The Tribune

By NATARIO McKENZIE

Tribune Business

Reporter

nmckenzie@tribunemedia.net

THE BAHAMAS must find ways to promote and develop the small and medium-sized business sector to help grow its economy according to a top private sector representative, who described such initiatives yesterday as “critical”.

Gowon Bowe, the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) chairman, told Tribune Business in the wake of the Central Bank’s Monthly Economic and Financial Developments April 2016 report that the country must be more strategic on how it attracts foreign direct investment and ensure that there is a trickle-down effect to spur local investment.

The Central Bank said recently that it expects that the domestic economy will register “only marginal gains” this year following a construction-led contraction in output in 2015. “This development should reflect a modest improvement in the tourism sector, amid on-going growth in key source markets, additional airlift and cultural initiatives; while activity in the construction sector should be supported by several foreign investment projects in both the capital and the Family Islands,” said the regulator.

“When we talk about how we get the economy growing, this is where the small and medium-sized businesses initiatives are going to be critical,” Mr Bowe said. “We have to find ways to encourage the SME class. There are a numbers of factors there such as how do we make it easier to establish a business, looking at the approval process as well as the licensing so businesses can get up and running. We have to look at the funding mechanism for small businesses. We know that, in the country, credit from the banks and insurance companies is not an easy source and it often requires a tremendous amount of collateral to do so. We have to see how we can spur on funding mechanisms like venture funds. We have to turn our attention to how we get financial resources flowing through small and medium sized businesses.

“The other aspect is looking at the taxes and burdens on small businesses, the business licence regime, being taxed on gross revenues as opposed to profit. For a small business that is just growing there may be very little profits but if they are paying business licence fees on a growing revenue base it really doesn’t incentivise a business to stay open.”

Mr Bowe noted that innovation and creativity must be encouraged. “We often say it but when we look around there are a lot of young people with ideas and it’s really about aligning the stars with the ease of being able to start a business, the availability of funding for well thought out business plans as well as a taxation system doesn’t cripple them,” he said.