tax charged on most goods and services that registered businesses provide in The Bahamas. It is also charged on goods and some services that are imported from outside The Bahamas. It is a tax on consumption ultimately paid by the final customer but collected and remitted to the Comptroller of VAT by businesses.
“It is no secret that the implementation of VAT has had a tremendous effect on the Bahamian economy,” she said.
Three and a half years after VAT was implemented in the Bahamas at a rate of 7.5 percent, the government raised the tax to 12 percent.
Komolafe expressed appreciation in addressing the Rotary meeting, acknowledging it was her first time. She thanked the club’s President Darren Cooper for inviting her and enabling her to speak to members about important national issues.