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US says Inflation Down

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By Dana Malcolm  

Staff Writer  

 
 

#USA, March 31, 2023 – The US inflation rate has dropped again. Welcomed information as the ripple effects of these lowered costs will mean less expense to islanders who depend heavily upon the US for imports. Overnight, in the TCI, FortisTCI announced that consumers can expect a drop in energy prices; specifically, the fuel factor rate has declined 18 percent.

The rate now stands at 6 percent, meaning prices are 6 percent higher than they were in February last year. That figure is down from 6.4 percent in January. This is according to the US Bureau of Labor statistics which measures the Consumer Price Index. This is a far cry from the 9 percent highs in June 2022, that saw food and gasoline reach staggering highs. 

Prices between January and February rose 4 percent, down from a 5 percent rise in January. Prices are rising more slowly than they did last year, closer to the healthy 2 percent inflation that the Federal Reserve, America’s Central Bank, craves. The number is still far enough away that the Fed has continued to raise interest rates. 

Bahamas News

Bahamas NIB Minister explains dire situation and need for July increases

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Rashaed Esson
Staff Writer 

 

The Bahamas’ National Insurance Board (NIB) is facing financial issues, at risk of being unable to pay off its debts by 2028, as revealed by Alfred M. Sears, Minister of Immigration and National Insurance in the Mid-year Budget Performance report.

This unfortunate development is according to NIB’s 11th Actuarial Report, facilitated by the International Labour Organisation (ILO) and it is calling for swift solutions to restore the capacity of the NIB fund.

Sears, in a release of the report, published on March 7th, goes into the details of the NIB’s dilemma, saying that the Board’s annual income, which includes contribution and investment earnings, is not enough to cover its expenditure fee, inclusive of benefits and administrative costs, “especially in the Long Term (Pensions) Benefits Branch.

The contributing factors to the issue take different forms, Sears highlights. He refers to the decreasing working-age population and an increase in the elderly population, there is an imbalance. The ratio of active contributors to pensioners is currently at 3 to 1, meaning that every three workers are paying for a single pensioner.

Additionally, there is the decline of compliance; benefits expenditure dominating contribution income reductions in investment income, high administrative costs, women having fewer children, and individuals living longer and this simply means a much larger and unsustainable burden for the workforce to shoulder.

If nothing is done, future generations won’t be able to benefit from the NIB as they should.

It is for this reason that reforms are recommended and will be implemented, as advised by the Actuarial Review.

“The Review recommended that a significant increase in the contribution rate is required to pay the full benefits in 2028,” Minister Sears informed.

As a result, come Monday July 1st, 2024, “the contribution rate for NIB will be increased by 1.5%, to be shared equally between the employer and the employee, and thereafter a 1.5% increase Every Two Years from July 1, 2024 to July 1, 2044.”

This, according to Sears, will ensure NIB’s continued provision of necessary services and benefits to Bahamians. A reliable support system for the archipelago.

In fact, with this development, Sears points out that NIB is projected to see a surplus after 2030, when its annual income will exceed the projected expenditure.

The National Insurance Board minister mentions that it is massively important for Bahamians, standing as the foundation of the nation’s social welfare system, providing support to Bahamians when times are hard.

“It would be true to say that if it were not for the National Insurance Board so many of our citizens would not have survived through Hurricane Dorian and COVID-19. For example, between 2019 and 2021, the Government, through NIB, provided income supplement and unemployment assistance to thousands of Bahamians totaling $120 million and NIB itself paid out unemployment benefits, during this period, of $131.5 million between 2019 and 2021,” he maintained.

With the coming increase in contributions, Sears expressed he understands that it might be of concern to Bahamians, so he assured them that it is made to be reasonable and proportionate.

“The phased approach will allow for adjustments to be made gradually, giving each person time to plan and prepare accordingly,” he said.

In continuation, there is more coming beyond the increased contribution, according to Sears.

He said there will also be a comprehensive programme of reform of NIB which will include  “legislative amendments to the National Insurance Act, the National Insurance (Chronic Diseases Prescription Drug Fund) Act, the National Insurance (Benefit and Assistance) (Amendment) Regulations, and the National Insurance (Contributions)(Amendment) Regulations to strengthen financial sustainability and
accountability.”

Additionally, there will be more changes that are “a global and internal recruitment of qualified Bahamian professionals into the executive management of NIB,  to bring about transformative advancements in NIB’s “digital and IT infrastructure, better customer relations, more efficient and effective Human Resource management, reduce administrative costs and improve the investment strategy to produce a better rate of return.”

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Bahamas News

BPL Has Over $500 Million in Debt

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Minister of Energy and Transport the Hon. JoBeth Coleby-Davis said the Bahamas Power and Light Company (BPL) has over $500 million in debt.

“Yes, that’s right over half-a-billion dollars and counting. It owes banks, it owes the government and its employee’s pensions are underfunded by $120 million. You heard me! The employees’ pension is underfunded by $120 million. Big change is needed!”

Minister Coleby-Davis was making her Contribution to the 2023-2024 Mid-Year Budget Debate in the House of Assembly on Wednesday, March 6, 2024.

She explained that BPL operates 29 power stations on 17 Islands, and over the next five years BPL will need an investment of over $500 million to upgrade its infrastructure:

$300 million in new generation in New Providence and the Family Islands,

$130 million in transmission and distribution in New Providence in the next two years alone,

$35 million in advanced metering infrastructure, and

$70 million in other costs.

The Minister said, “Today to fix BPL, we need over $500 million to address its debts and over $500 million to upgrade and improve our aged and deteriorated infrastructure.”

Plan to Lower Cost, increase reliability and use cleaner sources of energy

The Energy Minister explained that the Government’s plan has four components, each of which is necessary to finally deliver to Bahamians what they deserve: lower prices, increased reliability, and cleaner sources of energy.

She said the components are:

Incorporate solar as a blended source of energy in the Family Islands with a view to replacing 100MW of generation infrastructure. The Ministry received 29 proposals in response to its Request for Proposal (RFP), and is presently evaluating those proposals and intends to notify the successful bidders by the end of March.

Incorporate solar as a source of 60-100MW of power generation in New Providence. The Ministry issued the RFP and the deadline for submitting proposals is March 28, 2024.

Replace and upgrade much of the Transmission and Distribution System in New Providence to improve reliability and reduce cost.

Ensure New Providence has 340 MW of power to meet demand now, and be in a better position to meet forecast growth in coming years.  This requires replacing aged or obsolete generation, purchasing considerable additional new generation, and introducing LNG, liquid natural gas, to increase efficiency of the generating environmental impacts.

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Caribbean News

CDB Approves Millions for Regional Improvement such as Health, Education and Poverty

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Rashaed Esson

Staff Writer 

#RegionalDevelopment#CDB, February 28th, 2024 – Projects for the improvement of water, renewable energy, education, health as well as budgetary support for governments in the region, are being financed with an approved USD$461 million by the Caribbean Development Bank (CDB). Included in the approval are The Bahamas with USD$125 million and Saint Lucia with 43 million. Additionally, as announced in a release from the Bank, climate resilience and poverty reduction will also be prioritized through the funding. 

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