NIA Budget Address Presented by Hon. Mark Brantley, Premier and Minister of Finance December 07, 2021
Mr. President, I beg leave to move the second reading of the bill shortly entitled the Appropriation Ordinance, (2022) 2021.
1.0 INTRODUCTION
It is an honor and privilege for me this morning to rise and present this budget under the theme:
“Recapturing the Momentum; Restoring Fiscal Sustainability”
1. Mr. President, this budget is presented against the backdrop of the continued uncertainty created by the global COVID-19 pandemic. Despite this, we are optimistic that during the upcoming fiscal year and beyond, we can return to some level of normalcy. I believe it to be true that Covid-19 is here to stay. We must therefore cope with the pandemic even as we seek to urgently recapture the momentum of the pre-COVID -19 era and set our economy on a path for fiscal sustainability.
2. During the budget presentation last year, we made projections that by this time in 2021 the global economy would have turned the corner on the pandemic. We were optimistic that the successful roll out of vaccination programs globally would have stabilized countries, restoring them to a pathway of growth which would ultimately benefit us. Unfortunately, this is not yet so as the pandemic continues to shrink global output, throwing tens of millions of people across the world into unemployment and poverty and disrupting economies across the globe.
3. Mr. President, it is therefore no secret that here in Nevis our economy continues to be severely impacted by the pandemic. Nonetheless, our island and our people must continue to demonstrate resilience in the face of adversity as the impact of this pandemic is unprecedented in scope and magnitude and continues to defy predictions. Even as I speak we have now learned of a new variant, Omicron, which has once again thrown the world into turmoil and uncertainty.
4. We continue to be extremely grateful to all our citizens for their sacrifices and patriotism, especially our frontline workers, for putting country above self in the fight against this deadly Coronavirus. It is through collaborative efforts that we have successfully managed the pandemic thus far. I encourage us all to recognize our individual and collective responsibility as we continue to safeguard our beautiful country and all of its people. Permit me to also express, on behalf of the people of Nevis, my deepest condolences to the Nevisians both at home and in the diaspora who have lost loved ones due to COVID-19. Our hearts and prayers are with you all.
5. Mr. President, over the past year, we have acquired the AstraZeneca and most recently, the FDA approved Pfizer vaccines and have been able to offer these to our people at all of our health centers across the island free of cost. The evidence is clear that vaccines are the best and most effective way to defeat this dangerous virus. I continue to urge our citizens and residents to do the responsible thing by getting vaccinated and follow all the COVID-19 Protocols. There is much truth in the oft stated adage that “none of us will be safe, until all of us are safe.” The empirical evidence in our Federation and globally is clear that vaccination reduces the risk of getting Covid19; reduces the risk of transmitting COVID-19; reduces the risk of serious illness from COVID-19; reduces the risk of hospitalization from COVID-19; and most importantly reduces the risk of death from Covid-19. In fact of the 5 tragic deaths that we have had in Nevis due to COVID-19, none were vaccinated.
6. Mr. President, allow me to also thank our friendly governmental partners and other Regional and International Organizations for their strong show of support in the donation of vaccines and other emergency medical supplies in helping us to navigate through this extremely challenging period. We are especially grateful to the Government and people of The Republic of China (Taiwan) for the donation of equipment and supplies and to the Governments of India and the United States for the donation of life saving vaccines.
7. Mr. President, as we seek to turn the corner on this pandemic era, borrowing the theme from our 38th Anniversary Independence Celebration, we must seek to “adapt, diversify and recreate” if we are to navigate the present state of affairs and get beyond this crisis without further damage to our economy. Our goal ought not simply to be about a quick recovery of our economy but should also focus on safeguarding our progress and prosperity for the medium and long term. Our tourism sector continues to be our main economic engine. It is showing good signs of life for the 2021/2022 season but is yet to regain the levels of activity needed over the near term. We must therefore continue to adopt coping strategies while expecting the gradual resumption of activities across this sector during the upcoming fiscal year 2022.
8. Mr. President, the need for a diversified economy has never been as greatly manifested than during this COVID-19 Pandemic. My Administration was forced to take bold steps and explore new frontiers to provide employment opportunities for our people. To this end we embraced the film industry as a means to tapping into the creative ideas and talents of our people. We were proud to partner with MSR Media, a UK based company, and have now created the foundation for a film industry for Nevis and the wider Federation. Thus far, we have seen four (4) featured films shot on Nevis and St Kitts. Those films are “One Year Off”, “Assailant”, “A Week in Paradise” and “Christmas in the Caribbean”.
9. I was very heartened that MSR Media established an Acting Academy using our facilities at NEPAC and that a number of our citizens and residents were able to gain acting and support roles in some of these films. More importantly, our people were able to gain employment as make-up artists and assistants while others were able to assume important management and logistical roles. Many hotel rooms at the Four Seasons and Hamilton Resort along with several private villas were booked and many car rental agencies saw some welcomed business. The Gin Trap restaurant was reopened as a private club generating welcomed employment and activity.
10. Mr. President the past 18 months have truly been a challenging period for my Cabinet and Government. The debilitating effects of the pandemic severely tested our resourcefulness and our resolve and continue to pose unimaginable obstacles to effectuating our development plans. When I assumed the leadership of Nevis in December of 2017, I never thought that during my first term as Premier I would have lost nearly 2 years thus far to a global pandemic. Infrastructural development plans had to be adjusted or postponed; financial resources had to be reallocated to Health as we confronted this crisis; unbudgeted expenses occasioned by the COVID-19 pandemic had to be met; our people had to be kept safe. All this Mr. President while our tourism industry was shuttered and our tax revenues decimated. It has truly been an unprecedented challenge to govern in a time such as this.
11. If you can recall Mr. President, Covid-19 has been the world’s first global pandemic in 100 years. There was no manual, no playbook nor guide as to how to manage this unprecedented crisis. And yet, my Government remained resolutely committed to the safety, growth and development of our people and our Island. Quite notably, we were able to keep all our Public Servants gainfully employed. Throughout lockdowns, curfews and long periods away from work, I think it is a matter for high praise that every single government worker, every single statutory corporation worker and every single pensioner was paid on time and in full. We were also able to limit the growth of the Public Debt even in the face of declining revenues while providing incentives to stimulate the other sectors of the economy as we anxiously awaited the rebounding of the tourism sector.
12. Mr. President, we witnessed the opening of the Newcastle Police Station and Fire Hall in December 2020 which was a welcome gift to the people of St. James Parish and the wider Nevisian community after earlier talks in some quarters of abandoning a physical police outpost in St James. In addition, we saw the opening of the state of the art CCTV Command Centre in Charlestown a giant leap forward in enhancing safety and security in our island. Most importantly, we have witnessed a reduction in violent crime on our Island. Mr. President we are truly delivering more safety and security for our people across Nevis.
13. We rejoiced at the groundbreaking ceremonies for additional housing for our people at Craddock Road, Hamilton, Maddens, Prospect and Rices even while we continued housing at University Heights. It is a matter of some pride Mr. President that this is the first time in history that the NHLDC is undertaking some 6 housing developments across the island simultaneously. Mr. President we are delivering more affordable housing for our people across Nevis.
14. Mr. President, work commenced on the Butlers Road Rehabilitation Project, and we have all borne witness to the unprecedented road works done throughout Charlestown. We have solved longstanding drainage issues in Ramsbury and Craddock Road, bringing welcomed relief to those neighborhoods. Mr. President we are delivering better roads across Nevis.
15. We have installed a 400,000-gallon water tank at Hamilton, along with a water filtration system, which has increased our water yield exponentially and added stability to our water supply. It is a matter of pride that the frequent cries we used to hear from our people that there is no water are heard no more. Mr. President we are delivering a better and more stable water supply across Nevis.
16. Mr. President, construction of the Technical Vocational Education Training (TVET) Center at the Gingerland Secondary School is now complete and ready for use. In the next fiscal year we shall see the start of the TVET center at the Charlestown Secondary School. We continue to provide financial support and scholarship opportunities for our students studying abroad and those pursuing studies online. We have innovated and reopened our schools, blending technology with in-person training for the safe delivery of education to our children. Mr. President we are delivering more training and education to our people across Nevis.
17. Our national showpiece and first ever National Park at Pinneys will be officially opened on December 19, 2021. This promises to be an epic event for the people of Nevis and the wider Federation. We publicly thank the Government and people of the Republic of China (Taiwan) for this significant investment as a monument to the friendship between our two countries. Mr. President we are delivering for our people across Nevis.
18. Mr. President, we have upgraded our health care system and invested in 2 brand new ambulances and critical equipment to fight the COVID-19 pandemic. This included the procuring of PCR testing equipment to allow us to test for the virus right here in Nevis. We have secured significant diagnostic equipment to be delivered early in fiscal year 2022. We have secured advanced refrigerators to store vaccines and have for the second time distributed masks and hand sanitizers to the residents of Nevis. We have hired nurses from the Philippines, Cuba and St Vincent and the Grenadines to add to our complement of local nurses. Our work on the new hospital wing continues and we anticipate being able to deliver this to the people of Nevis in the fiscal year 2022. Mr. President we are delivering improved healthcare services for all of our people across Nevis.
19. Mr. President we continue to provide support to the various sectors of the economy as a means of stimulating activity and promoting fiscal sustainability. We have also hired consultants and completely revamped the website and operations for the Nevis Investment Promotion Agency (NIPA) to create a first class one stop shop for investment into Nevis. In addition we invested heavily to upgrade the financial services registry to make it easier for users to access financial services online.
20. Mr. President, when the COVID-19 pandemic struck us in March of 2020 my Cabinet took a decision to pivot hard towards the Agricultural Sector. It is self-evident that a strong agricultural base is imperative if we are to ensure food security and self-sufficiency for our people. The stimulus provided by the NIA has played a pivotal role in the reviving and expansion of the agricultural sector on the Island of Nevis. We have already begun to witness an increase in the local supply of food items and our locally grown produce is now available on supermarket shelves across the Federation of St. Kitts and Nevis. Mr. President we are delivering more food across the island of Nevis.
21. Mr. President, our micro lending program administered by the Small Enterprise Development Unit (SEDU) provided assistance to entrepreneurs engaged in small and medium-sized businesses. It is through this low interest rate funding, the waiver of customs duties on business equipment and ongoing training opportunities that these small business entities are able to develop and maintain their businesses during this difficult period. Mr. President we are delivering more assistance to small businesses and especially to women and youth across Nevis.
22. Mr. President, the innovative stimulus provided to the construction industry has been a tremendous success. I am advised that currently there are 163 active construction sites on Nevis. My Government waived the 10% Alien Land Holding License fee in an effort to stimulate the sale of existing villas on the island. I am advised that as a direct result the island of Nevis saw villa sales of over EC$74 million in a mere nine (9) months. Many of these same villas are now being renovated adding to the jobs created in construction. Mr President we are delivering greater economic opportunity and construction jobs to our people across Nevis.
23. Mr. President on November 12, 2021 our electricity company NEVLEC received a brand new 3.8MW Wartsilla generator at a cost of just over US$6 million. This is the second new generating set purchased by us in the past 5 years. The reason for this purchase was to stabilize the electricity grid and ensure that we minimize any unplanned outages on Nevis. We have invested notwithstanding our commitment to renewable energy because we are determined that as we wait for the Geothermal Energy to materialize we cannot and will not allow Nevis to fall into darkness. Mr. President we are delivering more reliable electricity to our people across Nevis.
24. Mr. President, these have been the main mechanisms employed by my Cabinet to resuscitate an ailing economy battered by the pandemic. It has not been easy but we remain eternally optimistic about our island and our nation. The road ahead will be extremely difficult as we reshape and renew our economy and society in this new and uncertain environment. I encourage all our people, especially our business sector, to adapt and be creative. While we are proud of our responses thus far much work lies ahead. We must therefore remain steadfast in our efforts to protect our people and rebuild our economy.
25. Mr. President, recapturing the momentum after this pandemic will require bold and decisive leadership. I am confident that our tomorrow will be better than our today. I am confident that our best days are yet to come as Nevis now seeks to build back better.
2.0 INTERNATIONAL AND REGIONAL ECONOMIC OUTLOOK
26. Mr. President, as we look for signs of improvement in the global economy, we are encouraged by the cautious optimism being expressed. The World Economic Outlook (WEO) published by the International Monetary Fund (IMF) in October 2021 characterized this stage of the crisis as “Recovery During a Pandemic: Health Concerns, Supply Disruptions and Price Pressures”.
In this report the IMF predicts that having successfully managed the prior fallout from the pandemic, global growth is expected to reach 5.9 percent in 2021 and slowing to 4.9 percent in 2022. With regard to advanced economies, growth is expected to reach 5.2 percent in 2021 lowering to 4.5 percent in 2022. Growth in emerging and developing countries is expected to reach 6.4 percent in 2021 reducing to 5.1 percent in 2022.
27. Mr. President, we have seen firsthand the asymmetrical nature of the fragile economic recovery that has taken place, whereby developing and low-income countries such as ourselves have not been able to benefit fully from the global economic strides achieved thus far in the recovery. The IMF’s report also points out that the momentum of the recovery is beginning to wane and taper off as a result of persistent uncertainty due to the continuous periodic resurgence of the various variants of the virus within countries, inequitable distribution of vaccines and low vaccine uptake rates. These issues coupled with worsening weather disruptions brought on by climate change pose an even greater downside risk to the recovery for susceptible low-income countries and small island developing states like ourselves.
28. Mr. President, the Eastern Caribbean Central Bank (ECCB), in its Communiqué of the 100th Meeting of the Monetary Council, estimates that growth for the region is expected to reach 0.9 percent in 2021 increasing to 6.9 percent in 2022, which is a marked improvement over the contraction of 17.0 percent projected for regional economies in 2020. However, having made that optimistic prediction, the ECCB has expressed some hesitancy as to whether the region could actually achieve such robust growth in 2022 as there are several downside risks that can severely derail such an outcome.
29. The inequitable access to vaccines, low vaccine uptake rates and limited fiscal flexibility to effectively manage the pandemic are all issues that if allowed to persist will stymie the prospects for growth in the near to medium term. In addition to these challenges, increases in severe weather events as a result of climate change and the concerning rise in both the cost of imports and domestic food prices will lead to a further expansion in the already present economic divergence between advanced and low-income countries.
30. Further, Mr. President, the current data provided by the ECCB indicates that St. Kitts and Nevis actually experienced a significant contraction in GDP of 14.41 percent in 2020. However, the Federation is expected to experience some recovery in 2021 with Gross Domestic Product (GDP) for the year expected to only contract by a minimal 1.78 percent in comparison to the significant contraction experienced in 2020. This result indicates that there is still much more work to be done to get us back to the pre-pandemic levels of economic growth and to see the economic gains from the global recovery translated into tangible changes in the local economic landscape.
3.0 DOMESTIC ECONOMIC PERFORMANCE
3.1 Fiscal Performance 2020/2021
31. Mr. President, the fiscal year 2021 was projected to be an uncertain period for the local economy. Therefore, most of our policy support initiatives that were implemented during the latter half of the fiscal year 2020 have remained in place in an effort to spur economic activity. Given the current global and local economic landscape, my Administration continues to manage the tradeoff between the implementation of fiscal consolidation measures and the necessary synchronized fiscal expansion policies through our fiscal support programs, which are required to stabilize the local economy.
32. Our main economic earner, the tourism sector, continues to be significantly hampered by the lingering effects of the crisis and is yet to return to normal levels of activity. This has had a negative knock-on effect on the levels of employment, government revenue prospects, private sector investment, growth and profitability, and the standard of living of our people. Having projected that our economic performance for this current year 2021 to be on par with that of the last fiscal year, our fiscal position as at November 30, 2021 can be best described as stable, with an indication of a slightly better performance than projected.
33. Mr. President, the total recurrent revenue generated as at November 30, 2021 amounted to $108.38 million, which represents a slight increase of $5.37 million or 5.22 percent over the results of the same period in 2020, where the recurrent revenue generated at that time was $103.01 million. This revenue coupled with the amount of $41.25 million received as a share of revenue from the CBI Program, administered by the Federal Government, resulted in an overall total revenue of $149.63 million.
34. Mr. President, the tax revenue collected as at November 30, 2021 amounted to $77.67 million, which represents a marginal increase of 0.09 percent when compared to the amount of $77.60 million collected for the similar period in 2020. Overall, tax revenue accounted for 71.66 percent of our recurrent revenue collected to date with the remaining 28.34 percent classified as non- tax related revenue.
35. The most significant contributor to tax revenue continues to be VAT receipts, which accounted for 19.74 percent of recurrent revenue. Notably, there has also been significant improvements in the revenue performance at the Financial Services Department which accounted for 13.72 percent of recurrent revenue, an increase of 53.78 percent when compared to the revenue collected for the same period in 2020. Other notable contributors to revenue include Stamp Duties: 10.77 percent, Social Services Levy: 7.39 percent and Import Duties: 7.28 percent.
36. Mr. President, the total expenditure for the period January to November 2021 amounted to $164.72 million, which marks a decrease of $7.24 million or 4.21 percent when compared to the outlay of $171.96 million for the same period in 2020. Recurrent expenditure for the period under review amounted to $132.33 million, which is a marginal increase of $1.81 million or 1.38 percent when compared to the $130.53 million spent in 2020. The main components of the period’s recurrent expenditure were personal emoluments which accounted for 53.55 percent and the purchase of goods and services which accounted for 22.85 percent. Debt servicing consisting of both principal and interest repayments amounted to $17.33 million or 13.09 percent of recurrent expenditure.
37. Mr. President, the outlay for capital expenditure for the period under review amounted to $32.38 million, which represents a decrease of $9.05 million or 21.84 percent when compared to the expenditure of $41.43 million for the same period in 2020. Several ongoing public sector investment initiatives which are geared towards improving both the physical and social infrastructure on the island were undertaken during this period.
38. Mr. President, our fiscal position as at November 30, 2021 is encouraging. Despite the challenges with regard to revenue generation and having to significantly scale down our expenditure plans; we have been able to maintain our primary balance surplus which stands at $2.24 million for the period under review. In comparison to the same period last year, the surplus stood at $3.16 million indicating a contraction of 29.01 percent. Although our fiscal deficit persists, it must be noted that the gap has narrowed, moving from a deficit of $20.01 million as at November 30, 2020 to $16.42 million as at November 30, 2021. This indicates an improvement of 17.96 percent. Though we are moving in the right direction, we will have to continue to strike a balance between enforcing fiscal sustainability measures and incentivizing the various sectors of our economy over the near to medium term.
3.2 Performance of the Value Added Tax (VAT)
39. Mr. President, all of our tax revenue streams continue to be negatively impacted, including our revenue from VAT receipts which ordinarily accounts for 25 percent of recurrent revenue. VAT collected on the consumption of domestic goods and services has been severely impacted by the crisis as a large portion of this revenue is driven by activities in the hotel and restaurant sector.
40. For the period under review, VAT collected at the Inland Revenue Department amounted to $8.99 million, which represents a 26.22 percent decrease when compared to the $12.18 million generated for the corresponding period in 2020. VAT receipts collected at the Customs Department for the review period amounted to $12.40 million, a 3.14 percent increase in collections in comparison to the $12.03 million collected for the same period in 2020.
41. Overall Mr. President, the total VAT receipts for the period of this review amounted to $21.39 million. This result indicates that total VAT receipts have fallen by 11.64 percent or $2.82 million when compared to the $24.21 million collected for the same period in 2020. VAT generated on domestic goods and services is driven by activities in the local economy and with the slow rebounding of activities in the hotel and restaurant sectors, it is expected that VAT receipts will continue to suffer over the near term.
3.3 Status of Public Debt
Mr. President, as countries across the globe continue to recover from the effects of the COVID 19 pandemic on their economies, my Government has continued to implement responsible debt management policies and in so doing has been able to keep our borrowing to a minimum for the fiscal year 2021. We wish to thank our creditors for continuing to allow us the flexibility to work within our existing overdraft limits to meet the daily commitments of the government. I am happy to report that my Government has not contracted any new debt for this fiscal year. This is a remarkable achievement especially at a time when we are experiencing a drastic reduction in our revenue collections.
However, we continue to draw down on loan facilities which were approved prior to the onset of the pandemic. These include a $486,000.00 drawdown on the Taiwan ICDF Loan for the Small Enterprise Re-lending Project, $500,000.00 drawdown for the Water Drilling Project and $1.9 million drawdown for Developmental Projects, both from loan funding provided by the St. Christopher & Nevis Social Security Board. Also, the Nevis Air & Seaport Authority (NASPA) undertook the refinancing of a debt instrument held with the Bank of Nevis Ltd in the amount of $1.2 million. The purpose of this new facility was to consolidate existing debts while providing working capital to meet their daily expenditure needs.
Mr. President, I wish to report that the total debt for the Central Government as at October 31, 2021 stood at $440.1 million which represents an increase of 1.2 percent when compared to the amount $434.8 million as at December 31, 2020. This increase of $5.3 million in the debt stock is primarily due to the capitalization of the monthly interest payments on the St. Kitts-Nevis-Anguilla National Bank Ltd.’s restructured loan as a result of the agreed upon moratorium. The previously mentioned drawdowns along with fluctuations in our daily overdraft balance have all contributed to this increase. The Central Government’s stock of debt comprises $406.5 million or 92.4 percent domestic debt and $33.6 million or 7.6 percent foreign debt.
Mr. President, the total Public Sector Debt which includes the debt stock of our Statutory Bodies which is guaranteed by the NIA stood at $492.9 million as at October 31, 2021. This represents a 0.9 percent increase in comparison to the Public Sector debt stock of $488.7 million as at December 31, 2020.
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4.0 RECAPTURING THE MOMENTUM
4.1 Investment, Job creation and Employment
Mr. President, the Nevis Investment Promotion Agency (NIPA) must be seen as an avenue to facilitate lucrative investment opportunities to increase job creation while developing long-term strategic partnerships with potential investors.
As indicated in last year’s budget speech, efforts were well advanced to rebrand NIPA as we seek to become more aggressive in the investor market. The main feature of this rebranding exercise was the launching of the new NIPA Website and Investor Platform designed to heighten awareness of Nevis to the discerning investor. The new website platform, “InvestNevis.org” is interactive and offers a sophisticated user-friendly platform.
During this fiscal year, NIPA was able to promote investment opportunities in Nevis via virtual platforms, at several high-level forums hosted by the Ministry of Foreign Affairs which catered to our overseas consulates and ambassadors. Additionally, the Department hosted an education webinar “The Nevis Advantage” highlighting the benefits to potential investors of using a Nevis IBC, Trust and LLC for estate planning.
Moreover, on November 16, 2021 the Department participated in the Dubai Expo 2020 under the theme “Expanding Opportunities for Financial and Estate Planning”. Our participation at this event took the form of a hybrid presentation consisting of both online and in-person presentations to potential investors at the expo. A number of distinguished speakers made presentations and also engaged the audience in live discussions after the presentation. This event, which was held at the Abu Dhabi Hall in Dubai, highlighted the products and services offered by our Financial Services Sector and targeted potential clients who are seeking solutions for estate planning or to establish financial services entities. We continue to contribute significantly to the ongoing exposure of the Federation at this event where Nevisian art, crafts and handiwork are being showcased at the St. Kitts and Nevis Pavilion there. This is excellent exposure for our skilled personnel and artisans. The Exhibition will continue throughout 2021 ending on March 31, 2022.
It is also envisaged that the promotional efforts via social media platforms and the website can forge economic partnerships for business growth and expansion on the island. The newly revamped NIPA will become the interface between the investor and the various departments of government, including the Companies Registry, the Department of Physical Planning, the Ministry of Finance and the Ministry of Agriculture. This renewed effort will enhance the investor experience while also serving to increase the Federation’s ranking in the Ease of Doing Business Index.
Mr. President, other initiatives currently being undertaken by NIPA to enhance our appeal to potential investors, include the launching of the Customer Relationship Management System (CRM). This system which was launched through the assistance of the Caribbean Association of Investment Promotion Agencies (CAIPA) seeks to assist in the management of the Department’s interactions with current and potential investors while enhancing the investor facilitation experience.
Moreover Mr. President, NIPA is currently developing promotional videos for priority sectors and will disseminate these via the new website and social media platforms to gain more traction from potential investors, enhancing and simplifying our investment package for investors. NIPA will also continue to organize promotional webinars highlighting our financial services products and key priority sectors for development, as well as continue to gain exposure through the ongoing Expo 2020 Dubai Country Programming initiative. The Department will collaborate with Nevis Tourism Authority (NTA) to showcase NIPA’s investment opportunity videos on the Nevis Visitor Channel with a view to incentivizing our ultra-high net worth visitors to become investors.
Mr. President, the above initiatives are a clear indication that my Administration has not lost sight of the importance of attracting foreign direct investment as a means of providing employment opportunities for our people and driving economic growth.
We continue to incentivize a number of proposed and ongoing developmental projects including the development of the Rest Haven Property, the refurbishing and re-opening of the Nisbett Plantation Inn, the development of the land at Pinneys owned by NewFound, the development of the Wyndham Resort, the Apsara Science and Technology Park at Potworks, the Bush Hill Gardens development at Brown Hill, the Belmont Gardens development at Pinney’s, the One and Only Resort development at Indian Castle, the new global headquarters for Hamilton Reserve Bank at Barnes Ghaut, an entity to manufacture local beer, and the Nautilius Club Marina Development at Cades Bay. It is intended that these proposed and ongoing developmental projects will come on stream during the next fiscal year.
We are however mindful of the global challenges brought on by the pandemic and its continued effects on larger economies such as the USA, European Union and South East Asia. These effects have led to limitations on the movement of resources away from general investment and into investment in health-related opportunities in an effort to fight against this pandemic. Despite this, we remain cautiously optimistic that we will see these proposed projects come to fruition.
In the interim Mr. President we continue to incentivize local business development as a means of providing employment for our people. We have incentivized a number of local villa and condo developments in an effort to stimulate employment in the construction sector. Incentives provided by my Government have seen the recent opening of the first phase of the Belmont Gardens Project at Pinneys. Its high-end dining and duty free shopping complement the ambiance of the Pinneys Park which lies adjacent. To further complement these two initiatives, my Administration will move with alacrity to complete phase 2 of the Pinneys Park Development Project which will involve the redesigning and upgrading of the areas presently occupied by the restaurants and bars at Pinneys Beach in a manner that enhances the ambience of the entire area.
Mr. President, our efforts at incentivizing the growth of our small business sector are bearing fruit as we are slowly witnessing the growth of a manufacturing sector on Nevis which is providing material inputs to support our vibrant construction and health sectors. It must be noted that this CCM led Administration has always highlighted the growth of a manufacturing sector as one of its key priorities in its manifesto. We are indeed happy that we are now witnessing the operation of at least six medium to large scale manufacturing entities established here on Nevis, all with the capability to export their products to neighboring countries.
Mr. President, the data produced by the St. Kitts and Nevis Social Security Board shows that average monthly employment in Nevis during the first half of 2021 stood at 5361 persons. This is on par with the average monthly employment of 5381 for the year 2020 but substantially reduced when compared to the average monthly employment of 6060 experienced in 2019, prior to the onset of the Covid-19 pandemic. We expect these employment numbers to grow as the tourism sector rebounds. Likewise, the data provided by the Inland Revenue Department indicates that a total of 266 new business licenses were approved during the period up to November 15, 2021. This is in on par with the 296 licenses issued in 2020. In a similar manner the data provided by our local Companies Registry shows that a total of forty-six (46) local companies were incorporated at the Registry during the period up to November 15, 2021.
These numbers are indicative of our people’s level of confidence in the economy and in the policies of my Administration with regard to creating the appropriate investment climate to stimulate job creation and employment.
Mr. President, despite the above accomplishments in the traditional sectors, there is an urgent need for a more diversified economy. Our partnership with MSR Media was the first step in our efforts to adopt the film industry as an alternative economic sector in our quest to diversify our economy away from the traditional sectors of retail trades, tourism, construction and financial services. We must aggressively seek to promote Nevis as a full-fledged movie-making destination. We have seen the tremendous economic benefits that can be derived from the development of a film industry as an additional revenue generating sector while serving as a means of harnessing the creative energies and talents of our young people.
I wish to report that a total of 35 individuals were able to gain full time employment by MSR Media during the filming of these four(4) feature films along with the contracting of services of a number of business entities including professional firms, equipment and vehicle rental companies, hotel and villa accommodations, transport, food, security and other services The direct contribution of MSR Media to the local economy amounted to approximately $3.5 million with counter-part funding from the NIA in the amount of approximately $1.0 million. This pivot towards the film industry was a welcome boost and it provided vital employment opportunities at a time when a number of our people were laid off and in search of gainful employment. Mr. President, the skillset required to support the film sector must now feature in the programs to be offered at our TVET centers. The area of cosmetology is one of the intended programs which will serve to enhance the existing skill sets of those persons interested in becoming make-up artists.
Mr. President, having now analyzed the economic effects of this new industry, my Administration will immediately seek to develop a more detailed framework to promote Nevis as a film making destination. This framework will be developed in conjunction with our hoteliers and other participants in the tourism sector as this industry must serve as a means to complement our existing tourism promotional efforts with the ultimate goal of raising the occupancy levels at our hotels. A key feature of this framework will be a detailed package of fiscal incentives offered by government and the hotel and allied sectors. The experiences gained and skill sets developed by our people during these film making exercises must prepare our people to attain even greater roles in the film industry at the regional and international levels. This will also serve as an incentive to pursue career paths in this industry. This framework will be displayed on the NIPA website and will serve as a clear indication of our commitment to attract and develop viable partnerships with producers in the film industry.
4.2 Tourism and the Environment
Mr. President, this current fiscal period has been a year full of challenges for the tourism sector and has demanded creativity and proactive responsiveness from the Ministry of Tourism, the Nevis Tourism Authority and our numerous tourism stakeholders. These challenges became even more pronounced as the pandemic raged worldwide causing severe havoc in all our tourist markets and generating uncertainty in tourism demand. In response to this, it is imperative that we focus our attention on measures designed to recapture our pre-COVID-19 momentum and restore sustainability in our tourism sector.
Our efforts must now be geared at ensuring that Nevis stays current in our existing tourist markets. We must undertake an aggressive marketing and public relations campaign to regain the interest of potential visitors in an effort to restore buoyancy to our tourism sector.
To this end the Nevis Tourism Authority recently launched a brand-new website that combines stunning destination imagery with easy-to-read information clearly outlining the unique features of our luxurious Caribbean island. The website, which has already garnered positive reviews, provides an opportunity to communicate, inspire and engage with potential visitors. The new layout combines a sleek design with rich content and updated photography giving visitors to the site a true reflection of the destination with easily understandable details of our uniqueness.
Mr. President, we are also happy to report that the respected travel publication Conde Nast Traveller included Nevis in their Readers Choice