Tourism and related services (including construction):
The tourism and tourism services sector are the lifeblood of The Bahamian economy, contributing over 70 percent of the country’s GDP and employing just over half of the workforce. Although tourism is on the rebound following the global COVID-19 crisis, it has yet to reach the pre-pandemic level of more than seven million annual tourists, mostly coming from the United States. Driving the tourism recovery are the lifting of COVID restrictions and multi-million-dollar projects on several islands in the archipelago, including a $250 million Nassau Cruise Port redevelopment project, a $400 million Disney Cruise Line Lighthouse Point development, a $200 Carnival Cruise port, a $200 million Ritz Carlton development, a $100 million Half Moon Cay development, and Sterling Global Financials’ $250 million Hurricane Hole mega-yacht facility. The government is also promoting boutique hotels and Air BnB-style accommodations and homestays on smaller islands, and exploring niche tourism offerings, like medical, wellness, religious, culinary, and environmental tourism. These all require management and related goods and services U.S. firms can provide. The sector remains vulnerable to external shocks, but post-pandemic prospects are solid, and the government is supportive of new entrants.
Renewable and Non-Oil Energy and Energy efficiency:
The Bahamas is transitioning to non-oil and renewable energy, including sourcing 30 percent of its energy needs through renewables by 2030, providing financial incentives for household solar, and transitioning directly to solar on less populated islands. The Bahamas is transitioning from diesel to liquified natural gas (LNG) on its most populated island of New Providence and recognizes LNG as a bridge to renewables adoption. The government announced plans for a 70-megawatt solar installation on New Providence as part of this transition. These renewable energy efforts are supported by a $9 million EU grant and an $80 million Inter-American Development Bank (IDB) loan, and the government is committed to transitioning its fleet to electric vehicles and retrofitting government buildings with renewable energy systems. In April 2022, the government announced plans to become the first country in the world to sell blue carbon credits to finance renewable energy and climate-resilient infrastructure.
Reconstruction and Infrastructural Redevelopment:
Since Hurricane Dorian in 2019, the second and third most populous islands of Grand Bahama and Abaco remain in need of redevelopment assistance. There are opportunities for U.S. companies in construction, non-oil and renewable energy, utilities management, water treatment, and repairs to critical infrastructure. Hurricane-resistant standards figure prominently in the government’s redesign and rebuilding plans, including topography design, temporary and permanent housing, and urban planning. There are opportunities in infrastructural development, including airport and seaport upgrades and roadway improvements – all requiring traditional and prefabricated materials, capital equipment and supplies, and constructions services.
Local extractive industry groups have implored the government to develop the country’s natural resources to diversify the economy, create employment, and promote greater wealth distribution. The national Natural Resources Committee continues to explore efforts to commercially develop aragonite, limestone, salt, sand, forestry, sun, wind, and oil resources. U.S. firms have expressed interest in these sectors, particularly limestone mining and forestry.
Digital Economy & E-Commerce:
The Bahamas has seen increased demand for information technology and data security services due to the pandemic. The government committed to further digitize its services and online processes, including foreign investment applications, as well as develop an “entrepreneur visa” to attract high-tech companies. There is continued demand for smart technology, ICT services and equipment, medical technology and equipment, and consumer products. The government plans to establish a “Tech Hub” at the University of The Bahamas Grand Bahama campus, and with the assistance of a U.S.-based company, the government has developed marketing strategies to promote the tech hub and train Bahamians in software development.
Digital Assets and FinTech:
In 2022, The Bahamas announced plans to transform the country into the leading digital asset hub in the Caribbean. With the enactment of the Digital Assets and Registered Exchanges (DARE) Act, it strengthened its digital assets regulatory environment for its central bank baked digital currency “Sand Dollar”, cryptocurrencies, centralized and decentralized exchanges, and related services. This enhanced regulatory environment drew FTX, the world’s second-largest cryptocurrency exchange, to relocate its headquarters to The Bahamas from Hong Kong in 2021. FTX committed to investing $60 million towards the development of its new headquarters, including a boutique hotel and commercial center. The Securities Commission of The Bahamas, which has direct regulatory oversight of the sector, confirmed FTX’s arrival inspired at least five other crypto players to relocate to The Bahamas. The Commission continues to review and process several other registration applications, including for U.S. owned companies.
Grand Bahama, the second-most populous Bahamian island, features a free-trade zone which is home to many U.S. owned manufacturing businesses, including cement and pharmaceuticals. Efforts are underway to promote light manufacturing for export abroad.
Consumer Products: All consumer products in The Bahamas are imported. Bahamians are brand conscious and prefer American brands that they encounter on frequent buying trips to the United States, or through advertisements on U.S. cable TV programming.
Agriculture & Food Products:
The Bahamas imports nearly 90 percent of its food at an annual cost of approximately $1 billion, the vast majority from the United States. The U.S. Department of Agriculture (USDA) notes large hotels and resorts purchase 60 percent of their food and beverage products directly from U.S. suppliers. The Bahamian government is seeking private investment in the agriculture and fisheries sectors to increase their contribution to GDP from $150 million (1.5 percent) to $1.2 billion (10 percent) by 2031.