With more than 25,000 people laid off or losing their income due to the COVID-19 pandemic, unemployment in The Bahamas is projected to exceed 30 percent, said Prime Minister Dr. Hubert Minnis in a national address yesterday as he painted a grim picture of the country’s economic future while advising painful measures will be taken.
The prime minister said The Bahamas is in a time of heartbreak and hardship and the government “will not sugarcoat the severity of the circumstances in which we find ourselves”.
“Some of the decisions that we shall have to take will no doubt be uncomfortable and indeed painful,” he said during the 50-minute long address.
“But we cannot shirk away from making the hard decisions.”
And with government revenue down half of what is expected for the month of April, Minnis said some estimates show the economy may shrink by between 14 and 20 percent during 2020, representing a historic one-year decline.
“We are in very difficult and uncharted waters. Based on applications to NIB (the National Insurance Board), more than 25,000 people have been laid off or have lost their income to date. This number will likely increase. The initial numbers from the treasury indicate that the tax revenues for April were just about half of what was collected in April 2019,” he said.
“Our unemployment rate in the near term will likely exceed an unprecedented and extraordinary 30 percent. The entire global economy is in free fall and in uncharted territory.”
Minnis added, “Tourism, the leading engine of our economy, is being devastated.
“Many businesses that closed during the lockdown are not confident they will be able to reopen once the restrictions are lifted. We are facing a stark reality that the vast majority of us have never seen in our lifetimes.”
Because of this grave outlook for the economic situation and the state of government finances, Minnis forecasted that the government is going to have to make very tough decisions.
And hinting to a stark upcoming budget exercise, the prime minister added that Bahamians must be prepared to do things differently both in the near-term and in the long-term in order to maintain some measure of economic stability in the near-term.
“The upcoming national budget communication on May 27th will outline the economic and fiscal plan for the country for fiscal year 2020/2021 which begins in July. It will be a budget that is shaped to match the unprecedented nature of the times we are living in,” he said.
“What I will say at that time is that your government will ensure that social welfare allocations are expanded to meet the basic food and other core needs of those economically displaced because of COVID-19.”
The prime minister noted that the upcoming budget will provide for the ongoing support of those still recovering from the ravages of Hurricane Dorian while ensuring that no Bahamian goes hungry due to the economic hurricane caused by COVID-19.
He said the budget will also make provision for expanded capital works and will seek to stimulate domestic private construction.
“We will focus on both large and small civil works so that small contractors and their teams across the country can get as much work as possible to provide jobs and commercial activity in all the islands of our archipelago,” he said.
“These expanded works will bring income to thousands of families in need during this downturn. We will do what is necessary in the near-term to preserve social and economic stability. We must also change the way we approach how our economy functions.”
Minnis also indicated that the recently established Economic Recovery Committee has been broken down into subcommittees on structural reform; Family Islands development; healthcare and social capital; commerce, entrepreneurship and next generation (youth) engagement; agriculture, fisheries and manufacturing; environmental stewardship; labour and education; digitization and the conceptual economy; tourism and the creative/ orange economy; and financial services.