The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The government yesterday sought to show its small and medium-sized enterprise (SME) focus is delivering results by reiterating that almost 14,000 such businesses have been formed since the 2017 general election.

Drawing on business licence data, the Ministry of Finance said the 58 percent increase in SME numbers between 2017 and 2020 had helped to sustain economic activity and create new jobs amid the COVID-19 pandemic’s devastating impact on tourism.

“Since coming to office we have dedicated an unprecedented amount of resources to support the start-up and expansion of SMEs. We are prioritising private sector development because we understand SMEs are crucial for sustainable economic growth,” said Kwasi Thompson, pictured, minister of state for finance, in a statement.

“The Bahamian entrepreneurial spirit has always been a backbone for our country’s economy, but for the first time the government has recognised this by targeting millions of dollars in investment to ensure that spirit continues to flourish and lift up our economy.”

The Ministry of Finance statement is a repeat of what the prime minister said in leading-off the budget debate in the House of Assembly. “When this administration came to office, the business license register reflected a total of 24,241 small and medium-sized businesses,” Dr Hubert Minnis said then.

“I am proud to say that the efforts made to support small businesses by this administration have been fruitful. The number of registered small and medium-sized businesses has grown by 58 percent since 2017, from 24,241 to 38,227 at the end of 2020.”

However, the data does not show the net increase in SMEs established in The Bahamas over this period. The “net” is calculated by subtracting those businesses that failed or closed down over that four-year period from the ones that were newly-created.

Meanwhile, the Ministry of Finance said the Access Accelerator Small Business Development Centre (SBDC) had approved nearly $60.5m in funding for SMEs as at September. It acknowledged that this funding was largely allocated as part of the “Resilient Bahamas” budget strategy for fiscal year 2020-2021, which focused on keeping small businesses afloat.

The Ministry of Finance pointed out how this support will continue, with the government allocating $35m in the upcoming 2021-2022 fiscal year to support SMEs as part of the $250m it has committed to provide over the next five years.

“We are not only relying on direct financing. Our budget is leveraging the use of tax concessions to promote the continued development of the private sector. We’re providing incentives to expand your business operations through duty-free imports of first stock inventory and other products necessary to small business development,” Mr Thompson added.

“Specifically, in our southern Family Islands, we’ve created tax-free zones to encourage economic growth by way of concessions on materials needed for residential and commercial development and tax breaks on business license fees.”

The government is also planing to expand financing options for SMEs with the imminent crowdfunding regulations, which will allow small businesses access to capital-raising mechanisms that were previously limited to larger firms. Under these new regulations, small businesses will be able to raise up to $5m in capital.

The Ministry of Finance added that the government is also looking to SNE growth to tackle unemployment. Through the government Employee Incentive Programme, businesses can apply for tax credits of up to $400 per week to fund the payrolls of up to ten new employees. The government is hoping to create up to 2,500 new jobs created from this initiative.