04112022 BUSINESS

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MONDAY, APRIL 11, 2022

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PI developer takes on Schooner Bay • Sterling strikes deal to run south Abaco project • Plans to develop boutique hotel, change model • Schooner stakeholders urged: ‘Pull together’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A NASSAU financier/ developer has struck a deal to take over management, and develop a boutique resort, at a south Abaco community once hailed as a sustainable development model for The Bahamas. Sterling Global, which is behind the multi-million dollar Hurricane Hole development on Paradise Island, has partnered with the original Schooner Bay developer to “bring that project where it needs to be” and oversee all aspects of its operations - including sales and marketing - after its progress has stagnated in recent years.

SCHOONER BAY The deal, which was last night confirmed to Tribune Business by multiple sources, and further affirmed by e-mails obtained by this newspaper, will likely see Schooner Bay’s development model alter from that of a pure residential

community to a resort-led development. A note of the April 2, 2022, meeting where Sterling and its senior executives were introduced to Schooner Bay residents and other stakeholders, disclosed that Homeowners Association

SEE PAGE 9

‘Leave us alone and we’ll blow 2018 GDP out water’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net ABACO’S economic output “will come roaring back and blow 2018’s figures out of the water” if the island’s recovery is freed from the Government’s constant rule changes, its Chamber of Commerce president argued yesterday. Ken Hutton told Tribune Business it was “amazing” that the Dorianravaged island’s gross domestic product (GDP) had increased by 55 percent between 2020 and 2021, according to newly-released

KEN HUTTON data from the National Statistical Institute, but asserted that it could “be so much further along” in its recovery if there was

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Gas dealers: 50% margin rise to avoid Easter strike By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net GAS station operators are seeking a 50 percent margin increase and for its calculation to be based on a percentage, as opposed to a fixed amount, amid threats that up to 80 percent of them may strike this Easter weekend. Vasco Bastian, the Bahamas Petroleum Dealers Association’s (BPDA) vice-president, told Tribune Business that station closures could occur this weekend if the Government remains unwilling to adjust a tax structure that dealers say makes it increasingly hard to purchase large

bulk fuel quantities from Esso, Rubis and FOCOL Holdings (Shell) as gas prices rise. He added that he is trying to “hold off” any strike action by members over the Easter weekend given the disruption it would cause over the holiday as well as the potential damage to businesses and the wider Bahamian economy. Mr Bastian said: “These gas station dealers are trying to strike to stop selling diesel and gas. It was going to be this past weekend but it probably won’t be until next weekend during the holiday weekend and, as the BPDA

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Super Value chief: Food price peak ‘in 6 months’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net SUPER Value’s principal is optimistic that soaring global food prices could peak “in six months’ time” as it relies on high warehouse inventories and “forward bookings” to mitigate the impact on Bahamian consumers. Speaking after the United Nations Food and Agriculture Organisation (FAO) revealed that global food prices hit an all-time high in March due to the fall-out from Russia’s war with Ukraine, Rupert Roberts told Tribune Business that the 13-store chain could likely “hold back” some of these increases for several months yet due to stocking up on inventories and advanced purchases. Both Ukraine and Russia are major wheat producers and exporters, and he estimated that the price of stapled such as cooking oil and flour could have jumped by 50 percent

RUPERT ROBERTS compared to 2019 levels whenever the conflict in eastern Europe ends. Prices for fresh fish, such as grouper and snapper, had increased by 23 percent, he added, as fishermen hiked their demands due to the rise in gas prices. With soaring inflation continuing to impact Bahamians’ living standards and disposable incomes, Mr Roberts said of food prices: “The buyers feel we will hit the plateau with high food prices in six months

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PAGE 2, Monday, April 11, 2022

The Moody’s verdict on state of The Bahamas

THE TRIBUNE The Bahamas is standing at the crossroads. In one direction lies growth and development, but the other path is one burdened by debt and the heavy weight imposed by the critical decisions needed to take the country forward. Options are limited, the decisions are time sensitive, and the outcomes, regardless of what they are, will be fundamental to

Bahamian well-being and standards of living. The question this begs is: What are the viable paths? In what direction should the country move? What are the trade-offs that must be made? What are the policy positions that must be brought to bear, and what uncomfortable but necessary conversations must be had? I believe the policymakers, having laid out their debt strategy and projected fiscal performance trajectory, must pay careful attention to any lack of congruence between the two and further articulate how existing tensions between the $10bn-plus national debt and economic growth are being reconciled and managed. In its recent credit report, Moody’s gave its assessment on the recent fiscal projections. The credit rating agency said: “The Government’s assumptions about revenue growth may prove overly optimistic, risking a more gradual path to fiscal consolidation. Unexpected shocks, along with implementation slippage, are two key risks to the projections. Efforts to improve efficiency could fall short and force the Government to pursue contentious tax-raising measures.” This is not the first such warning. In recent times, Moody’s appears to be dampening the administration’s pronouncements and projections. What is their motive? Why is Moody’s seemingly against The Bahamas taking a more optimistic view of its own affairs? Well, as a sovereign rating agency, it has an obligation to its clients and the market, especially those who rely on it for intelligence, to present what it believes is an accurate state of affairs. This does not mean Moody’s is correct and the Government wrong. It simply means there is a difference of opinion. That difference, though, holds important implications for The Bahamas. As the Government tells its story about the path to recovery, Moody’s and similar agencies are also telling a story about a subset of that equation - the national debt. What is important is the fact that both stories demand circular arguments and reasoning. Economic recovery is highly dependent on the effectiveness with which the current national debt is managed, and the reduction in interest payments and debt stock to sustainable levels. On the other hand, the extent to which the current debt can be effectively managed is highly dependent on economic recovery, a reduction in deficit spending and achievement of fiscal surpluses. Beyond the return to pre-pandemic norms, neither the future state of debt or economic conditions will

Hubert Edwards By

independently change for the better. In this regard, the national debt and economic recovery is inextricably tied to each other, along with the fate of the Bahamian populace. The International Monetary Fund (IMF) eloquently puts it this way: “Even with significant fiscal consolidation, financing needs will decline only gradually over the medium-term. This creates elevated risks of the country finding itself in debt distress. Mitigating these risks will require careful planning.” In my recent piece on the IMF’s 2022 Article IV concluding statement, I stated: “Regardless of the nature or tone of the commentary, it is critical that where the suggestions make sense there should be wise movement in those directions. Given where the country is economically, it is important that we draw on all available sources in a serious and practical manner. This must be done with a view to solving the problems which currently ail us, and position us for a more vibrant and resilient future; a future where we are able to better cope with the shocks, internal and external, that will continue to assail us.” This was a call to use all information available to us to better appreciate the current state of affairs but, more importantly, to find solutions going forward. The IMF stated in its recent Article IV concluding statement: “The Bahamas would benefit from a more robust multi-year debt management strategy.” That is a message worth reflecting on. Moody’s has laid out some important insights in its report. If we pay careful attention to the constituent parts of these report, not just to the headlined items, there is much insight to be gained. Before analysing Moody’s 2022 report, let us consider some of its previous positions and how they inform current realities. In its 2021 ratings, Moody’s said it “expects the gradual recovery in tourism to leave a long-lasting impact on The Bahamas’ credit profile through materially higher debt and interest burdens, which will significantly

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THE TRIBUNE

Monday, April 11, 2022, PAGE 3

ADDRESS DORIAN-SPILL LIABILITIES IN SOUTH RIDING SALE APPROVAL By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net ACTIVISTS are urging the Government to ensure all environmental and financial liabilities stemming from the Dorian-related oil spill at South Riding Point are properly addressed in the approval for the facility’s potential sale. Joseph Darville, Save the Bays executive chairman, told Tribune Business the Davis administration must “make sure the cleanup is done properly and we’re compensated for the damage” as sources suggested Equinor is close to exiting its ownership of the Grand Bahama oil storage facility. Several contacts, speaking on condition of anonymity, suggested that the proposed purchaser is the Liwothan Group, an oil

terminal and logistics headquartered in Estonia, which also has assets in London. They added that senior South Riding Point staff were already engaging with the likely new owners, who were also being introduced to the Freeport business community by the Grand Bahama Port Authority (GBPA). While the deal between Equinor, which is 67 percent majority-owned by the Norwegian state, and Liwothan Group is thought to essentially be sealed, it is understood to still be awaiting approval by the Government here. “I had heard it’s up for sale,” one source said of South Riding Point, “and that there were some real buyers around.” Some 55,000 barrels of oil, around 3 percent of the total storage volume, was estimated to have been blown into the surrounding

area when Hurricane Dorian’s Category Five winds destroyed the roofs of several tanks at South Riding Point. Equinor responded by investing in clean-up and remediation at the site but, some 16 months after Dorian’s passage, a Bahamas National Trust (BNT) report in late 2021 raised concerns that there continues to be a high concentration of crude oil around the terminal that remains a threat to wildlife. Some 31 acres was said to require revegetation, with Equinor promising to respond to the BNT’s concerns. Now, with the global energy conglomerate seemingly close to exiting South Riding Point’s ownership, questions arise as to whether itself - or Liwothan Group - will be responsible for continued clean-up and

remediation, plus whether any compensation will be paid to The Bahamas and affected stakeholders, and by whom. “We have a serious crisis in that regard,” Mr Darville told this newspaper at the weekend. “I’m just wondering who’s going to ascertain and compensate us for the damage done to the environment, as well as all the necessary clean-up that has to take place. “We’re the only entities, Save the Bays and Waterkeepers Bahamas, who have been keeping an eye on what is going on there. They did the massive clean up of the aggregate piles, 60 feet of more of oil sludge covering the aggregate that was mined.” However, Mr Darville said dealing with other areas contaminated by the oil spill had proven more tricky because of the potential damage that

would be caused in uprooting trees to get at the sludge. “If they go off leaving it in that state, they will have to compensate the Government of The Bahamas and the people of The Bahamas for the damage that has been done,” he added of Equinor. “If we’re going to have anything to do with the sale or change in operations, then the environmental people have to be involved. We’re the only ones keeping an eagle eye on the clean-up that’s been taking place and dealing with it time and again. “The Government...... needs to make sure that whatever clean-up is done, is done properly, and we’re compensated properly for the damage. Hopefully we will not have any further oil operations in that regard.” Mr Darville said he had been informed by persons

EX-MINISTER: CIVIL SERVANTS HIJACKED NEW RESEARCH ACT By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A FORMER environment minister is urging the Government not to “throw the baby out with the bath water” in reforming an Act that has been accused of bringing scientific and environmental research in The Bahamas to a near-standstill. Romauld Ferreira, who brought the now-controversial Biological Resources and Traditional Knowledge Act to Parliament and oversaw its passage into law on April 1 last year, told Tribune Business that the permitting halt could be addressed by simply “carving out” nonprofit, conservation and student research groups from the enhanced due diligence regime that applies to commercial, for-profit expeditions seeking to exploit The Bahamas’ natural resources. Arguing that it was “never the intent” to subject the former groups to such rigorous inspection, Mr Ferreira blamed the Act’s hijacking by civil servants - and their inflexible application of its rules and procedures - for ensuring

the Act’s implementation did not match the Minnis administration’s intent. He spoke amid further complaints from non-profits that the permitting hold-up is costing them hundreds of thousands of dollars in research grants. One, the Reef Rescue Network, which was created by the Perry Institute for Marine Science, and has partnered with resorts, dive operators and environmentalists in The Bahamas and elsewhere on coral reef restoration, said it had been hit especially hard despite having had government approval to operate for the past five years. A letter sent to Tribune Business by one scuba diver/conservationist,who requested not to be named, said all its activities - including a programme that had trained some 70 instructors in reef replanting - had come “to a grinding halt” due to the new Act’s passage and halt in the granting of permits. “Tourists and members of the community, including students, could obtain a specialty dive certification from local operators, creating revenue for dive companies and getting

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more people involved in coral replanting. A win-win for all involved,” the letter said. “Every year since it started, Reef Rescue Network (RRN) has attracted more than $100,000 in outside investment to the country. Just before its permits stopped being issued, it was set to expand through a huge grant of $400,000 from the Inter-American Development Bank (IDB). This money was for direct injection into Bahamian businesses.

“Up to $450,000 more has been committed by the UN Global Fund for Coral Reefs, making the project worth over $1m in terms of direct investment into The Bahamian economy, with more investment on the horizon. According to the IDB, the project was expected to grow dive shop employment by 15 percent and sales revenue by 10 percent,” it continued. “Now, sadly, everything has come to a grinding halt. If something doesn’t change soon, all of the projected investment, all of the

revenue for dive operators and other local businesses working with RRN, will disappear. The investors will

who fabricated the tank tops at South Riding Point that they were constructed to withstand 140 mile per hours winds, not the 180plus speeds brought by Hurricane Dorian. “Because they were interrupted due to COVID19 and other conditions, I would estimate that they probably cleaned up about two-thirds of the area,” he added of Equinor. “That leaves still at least one-third of the area that has not been treated.” Given that Dorian’s winds blew the spilled oil north into the pine forests, Mr Darville said: “Our main concern is the wetlands. When they dried up, we filled up the water kegs and there was oil in the sub-strata in the wetlands. That’s very concerning, as it has penetrated the water table. There’s still oil trapped in there.” take their funds to a friendlier jurisdiction. “I applaud the attorney general for committing to review and update the misguided law, passed by the former FNM

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PAGE 4, Monday, April 11, 2022

THE TRIBUNE

HOME CONSTRUCTION MUST NOT BE ‘RUSSIAN ROULETTE’ By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net

A BAHAMIAN engineer is urging the Government to hire “third party inspectors” from the private sector as a means to relieve the burden

facing the Building Control Department. Ms Sonia Brown, principal at Graphite Engineering, told the Sustainable Grand

Bahama Conference that the profession must “find creative ways” to access engineering details for small dwellings and “relevant data” on how to build “affordably, sustainably and with resilience”. “We have a problem with inspectors,” she added. “There simply aren’t enough trained inspectors, and we in the engineering community have been lobbying the Government for many years to facilitate the introduction of third-party inspectors to help relieve the burden off of the Building Control Department. “The challenges are greater on the Family Islands, and are exacerbated by a provision in the Local Government Act, which empowers any individual, regardless of education level, with the powers of a building control officer. This sets a dangerous double standard, because in New Providence, at the very minimum, you need to be

a registered professional engineer or a registered professional architect.” Ms Brown added: “Some of these challenges also relate to the failure to implement the Construction Contractors Act, so that there are clear guidelines for who is entitled to be called a contractor. For poor, unsuspecting prospective homeowners looking to invest their life savings in a home, selecting a contractor should not be a guessing game or Russian roulette. “We need to improve the skill level and training of persons involved in the construction trades from masons to plumbers, electricians and the like. Further, we need to establish flood maps, no build zones so that consumers are protected from purchasing property that ought not to build to be built on.” Asserting that consumers looking to buy low-cost homes need protecting the most, Ms Brown said:

“Consumers need to be equipped with the basics when buying or building, and those purchasing lowcost homes need protecting the most. Admittedly, as we look at reforming how we approach housing, the balance between affordability, sustainability and, I will add, resilience, is a delicate one, but we must work to achieve it. “When we look at affordability, we want to ensure that no more than 30 percent of household income goes towards servicing costs related to our home. When we refer to a house being sustainable, we mean the house has as little impact as possible on the environment and. for good measure, I throw in a requirement for resilience because we are in The Bahamas, and resilience in simple terms is the ability to weather the storms that will come. “When we look at affordability, size does matter, and it is the single most important factor in keeping costs down, by which you can not only afford initially but what you can afford to maintain,” she added. “Building for sustainability also means you will pay attention to elevating your home at least two feet above the crown of the road. It means preserving existing trees to help with shading your home, orienting your home to the extent possible to take advantage of prevailing winds, implementing shading elements such as porches to keep your home cool and, ever-so important, the use of insulation, especially at the roof, to minimise the amount of cooling required.”

THE TRIBUNE

Monday, April 11, 2022, PAGE 5

Soaring prices By CHRIS ILLING

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HE US Federal Reserve apparently intends to raise interest rates significantly – and reduce the balance sheet. Fed Reserve governor, Lael Brainard, signalled this aggressive action. In view of high inflation, the US Federal Reserve wants to raise interest rates and probably shrink its balance sheet as early as May. This is according to the minutes of the Federal Reserve’s March 16 monetary policy meeting, released on Wednesday. Accordingly, many of the monetary watchdogs believe it is appropriate that a large interest rate hike of 0.5 percent - or even several such increases in the future - may be appropriate. This applies if inflation risks remain elevated or even intensify. At the March meeting, many members of the Federal Reserve’s Open

Market Committee responsible for interest rate policy were already in favour of taking such a large interest rate hike. However, the committee decided to raise interest rates by a quarter of a point from 0.25 percent to the new interest rate level of 0.5 percent. This decision was probably taken against the background of uncertainty caused by the Ukraine war. Delivery bottlenecks in the wake of the COVID-19 crisis have led to consumer prices recently rising by 7.9 percent, the highest rate of increase in more than 40 years. According to US Treasury secretary, Janet Yellen, the global price of oil would

probably “go through the roof” if Russian exports were completely blocked. Many states, especially in Europe, are “very dependent” on Russian oil, Yellen said at a hearing in the US House of Representatives. “We want to inflict maximum pain on Russia, but also be careful not to inflict undue pain on the Americans and our partners,” she added. The US has banned imports of Russian oil because of the Ukraine invasion, although imports made up only a small part of the US supply. A complete blockade of Russian exports is currently not desirable in view of the high demand with roughly

THE PRIME Minister opens the third annual Sustainable Grand Bahama conference. Photo:Lisa Davis/BIS

PM: ‘Hard questions’ on GBPA, Hawksbill Creek FREEPORT faces “hard questions” on whether the Hawksbill Creek Agreement remains “fit for purpose” and the Grand Bahama Port Authority’s (GBPA) future role, the Prime Minister said yesterday. Philip Davis QC, addressing the Sustainable Grand Bahama conference, said there were even questions surrounding whether the GBPA has a role to play in Freeport and Grand Bahama’s development “While some of us may look back nostalgically on the glory days of the past, a sober and courageous plan for the future has to go into the fundamentals of what the people of Grand Bahama need,” said Mr Davis. “An economy, with sufficient long-term potential for growth, sustaining future generations. An economy sufficiently diversified, able to create opportunities for our people from across all sections of the Grand Bahamian community.” While voicing confidence that the policy proposals contained in the Progressive Liberal Party’s (PLP) election manifesto, Blueprint for Change, will make a positive difference to

Grand Bahama, the Prime Minister added: “I know that these interventions are not the whole answer. “Beyond our own ideas and plans there is still scope for additional ideas and plans in order to fully achieve the full potential of the vision of growth and diversification for Grand Bahama. We are serious about finding and defining solutions. We have to be unflinching, looking at and answering the hard questions.” These “hard questions” were identified by the Prime Minister as including whether the economic framework on the island (the Hawksbill Creek Agreement) is still fit for purpose; the role of the GBPA and, indeed, whether it even has a role to play. “Today, I also challenge you to face head-on the question of how best to embrace ideas of sustainability within the context of national development,” Mr Davis added. “This is a delicate balancing act, akin to walking a suspended tightrope. The needs and demands of the three broad components of economic, environmental and social

sustainability must all be satisfied. “So, how best should we do it? I urge you to be mindful of some of the painful lessons and memories of the past. Though the short-term economic benefits were significant, some of the negative impacts of the large-scale operations of BORCO and Syntex are still being experienced in communities like Hunters and Lewis Yard. Unfortunately, some of the cultural, social and environmental drawbacks still persist today.

the same supply, said Ms Yellen. She added that once other countries and producers increase their oil production, it might be possible to limit Russia’s exports even further. Crude oil prices have already risen significantly since Russia’s conflict with Ukraine began The Paris-based International Energy Agency (IEA) announced last Wednesday that member states would supply the oil market with 60m additional barrels of crude from emergency stockpiles. The news sent oil prices down more than 5 percent, with US crude futures tumbling to $96 per barrel. Brent crude, the global benchmark, fell to $101 a barrel. Russia could be forced to cut its production by 3m barrels per day this month as it struggles to find buyers following the invasion of Ukraine. The large oil companies, meanwhile, are experiencing a tremendous roller coaster

SOARING PRICES ride presently. During the last 12 months, Shell’s share price is up 55 percent, British Petroleum’s (BP) by 40 percent and Exxon’s is up almost 50 percent. But all companies are now under pressure to pull out of Russia. Shell said last Thursday that it will write down up to $5bn as a result of the decision to seize their Russian business. The company had said the Russia write-downs would reach around $3.4bn earlier in the month. According to the star US investor, Warren Buffett, a lot of cash and war do not go together. At least that is what he said in

2014, when Russia annexed Crimea. The risk of a currency depreciating massively is too great. But now Mr Buffett is betting on the future of oil. Berkshire Hathaway this week increased its stake in US oil company, Occidental Petroleum, by about $1bn. In the past few weeks, Mr Buffett and his holding company have been making substantial gains in these stocks. Overall, Berkshire now holds almost 15 percent of the oil company. Tumultuous times with great potential for the savvy investor.

PAGE 6, Monday, April 11, 2022

THE TRIBUNE

BAHAMAS’ SUSTAINABLE FUTURE REQUIRES ACTION, NOT PROMISES By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net THE Bahamas no longer has “the luxury of making grand speeches” that are not backed by action, a Cabinet minister has conceded, as it faces “falling further behind” if sustainability does not become a reality. Senator Michael Halkitis, minister of economic affairs, told the Sustainable

Grand Bahama conference on Saturday that this nation must stop talking a good game and transform words and promises into on-theground realities that deliver meaningful benefits for its people. He added: “We are at a pivotal moment in our development as a nation. We do not have the luxury of making grand speeches and throwing about big ideas without putting action behind them any more.

“If we do not take aggressive action to make this sustainable future a reality, we will face the prospect of falling even further behind global leaders, perhaps too far behind to catch up within our lifetime.” Such action requires The Bahamas to “embrace sustainable technologies and innovation”, with Mr Halkitis adding: “There are emerging industries for us here in The Bahamas that can provide jobs and ownership opportunities at all

levels. The Davis administration has pledged to make investments in renewable energy and sustainable initiatives related to the green and blue economies. “Already, we are seeing movement on that front with farming, ocean and coastal initiatives that are competitive and innovative on a global level. This is priority number one for us. While we pursue these projects that, in a sense, have come to define the common understanding of sustainability, we must also reframe how we think about sustainable development. “Sure, solar panel initiatives and AI-powered (artificial intelligence) farming initiatives are a great way to make steps towards a sustainable future, but we must also ensure that sustainability is woven into our general approach to development.” Highlighting the importance of small and medium-sized enterprises (SMEs), together with real estate, infrastructure and resorts, having “sustainability embedded within their DNA,” Mr Halkitis said: “A great example of this recently occurred with Grand Bahama’s northern neighbor, Abaco. The Government formally opened the Angel Fish Creek Bridge, connecting Great and Little Abaco, a few weeks ago. “This bridge is the largest single span structure in The Bahamas and has a steel truss, making it erosion resistant and far more capable than the previous bridge of withstanding the kinds of storms and storm surges expected more frequently with climate change. The bridge also has solar lighting, minimising its impact on the power grid. For the first time in over 70 years, the new bridge allows for a free flow of water between the two islands. “As a result of the free flow of water, local reports are indicating that the water has changed from a stagnant, murky green to a clear

MICHAEL HALKITIS turquoise. Fisherman are saying that they are seeing a variety of fish and other sea life in the immediate area for the first time in their lifetime – all because this was an initiative that sought to meet transportation needs while also fitting into our model of sustainability and climate resilience.” Mr Halkitis continued: “The Government believes that sustainability, pursued in an earnest and practical way, has the potential to transform our society, our government and our economy in much the same way that the Internet and digital technologies have transformed private sector operations and practices. It is time for a sustainable transformation. “This transformation will come in the form of new industries; new jobs; healthier, cleaner environments; renewable energy; greater investments to protect our coastlines and industries from the impact of climate change; and the diversification of the Bahamian economy for greater resilience. In the pipeline, we have a number of initiatives that are directly

or indirectly related to the innovation and adaptation needed to continue to take this country in the right direction. “At the top of the agenda is the continued digitalisation of government processes for increased efficiency and effectiveness. This includes investments in digital communications and operational systems, as well as digital file management and the use of automation to speed up internal and outward facing processes. Digitalisation also includes expanded access to government services and greater transparency,” the minister said. “One of the most promising digital innovations that we must leverage for mainstream use is our digital currency, the world’s first Central Bank digital currency, the Sand Dollar. This will be a godsend to many who lack access to traditional financial and banking services, especially in Family Islands that do not have proper access to banking services or may even not have a bank present on the island at all.”

THE TRIBUNE

Monday, April 11, 2022, PAGE 7

‘LEAVE US ALONE AND WE’LL BLOW 2018 GDP OUT WATER’

FROM PAGE ONE

certainty regarding the Special Economic Recovery Zone (SERZ) and the tax breaks offered to rebuilding residents and businesses. The latest confusion, he added, surrounded a “without notice” change that seemingly makes VAT and duty payable by all who lack a stamped SERZ certificate from the Ministry of Finance. Besides the hundreds of applicants still awaiting a response to their certification applications, which were made prior to the March 31 deadline, Mr Hutton said this seems to contradict the actual SERZ relief Order that was signed into law on January 5 this year. That Order’s section 4 states that the wholesale and retail sale of all building materials, hardware, furniture, fixtures, electrical and plumbing supplies in a SERZ is to be VAT zerorated until December 1, 2022, “subject to conditions stipulated by the Ministry of Finance. “Local businesses have not been informed how it affects them,” Mr Hutton said of this change. “Up to now, they’ve been selling materials VAT and dutyfree at the point-of-sale.

Do we go back to charge VAT and duty at the pointof-sale, and only exempt those customers with a certificate? That is not what Order on January 5 and its section 4 said. “Is that still the case? I don’t know. If that is not the case, nobody has been notified, and that entails a tremendous amount of work for the retailers and wholesalers here. There has to be a double configuration of their systems: Some people do not get the exemptions and some people do. You have to set your system up like Freeport, bonded and nonbonded. It’s not something you can do overnight. “It’s just again another unnecessary level of uncertainty that has been thrown at us when what we need is just to give Abaco the tools, the time and opportunity, and it’ll come roaring back and throw the 2018 GDP numbers out of the water in very short order.” Abaco’s 2021 GDP of $345.7m is almost 42 percent below the $594.3m it achieved in 2018, thanks to the combined devastating blows of Dorian and COVID-19. However, last year’s output came close to matching 2019’s $393.7m, when Abaco enjoyed eight

uninterrupted months prior to the Category Five storm. The Davis administration, though, has been seeking to roll-back and contain Dorian recoveryrelated tax breaks in the belief that it is giving too much away, especially to wealthy second homeowners (many of them foreign) that it believes can afford to rebuild without taxpayer assistance. Mr Hutton, though, attacked this as “jealousy and ignorance” in a letter he sent last Thursday, April 7, to Abaco’s two MPs, John Pinder and Kirk Cornish, warning of the concerns developing among the island’s residents and business owners. He told the two parliamentary secretaries: “We have a major issue regarding a change to the SERZ regulations. I was just informed that the SERZ concessions have been amended, without notice, and VAT and duty are now payable everywhere in Abaco unless one has the stamped SERZ certificate from Ministry of Finance. “The application deadline passed at the end of March and there are still many applicants who have not received a response. Further, we have been

informed no additional applications will be considered even if the applicant was unprepared, unable to or not in a position to complete the application before the deadline....... “According to what I was told by my Customs broker, the new SERZ regulations will mean all retail and wholesale businesses in Abaco will have to start charging VAT at pointof-sale unless a stamped SERZ application is presented. This unannounced change brings several operational and financial challenges, which entails a significant reprogramming of systems,” he added. “Under the SERZ Order of January 5, it says that local wholesale and retail of goods within the schedule are to be sold as VAT zero-rated. The changes made, without consultation from Abaco stakeholders, have significant and far-reaching impact. The new PLP government came to office promising to consult with local stakeholders but,

instead, we are still being ruled by edict out of the capital by an administration far removed from the people most affected by their policies.” Turning to the broader picture, Mr Hutton wrote: “ The declared purpose of the SERZ concessions from the beginning was two-fold: To encourage rebuilding and incentivise the local economy back to growth. Abaco was initially told SERZ would be in place for three years, which all agreed would have been sufficient time to get the economy back on its feet and on its way to growth again. “The arrival of COVID resulted in critical delays to that recovery and threw the process back by at least a year or more. Add to that, Abaco is now being affected by historic inflation and global supply chain issues causing rebuilding to be not only more expensive but also more prolonged. The impression in Nassau that some underserving people are benefiting from

SERZ more than others is based on jealousy and ignorance of the facts on the ground. “We need the concessions to continue unaltered for at least two more years. We are nowhere close to having a robust economy. People are struggling just to get by. Delays, unannounced changes and reductions to SERZ not only add an unnecessary level of uncertainty, but increase an already heightened level of mistrust and resentment of the Government caused by the former administration’s gross mismanagement of the Abaco disaster response.” Mr Hutton, saying he was disappointed not to have received an acknowledgement of his e-mail from either MP, had concluded his letter by saying: “I don’t think the Abaco community is going to take this lightly.”

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PAGE 8, Monday, April 11, 2022

THE TRIBUNE

SUPER VALUE CHIEF: FOOD PRICE PEAK ‘IN 6 MONTHS’ FROM PAGE ONE and stay there for the new normal until the world gets back to normal, scales the production volumes and brings them back down. Russia and Ukraine are out of the business, but the US and Canada are going to try and ramp up their exports and replace those two.... “We think that in six months we will be at the new normal, and will work back the cost of living from there. We feel the buyers have certainly done an excellent job. We’re seeing food shipments that are either in or have been booked in advance. If they are booked ahead three months, that’s effectively six months for the country. “We feel proud that we are holding back so strongly and don’t have to pass on for a long time because of high inventory and forward bookings. We have enough booked in on corn beef to take us through next summer.” Such advanced purchases, and high inventory levels, cannot be maintained for perishable produce and items such as cornflakes and flour that have short shelf lives. The price for a 50-pound bag of grits, for example, has risen 26 percent to $24. Debra Symonette, Super Value’s president, in a note said the supermarket

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chain’s six-month supply of “hard goods” was enabling it to somewhat offset the post-COVID supply chain crisis and producer woes amid rising global inflation. “Supply chain issues still exist and shipments are running a month behind schedule,” she wrote. “However, we are well stocked with merchandise. We have up to six months’ supply of hard goods such as corned beef, spaghetti and meatballs, sardines, mackerel, pigeon peas, ketchup, cooking oil and canned soups. “Unfortunately, we are unable to stock up on items such as flour, rice and cereals due to the possibility of bug infestation in the summer months. Freight costs remain high and will increase further due to the fuel increase brought on by the war in Ukraine.... We are able to beat the price increases and continue to offer lower prices to our consumers. “Now that China is locked down and not using fresh beef, Brazil has come back and offered us a special on corned beef. Hence our ability to offer it to our customers at a special price until next summer.” However, the impact of Russia’s invasion of Ukraine will feed into all bakery products and others that employ flour and wheat. “The two commodities, oil and flour, affect most products, so of course we can expect a chain reaction of price increases,” Ms Symonette said.

“Eggs have seen a significant increase due to the loss of millions of chickens which were struck by the bird flu early this month.” Turning to other concerns, the Super Value president added: “We should also mention that, during the height of the fuel crisis years ago, our power bill would increase to almost $1m per month. We are hoping that it does not get to this level again. “Last year we installed solar at our warehouse and got an 80 percent savings. We have ordered solar for all of our stores to install this summer to keep expenses down. Suppliers assure us that they have the merchandise but suffer from a shortage of workers in the workforce.” Cooking oils, cereals and meats hit all-time highs in March, and meant food commodities cost a third more than the same time last year, according to the FAO. The Russia-Ukraine war was said to have helped push cereal prices up 17 percent over that month with the closure of Ukraine’s ports halting wheat and maize exports. Russian exports were also slowed by financial and shipping problems, resulting in world wheat prices soaring by 19.7 percent during March. Maize prices posted a 19.1 percent month-on-month increase, hitting a record high along with those of barley and sorghum.

THE TRIBUNE

Monday, April 11, 2022, PAGE 9

PI DEVELOPER TAKES ON SCHOONER BAY

FROM PAGE ONE

(HOA) fees will likely increase as Sterling moves to match the development’s income streams with operating expenses. Although the length of Sterling’s tie-up with the original developer, Schooner Bay Ventures, was not disclosed, a note on the meeting being circulated to homeowners suggested it was likely a long-term partnership and that the message had been sent that all parties - developer, manager, homeowners and amenities - “need to pull together to make Schooner a success” David Kosoy, Sterling Global’s founder and executive chairman, last night said he was off-island in an e-mailed reply to Tribune Business inquiries. “It’s something that can really bring that development to where it needs to be,” one source, speaking on condition of anonymity, said of Sterling’s involvement at Schooner Bay. “It’s going to require a lot of work, and a lot of capital, but they [Sterling] know how to find capital. Sterling funds projects all over the US, Canada, UK and Ireland. They’re based in The Bahamas, but also do a lot of work in the Cayman Islands and Turks & Caicos.” Sterling is also developing the $352.2m Montage Cay and Marina Project on the former Matt Lowe’s Cay in Abaco, a development billed as creating 250 fulltime jobs. With Sterling already enjoying strong Abaco connections, another source said of its Schooner Bay involvement: “An e-mail went out to the homeowners about three weeks ago, and then Sterling had a meeting with the owners on-site and virtually. They’ve been pretty forthright that they are partnering and doing business, and that Sterling is going to take over sales and management and develop a boutique hotel.” This was all confirmed by documents obtained by Tribune Business. A March 29, 2022, e-mail sent out in the name of Dr David Huber, Schooner Bay Ventures’ president and owner, said: “We write to you today to advise you that Schooner Bay Ventures is partnering with Sterling Global Developments to manage Schooner Bay. “We will share more about this new partnership in the near future, but in the interim, we would like to introduce you to members of the Sterling team on April 2, 2022 at Schooner Bay at 3 pm at the cabana. For those of you who are not currently on property or not available to be there, we will provide a Zoom link

to the meeting.” The e-mail was issued by Schooner Bay Ventures’ US attorney, Tina Gascoigne. A summary of the meeting, subsequently obtained by Tribune Business, confirmed that it was attended by both Mr Kosoy and Bill Green, Sterling’s president, as well as Michel Neutelings, who was described as the “main operations guy for Schooner”. Mr Neutelings, a partner in the Milo Group, was also lead project manager for the $200m Children’s Bay development in Exuma, although construction work has yet to start there. Also present for the Schooner Bay meeting were Dr Huber and Ms Gascoigne, together with representatives of existing amenities at the community such as the Sandpiper Inn and Captain’s House. “Dr Huber started the meeting explaining that, to-date, he has invested $100m in Schooner,” the meeting summary said. “He has been working with Sterling Global for a while now to get an agreement for development of Schooner. “Sterling Global is overseeing about $9bn in developments in the Caribbean, including on Paradise Island and on Matt Lowe’s Cay just east of Marsh Harbour (also called Montage Cay). They have 100 employees who live in Nassau. Bill specialises in overall development and Michel in operations. Michel will be on-site frequently and is available for any questions and concerns. They really want to improve communication with homeowners. “There were several key messages during the session, the main one being they are looking to develop Schooner as a resort not a community (ie; not like Hope Town on Elbow Cay). As a resort, Schooner needs people to want to come and stay. Therefore we need to add some amenities and up the rental turnover, number of visits and length of visit stay. To that end, the first development will probably be a boutique hotel with a restaurant that is always open,” the note added. “Once revenues have increased, other amenities like a pool etc will be added in a phased approach; increased revenues equals increased amenities. Their [Sterling’s] model is to develop specific areas. Once that area is successful, they will go on to the next, hence the phased approach. Their model has been very successful to-date.” No figures for investment and jobs created, or timelines, were provided in relation to the boutique hotel. “In the short term,

NOTICE NOTICE is hereby given that KAREEM CAMARON JONES, of Reeves Street, Fox Hill, P.O. Box SB-50274, Nassau, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 11th day of April, 2022 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.

they will be looking at the operational costs for running Schooner (geothermal, water/waste management, landscaping, security, etc) versus the revenue from things like HOA (Homeowners Association) fees,” the meeting summary said. “It appears some homeowners have not been paying their HOA fees. “Once this assessment is complete, there is a strong possibility that HOA fees will increase. As well, they will be looking at consolidating other services like property management, marketing and new home sales/ resales to achieve economies of scale (lower overall costs) and consistency in services. This approach should increase revenues for Schooner and increase rental income and home values for homeowners. “They will be reaching out to each of us to get our thoughts but, in the end, the message was we are all part of the same team and need to pull together to make Schooner a success. Dr Huber and Sterling will assess their success on an ongoing basis. No exact length of term was discussed, but it will certainly be over a longer term, not six to 12 months.” Suggesting that a new development plan for Schooner Bay is in the offing, the meeting summary added: “Over the next month or two they [Sterling] will be reviewing the Schooner site plan, and will come up with a new plan that will probably include changes to lot sizes, building requirements, common areas and locations of community amenities. “Overall they were very impressed with the construction quality of the buildings at Schooner, and said they would not lower any building standards for future construction. They were also impressed with the harbour but are bringing in some engineering experts to see what improvements might be made. “Enhancing the marina and its services will definitely be a priority (they are currently developing a very high-end marina on

Paradise Island, just east of Atlantis) so have access to significant expertise in this area.” Schooner Bay was initially held up as a model for sustainable, resilient development that The Bahamas is increasingly seeking to cope with the realities of climate change. However, its rate of build-out has slowed dramatically for much of the past decade. Schooner Bay’s abrupt change in direction appears to have coincided with its decision in 2013-2014 to part ways with Bahamas-based developer, Orjan Lindroth,

and his Lindroth Development Company. The latter had acted as the 220-acre project’s master planner and development partner since inception, handling all real estate sales and promotions. They were replaced by a succession of foreign sales companies who met with seemingly limited success. While Mr Lindroth and his company were Schooner Bay’s public face, the project’s financing was provided by Dr David Huber. Dubbed “America’s richest Mormon”, Dr Huber made a multi-billion dollar fortune

from patenting fibre-optic technology and then taking the companies that owned it public on the US stock market. Tribune Business wrote a series of articles in late 2017 questioning the project’s management and other practices, with many of the issues raised not being directly addressed by Schooner Bay Ventures. The project is one of the few developments outside Nassau to attract Bahamian buyers, one of whom is ex-prime minister, Dr Hubert Minnis.

MARKET REPORT www.bisxbahamas.com

FRIDAY, 08 APRIL 2022

BISX ALL SHARE INDEX: BISX LISTED & TRADED SECURITIES 52WK HI 6.70 40.50 2.05 2.90 2.60 6.05 10.05 3.55 9.02 3.10 7.20 14.00 2.71 10.25 11.25 10.75 15.00 4.00 10.00 16.50

52WK LOW 4.55 32.12 1.46 2.20 1.30 5.50 6.00 2.82 4.25 2.27 5.50 9.75 1.99 6.50 10.02 9.00 13.10 3.50 8.00 15.50

SECURITY AML Foods Limited APD Limited Benchmark Bahamas First Holdings Limited Bank of Bahamas Bahamas Property Fund Bahamas Waste Cable Bahamas Commonwealth Brewery Commonwealth Bank Colina Holdings CIBC FirstCaribbean Bank Consolidated Water BDRs Doctor's Hospital Emera Incorporated Famguard Fidelity Bank (Bahamas) Limited Focol Finco J. S. Johnson

PREFERENCE SHARES 1.00

1.00

1000.00 1000.00 1000.00 1000.00

1000.00 1000.00 1000.00 1000.00

1.00 10.00 1.00

1.00 10.00 1.00

Bahamas First Holdings Preference Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Fidelity Bank Bahamas Class A Focol Class B

CORPORATE DEBT - (percentage pricing) 52WK HI 100.00 100.00

52WK LOW 100.00 100.00

SECURITY Fidelity Bank (Note 22 Series B+) Bahamas First Holdings Limited

CLOSE

CHANGE

%CHANGE

YTD

YTD%

2279.48

-0.01

0.00

51.24

2.30

SYMBOL AML APD BBL BFH BOB BPF BWL CAB CBB CBL CHL CIB CWCB DHS EMAB FAM FBB FCL FIN JSJ BFHP CAB6 CAB8 CAB9 CAB10 CHLA FBBA FCLB SYMBOL FBB22 BFHB

BAHAMAS GOVERNMENT STOCK - (percentage pricing) 115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.22 100.53 99.98 100.00 100.00 100.00 100.00 100.00 100.98 100.00

104.79 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.29 99.98 91.00 90.95 89.02 89.62 89.00 90.24 90.73

MUTUAL FUNDS 52WK HI 2.50 4.67 2.20 207.86 207.68 1.72 1.83 1.81 1.05 9.37 11.83 7.54 16.64 12.84 10.77 10.00 10.43 14.89

52WK LOW 2.11 3.30 1.68 164.74 116.70 1.68 1.73 1.75 1.01 6.41 7.62 5.66 8.65 10.54 9.57 9.88 8.45 11.20

Bahamas Note 6.95 (2029) BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-7Y BGRS FL BGRS67023 BGRS FL BGRS70022 BGRS FL BGRS78024 BGRS FX BGR125238 BGRS FX BGR127139 BGRS FX BGR127149 BGRS FX BGR129249 BGRS FX BGR131249 BGRS FX BGR132249 BGRS FX BGR136150

BAH29 BG0107 BG0207 BG0130 BG0230 BG0307 BG0330 BG0407 BSBGRS670233 BSBGRS700220 BSBGRS780248 BSBGR1252380 BSBGR1271398 BSBGR1271497 BSBGR1292493 BSBGR1312499 BSBGR1322498 BSBGR1361504

LAST CLOSE 5.30 39.95 2.04 2.31 2.50 6.05 9.25 3.30 7.60 2.66 7.16 14.00 2.30 10.13 12.57 10.75 15.00 3.99 10.00 15.50 1.00 1000.00 1000.00 1000.00 1000.00 1.00 10.00 1.00 LAST SALE 100.00 100.00 107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.06 100.53 99.98 100.00 100.00 100.00 89.62 100.00 100.00 100.00

CLOSE 5.30 39.95 2.04 2.31 2.50 6.05 9.25 3.30 7.60 2.66 7.16 14.00 2.30 10.13 12.55 10.75 15.00 3.99 10.00 15.50 1.00 1000.00 1000.00 1000.00 1000.00 1.00 10.00 1.00

BISX ALL SHARE INDEX - 19 Dec 02 = 1,000.00 52wk-Hi - Highest closing price in last 52 weeks 52wk-Low - Lowest closing price in last 52 weeks Previous Close - Previous day's weighted price for daily volume Today's Close - Current day's weighted price for daily volume Change - Change in closing price from day to day Daily Vol. - Number of total shares traded today DIV $ - Dividends per share paid in the last 12 months P/E - Closing price divided by the last 12 month earnings

VOLUME

10,000

400

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

CLOSE 100.00 100.00

CHANGE 0.00 0.00

107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.06 100.53 99.98 100.00 100.00 100.00 89.62 100.00 100.00 100.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund Leno Financial Conservative Fund Leno Financial Aggressive Fund Leno Financial Balanced Fund Leno Financial Global Bond Fund RF Bahamas Opportunities Fund - Secured Balanced Fund RF Bahamas Opportunities Fund - Targeted Equity Fund RF Bahamas Opportunities Fund - Prime Income Fund RF Bahamas International Investment Fund Limited - Equities Sub Fund RF Bahamas International Investment Fund Limited - High Yield Income Fund RF Bahamas International Investment Fund Limited - Alternative Strategies Fund Colonial Bahamas Fund Class D Colonial Bahamas Fund Class E Colonial Bahamas Fund Class F

MARKET TERMS

CHANGE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (0.02) 0.00 0.00 0.00 0.00 0.00

(242) 323‐2330 (242) 323‐2320 EPS$ 0.239 0.932 0.000 0.140 0.070 1.760 0.369 -0.438 0.140 0.184 0.449 0.722 0.102 0.467 0.646 0.728 0.816 0.203 0.939 0.631 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

VOLUME

DIV$ 0.170 1.260 0.020 0.080 0.000 0.000 0.260 0.000 0.000 0.120 0.220 0.720 0.434 0.060 0.328 0.240 0.540 0.120 0.200 0.610 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

INTEREST Prime + 1.75% 6.25% 6.95% 4.50% 4.50% 6.25% 6.25% 4.50% 6.25% 4.25% 4.63% 4.50% 4.50% 5.00% 5.00% 5.50% 5.55% 5.60% 5.65% 5.69%

NAV 2.50 4.67 2.20 204.67 199.97 1.72 1.83 1.81 1.01 9.37 11.79 7.54 15.94 12.47 10.74 N/A 10.43 14.89

YTD% 12 MTH% 0.34% 4.30% -0.06% 5.21% 0.21% 2.72% 1.37% 3.18% 8.18% 14.94% 0.26% 2.76% 0.36% 2.37% 0.28% 2.51% -1.31% -3.43% -0.02% 10.36% -0.33% 18.23% 0.22% 3.05% -3.89% 14.76% -1.04% -2.57% 0.81% 4.20% N/A N/A 3.00% 25.60% 7.90% 48.70%

P/E 22.2 42.9 N/M 16.5 N/M N/M 25.1 -7.5 54.3 14.5 15.9 19.4 22.5 21.7 19.4 14.8 18.4 19.7 10.6 24.6 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

YIELD 3.21% 3.15% 0.98% 3.46% 0.00% 0.00% 2.81% 0.00% 0.00% 4.51% 3.07% 5.14% 18.87% 0.59% 2.61% 2.23% 3.60% 3.01% 2.00% 3.94% 0.00% 0.00% 0.00% 0.00% 0.00% 6.25% 7.00% 6.50%

MATURITY 19-Oct-2022 30-Sep-2025 20-Nov-2029 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2022 26-Jun-2045 15-Oct-2022 8-Apr-2023 29-Jul-2022 22-Sep-2024 15-Oct-2038 15-Jan-2039 15-Jan-2049 15-Apr-2049 15-Jul-2049 15-Oct-2049 21-Apr-2050

NAV Date 31-Jan-2022 31-Jan-2022 28-Jan-2022 30-Sep-2021 30-Sep-2021 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Mar-2021 31-Mar-2021 31-Mar-2021

YIELD - last 12 month dividends divided by closing price Bid $ - Buying price of Colina and Fidelity Ask $ - Selling price of Colina and fidelity Last Price - Last traded over-the-counter price Weekly Vol. - Trading volume of the prior week EPS $ - A company's reported earnings per share for the last 12 mths NAV - Net Asset Value N/M - Not Meaningful

TO TRADE CALL: CFAL 242-502-7010 | ROYALFIDELITY 242-356-7764 | CORALISLE 242-502-7525 | LENO 242-396-3225 | BENCHMARK 242-326-7333

PAGE 10, Monday, April 11, 2022

THE TRIBUNE

The Moody’s verdict on state of The Bahamas FROM PAGE TWO exceed those of Ba3-rated peers.” The latter part of the statement is important. While there are many factors working in favour of the country, its debt circumstances make it an outlier compared to lesser developed states. The current experience of higher debt yields should not be unexpected. The rating category of Ba3 is considered to have speculative elements, and is subject to substantial credit risk. The Bahamas is rated Ba3 with a negative outlook. Appreciating that the country is an outlier within a speculative class, having debt levels beyond most very risky peers, underlines the pressure we face in financing current and future debt and the urgent need for a turn around. Again, in 2021, Moody’s said: “The Bahamas’ debt burden was already higher than Ba-rated peers prior to the pandemic, and will remain above similarly rated peers as the economy recovers only slowly from the pandemic.” Reminding ourselves of the fact that these statements are primarily “conversations” directed at current and future bond

holders, we should be able to bring clear context to the performance of our sovereign bonds on the international market before and after September 2021. The rating agency clearly noted that compared to other speculative options, The Bahamas is likely to be at a greater disadvantage. It would be no surprise, therefore, that such investors would treat bonds of countries many would consider “lesser” than The Bahamas as being of greater quality. It is possible to glean this message from the 2021 statement suggesting that the pandemic “…has fundamentally weakened The Bahamas’ credit profile with lasting consequences in terms of a higher debt burden and weaker debt affordability, as well as reduced economic strength”. Why is this important? How does this tie to the main point being discussed here? The answers lie primarily in the fact that there has been no great change in circumstances. This is evidenced in Moody’s latest 2022 report, which said: “The Bahamas’ debt burden likely peaked at 89.4 percent of GDP as of the end of fiscal 2021, while the interest-to-revenue ratio will

peak in fiscal 2022 at 24 percent. These ratios are among the highest for Ba-rated sovereigns.” The country is expected to remain firmly rooted in the upper tier of an adverse classification. The Bahamas is well beyond sustainable levels of debt, and the market perception of its recovery is not good. The extent of the adverse debt impact on economic recovery, ease of securing future financing and market response becomes clear when we appreciate that almost one-quarter of government’s revenue will go to pay interest costs (debt servicing). Policymakers’ most urgent concern is likely to be how to change market sentiment and reduce the proportion of revenue going to debt servicing, thus facilitating greater investment in productive infrastructure developments and priming the economy for growth. This 2021 statement from Moody’s aptly describes the current situation that The Bahamas is experiencing. “The removal of COVID-related spending on unemployment benefits and other related items, along with a revenue recovery, will support

fiscal consolidation, which will reduce the debt burden gradually.” it said. The pandemic has shifted positively. There is a return of tourism dollars, reportedly at a better-than-expected level, and spending on social support is all but gone. Under these circumstances, if sustained, there is a reasonable expectation of debt reduction. It is the pace of this reduction that poses a risk for The Bahamas. The IMF said: “The factors most likely to affect the Bahamas’ credit quality are the pace of fiscal consolidation, how quickly the Government returns to fiscal deficits consistent with reducing its debt, and how the Government meets its relatively large financing needs over the next two years without putting downward pressure on debt affordability and increasing liquidity risk. Financing needs and liquidity risk will remain high over the next two years.” The IMF is forecasting that the timeline for a notable downward shift in debt is still, at best, in the mid-term, which is generally consistent with the Government’s own strategy. The next two years or so will therefore be crucial. Despite anticipated

EX-MINISTER: CIVIL SERVANTS HIJACKED NEW RESEARCH ACT FROM PAGE THREE administration, that led to this mess in the first place. I just hope his team can

get it done in time to save the RRN and other crucial programmes before they are forced to shut down permanently.”

Senator Ryan Pinder, the attorney general, on Friday blasted the deficiencies in the Biological Resources and Traditional Knowledge

Act and other legislation passed by the Minnis administration as “a poor excuse for legislative governance”. However, Mr Ferreira, while voicing sympathy for the research and environmental community’s concerns, and saying he agreed with many of them, hit back at the attorney general’s remarks by describing them as “extremely short-sighted” in not recognising that the Act being challenged was part of a 12-strong package of laws passed by the Minnis administration. He added that these, such as the Environmental Planning and Protection Act and Ministry of the Environment Act, had given The Bahamas a comprehensive environmental regulatory regime for the first time in its history. Branding this as “a landmark achievement”, Mr Ferreira said: “All this was part of the rubric. For him to say that shows he’s incredibly short-sighted and doesn’t understand what’s at stake....... “We know that commercial ventures are coming

positive fiscal consolidation, the expectation for economic performance is low, interest loads are high and debt reduction will be slow. Given that these projected outcomes appear reasonably firm, it is expected that policymakers will use this window to nurture near-term adjustments such that the benefits will begin to materialise sooner or later. It is important, therefore, when the rating agency pointedly states: “The Government’s assumptions about revenue growth may prove overly optimistic, risking a more gradual path to fiscal consolidation. Unexpected shocks, along with implementation slippage, are two key risks to the projections. Efforts to improve efficiency could fall short and force the Government to pursue contentious tax-raising measures. The administration must remain mindful of the need to demonstrate the soundness if its projections, the soundness of its policy selections, and the potential impact of its chosen reforms. The communication of a sustainable, positive future is critical to unlocking possibilities for the economy given Moody’s statement that “The Bahamas’ credit

profile incorporates the country’s moderate economic strength, reflecting its subdued economic performance, high wealth levels and moderate institutional strength”. Alongside the negatives, every positive element has been considered. The upside must rest in reversing the negatives and improving on the positives. To be continued....

in here and stealing our knowledge. We know this. We know that they have taken our traditional products and made money, and taken our biological blueprint and made money, and The Bahamas did not benefit. What this Act did was to make sure we do. If he’s [Mr Pinder] saying that’s short-sighted and not in the interests of The Bahamas, he’s wrong.” Mr Ferreira, though, admitted that the Act was not intended to halt, delay or frustrate scientific research and exploration by Bahamians, students, conservationists and nonprofits. “That was never the intent of the Act,” he asserted. “It was focused on commercial applications. “What Dr Nick Higgs [of Cape Eleuthera Institute] is saying has some merit and should be taken into consideration. I understand the frustration, and have very strong feelings about the way it’s being administered versus the intent. On the face of it, I agree with their position. We had started discussions on how to carve out educational groups” before the Minnis administration left office.

“We know there are educational groups in The Bahamas, and legitimate Bahamian scientists and foreign scientists, and we need those synergies and transfer of knowledge,” Mr Ferreira added. “I’d never have stopped that knowingly. That’s not the purpose. Instead of throwing the baby out with the bath water, a simple amendment is required along the lines suggested by Dr Higgs.” This, the ex-minister said, would remove enhanced scrutiny of permit applications from non-profits and students, instead imposing this solely on commercial ones. This, he added, would ensure the Department of Environmental Planning and Protection (DEPP) is not overwhelmed with permit applications as he warned Mr Pinder and the Davis administration against a complete overhaul of the Act. “Unfortunately we had some civil servants take it over, and the rigid application of rules and procedures led to some challenges, but it can easily be overcome,” Mr Ferreira said.

NB: Hubert Edwards is the principal of Next Level Solutions (NLS), a management consultancy firm. He can be reached at info@nlsolustionsbahamas.com. He specialises in governance, risk and compliance (GRC), accounting and finance. NLS provides services in the areas of enterprise risk management, internal audit and policy and procedures development, regulatory consulting, anti-money laundering, accounting and strategic planning. Hubert also chairs the Organisation for Responsible Governance’s (ORG) Economic Development Committee. This and other articles are available at www.nlsolutionsbahamas.com.

PAGE 16, Monday, April 11, 2022

THE TRIBUNE

GAS DEALERS: 50% MARGIN RISE TO AVOID EASTER STRIKE FROM PAGE ONE

vice-president, I’m opposed to this. I’m trying to get these guys to meet with the Government and let’s talk before we take any type of draconian measures. This is no time to stop selling fuel.” Petroleum dealers want a 50 percent margin increase, in addition to lowering VAT on gasoline. The last time petroleum dealers enjoyed a margin increase was in 2011, when the Hubert Ingraham-led Free National Movement (FNM) government granted a 10 cent increase per gallon of gasoline to take it from 44 cents to 54 cents. A 15 cent

increase per gallon of diesel was also allowed. A 50 percent hike now would raise dealer margins to 81 cents per gallon. Mr Bastian said: “Rubis, Esso and Shell independent dealers. They are all gathering together to strike this coming weekend. The gas stations owners can’t afford to buy fuel in a week or two if the Government doesn’t come and reduce this whole levy and taxes and other stuff, and come up with some national plan to make it more affordable for gas station operators to buy more fuel. “The Government is going to run the risk that

dealers cannot afford to buy fuel, and if they can’t buy it then the Bahamian people can’t buy it. I’m telling these guys not to strike; striking is a last resort. I’m not down for that. They have to be crazy. Before I do that I would resign. I would go and resign and become a consultant for the Government against them.” He added: “But those guys are good guys. They just want their formula to be changed from a fixed margin to a percentage base, and if they get it switched from the fixed margin to the percentage base it would be better. They would be able to buy their fuel and have

no intervention from the Government. “But these guys are putting up all of the cash, buying all of the fuel, selling it to the public and they are losing. Because essentially, with the high cost of fuel, every time the gas prices goes up in The Bahamas the Government makes more money in taxes and VAT. So they’re saying for far too long we have been funding the Government with this, and we’re not going to fund the Government any more. We’re tired and we’ve had enough of this.”

THE WEATHER REPORT

5-Day Forecast

TODAY

ORLANDO

High: 83° F/28° C Low: 61° F/16° C

TAMPA

TUESDAY

WEDNESDAY

THURSDAY

FRIDAY

Sunshine with winds subsiding

Breezy early; partly cloudy

Some sun with winds subsiding

Winds subsiding with sunshine

Breezy in the morning; partly sunny

A thunderstorm in the afternoon

High: 80°

Low: 70°

High: 83° Low: 71°

High: 84° Low: 73°

High: 84° Low: 72°

High: 84° Low: 73°

AccuWeather RealFeel

AccuWeather RealFeel

AccuWeather RealFeel

AccuWeather RealFeel

AccuWeather RealFeel

AccuWeather RealFeel

81° F

66° F

85°-68° F

87°-72° F

90°-74° F

92°-75° F

The exclusive AccuWeather RealFeel Temperature® is an index that combines the effects of temperature, wind, humidity, sunshine intensity, cloudiness, precipitation, pressure and elevation on the human body—everything that affects how warm or cold a person feels. Temperatures reflect the high and the low for the day.

N

almanac

E

W

ABACO

S

N

High: 75° F/24° C Low: 70° F/21° C

8-16 knots

S

High: 79° F/26° C Low: 70° F/21° C

8-16 knots

FT. LAUDERDALE

FREEPORT

High: 79° F/26° C Low: 71° F/22° C

E S

E

W

WEST PALM BEACH

W

uV inDex toDay

TONIGHT

High: 85° F/29° C Low: 65° F/18° C

N

| Go to AccuWeather.com

High: 79° F/26° C Low: 68° F/20° C

MIAMI

High: 80° F/27° C Low: 71° F/22° C

8-16 knots

Statistics are for Nassau through 2 p.m. yesterday Temperature High ................................................... 77° F/25° C Low .................................................... 72° F/22° C Normal high ....................................... 81° F/27° C Normal low ........................................ 68° F/20° C Last year’s high ................................. 84° F/29° C Last year’s low ................................... 64° F/18° C Precipitation As of 2 p.m. yesterday ................................. 0.00” Year to date ................................................. 6.79” Normal year to date ..................................... 5.07”

ELEUTHERA

NASSAU

High: 80° F/27° C Low: 70° F/21° C

Forecasts and graphics provided by AccuWeather, Inc. ©2022

High: 77° F/25° C Low: 71° F/22° C

N

KEY WEST

High: 81° F/27° C Low: 72° F/22° C

High

Ht.(ft.)

Low

Ht.(ft.)

Today

4:20 a.m. 4:47 p.m.

2.4 2.0

10:52 a.m. 0.6 10:53 p.m. 0.5

Tuesday

5:12 a.m. 5:38 p.m.

2.5 2.3

11:39 a.m. 0.4 11:47 p.m. 0.3

Wednesday 5:59 a.m. 6:24 p.m.

2.6 2.5

12:21 p.m. 0.2 ---------

Thursday

6:44 a.m. 7:08 p.m.

2.7 2.8

12:37 a.m. 0.1 1:01 p.m. -0.1

Friday

7:27 a.m. 7:52 p.m.

2.8 3.0

1:24 a.m. -0.1 1:41 p.m. -0.3

Saturday

8:10 a.m. 8:35 p.m.

2.8 3.2

2:11 a.m. -0.3 2:21 p.m. -0.5

Sunday

8:54 a.m. 9:20 p.m.

2.8 3.3

2:58 a.m. -0.4 3:03 p.m. -0.6

sun anD moon Sunrise Sunset

High: 77° F/25° C Low: 71° F/22° C

N

S

E

W

8-16 knots

S

10-20 knots Shown is today’s weather. Temperatures are today’s highs and tonight’s lows.

tiDes For nassau

6:52 a.m. Moonrise 7:31 p.m. Moonset

2:48 p.m. 3:47 a.m.

Full

Last

New

First

Apr. 16

Apr. 23

Apr. 30

May 8

CAT ISLAND

E

W

The higher the AccuWeather UV IndexTM number, the greater the need for eye and skin protection.

ANDROS

SAN SALVADOR

GREAT EXUMA

High: 78° F/26° C Low: 70° F/21° C

High: 78° F/26° C Low: 72° F/22° C

N

High: 78° F/26° C Low: 71° F/22° C

E

W S

LONG ISLAND

tracking map

High: 79° F/26° C Low: 73° F/23° C

10-20 knots

MAYAGUANA High: 81° F/27° C Low: 76° F/24° C

Shown is today’s weather. Temperatures

CROOKED ISLAND / ACKLINS

are today’s highs and tonight’s lows.

RAGGED ISLAND High: 80° F/27° C Low: 75° F/24° C

H

High: 79° F/26° C Low: 74° F/23° C

GREAT INAGUA High: 82° F/28° C Low: 76° F/24° C

N

E

W

E

W

N

S

S

12-25 knots

12-25 knots

marine Forecast ABACO ANDROS CAT ISLAND CROOKED ISLAND ELEUTHERA FREEPORT GREAT EXUMA GREAT INAGUA LONG ISLAND MAYAGUANA NASSAU RAGGED ISLAND SAN SALVADOR

Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday:

WINDS NE at 8-16 Knots ESE at 8-16 Knots E at 8-16 Knots ESE at 8-16 Knots ENE at 10-20 Knots E at 10-20 Knots NE at 12-25 Knots ENE at 12-25 Knots ENE at 8-16 Knots E at 8-16 Knots E at 8-16 Knots ESE at 8-16 Knots NE at 10-20 Knots E at 8-16 Knots NE at 12-25 Knots ENE at 12-25 Knots ENE at 12-25 Knots ENE at 10-20 Knots NE at 10-20 Knots ENE at 10-20 Knots ENE at 8-16 Knots E at 8-16 Knots NE at 12-25 Knots ENE at 12-25 Knots NE at 10-20 Knots E at 8-16 Knots

WAVES 3-5 Feet 3-5 Feet 1-2 Feet 1-2 Feet 4-7 Feet 4-7 Feet 4-7 Feet 4-7 Feet 3-6 Feet 3-6 Feet 1-3 Feet 1-3 Feet 1-2 Feet 1-2 Feet 4-7 Feet 4-7 Feet 3-5 Feet 3-5 Feet 5-9 Feet 5-9 Feet 1-3 Feet 1-3 Feet 3-6 Feet 3-6 Feet 2-4 Feet 2-4 Feet

VISIBILITY 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 6 Miles 10 Miles 10 Miles 10 Miles 10 Miles 5 Miles 10 Miles 10 Miles

WATER TEMPS. 77° F 77° F 79° F 77° F 78° F 77° F 82° F 82° F 78° F 78° F 76° F 75° F 78° F 79° F 81° F 80° F 79° F 79° F 79° F 79° F 79° F 78° F 79° F 79° F 78° F 78° F

THE TRIBUNE

Monday, April 11, 2022, PAGE 17

WALL STREET FALLS TO FIRST DOWN WEEK IN FOUR ON RATE WORRIES By DAMIAN J. TROISE AND STAN CHOE AP Business Writers NEW YORK (AP) — Wall Street closed its first losing week in the last four with an up-and-down Friday, as investors brace for the Federal Reserve to tighten the brakes on the economy more aggressively to beat down inflation. Big tech stocks once again led the market lower, and the S&P 500 fell 11.93 points, or 0.3%, to 4,488.28 after wobbling much of the day. The Dow Jones Industrial Average rose 137.55, or 0.4%, to 34,721.12. The weakness for tech stocks, meanwhile, dragged the Nasdaq composite down 186.30, or 1.3%, to 13,711.00. For the week, the S&P 500 lost 1.3%. Stocks have slumped as the Federal Reserve swings more aggressively toward fighting inflation by raising short-term interest rates and making other moves. It’s a sharp reversal from keeping rates at record lows to stimulate the economy and carry it through the pandemic. Investors learned this week that the Fed may hike short-term rates by double the usual amount at several upcoming meetings, and that it came close to doing so last month. The last time that happened was in 2000. The Fed also indicated in the minutes from its last meeting that it’s likely to shrink its massive stockpile of bonds by up to $95 billion monthly, starting as soon as next month. Altogether, the moves should make it more expensive for U.S. households and businesses to borrow, which in turn would slow the economy and hopefully

halt the hottest inflation in 40 years. Higher rates hurt all kinds of investments, particularly the stocks seen as the most expensive. That’s because higher rates mean better returns for owning relatively safe bonds, which makes investors less willing to pay higher prices for riskier assets like stocks. That’s why big technology and other high-growth stocks have led the market lower recently. Amazon, Nvidia and Tesla were among the heaviest weights on the S&P 500 Friday, and each dropped at least 2%. Worries are also rising about the strength of the economy. With the Federal Reserve set to raise rates so aggressively, the fear is it will squeeze the brakes too hard or too quickly and force the economy into a recession. While that’s not the consensus on Wall Street, economists at Deutsche Bank earlier this week said they project a U.S. recession by late next year. The war in Ukraine has made things more uncertain by threatening to worsen inflation and damage the global economy. Prices for oil, gas and food have been particularly volatile since Russia invaded the country. A barrel of benchmark U.S. crude rose $2.23 to settle at $98.26 on Friday. It has swung wildly in recent weeks and briefly topped $130 last month. Brent crude, the international standard, added $2.20 to settle at $102.78 per barrel. Much of the market’s focus has been on the bond market, where expectations for a more aggressive Fed have sent yields to their highest levels in three years. The 10-year yield climbed to 2.71% from 2.65% late

MUSK SUGGESTS TWITTER CHANGES, INCLUDING ACCEPTING DOGECOIN By ALEX VEIGA AP Business Writer AS Twitter's newest board member and largest shareholder, Elon Musk is already floating suggestions for changes he'd like to see on the social media platform. In a series of tweets late Saturday, the Tesla and SpaceX CEO said that the company should include an "authentication checkmark" as a feature of its Twitter Blue premium subscription service, which costs $2.99 a month. Twitter adds a checkmark logo next to a user name when the account has been verified "authentic, notable and active." Musk also suggested Twitter make the authentication checkmarks of premium subscriber accounts different than those granted to official accounts belonging to public figures, for example. Such a move, Musk said, would "massively expand" the pool of verified user accounts and discourage the proliferation of spam "bot" accounts, making them too expensive to maintain. Musk also shared ideas for how Twitter should

charge for its subscription membership, saying the fee "should be proportionate to affordability and in local currency," and adding: "Maybe even an option to pay in Doge?" referring to the Dogecoin cryptocurrency. "And no ads," Musk tweeted. "The power of corporations to dictate policy is greatly enhanced if Twitter depends on advertising money to survive." Nearly 90% of Twitter's revenue in 2021 came from advertising. Musk's latest tweets about Twitter, including posting polls asking his 81 million followers whether Twitter is "dying" and whether the company's San Francisco headquarters should be converted into a homeless shelter "since no one shows up anyway," followed a tweet earlier in the week asking if he should add an edit button on the platform. Last week, Twitter disclosed in a regulatory filing that it entered into an agreement with Musk giving the billionaire a seat on the company's board, with the term expiring at its 2024 annual shareholders meeting.

TESLA and SpaceX CEO Elon Musk arrives on the red carpet for the Axel Springer media award in Berlin on Dec. 1, 2020. As Twitter’s newest board member and largest shareholder, Musk is already floating suggestions for changes he’d like to see on the social media platform. In a series of tweets late Saturday, April 9, 2022, Musk said that the company should include an “authentication checkmark” as a feature of its Twitter Blue premium subscription service, which costs $3 a month. Photos:Hannibal Hanschke/AP

IN this photo provided by the New York Stock Exchange, trader Michael Capolino, right center, works on the floor, Friday, April 8, 2022. Treasury yields continued rising as traders get accustomed to the Federal Reserve’s ongoing policy pivot to fighting inflation instead of stimulating the economy. Photo:Courtney Crow/AP Thursday. It was at just 1.51% at the start of the year. It could be set to rise further as the Fed not only

halts but reverses its program to buy trillions of dollars of bonds. The bond buying helped prices for stocks and other

financial assets to soar and markets to stay relatively calm, Chief Investment Strategist Michael Hartnett

wrote in a recent BofA Global Research report. Now the Fed is less than a month away from reversing that, which “by design will be negative” for financial assets, Hartnett said. He said it should lead to higher bond yields and higher volatility in markets. Meanwhile, COVID19 continues to squeeze the economy around the world, particularly in China. Shanghai residents face severe restrictions on movement and activities because of a surge in infections, with economic effects rippling around the world. ACM Research, a supplier of equipment for the semiconductor industry that has operations in Shanghai, said the restrictions will cause a significant hit to its revenue. Its stock fell 6.1%. A jump in COVID-19 cases is also behind airline disruptions in Europe. Two major airlines, British Airways and easyJet, canceled about 100 flights Wednesday. The industry is suffering from staff shortages because of the virus.