The government is working to find the best solution to reduce the dependency of state-owned enterprises and quasi-governmental organizations in the wake of the novel coronavirus (COVID-19) threat, with Deputy Prime Minister and Minister of Finance Peter Turnquest contending that they will likely become bigger burdens to the public purse because of the economic fallout caused by the virus.
The global pandemic has begun to stretch thin the resources of the National Insurance Board (NIB), grounded Bahamasair and put a question mark to the future of Bahamas Power and Light’s (BPL) rate reduction bond.
Turnquest told Guardian Business that the government is still working with state-owned enterprises and quasi-governmental organizations “but obviously we don’t want to make a decision today that is going to cause long-term pain”.
The Central Bank of The Bahamas (CBOB) has requested that NIB offload some of its foreign investments, as it seeks to protect foreign reserves.
With cruise lines and hotels continuing to push back their sail and opening dates respectively, keeping thousands of Bahamians out of work, NIB could be forced to prolong its assistance programs.
On Wednesday, Chairman of Bahamasair Tommy Turnquest lamented that the airline will likely continue to be a burden to the public purse when the threat of COVID-19 has subsided, especially given that it could be forced to reduce its seat capacity to guard against the further spread of the virus and ensure the safety of passengers and crew.
But Turnquest said Bahamasair will work hard to pull its weight.
“Bahamasair is already a drain on the public purse,” he said. “But we can’t just say we’re going to be a drain, there has to be some contribution.”
BPL continues in its attempt to raise $600 million on the international market, but market instability due to COVID-19 has pushed that acquisition process back.
The power company’s Chairman Dr. Donovan Moxey told Guardian Business at the beginning of the COVID-19 emergency orders that the turmoil in the markets could present an opportunity to raise the money. That has yet to happen.
The government is set to roll out its 2020/2021 budget with these considerations exacerbated by COVID-19.
Turnquest told this paper this week that the government will likely have to borrow $250 million before the end of the fiscal year. But the government could look to borrow up to $3 billion to shore up the Bahamas economy because of COVID-19.