Deputy Speaker,
Cat Island, Rum Cay and San Salvador are so special, so beautiful you can’t help but wonder that God chose to bestow so many blessings on these islands.
Whenever I’m in Cat Island these days, I think about my grandparents.
They were not the type of people to complain. But they did work very hard to get by.
I wish they could see what is happening in Cat Island now – the work on the Arthur’s Town and New Bight Airports, the nearly one hundred miles of roadworks underway, along with one of the largest waterworks projects in the country.
We are building a new era of opportunity and change – and you can be sure Cat Island is going to be part of it.
Rum Cay’s airport terminal is on the way, their clinic is substantially completed and we are looking to construct a new administration building. On San Salvador their new High School is shortly underway and the road works which is currently before the tenders committee for approval.
Family Islanders have always been forced to choose – to gain access to certain kinds of opportunities has meant leaving behind the tight-knit communities, the traditions, and the tranquility of small island life.
But now, sooner than you think, those opportunities – for education, for work, for business ownership, for professional development, for advanced health care – will be available on islands throughout our archipelago.
Billions in new private sector investments…
Hundreds of millions in government-led initiatives and public-private partnerships…
Rapid advances in technology…
New hybrid energy grids to drive down costs and increase reliability of electricity…
Finally, our country is making the kind of long overdue infrastructure and technology investments that are critical to improving the quality of life and opportunities in our Family Islands.
None of it is easy – we’re encountering all the obstacles that have prevented progress and modernisation in the past – the high costs, the supply chain problems, the shipping delays, slow-moving bureaucracy.
But we’re fighting our way through all of that, Deputy Speaker.
Developing the potential of our Family Islands is vital to our nation’s progress.
We are finally on a path to a more inclusive Bahamian economy, one in which opportunity and prosperity lift up more Bahamians than ever before.
Mr. Deputy Speaker,
We are living in times of profound change, presenting our country with both formidable challenges and unprecedented opportunities.
The risks and dangers are not insignificant:
Significant shifts in geopolitics and global trade are creating new uncertainties, with some analysts forecasting turbulence ahead.
The global inflation crisis is unfortunately not entirely in the rear-view mirror.
Cyberattacks increasingly have the potential to cause catastrophic damage.
A changing climate is disrupting economic growth and endangering lives.
No nation is immune – these are challenges that must be confronted by all.
That’s why we have devoted significant budget expenditures to strengthening and protecting our country.
But as serious as these challenges are – and they are very serious – we should also have enormous optimism about our country’s prospects.
That’s because this is also a time of extraordinary opportunity, one in which Bahamians can thrive, as we take on longstanding problems with new energy and new solutions.
No one should doubt that our little country can do big things, even when facing significant headwinds. We have always punched above our weight.
Just think about how far we’ve come!
It was only three and a half years ago that our country’s economy was in tatters, our nation’s finances in freefall, our hospitals, schools, and communities in crisis.
Tens of thousands of Bahamians had lost their jobs. School closures affected 50,000 of our students.
The cost of the pandemic to our country was estimated by the Inter-American Development Bank at $9.5 billion dollars.
That’s on top of the $3.4 billion in damages and losses from Hurricane Dorian.
Then – just as we began our administration, a global inflation crisis led to prices rising across the world faster than they had in more than 40 years.
That’s what we met in place.
We didn’t let the scale and complexity of the challenges get in our way.
We started implementing our Blueprint for Change on day one.
First came rescue – digging out of severe crisis, ending harmful, punitive policies, and offering compassion and relief instead.
Then recovery: We moved quickly – faster than our competitors – to open our economy, working hard to get Bahamians back to work, while offering free testing and medical support that were always the smarter alternative to lockdowns and curfews.
We pulled the country back from a fiscal cliff, ending speculation about currency devaluation, increased taxes and stabilized the country’s finances.
We lowered VAT to 10%, (against advice and recommendation to increase VAT to 15% to bring it in line with regional average), lowered customs duties, introduced policies to expand domestic food production, and invested in protecting our borders and our communities.
We spent tens of millions repairing schools which had been closed for too long, worked hard to bring back children who had stopped attending, conducted our country’s first nationwide learning assessment, added new resources, expanded our vocational and technical training, and began an overdue revamp of the curriculum.
Despite skepticism and opposition from some quarters, we raised the minimum wage, which equated to an extra one week pay per month.
After years in which no homes had been built, we started building affordable housing.
After years in which the wealthiest had been allowed to avoid paying their fair share, we are collecting taxes owed by foreigners and big companies.
We have negotiated a record number of labour agreements, increasing salaries and improving benefits.
We are undertaking an expansion and renovations at PMH and clinics throughout our islands.
We launched our country’s first nationwide, comprehensive energy reforms – because unreliable and expensive electricity have been holding back our economy for too long – impacting investments, business expansion, our capacity to diversify, and job creation.
We are taking a deteriorating, crumbling, expensive grid, dependent on heavy and diesel fuels – a grid that in no way can meet growing demand – and we are building a new energy era.
Finally, solar panels are going up, costs are coming down.
Our policies are fueling our nation’s recovery – a recovery the International Monetary Fund called “remarkable” – meaning it was far from inevitable.
Our hard work to promote our beautiful country, and to create new strategic partnerships, has paid off:When in 2023, we hit nearly 10 million arrivals, nobody stopped to rest – we kept working, and in 2024, welcomed more than 11 million.
Here in New Providence, Atlantis is considering expanding, Baha Mar is expanding, Ocean Club is expanding, and we have major new foreign and domestic investments springing up throughout the island.
In Grand Bahama, we have a new cruise port, a major upgrade to the container port, a new trading hub, and multiple new resorts – all in the works.
Bimini, Exuma, Andros, Abaco, San Salvador, and nearly every inhabited island in our archipelago have seen unprecedented investor interest as dozens of major new projects are underway.
More investment will bring more revenue, increased entrepreneurial opportunities and more jobs; a strong tourism sector can grow alongside new initiatives to diversify our economy.
But there’s so much more to do – even with thousands back to work, and unemployment the lowest it’s been since 2008, and the largest GDP last year in our nation’s history.
That means this is the largest our economy has ever been. In fact, each year of our term, including last year and the two years prior, has produced economic growth higher than pre-COVID growth numbers.
But we are still paying off the massive debts we inherited – debts run up because of Dorian and the pandemic and bad policy choices made during the management of those crises.
The high cost of living, and barriers to progress, mean too many Bahamians aren’t thriving yet.
The truth is, there’s never been a time when our economy created enough opportunities for Bahamian advancement and ownership.
That’s why we’re working to create a New Day. Because the old day left too many people out.
The most important way to build new paths to security and success is to invest in our people – and you can expect to see us build on existing initiatives with new and innovative policies to do just that.
Mr Deputy Speaker,
We have shown that compassion and strategic investments in our people and our country can co-exist with fiscal responsibility.
In September 2021, we met record-high budgetary deficits in the hundreds of millions – now we have delivered the lowest recorded deficits in years as we move closer to a balanced budget.
We have knocked a billion dollars off our deficit – while at the same time providing more funding for local governments, launching a National Youth Guard, putting free Wi-Fi in our parks, expanding Urban Renewal outreach, and deploying new ambulances.
I wish you could have all seen the faces of our beautiful children at Yellow Elder Primary School, where I recently had the honour of celebrating a special milestone – our School Breakfast Programme has now served more than half a million – 500,000! — free, hot, nutritious breakfasts to our school children, so they can start their days ready to learn, grow, and thrive. A programme that started with nine schools is now serving 11,000 students in 91 schools, across the length and breadth of our country. Next year, the programme will be in every primary school in the country.
The programme hasn’t only increased attendance and improved grades – it’s helped families during a time when inflation has pushed prices up too high.
Deputy Speaker,
The high cost of living remains one of our country’s greatest challenges.
In a few weeks, families will get a little relief. Beginning on the first of April, the Value Added Tax will be reduced from 10 percent to 5 percent on unprepared foods, whether provided by grocery and convenience stores or imported directly.
Unlike in the past, when merchants had to apply for VAT refunds on breadbasket items after importing them, this time, we have made a critical change. The VAT rate reduction will now be applied directly at the border. What this means is that every Bahamian, whether a business owner or an individual importing unprepared food items for their families, will pay a lower rate upfront. This measure will result in more affordable prices on the shelves and greater access to essential goods for all Bahamians.
Mr Deputy Speaker,
Our budget invests significantly in fighting crime.
In the three-and-a-half years since we’ve been in office, our administration has hired hundreds more police officers; invested in new vehicles; bought more CCTVs, body cameras, and other equipment; and passed laws for harsher penalties for gang members and those who break the conditions of their bail.
Our police force now has one of the highest crime detection rates in the region. If you commit a crime in this country, you are overwhelmingly likely to be caught.
Even better is preventing those crimes in the first place.
Just over a year ago, we launched the Gang Crime and Justice Taskforce.
This is a cross-government effort chaired by me, and co-chaired by the Minister of Education, Technical and Vocational Training, and the Minister of National Security.
We bring a whole-of-government effort across the five pillars of crime: Prevention, Policing, Prosecution, Punishment and Rehabilitation.
We recently reported on the ‘Clear, Hold, and Build’ initiative, launched in Englerston towards the end of last year, with promising results: crime is down, and residents report feeling safer.
In order to ensure that the community moves forward into a better future, The ‘Build’ phase is well underway, and will continue for some time.
A community centre is being constructed, skills training and job opportunities are being advanced, conflict resolution, health and social service support have been intensified, along with the installation of more CCTVs, and other initiatives to improve safety and well-being.
The conditions which support crime did not arise overnight, and it will take time to restore that community to its former glory. But I know it can be done.
And Englerston is just the beginning.
Embracing what we learned in Englerston, we are already expanding the Clear Hold and Build Initiative to the communities of Nassau Village and Carmichael.
Deputy Speaker:
There has been considerable discussion about the costs of travel.
Let me be clear: the benefits gained by travel have far, far exceeded the costs.
The successful promotion of our country, the strategic partnerships and investments, the advocacy and coalition-building – these have already justified the costs of travel, many times over, not to mention the benefits which will continue to accrue.
Record-breaking visitor numbers. New airlift. The removal of our country from the blacklist. Record investment in the pipeline – including $1.5 billion in Grand Bahama alone.
The $200 million agreement just forged with Afreximbank for infrastructure will be an important catalyst for economic growth and jobs.
The partnership with Nature Conservancy and multiple other collaborators is worth $124 million to our country.
Our ability to negotiate access to fair financing and fair insurance arrangements in a world of climate disruption will require working together with other nations in the same position.
Climate change work faces challenges, but also breakthroughs on important fronts. That’s because whether or not people believe in climate change, climate change believes in them – and as disasters multiply and insurance markets respond, the urgency for action grows. The United States currently contributes about 15% to global emissions; they are of course very important, but their policies are far from the full story.
Playing a bigger role on the world stage has meant The Bahamas is hosting more important events and leaders. In addition to raising our profile and reputation, there are direct economic benefits – as a group of very kind livery drivers assured me.
I think it’s important for Bahamians to know that many of those who travel are young Bahamian experts, serving their country, for whom the professional development, exposure, and networking with colleagues are invaluable. Investing in the next generation of policymakers is, in turn, surely indispensable to us as well.
In 2025, mitigating risks and leveraging opportunities requires outreach, collaboration, and strategic partnerships.
I encourage the members opposite to consider that their attacks on this issue may reflect how they view their political standing, rather than any thoughtful consideration of the matter.
They spent millions on travel, you know.
They may want to reflect on their administration’s failure to bring in any significant investment during their term, and possibly connect some dots.
Consider it a learning opportunity.
Because this is actually quite serious.
Many of the policies which will be imperative to our country in the years to come – from concessionary financing to crime-fighting to border protection to climate adaptation – and on and on – all will require international cooperation.
It’s an easy issue to demagogue – but it reflects poorly on their maturity in serious times.
Deputy Speaker:
In my mid-year communication, I provided a breakdown of the key factors contributing to recurrent expenditures to date in the fiscal year.
During the first half of the current fiscal year, we made crucial investments, as outlined in our 2024/2025 Budget. We designed this fiscal year’s budget to accommodate increased investment in several areas, and indeed, these expenditure items have risen during the initial half of the fiscal year, according to plan.
There has been some confusion – I hope sincere, rather than calculated – about those investments being executed precisely as intended. I can assure you the details were clearly presented in the Budget Communication in May, just as I can assure you that recurrent spending as a percent of budget in the first half of the current fiscal year falls well within historical norms.
Perhaps an example could be helpful:
During this current fiscal period, the Government has subsidized mail boat contracts, resulting in an increase of $4.4 million compared to the previous period, and totaled $6.9 million for the period. I made it a point to announce this initiative clearly in my Budget Communication in May. Mail boat contracts had not received any increases in over ten years. I don’t think I need to explain that mail boats are important to our island economy and to the citizens who depend upon them.
Another spending initiative during the first six months of the fiscal year was the increase in the number of scholarships being offered to students attending the University of The Bahamas and The Bahamas Technical and Vocational Institute, along with grants for UWI medical students. All together, these investments in Bahamians totaled $23.5 million in the first half of the current fiscal year. This investment also encompasses the proactive approach taken by this Government to front-load the execution of the capital budget allocated for the Ministry of Education.
Furthermore, during this period, we also invested in essential services, such as garbage collection and network support. These two areas alone accounted for a nearly $10 million increase, compared to the previous year. These services are indispensable, and although maintaining and enhancing them is indeed a significant cost, I can’t believe anyone would choose the hazards of insufficient investment in this area.
Deputy Speaker:
In my mid-year Communication, I highlighted the commitment of this Government to address cybersecurity seriously. Consider that even a single successful cyber breach could potentially cost our country tens of millions of dollars. Over the past six months, we have made significant investments in consultancy services to enhance our cyber security measures.
As of January 2024, our Government’s firewall had blocked 75 million malicious threats. It is estimated that the cost of one data breach could total $34.9 million.
Deputy Speaker
In addition, we have also engaged major commitments for landfill maintenance and information technology, both of which play vital roles in our operations. This particular category of expenditure saw an increase of nearly $7 million. All of these commitments which are characterized as consultancy services totaled $44.0 million for the first half of the fiscal year.
Deputy Speaker,
Just as families and businesses have been facing rising costs, so too has the government – our rental costs increased by $20.7 million in the first half of the fiscal year compared to the prior period.
The increase in this area is driven by a lack of suitable accommodations for our Ministries and Departments. The Registrar General Department, Freedom of Information Secretariat, and Department of Public Prosecution all moved into new accommodations within this fiscal year. The Immigration Department will consolidate its operations and move into new accommodations before the end of the fiscal period.
Deputy Speaker:
Living accommodations in the Family Islands are a considerable challenge for our hard-working civil servants, including the teachers, social workers and police officers who are stationed at various locations across The Bahamas. In the Family Islands, AirBnB properties has driven rental costs higher. The Government must of course ensure that these employees have access to housing, so the Government has absorbed the higher rental costs, to ensure these employees can continue carrying out essential services for the public.
Deputy Speaker:
In the first half of the fiscal year, another significant area of expenditure was the subsistence support provided to Water and Sewerage and PHA, contributing to a $16.6 million increase in subsidies compared to the previous year. It is crucial for us to maintain essential services while pursuing reforms aimed at achieving self-sufficiency for these state-owned enterprises. One of the primary challenges facing Water and Sewerage is the cost of water. Ensuring access to this essential resource for all Bahamians necessitates medium-term subsidies. Additionally, PHA requires a comprehensive reform strategy and will also need medium-term support to sustain essential services. We are optimistic that investing in PHA’s physical infrastructure will significantly improve its situation, and we are actively pursuing financing to facilitate this, all of which has been repeatedly mentioned in our budgetary communications.
The rise in interest costs were also a factor that contributed to the increase in recurrent spending, which rose $34.3 million year-over-year. This interest increase was largely due to paying accrued interest on facilities that were replaced by cheaper facilities. The growth in these interest payments has exerted upward pressure on overall recurrent spending; however, a part of our debt strategy has been utilizing more concessional funding that would bring down our cost of borrowing. We anticipate that our cost of borrowing will smooth out in the second half of this fiscal year.
The last major spending category that I want to address is compensation of government employees, which grew by $16.9 million. The nominal growth value of wages and salaries has been relatively flat, growing only 0.4 percent year-over-year. Over the last three years, wages and salaries have been at an average of 11.5 percent of the recurrent budget, and 2.5 percent of GDP each year. So, the increase in compensation of government employees has not been driven by wages and salaries but other compensation benefits along with an increase in NIB contributions.
Correction of Deficit Number
Deputy Speaker:
I would like to address a point raised in the opposition’s response regarding the deficit number.
They claimed a deficit figure of nearly $500 million, combining both the current deficit and arrears. However, this statement is misleading. Adding the deficit figure with the arrears figure is not an accurate representation. This is the case especially considering that the Government’s arrears reported in the Mid-Year Communication were total arrears as of December 31st 2024, and would largely be settled within this fiscal period.
Deputy Speaker,
Since this administration took office, the Government has NOT exceeded its budget. The suggestion we will do so this fiscal year is without evidence. We fully intend to meet our deficit target for this fiscal year.
Borrowing by Agencies (Guarantees)
Deputy Speaker:
As we chart a path toward fiscal sustainability, we must adopt a forward-looking strategy that empowers State-Owned Enterprises and Government business enterprises to stand on their own, without continuous reliance on the central Government.
Historically, these entities have relied heavily on Government subsidies. However, our administration is committed to changing that dynamic, by allowing these organizations to borrow on their own balance sheets and to take greater responsibility for their financial operations.
Let me be clear, Deputy Speaker:
This approach is not about a shifting of the burden.
It is about empowering institutions to become self-sufficient while ensuring that essential public services continue to be delivered effectively.
The guarantees reported in the Mid-Year Budget are not simply debts – they represent targeted investments that will yield tangible benefits for the Bahamian people.
Let’s consider the University of The Bahamas.
The Government is seeking Parliamentary approval to guarantee $25 million to support UB’s pursuit of international accreditation. This is an investment in the future of Bahamian education. When UB achieves accreditation, the university’s global standing will be enhanced, attracting more students, and strengthening the quality of education for generations to come.
Similarly, Deputy Speaker:
The Water & Sewerage Corporation is seeking $50 million in financing to expand reverse osmosis water production across the Family Islands. This funding is critical to ensuring that every Bahamian, whether in Nassau, Long Island, or Crooked Island, has access to clean, potable water.
As I mentioned at the outset today, investing in our Family Islands has been postponed again and again – to the detriment of those communities. We are breaking this pattern of neglect. This investment will bring clean water infrastructure to thousands of Bahamians, improving both quality of life and public health.
In the healthcare sector, it is proposed that the Public Hospitals Authority receive $75 million to support the construction of the Grand Bahama Hospital and renovations at the Princess Margaret Hospital. This funding will allow us to bring the Grand Bahama Hospital to its first phase of completion, delivering modern, high-quality healthcare services to residents of Grand Bahama and easing the burden on our healthcare system.
Deputy Speaker:
It is important to emphasize that the guarantees mentioned in the Mid-Year Budget do not signify that these funds have been received, or even fully negotiated.
We are reporting these proposed guarantees in the interest of transparency.
Every guarantee is subject to rigorous evaluation, including credit risk assessments and eligibility criteria under our newly established Guarantee Policy Framework. This process ensures that the Government only backs loans that are necessary, affordable, and in the best interests of the Bahamian people.
By empowering agencies to borrow independently, while holding them accountable for their financial performance, we are building a culture of responsibility and strengthening fiscal discipline across the public sector.
Through targeted guarantees, we are building better hospitals, expanding clean water access, and strengthening our institutions.
With each step, we are moving The Bahamas forward, toward greater self-sufficiency, fiscal sustainability, and a brighter future for all Bahamians.
$300 Million Loan announced in Parliament
Deputy Speaker:
I want to take this opportunity to address recent discussions surrounding the borrowing resolution tabled in Parliament last week for the authorization of borrowing up to $300 million. It is essential that we all have a clear understanding of what this resolution means and how it aligns with our national goals.
First, let me be clear:
This borrowing authorization is a precautionary measure, designed to provide us with the flexibility to borrow if market conditions are favorable. It does not mean we will borrow the full $300 million. The authorization is for up to $300 million, again not a commitment to borrow the full amount. This gives us the ability to act in the best interest of the country, borrowing only when it is prudent and when the timing is right, under normal market conditions.
These funds will NOT be used to finance the Government’s deficit operations, nor will they be used to fund any current Government projects. These funds are intended for something much more strategic:
They are intended to be placed into the National Investment Fund.
The purpose of the National Investment Fund is to acquire valuable assets that will help build a prosperous future for ALL Bahamians. We cannot build a Fund for national development and then fail to resource it properly. The Fund was established with a clear purpose, to acquire assets that contribute to the long-term growth and well-being of our nation.
Passing the National Investment Fund Act was an important step in our commitment to securing assets that will benefit all Bahamians for generations to come. To ensure the Fund is able to serve its purpose, we must provide it with the resources it needs.
What is the point of passing a significant piece of legislation like the National Investment Fund Act if we are not going to equip it with the necessary funds to succeed?
This resolution, and the borrowing it authorizes, is a step toward ensuring that the National Investment Fund is properly capitalized, with resources to acquire assets that will serve the best interests of the Bahamian people.
Conclusion
Deputy Speaker:
Creating a fairer, more prosperous nation for all Bahamians requires balancing fiscal discipline, short-term relief, and strategic planning.
We are clear-eyed about the risks and dangers ahead. We will surely face setbacks along with triumphs.
But we can finally be optimistic about our country’s direction.
We are catalyzing change, lifting up new leaders, and sparking innovation.
We are holding fast to our traditional values while building a brighter future.