The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A leading financial analyst yesterday said the Minnis administration appeared "acutely aware" that it needed to restore Bahamians' faith and confidence in the Budget and other government institutions.

Kenwood Kerr, Providence Advisors' chief executive, told Tribune Business that the Government's public statements showed it understood the urgent need to generate greater GDP growth rates and more jobs.

Suggesting that execution on its strategies remains the key challenge, Mr Kerr said: "The Government is aware of what these challenges are, and based on the pronouncements the Prime Minister enunciated in the Budget, there's a drive to address these things.

"I think they're cognisant of all these issues - to grow the economy, create jobs, pay down the debt, create sustainable energy policies and programmes. These things are recognised. I think they're acutely aware of what the challenges are. It's now execution.

"They have to create a policy thrust in the Budget, and restore the faith of the citizenry in what is happening."

Mr Kerr said economic growth and job creation needed to be the Minnis administration's priorities, but acknowledged that it will "have its hands full this month" with the visits of the International Monetary Fund (IMF) and two credit rating agencies.

One of the latter, Moody's, has placed the Bahamas on 'review' for a potential downgrade to 'junk' status - the second such downgrade of this nation's sovereign creditworthiness within eight to nine months.

Mr Kerr said: "The new administration must demonstrate quickly that it is serious about its budget proclamations, and not only paying lip service."

He suggested that between now and August it needed to show it will "continue to improve the collection of VAT, Business License fees and real property taxes", while making hard decisions about the 6,500 persons added to the civil service by the former Christie administration.

Based on average annual salaries of between $14,300 to $20,000 per persons, the Providence Advisors chief estimated these hirings could have added an estimated $130 million to the Government's annual wage bill.

Mr Kerr said the Government had to ensure public-private partnerships (PPPs) did not create liabilities for itself, and added that energy reform and refinancing of BEC's legacy debts would both boost the economy and cut the national debt.

He also called on the Central Bank to support efforts to reduce the interest rate spread and expand the capital markets.

Besides opening Baha Mar, Mr Kerr added that the Government needed to focus on land registration and reform; creating a Credit Bureau; and divide the Supreme Court into civil and criminal divisions.

He suggested that all three initiatives would contribute to the 'ease of doing business', as well as the "modernization of bankruptcy laws to allow for court-supervised reorganisations" and the creation of a "modern digital infrastructure".