T&T’s 2019 BUDGET – THE TURNAROUND PT. 3
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A Firstline Securities Blog by: Mike
Introduction
Following on from our second blog entry yesterday we continue our look at the 2019 National Budget of the Republic of Trinidad and Tobago – Turnaround.
The policy agenda of the PNM administration is aimed at achieving high and sustainable economic growth. To achieve this requires the establishment of infrastructure and a suitable regulatory framework that will allow all business ventures to prosper.
The EXIM Bank Facility
The EXIM Bank foreign exchange facility established in 2018 with US$100 million is designed to meet the foreign exchange requirements of qualifying non-oil domestic manufacturers.
Applications are now being processed for business entities that have applied to use the facility.
The Agricultural Financial Support Programme
The Agricultural Financial Support Programme (AFSP) was an initiative launched in the 2018 National Budget. The programme was officially launched on the 3rd October 2018.
The AFSP is intended to provide one-off grants up to TT$100,000 for a broad spectrum of agricultural activities ranging from modern farming technology, research, product development, brand building, food safety compliance requirements, value added initiatives, energy saving technologies, and labour-saving technologies.
Housing Construction Incentive Programme
The Housing Construction Incentive Programme (HCIP) is designed to encourage private developers to construct homes with a view to increasing the availability of affordable housing.
So far 15 investors have been engaged and those investors plan to construct 1,845 housing units by the end of 2021 when the HCIP is set to expire.
Manufacturing
According to the Minister the manufacturing sector rebounded with growth of 7.3% in 2018. Key to supporting this growth is making sure that foreign exchange is readily available (see blog entry number 2 in this series).
The Government has identified seven national economic activities that are key to diversifying the economy away from its reliance on oil and gas.
The seven national economic activities identified are: financial services, maritime services, aviation services, fishing and fish processing, software design and application, and the creative industries.
The Minister made no additional comments in respect of financial services or aviation services.
The Maritime and Yachting Sector
The Minister referred to the transhipment and cold-stacking activities undertaken in the Gulf of Paria. These activities are attracting an upsurge of interest from local and foreign entities, do not require infrastructure, and generate significant local employment.
To promote the yachting sector in Tobago the Government is expediting the development of a marina facility, with proposals being received in July 2018. The Government has also begun the process of identifying suitable entities to establish and develop a National Marina Ferry Terminal at Invaders Bay in Trinidad.
The Creative Industries
The Live Music Direct Programme and the Artiste Portfolio Development Programme will continue to be supported and extended in scope. These are both initiatives introduced in the 2018 National Budget.
The Industrial Estates
Existing industrial estates under the remit of the Evolving TecKnologies and Enterprise Development Company Limited (eTecK) are to be packaged for ownership to the public.
The plan is to divest six properties owned by eTecK in a competitive tendering process. The Government is entering into negotiations with three investors for three undeveloped pieces of lands and the remaining three properties will be re-advertised.
In addition, a new industrial park is being developed at Phoenix Park at a cost of US$104.3 million in conjunction with the Beijing Construction Engineering Group (BCEG) using finance obtained from China’s EXIM Bank.
BCEG has attracted interest from ten Chinese companies involved in high value and light manufacturing and emerging industries. The intention is that these companies will locate operations in the new business park.
Construction of the park is expected to take 33 months and will generate 1,000 jobs during construction. Once fully operational the park will provide space for between 60-80 factory shells and will directly employ 4,000-5,000 persons.
Agriculture
The Minister referred to a number of initiatives designed to bolster agriculture and help diversify the economy away from a reliance on oil and gas:
- Completion of construction work on the Moruga Agro-Processing and Light Industrial Park at a cost of TT$77 million. This project will include facilities to allow for the canning, bottling, and freezing of finished products and is expected to be completed in March 2019.
- Completion of a Next Generation Hatchery in Couva using state lands and private investment.
- Initiatives designed to promote the rehabilitation of the coconut, cocoa, and citrus industries, including the provision of disease-free plants and seedlings for planting.
Coming tomorrow
Tomorrow we continue our narrative with the fourth part of our blog series on the 2019 National Budget of the Republic of Trinidad and Tobago.
What are your thoughts on the 2019 National Budget?
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