Finance Minister K Peter Turnquest.
By Neil Hartnell
Tribune Business Editor
The deputy prime minister yesterday argued that every dollar invested in the government’s flagship small business initiative generates an economic impact more than five times’ greater.
KP Turnquest, kicking-off the mid-year budget debate in the House of Assembly, said that every $1 injected into the Small Business Development Centre (SBDC) produces an additional $5.58 in economic growth via the micro, small and medium-sized businesses (MSMEs) it helps to expand.
“All told, it is estimated that for every dollar that is invested in the SBDC by the government, an additional $5.58 is generated in economic growth. This means that every dollar invested in the SBDC creates an extra $5.58 in real dollars on account of the economic activity it creates through the businesses it would have helped,” Mr Turnquest said.
“The average economic impact of entities such as the SBDC around the world is estimated at only $2.33, which suggests that the activities of our own SBDC are guided in a way that garners the most benefit per cost, and in a way that drives our economy at a rate that is higher than its global counterparts.”
Mr Turnquest did not provide the study or empirical basis supporting these figures or assertions, although the amount of figures unveiled yesterday suggests that some kind of economic impact assessment and modelling on the SBDC has been conducted.
Voicing optimism that the SBDC, a three-way partnership between the Government, Chamber of Commerce and University of The Bahamas will have a “truly staggering” economic impact, he added: “Just in the last six months of this year alone – and still very much in its infancy - the SBDC is expected to generate through its development of small businesses approximately 43 jobs, inclusive of new, part-time, and retained jobs.
“Nearly $145,000 in salaries is expected to be created, while some $210,000 is anticipated to be retained. In addition, it is intended to garner the Government some $197,000 in revenue, through VAT, Business License, Customs Duty and NIB payments.
“The SBDC has advised nearly 500 small, new and existing businesses/individuals across The Bahamas. Since its inception, they have invested well over 67,000 hours in advising, training, courses, and research and site visits, “ Mr Turnquest continued.
“Further, there are roughly 61 companies still in the pipeline that are in the developmental stages where they are receiving advice and taking courses to be eligible for funding. It is estimated now that the funding that will be available to them is in the neighbourhood of $7m. This means more companies will be started, more companies will be expanded, and more dreams will be realised.”
Mr Turnquest, though, conceded that the SBDC’s work needed to be accompanied by improvements to The Bahamas’ ease and cost of doing business if the MSMEs it graduates are to become sustainable and thrive.
Touting “substantial” improvements in the time taken to process and approve permits, he said: “Compared to last year, persons now get their Business License 37 percent faster, and renewals 77 percent faster, while the time it takes to get a property conveyance registered has fallen by 44 percent.
“Additionally, it now takes 12 percent less time to get a construction permit approved than it did last year. Thanks to these changes, people are in business faster, construction projects are starting faster, and people are now spending less time transferring properties. These are real time impacts that people are feeling due to the work of this Government.”