There is an urgent need to diversify the Tobago economy to protect it from internal and external shocks, and Finance Secretary Joel Jack, says grants and training programmes to develop entrepreneurship is a critical element of the island’s diversification strategy.
Delivering the Tobago House of Assembly’s 2018/2019 budget statement on Monday at the Chamber in Scarborough, Jack listed the work of units and companies which he said were crucial to the overall strategy of diversification - the Business Development Unit (BDU) in the Division of Community Development, Enterprise Development and Labour; the Strategic Business Development Unit (SBDU); the Eco-Industrial Development Company of Tobago (E-IDCOT); and Venture Capital Equity Fund Limited (VCEFL)/Division of Finance.
“In the last year, the Business Development Unit provided loans and grants totalling $1.62 million to 70 recipients. In addition, the Unit provided capacity-building training programmes to 81 loan and grant recipients in a wide range of areas including accounting and business management. Since the inception of the Enterprise Assistance Fund (EAF) and Enterprise Assistance Grant Programme (EAGP), Tobagonians have received approximately $46 million in financial assistance along with technical support to start, operate and expand their businesses,” he said.
The THA has made significant investments in facilitating entrepreneurship and business activity on the island, he added.
“Over the next fiscal year, the Unit (BDU) will continue to provide financial and technical support through its two signature programmes - The Enterprise Assistance Fund and the Enterprise Assistance Grant Programmes. The Unit will also intensify its community outreach activities to ensure that persons throughout Tobago can benefit from its services,” he said.
Jack said the THA has initiated discussions with the Caribbean Development Bank (CDB) for a Business Incubator at the Cove Eco-Industrial and Business Park.
“This incubator will provide start-ups and small and micro enterprises with the nurturing environment needed in the early phase of their development with intensive hands-on business support from subject-matter experts and experienced entrepreneurs, and access to finance. This initiative will be jointly executed by the Business Development Unit, EIDCOT and the Venture Capital Equity Fund Limited,” he said.
On the SBDU’s work, Jack said that in the last year, the unit developed a database of existing SMEs that have demonstrated some level of export potential.
“Information was gathered on their current capacity and the required resources to assist in their expansion with the aim of enhancing export readiness. The Unit supported this thrust through the facilitation of a number of capacity building training workshops in a range of topics including Export Fundamentals and Business Development,” he said.
He also noted that this unit collaborated with ExporTT to host training for representatives of 13 businesses, primarily in the agro-processing sector, in preparation for the export market.
And that SBDU also collaborated with FashionTT for a business development training programme for Tobago designers.
“In the next fiscal year, the Strategic Business Development Unit, will continue to offer capacity building training programmes for Tobago entrepreneurs to gain and maintain access to export markets. In addition, the Unit will continue to facilitate the testing and branding of Tobago’s products to assist entrepreneurs in gaining access to regional and international markets,” he said.
Jack also announced plans to set up a product testing facility to ensure compliance with international standards.
“Discussions are under way with EIDCOT to facilitate the construction of this facility at Cove.
“E-IDCOT also has a significant role to play in our overall diversification thrust and it continues to encourage entrepreneurial activity by providing both land and factory space at subsidised rates to allow persons to develop and expand their business in Tobago. E-IDCOT is also currently developing a proposal for the processing of essential oils including bay oil at Cove. This project has significant job creation and foreign exchange earning potential,” he said.
Jack recalled that in the 2017/2018 budget statement he had spoken of a feasibility study for a commercial cargo port in Tobago.
“Following the completion of the tendering process, the consulting engineering firm Lee Young and Partners Ltd was contracted to conduct the feasibility study on the best location for this commercial cargo port. The study is at an advanced stage and the final report is expected before the end of this fiscal year. A commercial cargo port in Tobago could facilitate the development of the light manufacturing sector as well as improve the efficiency of commercial activity on the island,” he said.
On the VCEFL, Jack said this company continues to advance its mandate to diversify the Tobago economy and re-ignite the entrepreneurial spirit of the Tobago people.
“The company has completed a feasibility study for a Tobago Feed Mill which shows that this project is commercially viable. As such, the company issued a request for proposals for this project and the submissions are currently being reviewed.
“Over the last year, the company has also received a number of proposals for investment in the Clean and Light Manufacturing, Agriculture & Agro-Processing, Information Communication Technology (ICT), Renewable Energy & Green Technology sectors. The company continues to work with potential investors, and following the necessary due diligence and analysis, funds will be disbursed, and the investment will be added to the company’s portfolio,” he said.
HE added that VCEFL continues to seek additional capital funding from various sources, and that one such opportunity now being explored was funding from a multilateral agency which would provide additional financial support for investors.
Jack also noted a THA/private sector diversification thrust.
“Beyond the work of Assembly-led entities to facilitate economic diversification and expansion, the Assembly continues to work with the business community to develop and strengthen the private sector in Tobago by providing an enabling environment for them to succeed.
“Particularly, in view of the problems on the air and sea bridges, we know that the private sector in Tobago faced challenges and we continue to work with these stakeholders to find feasible and sustainable solutions.
“As an Assembly, we continue to upgrade our accounting and procurement systems to ensure seamless and transparent interactions with various suppliers of goods and services in the private sector ahead of the proclamation of the new procurement legislation,” he said.
He said the THA, as a major employer with significant influence on productivity, was committed to working with the private sector on this issue.
“Earlier this year, the Assembly conducted its second iteration of the Tobago Productivity Survey and the results will be used to inform our approach to the management of productivity in Tobago. We will continue to work with the business community as well as the labour unions as we confront this productivity issue,” he said.
On the issue of the land licence regime, Jack said administrative challenges continue to affect the level of foreign direct investment to the island.
“Accordingly, the Division of Finance and the Economy is currently working with the Ministry of Finance and the Economy, and the Tobago business community to review the application process to achieve greater efficiency. A joint statement will be issued shortly regarding the restructuring of this process,” he said.