Over $44 billion in Supplementary Funding sought in support of major developmental initiatives countrywide

Georgetown, Ministry of Finance, July 21, 2022: Supplementary funding to cater for a range of developmental initiatives countrywide including to provide additional resources for Amerindian and Hinterland Communities, Infrastructural Development in new and existing housing schemes and improvement and expansion of Coastal and Hinterland water supply among many other areas, were today sought when Senior Finance Minister Dr. Ashni Singh presented a Supplementary Appropriation Bill to the National Assembly during the 48 th Sitting of the 12th Parliament.

The Supplementary Bill comprised Financial Paper Number 1 of 2022 totalling $44.8 billion which will see $21 Billion being spent in the Housing and Water sector for infrastructural development in new and existing housing schemes and improvement and expansion of coastal and hinterland water supply; $5.5 Billion for the Agriculture Sector for various provisions including additional resources for the Black Belly Sheep project and the provision of additional resources for drainage and irrigation interventions and support to the Sugar Industry; $307 Million for the education sector for the provision of additional resources to facilitate the purchase of school furniture consequent to the reopening of schools in the new COVID environment, the provision of additional resources to facilitate the construction of a primary school in Wakenaam.

Meanwhile, under the Ministry of Public works, $4.4 Billion was identified for various programmes under this sector including for the provision of additional resources to facilitate the upgrading of roads and drains in various communities, additional resources to facilitate the advancement of preliminary works to support the road linkage project, and resources to complete critical sea and river defence works.

Under the Ministry of Amerindian Affairs, over $3 Billion is catered for to provide for additional resources to support Amerindian and Hinterland Communities, while for the Ministry of Public Service, $250 million is provided for to allow for additional resources for the Guyana Online Academy of Learning (GOAL) scholarships and $700 million provided for public assistance to citizens living with permanent disabilities under the Ministry of Human Services and Social Security. The initiatives being provided for cover a range of sectors, as Government continues to make efforts to transform and improve the lives of Guyana’s citizens.

Government’s historic Low Carbon Development Strategy (LCDS) 2030 presented to the National Assembly by Finance Minister

Georgetown, Ministry of Finance, July 21, 2022: Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh today presented Guyana’s Low Carbon Development Strategy (LCDS) 2030 to the National Assembly. It is expected that the National Assembly will debate the motion on the LCDS 2030 at its next sitting.

Today’s presentation of the LCDS 2030, follows a more than seven-month national consultation, based on a draft strategy which was launched by His Excellency President Irfaan Ali in an Address to the Nation on October 28, 2021. This revised version of the LCDS 2030, incorporates feedback and comments received during the national consultation process.

Since the launch, thousands of people across Guyana participated in information sharing and consultation activities. In his foreword to the LCDS 2030, President Ali thanked all those who participated and contributed ideas and opinions. The President said: “The strategy that has resulted is not a static document – but rather a vision that will live for years to come. It sets a direction of travel that I believe will catalyse innovation and new ideas as its various elements move to implementation. I hope that as this implementation pathway evolves, our national conversation and consultation about its important measures will continue. I want everyone in the country to have the chance to forge opinions about sustainable development.”

The LCDS 2030 builds from an original vision set out in 2009, when the then-President, Dr Bharrat Jagdeo, called for new global models for low-deforestation development pathways – stating: “Tropical Forest countries have long called for the ecosystem services provided by the world’s standing forests to be properly valued, through both public and private finance. This will enable people who live in forests and forest countries to create jobs and economic opportunity from an economy that works with nature, instead of today’s reality where forests are worth more dead than alive.”

This vision was given life through the LCDS 2009, which underwent one of the biggest national consultations in Guyana’s history at that time – and outlined a three-phase process whereby Guyana could earn money from forest climate services and invest these in LCDS priorities.

For Phase I, Guyana sought a bilateral partner who shared the country’s vision and who was willing to partner to create a model for the world. This culminated in the 2009 Guyana-Norway Agreement which, at the time, was the second largest forest agreement of its kind in the world. Norway paid Guyana over US$220 million for forest climate services for the period 2009 to 2015.  These revenues were, and are still being, invested in clean energy, low carbon jobs, Amerindian land titling, the Amerindian Development Fund project, rehabilitation of the Cunha Canal and other climate resilience work, support for small and medium enterprise development in collaboration with the local banking sector, and many other investments which were set out in the LCDS 2009 and a 2013 update. Crucially, throughout this period, the Guyana Forestry Commission (GFC) invested heavily in building one of the worlds’ most advanced forest carbon Monitoring, Reporting and Verification Systems (MRVS).

No payments were received for performance after 2015.

However, on resuming office, the PPP/C Government quickly set out to re-establish and expand the means to implement the vision of the original LCDS.

Guyana is now once again able to advance– and to move to Phase II of the plan that was set out in 2009. In Phase II, Guyana can start to replace or augment payments from Norway, and instead receive revenues for forest climate services from global voluntary carbon markets.

At the same time, the LCDS 2030 sets out how the country can start to prepare for potential revenue streams from other ecosystem services – including those based on Guyana’s world-class biodiversity and water resources.

The LCDS 2030 will be funded from more than just the new revenues from forest carbon markets – regular national finances will also be deployed. However, there are particular new opportunities to use the new revenue streams from carbon markets to the benefit of those who live in, and depend on, the forest – as well as other local communities.

The national consultation on the LCDS 2030 sought ideas on how these new revenues could be invested. As a result, the strategy sets out two pathways:

• National programmes as outlined in the draft LCDS 2030, including investments in renewable energy, land titling, protection against climate change and other areas;
• Community/Village-led programmes for indigenous peoples and local communities (IPLCs) as set out in Village Sustainability Plans (VSPs) or equivalent, put together by communities themselves in accordance with the principles of Free, Prior and Informed Consent (FPIC) as set out in the LCDS 2030 Chapter Two.

A dedicated 15% of all revenues from forest carbon markets will be available to Amerindian communities who choose to opt in and produce their own Village Sustainability Plans.

This proposal was welcomed by the National Toshaos Council in a resolution on Friday, July 15, 2022 with the NTC resolution recognizing “the extensive national-scale and community-based consultations, conducted over the past seven months, [which] have informed the main aspects of LCDS 2030” while welcoming “the commitment expressed in the LCDS 2030 to continued consultation and engagement with Indigenous Communities and Villages as the LCDS moves to implementation.”

Subsequently – on Monday, July 18, 2022 – the Multi-Stakeholder Steering Committee (MSSC) of the LCDS approved the finalisation of the Strategy based on the wide-ranging stakeholder feedback since October 2021. The MSSC oversees the consultative process and implementation of the LCDS 2030.

It comprises representatives of Government Ministries and agencies, non-governmental organizations, the private sector, youth, mining and forestry producers, the National Toshaos Council, indigenous communities, and civil society.

The MSSC will continue to meet regularly after the LCDS has been tabled in the National Assembly to take forward elements of the LCDS, which will require further consultation and idea generation.

With the approval of the MSSC, the LCDS 2030 was today tabled in the National Assembly. In the foreword, President Ali said: “I hope that individuals, businesses, and organisations – in Guyana and across the world – will stay engaged. I also hope that all politicians in the National Assembly will recognise that the long-term ambitions contained in this LCDS 2030 are ambitions for Guyana, so deserve support and continued engagement. Because if we work together, we can advance development for all our people. We can also demonstrate to the world – but perhaps more importantly to ourselves – that our “one Guyana” is more than up to the task of achieving big things and creating a better future for all.”


Finance Minister tables agreements for world class Regional hospitals, health care countrywide

Georgetown, Ministry of Finance, July 21, 2022: As Government moves to modernize the healthcare system throughout the country, Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh, today tabled two agreements in the National Assembly to cater for the construction of modern health care facilities in five of Guyana’s ten Regions during the 48 th Sitting of the 12 th Parliament.

The first Export Finance Agreement (No. CIE/BC-DL/Guyana/0020014380) dated June 14, 2022 between the Co-operative Republic of Guyana and the United Kingdom Export Finance totaling Euros 161,016,949 which allows for the financing, design and construction of a state-of-the-art Paediatric and Maternal Hospital at Ogle as well as the delivery of medical equipment to the institution.

The second one is a Deferred Payment Agreement (Lot One (1) to Lot Six (6) dated July 12, 2022 between the Co-operative Republic of Guyana and the China CAMC Engineering Company Limited for a total amount of Euros 136,132,800 for the financing of Government’s Regional Hospitals Project.

Under the Regional Hospitals Project, six Hospitals will be constructed in five regions: one in Region Two (Pomeroon/Supenaam); one at De Kinderen, Region Three (Essequibo Islands/West
Demerara); one at Diamond and another at Enmore, in Region Four (Demerara/Mahaica); one in Bath, Region Five (Mahaica/Berbice) and one in Number 75 Village, Region Six (East Berbice/Corentyne). Each modern hospital is slated to be equipped with 75 beds.

Meanwhile, the Paediatric and Maternal Hospital at Ogle will be equipped with 256 beds.

In his 2022 Budget Speech to the National Assembly, the Finance Minister stated that: “Ensuring a modern, world class healthcare system is a paramount objective for our Government. To this end, we will leverage existing and soon-to-be-built public healthcare facilities, private investment, as well as public-private partnerships in the sector, with the aim of not only meeting the needs of our citizens and residents, but also to be able to offer medical treatment as an export service through medical tourism”.

The Minister also referred to the construction of the paediatric and maternal hospital as well as the six new regional hospitals, while noting that the six hospitals which will be constructed will catapult healthcare delivery (beyond current levels provided by existing regional facilities) and will ‘reduce the undue cost and burden of referrals to the Georgetown Public Hospital Corporation (GPHC)’.

On July 8, 2022, in keeping with Government’s commitment to modernize the healthcare system in the country, President Irfaan Ali announced that a national healthcare initiative would commence in collaboration with the Mount Sinai Health System, an internationally recognized healthcare provider and Hess Corporation to improve access to and the quality of healthcare for Guyanese. The initiative allows the Mount Sinai/Hess Corporation partnership to work with the Government of Guyana to assist and advise Government how to develop and implement a high- quality primary health care system including specialized services in cardiology and oncology, to bring about significant improvement at the Georgetown Public Hospital Corporation (GPHC).

Major relief for mining community

-as Fiscal Enactment Amendment Bill primarily provides for the reduction of final tax and removal of Tributor’s tax applicable to the mining industry

Georgetown, Ministry of Finance, July 21, 2022: The Fiscal Enactment Amendment Bill No. 2 of 2022 was today presented to the National Assembly by Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh. This Bill seeks to give legislative effect to the commitments made by Government to the mining community during a meeting at the Arthur Chung Conference Centre at the end of May last and will allow for relief for miners through a number of measures to be implemented by Government.

On May 31 last, Vice-President Dr. Bharrat Jagdeo had met with the Guyana Gold and Diamond Miners Association (GGDMA) at the Arthur Chung Conference Centre (ACCC), following which Government announced a number of measures that would be taken to provide relief for miners as well as in fulfillment of the People’s Progressive Party/Civic’s (PPP/C’s) promises to miners as outlined in its manifesto.

The measures included the reduction of final tax from a maximum of 3.5 percent to 2.5 percent which would result in an estimated $1.4Billion being returned to the mining industry, and the removal of the 10 percent Tributors’ Tax that would benefit thousands of workers in the industry with $300 million expected to be returned to those who were paying this tax.

Further, Minister Singh also presented Value-Added Tax (No.3) Order 2022, which was Gazetted earlier in July, removing Value Added Tax (VAT) on lubricating oil, a key input in not only the mining industry, but almost all the productive sectors.

In total, all measures, once implemented would see a total of $1.9 billion returned to the industry.

Also tabled, was the Value-Added Tax (No.2) Order 2022, which removed VAT on cement, cement board and sheet rock, in line with Government’s vision for providing relief to citizens as well as to support the housing drive.

Second notification made to Parliament of all petroleum revenues paid into the NRF

-as Government continues to show commitment to transparency and accountability in the management of Guyana’s oil resources

Georgetown, Ministry of Finance, July 21, 2022: Senior Finance Minister Dr Ashni Singh today presented Notification Receipts to the National Assembly of all petroleum revenues paid into the Natural Resource Fund (NRF) during the period 1 st April 2022 to 30 th June 2022, pursuant to Section 33 (2) of the NRF Act 2021. This notification was published in the Official Gazette on the 18th July 2022 and reaffirms the PPP/C Government’s commitment to greater accountability and transparency in the management of Guyana’s oil resources.

The Natural Resource Fund (NRF) Act 2021, came into operation on January 1, 2022, replacing the illegitimate APNU/AFC NRF Act 2019. One of the key amendments to the legislation is that the Minister could face up to ten years imprisonment if he fails to disclose the receipt of any petroleum revenue received by Government in the Official Gazette within three months of receipt of such monies.

It can be recalled that under the APNU/AFC Administration a US$18 million signature bonus had been collected by Government from ExxonMobil but had not been disclosed to the citizens. Further, former Minister Jordan had even denied ever receiving this sum until information came to light, exposing that the Ministry of Finance asked the Bank of Guyana to set up a special account in which the amount was to be placed. With the provisions in the new Act, a situation like this could never repeat itself.

The International Monetary Fund (IMF), which recently concluded the 2022 Article IV mission to Guyana in May-June of this year, commended the PPP/C Government on the amendments made to the NRF Act and the staff concluding statement highlighted:

“The recent amendments to the 2019 Natural Resource Fund Act set clear ceilings on withdrawals from the fund for budgetary spending and promote transparency in the management and use of oil resources. Staff praised the authorities’ thorough review of the 2019 NRF Act before making amendments, and the restraint in using any oil revenues before the passage of the amendments,’

The PPP/C Government will continue to manage Guyana’s oil resources in a clear and transparent manner, to the benefit of present and future generations.

Ministers Singh, Bharrat, Dharamlall on outreach to Region One (Matarkai Sub- District)

Georgetown, Ministry of Finance, July 18, 2022: Senior Finance Minister Dr. Ashni K. Singh today visited the Guyana Manganese Inc. (GMI), a subsidiary of Chinese-owned Bosai Minerals Group (BMG), in Matthew’s Ridge, Barima-Waini, Region One. Minister Singh was joined by Natural Resources Minister Vickram Bharrat and Local Government Minister Nigel Dharamlall and a number of technical officers. There, the ministers met with senior management of the company and discussed the company’s investment and production plans, and noted the efforts that have been made by the company as Guyana resumes exports of manganese for the first time in nearly six decades.

The Senior Finance Minister also discussed other issues of interest to the company and emphasized the importance of the company’s compliance with the strictest of safety and environmental standards, as well as its corporate responsibility to the community in which it operates.

During the visit to the Region as well, the Ministers attended a community meeting at Matthew’s Ridge where they interacted with the residents and listened to their various issues and concerns.

At that meeting, the Ministers revealed plans for infrastructural development, improvements to healthcare facilities and services, and more training opportunities for the young people in the region. The Minister also assured the residents that President Ali’s Government is at their service and is committed to working hard to resolve issues and improve the livelihood of everyone in the village.

Guyana continues to build stronger ties with Saudi Arabia

-Guyana Delegation to attend Saudi-Caribbean Investment Forum

Georgetown, Ministry of Finance, June 26, 2022: Senior Finance Minister Dr. Ashni K. Singh has indicated that the Government of Guyana and the Private Sector will be participating in the Saudi- Caribbean Investment Forum from 6 th to 8 th July 2022, hosted by Caribbean Association of Investment Promotion Agencies (CAIPA) in Punta Cana, Dominican Republic. This forum will provide opportunities for Guyana to deepen its relationship with the Kingdom of Saudi Arabia, as participants will meet with prospective Saudi investors to present their projects.

Representatives from Guyana, including a high-level Government team and representatives of the Private Sector will attend the three-day investment forum, which will facilitate meetings with Saudi investors to present projects and to attract investors. Priority sectors of focus include logistics and transportation, renewable energy, infrastructure, hotel and resort development and agribusiness.

In February of this year, President Ali welcomed a visiting high-level delegation from the Kingdom of Saudi Arabia led by His Excellency Adel Ahmed Al-Jubeir, Minister of State, Foreign Affairs and Members of the Saudi Arabia Council of Ministers. Among the key issues discussed were the partnership and collaboration among the two countries in areas of oil and gas, climate change and Guyana’s transformative agenda and investment opportunities.

Guyana is undergoing an incredible transformation, driven by its oil and gas sector, opening many opportunities in both oil and non-oil sectors and improving access to resources that will serve to accelerate its growth and development. Building on the 19.9 percent growth last year, Guyana is expected to be the fastest growing economy in the world in 2022, with a projected GDP growth rate of 47.5 percent. This incredible economic outlook brings tremendous opportunities, including prospects for greater cooperation with global and regional partners, both Government and Private Sector. This also brings challenges that must be addressed to ensure that Guyana maximises its benefits while avoiding the pitfalls that can accompany a resource boom. In this regard, the country can also benefit from the experiences and expertise of its bilateral partners who have had similar experiences and challenges.

Guyana established formal diplomatic relations with the Kingdom of Saudi Arabia on February 22, 2012.

Ogle to Haags Bosch Road part of comprehensive masterplan for infrastructure transformation across Guyana-says Finance Minister

-as contract signed for Phase 1 of East Bank-East Coast Road Linkage Project from Ogle to Eccles

Georgetown, Ministry of Finance, June 24, 2022: Senior Finance Minister Dr. Ashni K. Singh today emphasized that the road linkage being formed to connect Guyana’s East Coast and East Bank corridors as well as the roads connecting Georgetown City to the country’s hinterland regions signal the commitment of the People’s Progressive Party/Civic (PPP/C ) Government to countrywide road and infrastructure network development and Guyana’s rapid transformation. The Minister was at the time delivering the feature address at the contract-signing and sod- turning ceremony held today for Phase 1 of the new East Bank-East Coast Road linkage project (Ogle to Haags Bosch, Eccles). The Minister added that Government will be continuing to ensure that major road networks are upgraded while also ensuring that additional new roads and infrastructure are completed as part of President Irfaan Ali’s vision for the country.

“What you have in this People’s Progressive Party Civic Government, ably led by our President, is not only to plan and plan in a visionary manner, but an ability also to execute and deliver plans. I urge you to keep your eyes keenly focused on the agenda for transformation because you will see roads and bridges, hospitals and schools, industrial estates, you will see not only public investment, but private investment…..several private investors building internationally branded hotels, here and elsewhere adding thousands of rooms to our room-stock and creating thousands of jobs in the tourism industry,” Dr. Singh emphasized.

The Finance Minister told attendees as well that soon Government will be signing another major contract for the reconstruction of the current Soesdyke/Linden Highway for which a team from the Islamic Development Bank (IsDB) are in Guyana on an Appraisal Mission to finalize discussion  on the reconstruction of this major thoroughfare. The highway links the Capital City Georgetown to Regions Seven, Eight and Ten and other riverain communities of the country.

Also speaking at the event was Minister of Public Works Bishop Juan Edghill who explained to attendees that the building of the Ogle to Haags Bosch four-lane roadway would see Government being able to open up new lands and when that happens there would be more lands for housing, agriculture, agro-processing, industrial development and for the oil and gas sector among other areas.

“You cannot transform and modernize a country without putting in road infrastructure,” Minister Edghill added as he also indicated to residents that as of Monday, June 27, Government will be removing all encumbrances close to public roadways including derelict vehicles.

While delivering his remarks, Indian High Commissioner to Guyana Dr. K. J. Srinivasa recalled that the project was envisaged over 7-8 years ago during the term of former President Donald Ramotar and when the current President, His Excellency Irfaan Ali served as Minister of Housing.

“As they say, better late than never,” the Indian High Commissioner posited as he noted that the road is expected to benefit the people of Guyana immensely.

“Friends as we see with our own eyes, the phenomenal transformation is unfolding in front of our own eyes,” High Commissioner Srinivasa emphasized while reminding attendees of the various projects in the past for which India assisted Guyana, including the National Stadium at Providence, East Bank Demerara, among others. He noted too that India, while continuing its own development in infrastructure, also recognizes this need in other countries such as Guyana.

Funding for the Phase 1 of the East Bank-East Coast Road Linkage Project (Ogle to Eccles) was garnered through a Line of Credit received by the Government of Guyana from the Export-Import Bank of India in an amount equivalent to Fifty Million United States Dollars (US$50,000,000) with the Civil Works contract awarded to Ashoka Buildcon Ltd. (Ashoka) totaling a sum of USD 106,377,380.77.

Works on the new road include construction of 7.8km of virgin road with an asphaltic concrete finish along the main road alignment consisting of four (4) lanes, each 3.6m wide and a median creating two traffic lanes in each direction. Concrete drains, sidewalks and a utility corridor will be constructed along the length of the roadway and several safety features will also be incorporated. In addition, construction works will also include a two (2) lane connector road at Eccles-Haags Bosch. This road will also be of asphaltic concrete while minor bridges and culverts will be constructed along the connector.

It was only in May last that Government signed a contract with a Brazilian construction contractor (Construtora Queiroz Galvao S.A) for the construction of the new Linden to Mabura road being funded by the Government of Guyana, the Caribbean Development Bank (CDB) and the United Kingdom at a total cost of $32.5 Billion.

In May 2022 as well, Government signed the single largest public infrastructure project undertaken in the history of the country for construction of a new US$261 million Demerara Harbour Bridge. Meanwhile a contract was also signed by Government for studies in connection with the bridging of the Corentyne river. Additionally, President Irfaan Ali earlier this year commissioned and opened a new four lane road leading from Mandela Avenue, Georgetown to Eccles on the East Bank of Demerara.

Also in attendance at the contract-signing ceremony were former President Donald Ramotar, Attorney General and Minister of Legal Affairs, Anil Nandlall, Minister within the Ministry of Public Works, Deodat Indar and Minister within the Ministry of Housing and Water, Susan Rodrigues.

‘MMs. Esther Rawlins was a consummate educator’-Senior Finance Minister says as he pays tribute to late Deputy Headmistress of Queen’s College

Georgetown, Ministry of Finance, , June 9, 2022: Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh, today paid tribute to former Queen’s College Deputy Headmistress Miss Esther Cecelia Waveney Rawlins at the Cathedral of the Immaculate Conception on Brickdam and Camp Streets during a funeral service for the late French teacher. Ms. Rawlins retired from the College in 1989 as Graduate Deputy Headmistress and she was a teacher during the period that the Finance Minister attended the institution.

“Indeed after her retirement in 1989, Miss Rawlins a consummate teacher continued to teach hundreds for many, many years to come and indeed after the turn of the century. She literally shaped and molded the minds of the thousands of students who passed through her hands, “Dr. Singh related.

He added that he came to know Miss Rawlins when he joined Queen’s College in 1982 and she taught him French at CXC.

“She not only imparted language lessons. Miss Rawlins was not just a teacher of French grammar but she taught us lessons that would prepare us for life. She was an outstanding teacher and a caring and compassionate human being. The love that she extended to her nieces and nephews, I have to say to members of the family you may not have realized it but you were enjoying the care and passionate love that literally hundreds and thousands over successive generations also enjoyed. I would like to express deep appreciation to Teacher Rawlins and acknowledge the impact that she would have made on all of our lives. I express my most sincere condolences to her loved ones and thank them for sharing Teacher Rawlins with the nation,” he added.

The Finance Minister, on behalf of President Irfaan Ali’s administration, further recognized the contributions the teacher would have made over the years to the teaching profession, the country as a whole as well as the wider world.

Miss Rawlins was a dedicated teacher who began teaching in 1955 as an assistant teacher at Tutorial High School. She later joined Queen’s College in 1973 as a foreign language teacher prior to retiring in 1989 as Graduate Deputy Headmistress with a total of over 25 years of service in the profession.


IMF lauds Government on several initiatives taken to transform Guyana’s economy

-notes deteriorated economy in 2020 has ‘recovered well,’
-amendments made to NRF Act also lauded
– Govt commended for ‘good progress in strengthening Guyana’s anti-corruption framework and
fiscal transparency

Georgetown, Ministry of Finance, June 3, 2022: In its preliminary findings published today, the International Monetary Fund (IMF) has lauded the Government of Guyana on many fronts for its policies implemented and initiatives taken to transform Guyana’s economy, which the institution said had ‘deteriorated’ in 2020 but has since ‘recovered well’. The findings were published following an official IMF mission visit to Guyana.

The IMF pointed out that its missions are ‘undertaken as part of regular (usually annual) consultations under Article IV of the IMF's Articles of Agreement, in the context of a request to use IMF resources (borrow from the IMF), as part of discussions of staff monitored programs, or as part of other staff monitoring of economic developments.

Guyana’s Economy has recovered well from the Global Pandemic and 2021 floods on account of sound policy action

The IMF in its findings said that the ‘Guyanese economy was negatively impacted by the pandemic, and 2021 floods, but has recovered well supported by the oil boom, and policy actions.

“Following the pandemic-induced recession and delayed political transition in 2020, economic growth recovered in 2021, with non-oil Gross Domestic Product (GDP) growth reaching 4.6 percent. The war in Ukraine exacerbated inflationary pressures in 2022—due primarily to higher fuel and food prices—but the government implemented measures to mitigate the impact on vulnerable households and the economy. Even though the current account deficit widened significantly in 2021 in part reflecting increased capital imports, the foreign exchange (FX) reserve position improved, due to the new Special Drawing Rights (SDR) allocation”, the report noted.

It added that “After deteriorating markedly in 2020, the fiscal position remained appropriately supportive in 2021. In response to the pandemic, the authorities reallocated expenditures towards cash grants and transfers and ‘shovel ready’ public investment projects, primarily improving road networks and providing affordable housing, and eased the tax burden on the most vulnerable. Public debt stood at 42.9 percent of GDP at end-2021, one of the lowest in the region,” the institution said.

‘Guyana’s medium-term prospects are more favorable than ever before, with increasing oil production having the potential to transform Guyana’s economy’

While noting that oil production is expected to increase significantly, the IMF indicated that Guyana’s commercially recoverable petroleum reserves is estimated to be well over 11 billion barrels, the third largest in Latin America and Caribbean, and one of the highest levels of oil reserves per capita in the world.

“This could help Guyana build up substantial fiscal and external buffers to absorb shocks while addressing infrastructure gaps and human development needs. However, increased dependence on oil revenues will expose the economy to volatility in global oil prices. A slowing global economy and the repercussions from the war in Ukraine could also adversely affect non-oil exports. On the other hand, higher global oil prices and additional gas and oil discoveries could significantly improve Guyana’s long-term economic prospects,” the IMF added.

IMF supportive of Government’s goals to transform the economy, address development needs in an inclusive way, and protect the long-term economic well-being of Guyana:

The IMF highlighted in its report that it is strongly supportive of the authorities’ efforts to reduce electricity costs, improve transport infrastructure, diversify the economy, improve access to and quality of social services as well as advance more broadly towards the Sustainable Development Goals. As such, Guyana’s Government was commended for its ‘Low Carbon Development Strategy 2030 to maintain the country’s forest coverage and address climate change challenges by shifting towards renewable energy sources, while entering the international carbon credits market’.

IMF lauds Government for amendments to the NRF Act:

The IMF went on further to laud the authorities (GOG) for the recent amendments to the Natural Resources Fund Act.

“The recent amendments to the 2019 Natural Resource Fund (NRF) Act set clear ceilings on withdrawals from the Fund for budgetary spending and promote transparency in the management and use of oil resources. Staff praised the authorities’ thorough review of the 2019 NRF Act before making amendments, and the restraint in using any oil revenues before the passage of the amendments,” the report said.

IMF recommends feasible, moderate increase in public investment while further strengthening the medium-term framework for fiscal policy:

While the international financial institution praised the Government for several of its initiatives, it also recommended that it moves at a cautionary pace in ramping up public investment.

“While pressing development challenges still face the country, a large surge in public investment could add inflationary pressure, affect competitiveness of the non-oil economy, lead to an eventual loss in FX reserves, and might not be sustainable over the medium-term,” the IMF said as it urged Government to simultaneously strengthen the capacity to manage public investment, based on recommendations from the 2017 PIMA report. It also recommended that Government set annual budgets within a fiscal framework that, over the medium term, constrains the annual non-oil overall fiscal deficit (after grants) to not exceed the expected transfer from the NRF, to anchor fiscal policy in a sustainable way.

“This rule will also ensure that fiscal spending, including capital spending, is increased at a measured pace, to address development needs without macroeconomic imbalances,” the institution said while also recommending that further analysis of the oil transfer rules be done, to ensure the long-term sustainability of the NRF and intergenerational equity.

AML/CFT framework strengthened, IMF recommends further advances in this area:

Noting that Guyana has been removed from the Caribbean Financial Action Task Force (CFATF) and the European Commission’s Money-Laundering Blacklists, the IMF recommended that the AMF/CFT framework be further strengthened with mutual evaluation to be done once more by the end- of 2023.

“Similarly, the National Risk Assessment is completed, and the BoG is working on its recommendations with the requested support from the Caribbean Regional Technical Assistance Center (CARTAC)’, the Institution posited.

The IMF also agreed with Government that exchange rate stability serves Guyana’s needs best currently.

“The use of the exchange rate as the nominal anchor is currently appropriate, concurrent with increased efforts to diversify the non-oil economy and deepen the domestic financial markets. The accumulation of substantial buffers in the NRF will strengthen Guyana’s headroom to maintain a stable exchange rate,” it added.

The IMF said too that over the medium- to long-term, as Guyana becomes a major oil producer, the Government is supported in its aims to deepen financial markets and the institution recommended the revising of the monetary policy framework to ensure it is well suited for the economy’s needs, including allowing the exchange rate to absorb shocks and increase its flexibility to maintain competitiveness.

GOG commended by IMF for good progress in strengthening Guyana’s anti-corruption framework, fiscal transparency, supports further advances:

Pointing out that several pillars of the anticorruption framework have been recently strengthened, including the Integrity and Public Procurement Commissions (IC and PPC) and the National Procurement and Tender Administration Board (NPTAB), the IMF noted that ‘Audit reports of public expenditures, including for COVID 19, are published, and their recommendations are followed up on. It added that asset declarations of a large number of public officials are submitted annually, and public procurement tenders are streamed live’. The IMF also noted that Government made progress in implementing the recommendations of the 2019 and 2021 EITI (Extractive Industries Transparency Initiative) reports, notably on the reconciliation with the fiscal regime.

“Some progress has also been made on information sharing and publication of extractive industries’ financial statements, and the authorities are strengthening capacity to address remaining gaps, including in moving towards electronic disclosure and adequate follow-up’, the institution observed.

The IMF concluded further that it is ready to assist Government in its capacity development needs. ”This includes technical assistance on macroeconomic and fiscal management, development of financial market infrastructure, and strengthening of statistical capabilities”, it said.

The IMF announced further that its Executive Board is expected to discuss Guyana’s Article IV consultation on August 31st, 2022.