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Exchange Controls To Be ‘Less Of Hindrance’

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JOHN ROLLE

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Central Bank’s governor yesterday pledged to make exchange control restrictions “less and less of a hindrance” to Bahamian investors and companies seeking capital.

John Rolle told the Bahamas Business Outlook conference that the regulator planned to employ the relaxed “framework” implemented in 2017 “a lot more as we move ahead” to enable Bahamian entrepreneurs to access overseas investment in foreign exchange-earning sectors.

Suggesting that there are further plans to “streamline exchange controls”, although he provided no details, the governor added: “We are going to focus a lot more on making sure, in so far as the investment regime is concerned, exchange control is less and less of a hindrance to investment activity.......

“This economy depends on foreign exchange activity, and what we’re doing with foreign exchange is ensuring more stable access and, over time, the Government liberalises more areas where Bahamians have a thirst to invest and do so outside The Bahamas.”

Mr Rolle said the Central Bank planned to build on the exchange control relaxations unveiled in 2017 which opened up certain areas of the economy, and the businesses in them, to greater investment from overseas players.

“We revised a lot of the exchange control restrictions for small and medium-sized businesses being able to raise funding in foreign currency,” he recalled. The governor said there were 12 areas in total, including renewable energy, tourism and financial services, that were especially targeted by this policy change.

“We said to the business community: If you’re dealing with foreign funding or taking on a partnership, the exchange control regime exists to facilitate the [consummation] of those activities, particularly where it will improve The Bahamas’ ability to earn foreign exchange,” Mr Rolle said.

“What’s important now is to use this framework a bit more as we move ahead. When we did the liberalisation, we didn’t wake up the next day and anticipate an influx of funding...” He added that the goal was to give investors and entrepreneurs, as they planned for the long-term, “appreciation that access to foreign funding channels exists for Bahamians.

“We’re going to do more around that,” Mr Rolle continued. “We want the business community to understand that, in so far as strengthening the foreign exchange side of the economy, we are open to a wide range of activities which increase funding.

“It’s very important that in this process we are putting together projects that attract viable funding and business partners. I believe the equity route is very important in this.

“The equity route is very important to exchange control because these investors can provide financing for Bahamas-based business activities understanding the Bahamian legal system protects them and enforces their rights around their investment.”

Mr Rolle said one consequence of greater exchange control liberalisation is that The Bahamas will find itself “competing more and more for Bahamian capital” that it can retain for investments in the local economy.

Elsewhere, he added that The Bahamas needs “to double down and strengthen data protection around financial services” as a result of the expansion of digital transactions including the Central Bank-backed Sand Dollar digital currency.

“What we are comfortable with is ensuring individuals have sovereignty over the information being created,” Mr Rolle said. “What this change is doing is increasing awareness of the public of data privacy and related issues. We are creating and leaving a digital footprint on all electronic transactions we’re doing with debit and credit cards.”

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