Finance Minister holds continued Budget consultations with Private Sector

-as presentation of Budget 2023 nears

Georgetown, Ministry of Finance, January 11, 2023: Senior Finance Minister Dr. Ashni Singh today held further consultations with various representatives of the Private Sector as Government prepares to present Budget 2023 in Parliament on Monday, January 16, 2023. Representatives attending today’s meeting included Mr. Ramesh Dookhoo of the Guyana Manufacturing and Services Association (GMSA), President of the Georgetown Chamber of Commerce and Industry (GCCI), Mr. Timothy Tucker, Chairman of the Finance Sub-Committee of the Institute for Private Enterprise Development (IPED) Mr. Jagdesh Haripersaud, Director/Board Member of the Women’s Chamber of Commerce and Industry Guyana, Ms. Rowena Elliott and Executive Director of the Private Sector Commission, Mr. Ian Chung. The meeting is a follow-up to the one held with President Irfaan Ali, Vice-President Bharrat Jagdeo, Minister Singh and other officials at State House last week. During that engagement a number of suggestions were made for inclusion in the Budget.

Dr. Singh has been over the last several months meeting and consulting with various stakeholders including the Private Sector, Government Ministries, other agencies and Civil society listening to their concerns and receiving suggestions. Budget 2023 which will be the fourth Budget presented to Parliament by the People’s Progressive Party/Civic (PPP/C) since its return to office in August 2020. This year’s Budget will see critical development programmes for Government being fast- tracked and many more expanded to reflect Government’s continued transformational agenda for the country which has been taking it forward at a rapid pace over the last two years and 5 months since the PPP/C’s return to office in August 2020. The PPP/C’s Budgets have all reflected its manifesto promises as well as additional initiatives that have been taking Guyana forward and transforming the country’s landscape at an extremely rapid pace as well as attracting attention on the world stage as its economy booms.

Only yesterday, the World Bank in its published report ‘the Global Economic Prospects’ projected that Guyana will be the only country in the Latin America and Caribbean (LAC) region to record double-digit growth in 2023 with a growth rate of some 25.2 per cent, building on the 57.8 per cent expansion in 2022.

The first Budget presented by the PPP/C was an Emergency one totalling $330 Billion and was presented under the theme ‘Our Plan for Prosperity: Protecting our People in a COVID-19 Environment; Strengthening Democracy and the Rule of Law; Incentivising Economic Growth and Job Creation; and, Enhancing Welfare’. The second, in 2021 totalled 383.1 Billion and was presented under the theme ‘A Path to Recovery, Economic Dynamism, and Resilience’ while the third in 2022 totaling $552.9 Billion was unveiled under the theme “Steadfast Against All Challenges, Resolute in Building Our One Guyana’.

Budget Day is Monday January 16, 2023

Georgetown, Ministry of Finance, January 9, 2023: Senior Finance Minister Dr. Ashni Singh today announced that Budget Day is Monday, January 16, 2023.

Dr. Singh has been over the last several months meeting and consulting with various stakeholders including the Private Sector, Government Ministries, other agencies and Civil society. Only last week, the People’s Progressive Party/Civic (PPP/C) Government, led by President Irfaan Ali hosted another consultative meeting at State House with representatives from several private sector and other agencies to listen to their concerns and receive suggestions for Budget 2023. These all formed part of possible inclusions as the Budget 2023 planning process continues.

As with Budget 2022, this year’s Budget is expected to see critical development programmes for Government being fast-tracked and many more expanded to reflect Government’s continued transformational agenda for the country which has been taking it forward at a rapid pace over the last two years and months since the PPP/C’s return to office in August 2020. It will be the third Budget presented since by the current administration and the second one for Dr. Singh who commenced his current tenure as Senior Finance Minister in November 2020. Prior to this, Government’s first Budget for their current term was presented in August 2020. In that first Budget Government reversed a large number of harsh taxes instituted on citizens by the former A Partnership for National Unity/Alliance for Change (APNU/AFC) Government.

The second Budget in 2021 was presented under the theme ‘A Path to Recovery, Economic Dynamism, and Resilience’ while the third was unveiled under the theme “Steadfast Against All Challenges, Resolute in Building Our One Guyana’. Budget 2021 comprised a number of developmental measures and also included funding for the construction of a number of housing schemes and expansion of existing ones along with investment in the revitalization of the country’s sugar industry. There were also programmes which the Government implemented in partnership with private sector bodies and other stakeholders especially with regard to the tourism, hospitality and agriculture sectors. Several relief cash grant measures were also implemented and saw thousands of citizens across the country benefitting from the relief. A number of areas had been devastated by flooding and Government also provided relief for affected persons especially those who had suffered loss of crops and livestock. The Health, infrastructure and education sectors also saw major injections in Budget 2021 as the COVID-19 Pandemic was ongoing.

Budget 2022 also saw major injections in a number of sectors including more expansion of Government’s housing drive, the infrastructure sector catapulted with an increased number of roads and bridges constructed, energy expansion and diversification, provisions for persons with disabilities, several injections toward Amerindian and Hinterland development as Government proved its commitment to bettering the lives of the indigenous people. It also saw large injections in the health, education and security sectors.

Guyana’s macroeconomic context continues to be one of a booming economy-IDB Quarterly issue on Caribbean Economics states

-with an expanded non-oil economy

Georgetown, Ministry of Finance, January 8, 2023: Guyana’s macroeconomic context continues to be one of a booming economy, with oil production driving growth in exports, Gross Domestic Product (GDP) and government revenues and expenditures in the medium term. The non-oil economy is also projected to have a ‘better-than-expected turnout of 9.6 percent for 2022 compared to 7.7 percent projected in the country’s 2022 budget’. This is according to the Inter-American Development Bank’s (IDB’s) quarterly (December 2022 edition) publication “Caribbean Economics” under the sub-title ‘The Headwinds-Facing the Post-Pandemic Recovery’. This recent edition of the publication examined Caribbean economies and how they have been performing during the post pandemic period while analyzing what was done by their Governments to allow for the economic results in each.

In Guyana’s case. the IDB publication highlighted that ‘in its October, 2022 World Economic Outlook (WEO), the International Monetary Fund (IMF) increased its estimates for oil production and GDP growth as a result of incorporating oil production from two additional floating, production, storage, and offloading (FPSO) vessels’ which resulted in higher levels of production but at the same, considering higher energy prices, led to Guyana’s main export flows and as a consequence Guyana’s volume of exported goods was projected to rise by ‘an annual average of 50 percent over 2022-2026 in contrast to the IMF’s previous estimate of 22.5 percent in its April 2022 WEO (IMF 2022b). However, the publication also noted that GDP growth was ‘expected to significantly expand in 2022 and ‘includes stronger recoveries in some ‘non-oil sectors’. The publication back this up by highlighting that the non-oil economy is also expected to have a better than expected turnout of 9.6 percent for 2022 compared to 7.7 percent projected in the country’s 2022 Budget’. It also indicated that the main drivers of growth in the non-oil economy include agriculture, services, and construction.

Recognizing the importance of a strong, diversified economic base, the President Ali-led Government in the earliest days of oil production, placed the highest level of importance on a strong non-oil economy. This is evident with Guyana’s non-oil growth in 2022 projected at over 9 percent, building on the 4.6 percent recorded in 2021 and over the medium term is forecasted above global levels.

Currently, Guyana holds portfolio responsibility for Agriculture and Food Security in CARICOM. As such, the publication pointed out that in order to strengthen food security, government had promoted the Vision 2025 by 25 policy initiative, which sought to ‘reduce extra CARICOM food imports by 25 percent by 2025. The report noted also that ‘Guyana is among the governments in the region that have been organizing investment forums to promote technological improvements in agriculture and foreign direct investment’. The report pointed out too that Guyana ‘rapidly moved from being a net importer of agricultural products and mineral fuels, representing 8 percent of GDP in 2018 and 2019, to being a net exporter of the same commodities, with a trade surplus of 16 percent of GDP in 2020 and 31 percent in 2021 with the rest of the world’.

Guyana implemented a suite of measures to contain rising prices amid external shocks

-one of the Caribbean countries which contained inflation to single digits-lower than many countries in the world

Georgetown, Ministry of Finance, January 7, 2023: As the global economy confronts high levels of inflation, the economies of the Caribbean, including Guyana, have recorded low inflation rates due to direct action to keep prices from rising. In its December 2022 quarterly issue of its ‘Caribbean Economics’ publication, the Inter-American Development Bank (IDB) has listed some of the measures taken by Guyana and other Caribbean Governments to stem inflation and assist their economies to grow despite external shocks and higher commodity prices on the world market. Some of the challenges these countries faced and alluded to in the report were the War in Ukraine, higher oil prices which resulted in higher fuel prices and of course, the Covid-19 recovery period. “Just as Caribbean economies are emerging from the sharp recessions associated with the COVID-19 pandemic, a confluence of external shocks now complicates the recovery…the current global context of high commodity prices affects countries differently, depending on whether they are mainly commodity importers or exporters”, the IDB stated.

As the People’s Progressive Party/Civic (PPP/C) continues to confront the challenges posed by global events, including supply chain disruption, the Russian invasion of Ukraine and the lingering COVID-19 pandemic, a suite of measures were implemented to ease the cost of living and contain the rising prices.

The report noted that in addition to the Guyana Government’s interventions to absorb the increased costs on commodities such as fuel (as a result of higher prices on the world market) by reducing Excise Tax on fuel from 20 to 10 percent in January, 2022 and then to zero in March of the same year as well as absorbing the additional operating costs on electricity and water tariffs, the IDB noted that the Government also intervened by allocating US$4.8 million for the purchase and distribution of fertilizer to farmers to reduce operating costs, distributing US$ 3.8 million in the form of one-time cash grants for households in the rural interior and riverain communities (US$120 per household) and through its public assistance payments to vulnerable populations by increasing these payments from US$57 to US$67 per person per month, benefitting approximately 18,000 people. ‘The payments were later expanded to provide lifelong support for people with permanent disabilities’, the report added. It also referenced the Old Age Pension which ‘benefitted approximately 65,000 senior citizens and which saw a series of increases that brought it from a monthly payment of US$98 in 2020 to US$134 in 2022’.

The IDB report went on to note that ‘price shocks have also inspired regional leaders to promote longer-term regional solutions to the dependence on imports from outside the region and also alluded to CARICOM’s 25 by 2025 Initiative (led by Guyana’s President under his portfolio responsibility in CARICOM) which has the aim to reduce food import dependence by 25 percent by 2025 adding that this promising objective could be achieved through a combination of increased domestic production and enhanced regional trade. It then used an example of such as the notable regional collaboration of ‘the Saint Barnabas accord signed by the governments of Barbados and Guyana in July 2022.

The Government of Guyana continues to proactively monitor, review and put into action, measures to ease the burden on its most vulnerable citizens.

Fourth notification made to Parliament of petroleum revenues paid into the NRF

-as Government continues to demonstrate its commitment to the principles of transparency, accountability in management of Guyana’s oil resources

Georgetown, Ministry of Finance, January 6, 2023: Senior Finance Minister Dr Ashni Singh today submitted Notification of Receipts to Parliament of all petroleum revenues paid into the Natural Resource Fund (NRF) during the period 1 st October 2022 to 31 st December 2022, pursuant to Section 33 (2) of the NRF Act 2021. This notification was published in the Official Gazette on the 5 th January 2023 and demonstrates the People Progressive Party/Civic (PPP/C) Government’s continued commitment to the principles of transparency and accountability in the management of Guyana’s oil resources. At the end of 2022, the balance in the NRF stood at US$1.27 billion.

It would be recalled that the NRF Act 2021, came into operation on January 1, 2022, replacing the illegitimate NRF Act 2019 passed by the APNU/AFC caretaker administration. The NRF Act 2021 allows for substantial improvement in the management of the natural resource wealth of Guyana including the establishment of a Board of Directors which is responsible for reviewing and approving the policies of the Fund and monitoring its performance, thereby separating the management of the Fund from the Minister responsible for Finance. Another key amendment in the new legislation is that the Minister of Finance 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.

The International Monetary Fund (IMF), in its 2022 Article IV mission to Guyana in May- June of 2022, commended the PPP/C Government on the amendments made to the NRF Act and highlighted:
“The NRF Act was strengthened recently. After a thorough review, and while restraining the spending of the oil receipts, the authorities amended the NRF Act December 2021. The recent amendments set clear ceilings on withdrawals from the Fund for budgetary spending,’

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

Government signs loan agreement with Bank of China for advancement of construction of historic New Demerara River Bridge

-Finance Minister announces

Georgetown, Ministry of Finance, December 30, 2022: In tandem with Government’s aggressive and transformative transport infrastructure plans for the country, Senior Minister in the Office of the President with Responsibility for Finance Dr. Ashni Singh today announced that Government had today completed the electronic signing of the loan agreement with the Bank of China for 160.8 Million Euros for the advancement of the construction of the New Demerara River Bridge. It can be recalled that in May this year, Government signed the US$260M contract for the major new Bridge as part of its plans to expand and modernize Guyana’s transport infrastructure, and significantly reduce the traffic woes on the East Bank of Demerara. The project, which has been long in the making by the PPP/C Administration, was awarded to the Joint Venture of China Railway Construction Corporation (International) Limited, China Railway Construction (Caribbean) Co., Ltd & China Railway Construction Bridge Engineering Bureau Group Co., Ltd.

The hybrid designed bridge will feature a modern four-lane structure (two carriageways), cycle lane, with a 2.65 kilometers length, driving surface of about 23.6 meters or 77.8 feet and will have a lifespan of some 100 years. The Demerara Harbour Bridge is also a vital linkage for the transport of agricultural goods from Regions 2 and 3 into Regions 4 and beyond. Therefore, easier and more efficient transport links will support agricultural development and food security for Guyanese.

The current Demerara Harbour Bridge is over 40 years old and connects the East Bank at Peters Hall with the West Bank at MeerZorgen, an estimate of 40,000 to 45,000 people and over 20,000 vehicles each day (11,000 per direction).

The new Demerara Harbour Bridge is a critical component of the Government’s drive to expand and modernize Guyana’s transport infrastructure and will address the challenges faced by users of the current bridge by providing safe, efficient, and effective crossing. It will offer easy connectivity to both the existing East Bank Demerara road as well as the new Diamond to Eccles bypass, the existing West Bank Demerara road, and the new Parika to Schoonord road. The new bridge will transform the face of transportation between Regions 3 and 4 and further regions. The new high span, four lane bridge will facilitate the smooth flow of traffic without congestion and delays.

The bridge is also a key strategic investment as economic activity on both sides of the Demerara expands rapidly, with developments on the horizon, such as new and expanded shore bases, a massive gas-to-power project and other industrial activities, alongside growth in more traditional sectors such as housing, construction, and services such as tourism. The bridge will play a significant role in accommodating and propelling economic growth.

US$192 Million Phase 2 East Coast Road Project to commence under Government’s expansive, aggressive transport infrastructure initiative

-as Finance Minister, Chinese Ambassador sign Framework Agreement

Georgetown, Ministry of Finance, December 30, 2022: Senior Finance Minister Dr. Ashni Singh and Her Excellency Guo Haiyan, Ambassador of the People’s Republic of China to Guyana today signed a Framework Concessional Loan Agreement to the tune of US$192 Million to finance Phase II of the East Coast Road Project. The signing was witnessed by Minister of Public Works Bishop Juan Edghill and other officials of the Ministry of Finance and the Chinese Embassy. Phase II of the project will include extension of the Railway Embankment Road into four lanes from Sheriff Street to Orange Nassau, extension of the main East Coast Roadway from Orange Nassau to Mahaica as well as rehabilitation of the existing East Coast Demerara road from Belfield to Orange Nassau which will allow for additional lanes. This Phase will also see the construction of 48 bridges and 22 culverts and another Bridge across the Hope Canal. The loan for the project is being provided by the Exim Bank of China. Phase I of the project was done during the previous term of the People’s Progressive Party /Civic Government (PPP/C) and included the extension of the East Coast main road.

Speaking at the ceremony, Chinese Ambassador to Guyana Her Excellency Guo Haiyan recalled that Guyana and China had recently celebrated 50 years of good relations, cooperation, mutual respect and mutual support and benefit and noted that China cherishes the friendship and cooperation with Guyana. She added that China is willing to strengthen this cooperation and the road- building project forms part of its global development initiative.

“We believe that the project borne through cooperation of the two countries will bring more benefit for people. The current financial situation is so volatile and poses a great challenge to developing countries and the concessional loan demonstrates China’s commitment to common development and gives a  indication of China’s confidence in Guyana’s development and in the two countries’ bilateral cooperation,” Ambassador Guo Haiyan added.

Making brief remarks as he witnessed the signing Minister of Public Works Bishop Juan Edghill noted that the road project is a major intervention in the road network along the East Coast corridor and will create greater accessibility, especially with the kinds of investments that the President Ali-led Administration is making and the possibilities of what could develop at Enmore in terms of industrialization and job-creation for people on the East Coast corridor.

“The already congested new four-lane needs to be supported by additional carriageways. It was the PPP/C while in office in the 2011 period that started that East Coast expansion and widening and here we are today. It will see the railway embankment from Sheriff Street (from the roundabout) to Orange Nassau being expanded into four lanes then the expansion of the East Coast. Then there will be the rehabilitation of the existing ECD road from Belfield to Orange Nassau. This will allow us to have additional lanes (four lanes on the railway embankment and for some sections-two lanes so that we’ll be able to see greater comfort in commuting into the city or out of the city while allowing for larger capacity in terms of containerized traffic to help with the movement of goods that will eventually evolve with the development of Enmore as a major job-creation centre,” Minister Edghill explained.

Finance Minister Dr. Ashni Singh prior to signing the agreement expounded on the ease of traffic congestion and decrease in commute time which the road project completion will allow for and the ramping up of economic activity and development occurring under the stewardship of the People’s progressive Party/Civic (PPP/C) both in its current and previous terms in office. Dr. Singh also highlighted the increase in vehicular traffic due to more persons being able to own their own homes and vehicles while the PPP/C is in office. He also alluded to the increase in the number of trucks and other large vehicles carrying good and materials and noted that this is a reflection of the construction and development boom.

“This is something that we welcome…in response to it, we take very seriously the obligation to expand our road network to ease this pressure and so as soon as President Ali came into office, Government set about an aggressive campaign to immediately transform our transport network. We have seen already parallel bypass roads constructed on the East Bank. Today you can drive from Sheriff Street to Diamond without ever touching the traditional East Bank road as we know….,” Dr. Singh emphasized.

He added that Government is building an Ogle to Diamond Road so that there will be multiple roads, pointing out that Government is not only addressing the EBD, but also the ECD as Government continues building out to provide an additional artery for travel between the East Coast and the East Bank which ultimately form an important part of Government’s transport infrastructure modernization plans.

Finance Minister signs $900 Million Revolving Fund MOU with Demerara Bank Limited to boost Forestry sector

-in keeping with President’s commitment during meeting with Forestry stakeholders

Georgetown, Ministry of Finance, December 29, 2022: Following up on President Irfaan Ali’s announcement in October of a $900 Million Revolving Fund to boost Guyana’s forestry sector, Senior Finance Minister Dr. Ashni Singh today, on behalf of Government, signed a Memorandum of Understanding (MOU) with Demerara Bank Limited during a simple signing ceremony at the Ministry of Finance. As can be recalled, President Ali had indicated during his announcement that Government’s intention is to increase its focus on small, medium and community loggers and had noted that Government and Demerara Bank Limited will collaborate to make available the $900 Million revolving fund to increase production in the forestry sector. The signing was witnessed by Minister of Natural Resources Vickram Bharrat, forestry sector stakeholders including representatives of the Guyana Forestry Commission (GFC) and the Guyana Manufacturing and Services Association (GMSA).

The establishment of the Fund is expected to address some of the challenges faced in the forestry sector in terms of the availability of easily accessible, low cost financing, especially for small scale operators. Meanwhile, the $900 Million Revolving Fund comprises a commitment of $300 Million by the Government of Guyana and a further $600 Million commitment by Demerara Bank Limited to address the challenges. It is expected to be utilized by individuals or companies operating within the forestry sector for the purpose of increasing production and value-added products in the sector.

Speaking during the ceremony, Dr. Singh reiterated that despite Guyana’s economy growing due to the oil and gas sector, Government remains committed to ensuring that the country’s economy is also diversified and resilient and not dependent solely on the oil sector and as such is continuing to work towards the country building a ‘vibrant, competitive and rapidly growing non-oil economy’.

“Naturally oil and gas will be driving a lot of the incredibly exciting economic growth that we’re seeing in Guyana, in 2022 we’ll see out economy grow in excess of 50 percent of real terms and in 2023 we are going to see our economy continuing to grow by an astronomical 25 percent or thereabouts and this is expected to continue into the medium term based on current proven reserves comprised of 11 billion barrels of oil but ofcourse exploration is still ongoing…,” he added.

Dr. Singh pointed out as well that in keeping with Guyana’s historical and pioneering Low Carbon Development Strategy (LCDS) which has resulted in Guyana being the first country to gain the first sale transaction of certified carbon credits under which Guyana has already earned US$75 Million as a first transaction of an ongoing series of transactions, that the realization of the forestry sector’s growth will be achieved in the context of continued responsible management of Guyana’s forestry resources and continued strong emphasis on value-added production.

Noting that access to financé has been a bottleneck for small loggers in Regions 1 and 10 in particular who are in need of same to capitalize or to recapitalize their operations as well as the need for available concessions to produce, Minister of Natural Resources Vickram Bharrat who witnessed the signing today, noted that the Forestry sector is in a better position than it was when Government returned to office in 2020 and that to date the GFC has allocated over 100 concessions to local small Guyanese loggers with the second issue being access to financing being addressed currently.

“So it is indeed pleasing for me as Minister of Natural Resources that we have reached this stage where we bargained (ofcourse with the intervention of His Excellency President Ali) with Demerara Bank Limited that we can now access finance for our small loggers, our sawmillers and to ensure that the forestry sector is being restored and returned to its former glory days,” Minister Bharrat added.

Minister Bharrat reminded that Government also has a housing project initiative with Barbados and St. Vincent and the boost to the forestry sector for further production through the MOU initiative signed today would assist in ensuring that there will be a further increase from that in 2022 and more production in the years beyond.

Signing on behalf of Demerara Bank Limited was General Manager Dowlat Parbhu who said that the Bank was pleased to partner with Government in the monumental initiative that will help to boost the sector. He recalled that the Bank has been supporting a number of sectors including agriculture alluding to the Bank’s launch of the Farmers’ Credit Line which provides loans to farmers for up to $1.5 Million at a very concessional rate. He noted that almost 300 farmers have been loaned financing from the last crop and this has helped many to return to the fields which in turn helps the sectors in Guyana which depend on rice especially.

“Today we are ensuring that for another sector in Guyana credit is available,” he added as he thanked President Ali for the initiative.

President Ali, in October had highlighted that financing through the Fund would be provided at an affordable interest rate of 4 percent and that Government would work in conjunction with the bank to prequalify persons based on recommendations from the GFC following which a system would be put in place to provide access to financing so that there would be an increase in cash flow for production. He had also emphasized that his Government is committed to supporting small, medium and community-based loggers but that there must be “clarity, good governance, transparency, accountability and a system that works”.