The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The deputy prime minister yesterday said the government will “certainly this week” receive around $500m in bridge financing from multilateral institutions as part of its $1.3bn deficit funding strategy.

K Peter Turnquest, pictured, speaking to reporters outside the Cabinet office, said: “All of our immediate borrowing plans should be completed, if not already completed, this week, and so from a short-term perspective that bridge financing we have been talking about, we should have that in hand - if not already certainly this week.

“If memory serves it’s going to be $500m or somewhere around there. As we talked about, the longer-term financing, which will probably take the form of a bond offering, we are working towards that for the fall.”

The International Monetary Fund (IMF) previously reported that apart from its $252m loan, the proceeds of which have already been used to cover the government’s expenses at the end of the now-closed 2019-2020 fiscal year, The Bahamas was targeting $180m and $50m provided by the Inter-American Development Bank (IDB) and Caribbean Development Bank (CDB), respectively.

The government was also said to be eyeing $88m from foreign lenders under a World Bank guarantee initiative, with the combined sums covering some $570m - or nearly 60 percent - of The Bahamas’ balance of payments financing needs.

“They are also seeking two guarantees from the World Bank’s Multilateral Investment Guarantee Agency (MIGA) for COVID-19 healthcare expenses and capital spending. The associated guaranteed commercial bank loans would have maturities exceeding five years,” the IMF said of the government’s plans.

“Discussions are ongoing with the Inter-American Development Bank (IDB) for new credit facilities amounting to $320m in fiscal year 2020-2021 for policy loans and investment loans, with maturities exceeding 20 years.”

Addressing the fiscal impact of the latest COVID-19 related restrictions, Mr Turnquest said: “Unfortunately, yes, we are in an extended period of shutdown from a tourism standpoint and, as we have always said, this does pose a risk to our overall economic plan for the medium-term going into the new year.

“However, we have also said that our plan built in that, between the July and November timeframe, we did not project a big bump in terms of tourist revenue, and so from that perspective we are still, more or less, where we anticipated where we would be and on track with respect to the revenue budget.”

“At last check we were on target with respect to the actuals, and we will see what happens at the end of this month once those numbers come in. Getting down into the fall, if we continue along the path that we are on then we are going to have to do some reassessments, and those reassessments can come in any form in terms of our cutting back on some of the recurrent expenditure or even on some of the capital side,” Mr Turnquest added.

“At this point, we don’t anticipate that that would be necessary, and we have had some very good discussions over the last week, including some with foreign partners, so we are comfortable where we are - certainly not happy, and we are as concerned as everybody else - but we believe at the moment that what we are seeing is pretty much in line with what we expected.”

Hoping that the lockdowns will be over relatively quickly so Bahamians can get back to the “domestic economy”, Mr Turnquest added: “We saw that during the last lockdown or after the last lockdown, where domestic business was actually picking up and providing a relatively stable tax background for us.

“So hopefully we get past this particular stage, arrest the increase in the cases and get back to some sense of normalcy in the domestic economy. Now we wait again for the appropriate opportunity to reopen the borders for our tourism.”