The Comprehensive Economic Development Plan 2013-17, also known as CEDP 2.0, places a major emphasis on developing business enterprise and entrepreneurship. Tobago had 4.6% of Trinidad and Tobago’s total population as of the 2011 census, but contributed less than 1.2% to its GDP. The development plan states it is critical to narrow or close this gap so “that the private sector grows and expands with large numbers of Tobagonians involved, and that young people who have traditionally migrated to Trinidad and elsewhere be provided with opportunities to start their own businesses or to have a wider range of opportunity for meaningful employment in Tobago”.
Accordingly, CEDP 2.0 calls for the pursuit of new opportunities in both non-tradable sectors, like tourism, and tradable sectors, such as agro-processing. The plan also calls for a 200% increase in the number of local entrepreneurs. Four separate institutions are contributing to this: the Business Development Unit (BDU) of the Tobago House of Assembly (THA); the Enterprise Assistance Fund; the Venture Capital Equity Fund (VCEFL); and Eco-Industrial Development Company of Tobago (E-IDCOT). These state-owned initiatives are expected to roll out support systems for small and medium-sized enterprises (SMEs) and the plan’s five target areas: tourism; agriculture and agro-processing; fisheries; manufacturing; and natural gas processing and electricity generation. CEDP 2.0 also sets some goals to be achieved by 2017, such as the creation of over 75 new start-ups at the Cove Eco-Industrial and Business Park, a 25% increase in local content in the tourism sector, a 10% increase in exports by SMEs and “a marked reduction in risk aversion in Tobago, measured by a 25% increase in … new viable businesses established”.
On The Move
In a June 2016 presentation on the 2016/17 budget, Joel Jack, THA’s secretary of finance, reported that since 2003, some TT$30m ($4.6m) in loans have been disbursed to approximately 300 Tobagonians to “facilitate entrepreneurial activities”. Another TT$13m ($2m) worth of grants have been disbursed to 750 Tobagonians since 2011. Jack also highlighted the ongoing development of E-IDCOT and efforts to develop the island’s ICT backbone. In addition to the Cove, the THA has also constructed a number of facilities in areas throughout Tobago such as Plymouth, Argyle, Signal Hill and Calder Hall to provide space for entrepreneurs wishing to establish and expand their business operations. Shelly Ann Baptiste, an enterprise assistance fund manager at the THA’s BDU and a director at E-IDCOT, told OBG that comprehensive support is available for new start-ups. “We have a grant programme for very early start-ups for up to TT$25,000 ($3850). Then we have a loan programme, with a maximum of TT$250,000 ($38,500),” she said. “Companies have up to five years to repay loans at a fixed 5% interest rate. We have established the VCEFL, which can provide from TT$250,000 ($38,500) up to TT$1m-2m ($154, 000-308,000) worth of equity or partnership funding.”
While the venture capital fund currently operates as a local government initiative, the THA is also interested in partnering with the private sector. Anthony Pierre, chairman of VCEFL, told OBG the fund invested in three enterprises in 2015, approved another three in 2016 and is looking into another two to three. By the end of 2016 it is expected to be working with around nine ventures, representing roughly TT$14m ($2.2m) in capital.
Over time, Pierre expects the size of projects, and the employment they create, to grow. “The challenge we have for 2017 and beyond is one of funding,” he said. “The ultimate fund size is intended to be TT$100m ($15.4m) when it is all built out, and we are hoping that we will be able to raise some of the additional TT$75m ($11.6m) that we need from private investors. That could include institutional investors, trade unions, pension plans and expatriates.”