By FAY SIMMONS

TRIBUNE Business Reporter

jsimmons@tribunemedia.net

The Ministry of Finance’s top official yesterday said the Davis administration’s growing investment in roads, energy infrastructure and public facilities is intended to create long-term economic growth rather than simply expand public spending.

Simon Wilson, the financial secretary, speaking at the Rotary Club of West Nassau, argued that infrastructure investment raises property values, attracts private investment and ultimately increases government revenues, making it essential to sustaining economic growth.

"The next phase for us is how do we convert this into sustainable growth - not a sugar high, but sustainable growth," he said. "That only happens by making investments."

Mr Wilson used Exuma as an example, arguing that improvements to the island's road network helped increase land values and stimulate private development.

"If you look at the land values of Exuma before road rehabilitation and after road rehabilitation, you will see that infrastructure really pays off," he said. "Those land values translate into actual revenue for the Government."

Mr Wilson said infrastructure creates what economists refer to as "shadow rents", where improved public assets increase surrounding property values, resulting in higher VAT collections, property tax receipts and investment activity.

Mr Wilson also cited Acklins, where the Government upgraded the island's main road from sand seal to asphalt. He said the improved road has reduced travel times between settlements, making it easier for residents to commute and encouraging more people to invest on the island.

Mr Wilson argued that similar investments are now taking place throughout the Family Islands, alongside new energy infrastructure, hospitals and utilities. He acknowledged such projects increase the Government's fiscal exposure, but said they are necessary to prevent economic stagnation.

"There is a risk that one event or one downturn puts us back in a situation where the economy doesn't grow," he said. "If it doesn't grow, it doesn't generate jobs. If it doesn't generate jobs, you have social dislocation."

He added that infrastructure investment is intended to position The Bahamas for predictable, sustainable growth over the long-term rather than relying on short-term economic gains.