The Tribune

By Neil Hartnell

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas must “stay this course” to regain ‘investment grade’ status, a prominent businessman urged yesterday, after the Inter-American Development Bank (IDB) hailed the country’s ”remarkable fiscal consolidation” and “fast growth” since emerging from COVID-19’s devastation.

Sir Franklyn Wilson, the Arawak Homes and Sunshine Holdings chairman, told Tribune Business that The Bahamas escaping its present ‘junk status with both Moody’s and Standard & Poor’s is “very achievable” if the country maintains its present economic and fiscal policies that focus on sustaining higher growth and eliminating the Government’s annual Budget deficits.

Speaking after the IDB delivered an upbeat assessment of The Bahamas’ post-COVID progress, he acknowledged that - while this nation is “not out of the woods” from either an economic or fiscal perspective - the collective message from the likes of the International Monetary Fund (IMF) and credit rating agencies is that this country is “on the right path” and must “keep doing what you’re doing”.

Sir Franklyn, though, voiced misgivings that “partisan politics” is overshadowing The Bahamas’ recovery progress in the four years since the COVID-19 pandemic ended. He argued that the Opposition is seeking “to distract” from the “mounting evidence”, as supplied by the IMF and IDB, that the economy is performing because it has “no case” to suggest it will do better.

The IDB, in a presentation dated November 19, 2025, said The Bahamas has enjoyed “a period of fast growth” since emerging from COVID-19 restrictions with tourism’s “momentum” - especially in the form of cruise passenger arrivals - continuing through this year after driving the post-pandemic revival.

The presentation by Dr Jose Luis Saboin, which Tribune Business understands was given to a group of Bahamian business leaders and private sector executives, also praised this nation’s post-COVID fiscal consolidation as “remarkable” amid the Davis administration’s forecasts that it will generate a $75.5m Budget surplus, equal to 0.5 percent of gross domestic product (GDP), for the first time in Bahamian history in the current 2025-2026 fiscal year.

The Bahamas was shown as enjoying the “third highest reduction” in its debt-to-GDP ratio in the Caribbean post-COVID, having cut this from around 100 percent in June 2021 to 75.4 percent exactly four years later. A significant part of the improvement, though, was driven by the economy’s post-COVID reflation although smaller deficits, and thus a reduced rate of national debt growth, played its part.

Amid the positives, Dr Saboin noted that The Bahamas’ debt has continued to increase alongside the expansion of tax and other government revenue income. This means that increased taxes have been used to finance the Government’s and public sector’s continued growth, rather than necessarily paying down debt, while interest payments on these liabilities have increased at a faster pace than revenues.

The IDB presentation, which calculated that hurricanes damages/losses and COVID-19 caused primary Budget deficits and the national debt to exceed forecasts by the equivalent of 12.7 percent of GDP over the past decade, warned that The Bahamas “might be exposed to fiscal fatigue” - a condition where a country loses the ability and will to maintain its fiscal consolidation strategy.

Based on current Budget figures, 12.7 percent of GDP is equal to $1.918bn or just shy of a $2bn blow that has been inflicted on The Bahamas and the Government’s finances by a succession of storms over the past ten years - Joaquin in 2015, Matthew in 2016, Irma in 2017 and Dorian in 2019 - plus COVID-19. Dr Saboin’s materials said that while the Government’s fiscal targets “look ambitious”, they are now at the point of “stabilising” its position.

“The fact of the matter is there is such strong independent validation that something good is happening in The Bahamas,” Sir Franklyn told Tribune Business of the IDB assessment. “This is independent validation. This is not just people talking stuff.

“What we have here, the IDB report is being supported by other people; the rating agencies and the IMF. One big Canadian bank (Royal Bank of Canada) had a roadshow with a few dozen business people recently. They said the same thing. Everyone is saying the same thing, which is that the economy of this country has had a remarkable turnaround in the last four years.

“The key point is we are not out of the woods, but if we stay this course the return to ‘investment’ grade standing is very achievable. That’s the simple message that basically all people are saying, and the evidence continues to mount from so many different sources.”

Sir Franklyn, though, argued that the Government has not received due credit for its economic and fiscal policies due to “partisan politics”. He asserted: “The country is so divided that those who see everything through a political lens; there’s too many positives not to see good news.

“When Hubert Ingraham was prime minister he said something which was so true: ‘Good news for the country is bad news for the Opposition.’ When you are in Opposition and the country is doing well, what is your case? When you have no case, you have to find, create a case, and that’s what’s happening in the country today. The Opposition has no case in terms of the performance of the economy.

“Let’s put it this way: The case is not favourable to them.. When you have a country where your basic thing is ‘we can do better’, you have a problem. You have to look for evidence that the current guys are doing bad and we can do better,” the Arawak Homes chairman said.

“But when all the these agencies, independent agencies, are unanimous in their view that the current guys are doing OK, it then puts a burden on those in Opposition. So what you do is that you’ve got to find something to distract. That’s just a function of the division in this country. That’s just the way it is.”

Prime Minister Philip Davis KC has previously acknowledged that not all Bahamians are feeling the benefits and enjoying an improved economy, especially given the post-COVID ‘cost of living’ crisis, and that the Government has more work to do in this area. However, Sir Franklyn called on Bahamians to “differentiate between political jargon and economic analysis” on The Bahamas’ political and economic outlook.

“On the basis of economic analysis, the fact of the matter is there’s this wide consensus, this drum beat of support, for this notion that the Government is doing well in economic terms. That’s the result of analysis, it’s not the result of political jargon,” he added.

“We are not yet at the target of ‘investment’ grade. There’s one more step to go. The drum beat of support from international analysis is saying: ‘Stay this course, keep doing what you’re doing, you’re on the right path. That is the message for the country. Don’t conflate this with partisan politics. This is what independent people are saying.”

Sir Franklyn asserted that escaping ‘junk’ status, and returning to investment grade with Moody’s and Standard & Poor’s (S&P), is “critically, critically, critically, critically important” for The Bahamas as it will make interest payments on the Government’s debt cheaper for taxpayers while also improving the country’s access to financing. And it will also make The Bahamas more attractive for domestic and foreign direct investment (FDI).

“It changes your world when you are investment grade because the process of evaluation changes,” the Arawak Homes chairman said. “Investment grade means people can invest in your instruments, debt instruments, with less process and they’re cheaper. The implications are tremendously favourable.

“So the key is to get back to investment grade, and this drum beat of support is saying you are on the way, you are on the way, so keep it up. That’s what the message is saying. That’s the way I interpret it.” Mr Davis has previously unveiled ambitions to restore The Bahamas’ ‘investment grade’ status by 2028-2029. However, The Bahamas still remains three notches away from escaping so-called ‘junk’ status with S&P and Moody’s.