One of the more pressing threats to the country’s stability is the extent to which growing numbers of Bahamians and businesses, driven by the high cost of living, are being pushed further and further away from the ability to survive and thrive.
What was expected to be a definitive announcement in Parliament yesterday on the upcoming Bahamas Power and Light (BPL) rate increase structure for residential and commercial customers, turned out to be an announcement by BPL’s minister, Desmond Bannister, of a projected average bill increase of $20 to $30 for residential customers with no indication of the increases commercial customers can expect.
We understand that the rate structure for BPL’s new Rate Reduction Bond (RRB) fee will not be set until planned borrowings are both completed and securitized, which means that, for now, the power company’s customers are unable to know with certainty what they can expect to be charged based on their usage.
Inordinate time was spent lambasting the previous administration and provisions of its RRB Act set to be repealed, but there are several hardship allowances this administration was free to make in its bill that were not foreshadowed.
No concession was announced for BPL customers in the Special Economic Zone of Abaco where businesses and storm victims are expected to endure continued hardship into 2020.
No concession was announced for customers on minimum fixed incomes such as pensioners, and no indication was provided on the numbers of customers who may become ineligible to benefit from a value-added tax (VAT) exemption on bills $300 or less once the new fee is introduced.
If businesses cannot remain open and maintain staff levels, less people will have money to pay their power bills regardless of the rates.
Prime Minister Dr. Hubert Minnis chided Progressive Liberal Party (PLP) Leader Philip Davis during yesterday’s debate for what he claimed was the previous administration’s refusal to implement a necessary RRB fee fearing protest threats allegedly made by some in the business community at that time.
It seemed lost on the prime minister that if large businesses were resistant to a rate increase back then, his administration should be particularly fearful of commercial fallout given that the economy is in a more precarious state now due, in part, to the devastating impact of Hurricane Dorian.
The impending increase to BPL bills is on the backs of mounting hardship for Bahamians.
The nation’s Consumer Price Index soared to a record high of 108.9 points in July, an indication that the unyielding burden of prices for goods and services continues with little sign of respite.
According to the Central Bank’s Monthly Economic Report for September, loan delinquencies increased across all categories, with consumer loan arrears rising by $24.5 million (12.1 percent), mortgage arrears expanding by $19.5 million (4.5 percent) and commercial loan arrears rising by $8.9 million (15.7 percent).
The International Monetary Fund’s October 2019 World Economic Outlook forecasts global growth in 2019 to reach its lowest level since 2008/09, with the outlook for 2020 impacted by variables including a projected slowdown in China and the United States that could result in a much more subdued pace of global activity than currently projected.
Challenging times are ahead.
With unemployment expected to soar to around 13 percent here at home and with thousands of Bahamians and residents from Abaco and Grand Bahama displaced and uninsured, this perhaps could not be a worse time for a hike in electricity bills for most of the country.
When this administration increased the VAT rate to 12 percent, Finance Minister Peter Turnquest said in response to blistering criticism that Bahamians “will survive”.
But the tragedy of this statement is nowadays, far too many Bahamians have only enough money to struggle to survive, with little to no disposable income available to invest in opportunities through which they and their families can thrive in their own country.
As Bahamians continue to pay the high price of mismanagement, the blame game they continue to witness in Parliament gives them little confidence that such a price will pay off for them in the long run.