The Tribune

By NEIL HARTNELL

TRIBUNE Business Editor

nhartnell@tribunemedia.net

PRODUCTIVITY reforms can drive “the creation of 10,000 new jobs” across key Bahamian industries in the next five years, a newly-released study is asserting, while setting the target of growing worker output by 24 percent.

The National Productivity Task Force, in its report on developing a “road map and action plan” for establishing the long-awaited National Productivity Innovation and Competitiveness Council, set itself the goal of generating “a sustainable productivity growth rate” that expands annual Bahamian gross domestic product (GDP) by 2.5 percent every year through 2031.

And, during the same five-year period, the Task Force is targeting a $13,600 improvement in average output per Bahamian worker - from the present $56,400 towards $70,000 - through improved skills, productivity and enhanced efficiency.

Acknowledging that the $70,000 will still lag the $92,300 average output per worker for developed and “higher income economies”, the Task Force’s report also targeted a 30 percent improvement in digital literacy among Bahamian youth by 2028.

The study, dated June 15, 2026, and presented to Pia Glover-Rolle, now minister for labour, public service and National Insurance, added that it is also targeting a 15-position improvement in The Bahamas’ global competitiveness ranking over the upcoming period through 2031.

However, it warned that “several challenges persist that pose risks” to the Council’s creation, identifying these as potential delays in passing the necessary enabling legislation through Parliament; politics; lack of funding and budget constraints; and “stakeholder resistance” in both the public and private sectors.

Productivity, which measures the cost and efficiency by which production inputs, such as labour, capital and technology, generate goods and services, has long been viewed as a key constraint on The Bahamas’ economic competitiveness.

The Council’s creation, which has been much talked-about, would establish a body tasked with devising strategies, and overseeing, efforts to boost workforce and overall economic productivity alongside improved “innovation and competitiveness”.

The Task Force, which was formed to develop the legislative, policy and practical framework governing how the Council will function and operate, asserted that its report sets out “a robust five-year strategic plan” through to 2031 along with a governance structure and how all stakeholders will participate.

“The five-year strategic plan is structured around five core pillars: Skills development, social dialogue, labour governance, digital transformation and the cultivation of a national productivity culture,” the Task Force, headed by former Bahamas Chamber of Commerce chief executive, Edison Sumner, said in its report.

“Ambitious yet achievable targets include increasing youth digital literacy by 30 percent in 2028, and expanding technical and vocational training programmes nationwide. Operational readiness is targeted with the appointment of an executive director and the formation of specialised secretariat teams by mid-2027.

“The Task Force aims to drive a sustainable productivity growth rate contributing an additional 2.5 percent annually to the national GDP over the next five years,” the Task Force study continued.

“This enhanced productivity is projected to directly support the creation of approximately 10,000 new jobs across key sectors including tourism, financial services and manufacturing, strengthening the labour market and fostering inclusive economic development.

“In parallel, the Task Force targets an improvement in The Bahamas’ global competitiveness ranking by at least 15 positions within the same period. This uplift will reflect enhanced business efficiency, innovation adoption and a more skilled workforce, positioning The Bahamas as a more attractive destination for investment and trade.”

The Task Force added that such targets, including the goal of increasing average output per Bahamian worker by 24 percent from the present $56,400 “towards $70,000-plus by 2031”, set clear and measurable goals against which the country can judge its productivity improvement progress.

However, it acknowledged that The Bahamas will have some way to go to match developed, high income earning economies even if it achieves the targeted $70,000 average output per worker within the next five years.

Noting that figure would still be more than $20,000 short of the top-performing economies, the Task Force study conceded that “The Bahamas faces significant productivity challenges that impede sustainable economic growth and social development”. Many of these lie in deep-rooted structural obstacles.

“Productivity is a fundamental determinant of a country’s economic prosperity and social well-being,” the report said. “For The Bahamas, recognising productivity within its specific national context is essential to overcoming barriers to growth and enhancing competitiveness on both regional and global stages.

“Labour productivity in The Bahamas exceeds the average for the Caribbean region but remains considerably below that of high income countries. Data from the Caribbean Development Bank and The Bahamas’ national accounts annual report 2019 show that between 2015 and 2019, the average output per worker in The Bahamas was approximately $56,400, while comparable figures for high income economies averaged around $92,300.”

Detailing the implications of this difference, the Task Force’s report said: “This significant gap underscores the substantial potential for productivity improvements that could drive economic expansion and raise living standards.

“Despite this promise, The Bahamas has faced mostly stagnant or even negative productivity growth in five of the six years leading up to 2019. This reflects deeper structural challenges within key sectors of the economy that hinder efficiency and limit the capacity to generate new employment opportunities.

“The country’s rising real wages, while beneficial for workers, have further constrained competitiveness, especially impacting small and medium-sized enterprises (SMEs), which constitute a major segment of the national economy. These dynamics present a complex environment where targeted interventions are necessary to unlock productivity gains and sustainable development.”

Many of the structural obstacles to productivity are well-known. The Government’s own Fiscal Strategy Report unveiled economic projections suggesting that - without productivity-related reforms - The Bahamas’ unemployment rate will “plateau” at around 9 percent with no further reduction in the jobless rate possible.

“Productivity challenges in The Bahamas are driven by a systemic skills gap, heavy reliance on the service and tourism sectors and high operational costs,” the Task Force’s report added. “Resolving these issues is critical to making the local workforce more competitive.

“A persistent gap exists between the skills possessed by the labour force and those demanded by the labour market. This mismatch is especially pronounced on soft skills - such as communication, problem solving and digital literacy - as well as in trade skills like construction, which are vital for the service-oriented and knowledge-based sectors dominating the Bahamian economy.”

The study added that many micro, small and medium-sized enterprises (MSMEs) “lack formal training”, which inhibits their capacity to grow sustainably, innovate and adapt to changing market conditions. And limited digital adoption leaves Bahamian businesses increasingly unprepared to meet global economic trends.

“The lag in digital adoption restricts the ability of Bahamian enterprises to compete effectively and respond to economic disruptions,” the Task Force study added. “Electricity rates are among the highest in the region. 

“Combined with expensive inter-island shipping, high overhead costs and supply chain delays heavily erode profitability and stifle business efficiency.” The report also cited “bureaucracy and red tape” as a major productivity barrier, including “prolonged wait times” for Business Licences and regulatory approvals.

“Collectively, these challenges constrain competitiveness and economic resilience, especially in the aftermath of external shocks such as the COVID-19 pandemic and hurricane events that have affected the region. Addressing these foundational gaps through targeted policies and capacity building is essential to fostering sustainable productivity growth and enhancing The Bahamas’ economic competitiveness.”

Calling for “urgent post-election government endorsement to accelerate legislative approval and secure adequate funding” for the Productivity Council and its work, the Task Force warned that numerous potential challenges remain to its formation and work.

Noting efforts already underway to boost productivity by diversifying the Bahamian economy away from its “over-reliance on the tourism sector”, the study added: “Although positive progress is being made, the said initiatives suffer from a number of constraints and structural impediments that are so severe as to undermine their execution and potential impact.

“Many of the strategic initiatives currently being implemented by The Bahamas lack adequate frameworks for their effective execution and monitoring for assessment and evaluation. In this regard, there is an insufficiency of mechanisms for the monitoring and evaluation of progress, and for assessing results of various sectors as embodied by the National Development Plan currently under implementation by government.”