The Minnis administration’s commitment to investing in private sector growth has been exhibiting positive results as the Ministry of Finance reports a 58% increase in small and medium-sized enterprises (SMEs) between 2017 and 2020. With the help of targeted investments to grow the sector, an additional 13,986 SMEs have opened their doors, increasing economic activity and creating new jobs in the process.
“Since coming to office, we have dedicated an unprecedented amount of resources to support the start-up and expansion of SMEs. We are prioritizing private sector development because we understand SMEs are crucial for sustainable economic growth,” said J. Kwasi Thompson, Minister of State, Ministry of Finance.
“The Bahamian entrepreneurial spirit has always been a backbone for our country's economy, but for the first time, the Government has recognized this by targeting millions of dollars in investment to ensure that spirit continues to flourish and lift up our economy,” said Minister Thompson.
As of September 2020, the Access Accelerator Small Business Development Center (SBDC) had approved nearly $60.5 million in funding for SMEs to support the visions of new and existing Bahamian entrepreneurs. This funding was largely allocated as part of the Resilient Bahamas Budget Plan for Fiscal Year (FY) 2020/21, which focused in part on keeping small businesses afloat.
Support for this crucial area of development will continue through a number of initiatives within the Accelerated Bahamas Recovery Plan for FY2021/22. Over the next five years, the government has committed to $250 million in financing for the SBDC with the first injection of $35 million being allocated in the 2021/2022 budget.
Improving access to capital financing has been an instrumental method of facilitating private sector growth. However, the Government is also providing new tax and employment incentives to small businesses, and working on its own modernization and digital transformation to be better facilitators of private sector growth.
“We are not only relying on direct financing. Our budget is leveraging the use of tax concessions to promote the continued development of the private sector. We’re providing incentives to expand your business operations through duty-free imports of first stock inventory and other products necessary to a small business’ development. Specifically in our Southern Family Islands, we’ve created tax-free zones to encourage economic growth by way of concessions on materials needed for residential and commercial development and tax breaks on business license fees,” said Minister Thompson.
The government also plans to expand financing options for SMEs with new crowdfunding regulations which allow small businesses access to mechanisms that were previously limited to larger organizations. Under these new regulations, small businesses will soon be able to raise up to $5 million in capital.
As SMEs continue to launch or expand, the government is capitalizing on this growth to tackle unemployment. The Government Employee Incentive Program will incentivize hiring as the private sector economy continues to rebound. Through the program, businesses can apply for tax credits of up to $400 per week to fund the payrolls of up to 10 new employees. The government expects to see 2,500 new jobs created from this initiative.