April 11, 2023
The Caribbean Development Bank (CDB) has committed US$100 million in support to The Bahamas as it charts a path to economic recovery and resilience following the back-to-back disasters of Hurricane Dorian and the COVID-19 pandemic.
The Bank’s Board of Directors approved a policy-based loan (PBL), the first in a proposed two-part series of PBLs, with a second tranche of US$25 million expected to be appraised in the 2023/24 fiscal year.
The PBL will provide support to the Government of The Bahamas as it undertakes a programme of policy, legislative, and institutional reforms aimed at strengthening fiscal discipline and boosting revenue mobilisation while safeguarding the vulnerable.
CDB Director, Economics Department, Mr Ian Durant stated the programme of assistance will help the Bahamian economy to get back on track after the devastating impacts of Hurricane Dorian in 2019, and the COVID-19 pandemic in 2020.
“While The Bahamas was recovering from the impact of Dorian, the pandemic created an additional shock on the tourism-dependent economy of The Bahamas. These shocks led to an unprecedented crisis that inflicted severe costs on the economy and people of The Bahamas. Central Government (CG) indebtedness rose sharply, and policy momentum aimed at fiscal consolidation and unlocking higher medium-term growth was interrupted,” explained Mr. Durant.
Despite this, he said the Government has been “making credible efforts towards restoring fiscal sustainability by implementing measures to increase revenue and reduce expenditure to bring its fiscal responsibility framework back on track” and it was against this background that CDB was lending its support.
CDB provides policy-based loans to governments in response to urgent needs occasioned by external or internal economic imbalances, including debt crises and temporary foreign reserves shortages.