Welcome to The Bay Street Brief!

This week I sat down to write and all I could think about was my wallet. Groceries might be getting more expensive. Building materials are getting scarcer. A global health scare landed at LPIA on Friday night. Can’t even take a vacation to escape it.

So I said the only thing that makes sense in times like this: cheapus we stay inside.

And just like that, we had a title.

Let's get into it.

That VAT exemption on uncooked foods that kicked in on April 1? The one that was supposed to give Bahamians some real relief at the checkout? Super Value's president is now warning the structure of that tax break may end up costing you more than it saves you.

Why now?

Super Value president Debra Symonette laid it out plainly this week. The supermarket chain is absorbing over $1 million in extra annual costs because of how the VAT exemption was structured. Owner Rupert Roberts puts the number even higher, at $1.6 million a year. That is a lot of zeros, and right now every single one of them is coming out of Super Value's pocket, not yours. For now.

So what actually happened?

When the Government eliminated VAT on uncooked foods, it classified them as "exempt" rather than "zero rated."

Under zero rating, VAT disappears at every level of the supply chain. Exempt treatment only removes the tax for the final consumer. Businesses in the middle, like grocery stores and wholesalers, still pay VAT on all their operating expenses tied to uncooked foods: electricity bills, rent, maintenance. And now they cannot claim any of it back.

If uncooked foods make up 60 percent of a store's sales, that store can no longer recover 60 percent of the VAT on its overhead. Those costs have to go somewhere. And typically, they go onto the shelf price.

The bottom line: Symonette was careful to say Super Value has not raised prices yet. But she was equally clear that it could happen, and that staff pay increases are also on the chopping block. "That's the last thing people need with the already-high cost of living." Hard to argue with that.

Rising global oil prices are making things worse. Shipping costs are climbing, and suppliers will pass those on down the chain until they reach your basket. The VAT relief and the freight increases could end up cancelling each other out entirely.

What to watch: The Ministry of Finance has reportedly promised the food distribution industry a compromise proposal. As of this week, nothing has arrived.

Nobody wants prices to go up. The industry doesn't, consumers certainly don't, and presumably the Government doesn't either.

If you are planning a home renovation, a new build, or anything involving a contractor this year, here is your early warning: the materials to do it are getting scarcer and more expensive by the month.

Bahamian Contractors Association president Leonard Sands this week warned that prices for aggregate materials like sand, rock, and fill have jumped 20 to 30 percent in just the last quarter. And he does not see them coming back down anytime soon.

Supply is shrinking. There are fewer and fewer limestone pits able to produce fill material, and when supply tightens, prices climb. Sands put it plainly: "It's increasingly harder to get bulk materials for construction." Combine that with global economic pressures already pushing costs higher, and the outlook for construction pricing is not pretty.

The limestone situation is particularly worth watching. Sands flagged it as a longer-term problem without an obvious solution: "At some point in time, there's going to come a place where you cannot get limestone fill. I don't know how the construction sector is going to be able to deal with that."

Higher material costs flow directly into contractor quotes. If you are building or renovating, expect those numbers to reflect the new reality. This also matters for the broader housing market. Affordable construction was already hard to find in The Bahamas. It just got harder.

While he had the floor, Sands also took a swing at the long-delayed Construction Contractors Board, which would give the industry proper oversight and regulation. Successive governments have promised it for over 20 years. It still does not exist.

"The only people who suffer are the Bahamian people," he said. Hard to argue with that.

So basically… materials are up, supply is down, and there is no clear relief in sight for either problem. If you are about to hire a contractor, get your quotes in sooner rather than later.

Looks like most of you are actually solving these BGCSE math quizzes now. Proud of you. Of course, a few of you are still scrolling straight to the bottom for the answer… and some of y’all are taking it straight to ChatGPT. We see you.

Solve this equation if you bad:

3(2x − 5) + 4 = 2(x + 7)

Check the bottom of the newsletter for the answer.

⚖️ The Davis administration was forced to replace Senator Keenan Johnson as Senate Vice-President last week after the FNM pointed out his appointment was unconstitutional. Johnson had already been named a parliamentary secretary, which the Constitution bars from holding the post. Senator Ja'Ann Major was elected in his place. A stumble out of the gate for the new administration, fixed quickly, but still a stumble.

📈 FOCOL chairman Sir Franklyn Wilson called BISX "very deficient" and in need of serious change. His concern: without more IPOs and major listings on the main board, the exchange is not living up to what it was built to be. BISX's top executive recently outlined plans to add new layers to the market. Sir Franklyn said that’s small things.

💧 Aquapure says it will absorb rising freight and packaging costs to keep bottled water prices stable this summer. Chief of operations Christian Knowles said the company is ramping up ahead of the busy season and actively insulating its operations so that cost pressures don't reach the consumer. Good news, given everything else in this newsletter.

⚖️ Resorts World Bimini's majority owner Genting Americas wants a $600 million lawsuit thrown out on a technicality. Original developer RAV Bahamas alleges Genting systematically loaded the property with hundreds of millions in liabilities from its wider empire, effectively turning Bimini into a "financial wasteland." Genting says the case was filed in the wrong court. A Florida judge has yet to rule.

🚀 SpaceX filed for its IPO this week, targeting a valuation of up to $2 trillion and what could be the largest public offering in history. Elon Musk will retain 85 percent of voting control, and the listing could make him the world's first trillionaire. Starlink, SpaceX's satellite internet unit, is the fastest growing connectivity option in The Bahamas and extremely popular on the Family Islands.

🤖 OpenAI is preparing to file confidentially for an IPO, with a listing potentially as early as September. SpaceX, OpenAI, and Anthropic all going public in the same year would be one of the most significant moments in tech market history. One to watch.

📱 Meta began laying off roughly 8,000 employees last week, about 10 percent of its workforce, as it redirects funds toward AI spending. The company has pledged up to $145 billion on AI this year.

⚽ Arsenal were crowned Premier League champions for the first time in 22 years last week, ending a drought that stretched back to the famous Invincibles season of 2003-04. Manchester City needed a win to keep the race alive and could only manage a draw. Mikel Arteta's side also has a Champions League final to look forward to.

Two passengers were isolated at Lynden Pindling International Airport on Friday after arriving with fevers following a three-week stay in the Democratic Republic of Congo, where an Ebola outbreak is currently underway.

That's the headline that sent the Caribbean into a brief panic. Here's what gone down.

The two passengers are pilots who had been conducting cargo flights. Health officials confirmed they had fevers but no other Ebola symptoms. They had not tested positive for any infectious disease. They were not in the area of the DRC currently experiencing the outbreak, did not treat or contact any Ebola patients, and had largely been isolated in a home during their stay.

Acting Chief Medical Officer Dr Jillian Bartlett confirmed that no Ebola infections have been identified, and that the risk to the public remains low. The remaining 216 passengers and crew on the flight were also screened.

The bigger picture: The DRC outbreak is real and serious. The WHO has recorded 750 suspected cases and 177 suspected deaths from a rare strain called Bundibugyo, which has no proven vaccine. The US has already moved to temporarily restrict entry for green card holders who have recently visited the DRC, Uganda, or South Sudan.

The Bahamas has not announced any travel restrictions yet. Minister of Health Michael Darville said that decision would require further government discussion.

No confirmed cases here. Protocols worked.

Travelled thousands of miles. Cleared multiple airports. Made it all the way to Nassau. Still couldn't get in.

The Bay Street Brief, on the other hand, is already in your inbox. And unlike Ebola, we encourage you to spread this thing around. Forward it. Share it. Send it to the group chat. The more people that catch it, the better.

Symptoms include: being informed, sounding smart at dinner, and forwarding it to at least five people you know.

No vaccine exists. Bahamian Health Officials are not concerned.

Your brand could be here. Unlike Ebola, you're still welcome in The Bahamas. Reply to this email to advertise with The Bay Street Brief. 🇧🇸

x = 6.25

How’d you do? Reply to this email and be honest👀

Enjoy the Brief? Share it.

Send this to someone who needs it in their life.

That's all for this week. Check us out on our socials for updates throughout the week.

Got a tip, a correction, or just want to say hey? Reply to this email. We read every single one.

Until next time.

— The Bay Street Brief Team