Bahamas back to pre-pandemic 'lethargic' growth

The Bahamas is back to the “lethargic” pre-pandemic growth, according to a top financial expert, and needs a strategy to move forward.

Gowon Bowe, chief executive officer of Fidelity Bank, told Guardian Business that while the recent GDP growth figures from the Bahamas National Statistical Institute (BNSI) have demonstrated that the recovery from the pandemic continued, the numbers have to be put into context.

The Bahamas’ economic recovery since Hurricane Dorian and the COVID-19 pandemic has yet to match the second quarter of 2019, when real GDP came in at $3.4 billion, said the BNSI in a report issued on Tuesday.

Speaking on Wednesday, Bowe said, “The first thing we want to do is really get back to where we were pre-COVID. And so, when we look at our GDP numbers, really 2021, 2022 and 2023, we were rebounding from, in nominal terms, almost a 25 percent decline.

“So when we talk about having, like we did in 2021 and 2022, those double-digit recovery numbers, those sound wonderful if we were starting from the same base, but given that we are starting from a very low base, is not to diminish the value of the recovery but is really to put it into context that we need to say that we are just getting back on track.

“I think if we look at the forward projections and really what it’s saying, is 2023 was the end of the recovery and unfortunately, we are reverting to the lethargic growth numbers of less than two percent per annum.”

The BNSI growth figures should be “taken for what they are as real GDP growth” and showing how the economy is rebounding from the pandemic, but realistically, the country should be more focused on how to grow at a more rapid pace than what it was prior to 2019, according to Bowe.

He also said: “The two percent per annum growth rate has proven insufficient to absorb school-leavers, insufficient to effectively expand the GDP at a pace that would allow for economic growth and expansion in terms of take-home pay and others for the general population.”

In order to increase economic growth, The Bahamas should look at expanding tourism beyond resort-based tourism, Bowe said.

“We have this misplaced belief that we should be finding new industries, as opposed to saying how do we fully take advantage of the industries that we have,” Bowe said.

He continued: “With that being said, tourism is not the global number one industry by chance. The reality is, when we look at The Bahamas, our tourism product has largely been recreational tourism, whether we like to admit it or not. Have we exploited sports tourism? Have we exploited ecotourism or have we exploited conference tourism?”

Bowe said there are so many different elements of tourism to be exploited, and all the policymakers need to do is focus on a national initiative to exploit some of these initiatives and take advantage of the strengths of the country’s number one industry.

The Bahamas also needs a “national strategy,” around financial services and the identity of the country, he noted.

Bowe also said that while the country was engaged in private banking and after a while became unfairly labeled as “tax management business,” it needs to change its financial services focus.

He added: “We need to be focusing on the upside of wealth management because the higher networth individuals are not getting poorer, they are only getting wealthier.

“They need estate planning. They do need tax management, and not from a perspective of how do I look to a low tax jurisdiction, but how do I effectively put my assets in locations that are tax compliant, and allow me to take advantage of the benefits of their particular tax system.”

Bowe said the policymakers need to get back to the strategy around the National Development Plan, where all sides can buy into a shared vision for the economic and social growth for the country, something that is “measurable,” while at the same time believable.