Category: Press Releases

03 Nov
By: Tanika Jones 0

IsDB concludes Mission to Guyana

The Ministry of Finance has just completed the successful hosting of a Programming Mission by the Islamic Development Bank (IsDB) to Guyana that will soon realise deeper ties between the two countries as they seek to identify projects to accelerate Guyana’s development.

The Mission which concluded on Friday, November 2, 2018 saw three intense days of meetings between a team of officials from the IsDB led by Dr. Sobir Komilov – Regional Manager for Latin America and the Caribbean; and included Mr. Saifulla Abid –Senior Country Manager for Guyana IsDB; Mr. Hamady Soma Ba – Relationship Manager from the International Islamic Trade Financing Department (ITFC) and Mr. Ahmed A Khalid – Regional Head (Asia) of the Islamic Corporation for the Development of the Private Sector (IFC) and representatives from the Public and Private Sectors.

The Mission aimed at developing a pipeline of potential projects for the medium term 2019 – 2021 that would inform the work programme of the IsDB; discussions were focused therefore, on identifying projects and programmes that seem most likely to have the greatest development impact in Guyana.

It was coordinated by the Ministries of Finance and Business under the guidance of the Hon. Winston Jordan, Minister of Finance and Governor for Guyana at the IsDB. Discussions were held with the Ministries of Public Health, Education, Agriculture, Public Infrastructure, Communities, Social Protection, GoInvest, the Georgetown Chamber of Commerce, and several Commercial Banks.

The challenges and opportunities to advance Guyana’s development agenda were explored and priorities for action identified. Health Care, Waste water treatment, renewable energy, TVET, housing and infrastructure were among the areas identified for initial consideration in 2019.

To close the mission, an aide memoir was signed between the Government of Guyana and the IsDB Group with both sides agreeing to continue collaborating on the development of the country.

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08 Oct
By: Tanika Jones 0

Minister of Finance Responds to Stabroek News Editorial

Dear Editor,

The mask is finally off, SN “Cohesion” 2018-10-07. It would appear that your editorial board is not pleased with any initiative of the government.

This editorial trotted out a tired and lazy narrative of a “bumbling” “incompetent” government that “rules over us”. Of course, this comes from a newspaper that is owned by a wealthy family that over the years has served as the megaphone for the private sector, several of whose members became obscenely rich through corrupt schemes, massive tax evasion and other nefarious activities under the former PPP/C regime. It appears that SN didn’t actually want a change of government; rather, it wanted the PPP/C government to change its ways. Unfortunately for SN, the Coalition government is a reality, over three years old. We were elected to serve the people of this country. We have been doing so; we will continue to do so, regardless of criticisms and detractors, without fear or favour, affection or ill will.

A lot of aspersions were cast on a number of my colleagues. I believe they are capable of defending themselves. As to your criticism of my so called “less than exemplary performance in charge of the Ministry of Finance portfolio,” you must have forgotten, conveniently, the deformed and broken economy that our government inherited in 2015. Lest we forget, too, that economy thrived on rampant drug trafficking, money laundering, and a banking sector in which a few institutions recklessly lent funds for private white elephant projects.

The hangover from that lending binge has resulted in an average non-performing loan ratio of 13.2%; in the particular case of one bank, one out of every three loans are now categorized as non-performing. This was a significant factor in the immediate slowing of the economy, post-2015. Just look at the half finished, empty buildings dotting the landscape and one would understand that the construction boom, hailed by the PPP/C and their admirers, was nothing but a bubble waiting to burst. More directly, the Treasury has been forced to bear the cost of a large number of reckless investments, including Skeldon, Clico, and the Marriott Hotel. It didn’t stop there: the government has had to dole out billions to settle lawsuits as well as meet the cost to retrieve the outstanding US$5M for the sale of the government shares in GT&T.

Despite that and significant challenges in the sugar sector, that we as a country are now finally grappling with, our government has provided a bailout for Guysuco- a whopping $37 billion to date.This sum excludes the $5.7 billion severance payment for workers; the transfer to central government of expenditure previously borne by Guysuco, including D&I and community centres; and debt repayments on loans contracted for the ill-fated Sugar Modernisation Project. But not once have I seen an editorial questioning the management of Guysuco about its stewardship of taxpayers monies.

Still, the economy grew by 4.5% in the first half of this year and is projected to grow by 3.7% for all of 2018. This compares very favourably to most countries in the Caribbean and Latin America. And this growth does not come from profligate government spending: Debt to GDP ratio, a critical indicator of an economy’s health, is well within the internationally-accepted limit for countries at our level of development, at around 50% and remains the second lowest in the Caribbean. The International Monetary Fund, in its May 9, 2018 mission statement said it “supports the authoritiesprudence towards private external borrowing” and that “the central government deficit was 4.5 percent of GDP, lower than the budgeted 5.6 percent. This better than expected outturn was largely supported by higher revenue arising from improvements in tax administration.” And for this, I must commend the sterling and relentless work of Commissioner General Godfrey Statia. Let us recall that back in 2013, only one third, or 992 out of 2,618 registered and active firms, filed tax returns and that out of 75,992 active self-employed persons, only 33,740 filed taxes, paying an annual average of $98,000 per person.

Meanwhile, in a press release on June 25 2018, Tahseen Sayed, the World Bank’s Country Director for the Caribbean said “Guyana is making important strides to promote financial resilience and improve fiscal management, and has embarked on a broad-based reform program. These reforms will be key to building a strong economy that is underpinned by a strategic management of public resources for the benefit of the Guyanese people.” The statement continued that “Significant progress has been made in implementing the 2016 Financial Sector Assessment Program (FSAP) recommendations, including enhancing the supervisory power of the BoG and establishing an emergency liquidity assistance framework, a national payment system and a deposit insurance scheme. The mission welcomed the establishment of a Financial Stability Unit within the BoG to assess macro-financial vulnerabilities.

So, who are we to believe? Stabroek News with its apparent axe to grind? Or the IMF, the World Bank and the other international lending institutions including the Inter-American Development Bank and the Islamic Development Bank that are increasingly viewing Guyana as a stable, well managed country with bright prospects that is ripe for sustainable development?

Also, the editorial claims, bizarrely, that public sector workers have not received a major increase in salaries since 2015. Again, a case of selected amnesia: only three months after taking office, our government increased the minimum basic salary of each public servant to $50,000. This translated to a 26.4% increase for those who earned the old minimum wage of $39,540 and 17.1% for over 4,000 public servants earning the then minimum wage of $42,703. Subsequent to this, public servants, including teachers, have seen further increases that amount to over 50% since the Coalition Government took office.

Further, our government has reduced the Value Added Tax (VAT), from 16% to 14%; reduced Personal Income Tax, from 30% to 28%; increased the tax threshold from $600,000 to $720,000 or 1/3rd of gross income (whichever is higher); made employees’ NIS contributions tax free; and reduced tolls on the Berbice Bridge. And yes, we have reduced Corporate Income Tax for manufacturing companies, from 30% to 27.5% and granted significant concessions to the gold and forestry sectors, among others.

All the while, we have kept inflation well in check:negative 3.3% in 2015, 1.4% in 2016 and 2% in 2017. Despite the desperate fearmongering of the PPP/C and fellow travellers, the Guyana dollar/US dollar rate as of May 2018 stood at G$212.48,from G$210 in May 2015. That’s a depreciation of 1.2% over 3 years. Impressive, indeed! Yet, we are conscious that more needs to be done.

As for the editorial’s claim about the “loss of all the senior officials who have resigned” from my ministry in “the last few weeks”, I refer you to a previous misguided article in which the reporter failed to seek clarity from my Ministry before publishing. In our subsequent response, we noted that “The policy of the Ministry under the stewardship of Hon. Winston Jordan is that employees who reach the age of retirement are not kept on unless they bring some special skill that is critical to the work of the Ministry, or, where suitable replacements cannot be found within the Ministry. We see this as part of giving younger civil servants the opportunities to build careers with us.” I would add that I remain extremely proud of the dedicated and highly competent team working at the Ministry of Finance. Under my leadership, this team has been able to produce, among others: two national budgets before the start of the financial year; Mid-year reports before Parliament goes into recess; two Public Debt Reports (not a requirement under any law); Public Private Partnership Framework; and more recently, a Green Paper on the Sovereign Wealth Fund. I have taken to Parliament, and had passed, more pieces of legislation than any other Minister of Finance did in their first three years.

Of course, Stabroek News itself is not immune to an exodus of skills, including competent editors and senior reporters, which is sadly apparent in the decline of its journalism over the past decade.

Rest assured that I will continue my single-minded dedication to the task at hand.

Yours sincerely,
Winston Jordan, MP
Minister of Finance

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06 Oct
By: Tanika Jones 0

Joint World Bank Mission visits Ministry of Finance

The Ministry of Finance is hosting a Joint World Bank Mission comprising the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA) and the International Financial Corporation (IFC) – the private sector arm of the Bank from October 1st to 9th, 2018.

The visit signals the Bank’s continued confidence in the macroeconomic stability of the economy and growing interest in Guyana’s Development Agenda, and the inclusion of the IFC underscores the importance government has placed on ensuring that the new World Bank partnership framework incorporates policies and measures to support the development of a vibrant private sector that is geared to benefit from, and to complement the emerging oil and gas sector.

During its engagement with Minister of Finance, Winston Jordan and his technical team, the Bank commended the Ministry for the high standard of Guyana’s Green Paper on the Sovereign Wealth Fund (SWF) and committed to providing more technical guidance and support as Guyana moves towards the completion of the draft SWF Legislation. In this regard, the draft SWF Act was shared with the Bank to solicit its technical review and advice given its vast experience with this type of legislation in oil producing nations.

This Mission will initiate discussions on the second tranche of the Programmatic Fiscal and Financial Stability Development Credit (DPC) and continue engagements with Government Officials and the wider stakeholder community on the preparation of a Systematic Country Diagnostic assessment for Guyana.

The first tranche was successfully negotiated earlier this year and disbursed to Guyana, the Second DPC will be negotiated and disbursed in 2019.

The Systematic Country Diagnostic Assessment is a precursor to developing a full Country Engagement Strategy that will inform the Bank’s future programming for Guyana within the next investment cycle of the Bank (IDA 19).

The Mission is led by Ms. Galina Sotirova, Country Manager for Guyana with responsibilities for the Caribbean Country Management Unit and includes Ms. Judith Green, Principal Investment Officer of the IFC and eight other senior technical experts including experts in the area of Oil and Gas.

As part of its wider mandate the Bank mission consulted widely with the Private Sector, Civil Society, several Commercial Banks and the University of Guyana among other stakeholders.

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08 Sep
By: Tanika Jones 0

Guyana is approved for first loan from the IsDB, GPL’s Upgrade programme gets USS$20m for more reliable power supply

Georgetown, September 8, 2018

Government’s efforts to provide citizens with a more sustainable and stable supply of electricity are rewarded as Guyana has received approval from the Islamic Development Bank (IsDB) for a loan of US$20m for the Guyana Power and Light (GPL) Utility Upgrade Programme to effect a comprehensive turnaround of its electricity distribution.

This loan is the first sum to be disbursed from the resource envelope of US$900m that was extended to Guyana by the IsDB in 2017. Guyana has already benefitted from two grants from the Bank totalling more than US$500,000.00.

The Guyana Power and Light has long been challenged by its inability to provide a reliable supply of electricity and suffers high levels of losses. This has been compounded by a rapid increase in demand for energy by residential and commercial users. The GPL Utility Upgrade Programme is co-financed by the Inter-American Development Bank and the European Union, and upon completion will reduce losses, realise a more efficient and reliable service and deliver a better quality of electricity for households and commercial users.

The Utility Upgrade Programme is part of GPL’s Development and Expansion for the period 2014 to 2021 which aims to reduce the overall losses in the power system. The loan will facilitate:

  1. The rehabilitation of 153 km of GPL’s medium voltage and low voltage network and 6, 941 smart meters, including the associated transformers, service lines and distribution boxes.
  2. The rehabilitation and extension of two 69/13.8KV substations at Kingston and Vreed-en-hoop including equipment switchgear, power transformers, rerouting of circuits distribution feeders and cable connections.

It will also finance consultancy services for the preparation of designs and specifications for the sub-stations and the site supervision for the works related to the Kingston and Vreed-en-hoop substations, as well as support the existing project management unit by financing additional specialised engineers and technicians to reinforce the existing team. GPL is the Executing Agency for the project and will operate under the aegis of the Ministry of Public Infrastructure.

Minister of Finance, Hon. Winston Jordan will sign the Agreement with the IsDB on September 19, 2018 in Saudi Arabia. Since becoming a member of the Bank, Government has been aggressively pursuing projects that will increase Guyana’s infrastructure and optimise its productivity in the areas of agriculture, trade and competitiveness and human and rural development having committed to the diversification of Guyana’s economy in preparation for first oil in 2020.

Guyana became a member of the IsDB in 2017; the partnership was formalised with a mutual commitment to a five year work programme.

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30 Aug
By: Tanika Jones 0

GMSA engages GRA on VAT and other key issues affecting manufacturers

A team from the Guyana Manufacturing and Service Association (GMSA) led by it’s President Shyam Nokta and including Board Member Ramesh Dookhoo and Chair of the Forestry and Wood Processing Sub-Sector Rafeek Khan met with Commissioner General Godfrey Statia and his GRA team on Thursday, August 16 to discuss several key issues affecting the manufacturing sector.

The meeting was convened as a follow up to the GMSA registering concerns to Minister of Finance Winston Jordan in June 2018 regarding the impact of the Amendment to the VAT Act in January 2018 on some sections of the manufacturing sector whereby resulting therefrom, certain businesses involved in exports were unable to reclaim the Value-Added Tax paid on inputs on the goods exported. The GMSA contended that the amendment, contrary to what the Minister had intended and as stated in his budget speech, affected major sectors of the economy, foremost being the forestry and wood processing sector. The GMSA further contented that the VAT on such inputs serves as a dis-incentive to producers who primarily manufacture for export and comes at a time when the forestry and wood processing sector is facing several challenges including the deplorable state of interior roads and when there is strong push for more value adding to target external markets.

The Commissioner General indicated that in keeping with the Minister’s pledge of no new taxes and the fact that the Amendment was intended to improve Administrative efficiency of VAT administration that GRA is exploring ways to address the issue. He also requested that the GMSA explore other avenues and make suggestions with financial analyses rather than making broad statements since the GRA’s analysis using return submissions have revealed a negligent impact on the industry.

Notwithstanding the Commissioner General’s position, the GMSA stands by its position regarding the adverse impact on key economic sectors. The GMSA also took the opportunity to raise other issues pertaining to tax administration including the implementation of the new scanner system and processing times, and put forward for consideration a request for incentives for manufacturers in relation to energy and renewable energy technologies. A list of procedural issues relative to facilitating the smooth flow of businesses was also given to the Commissioner for his attention in the near future.

Also raised was the issue of addressing Excise Duty on Indigenous Wines in keeping with the Government stated policy of incentivizing local manufacturing. The issue of Excise taxes on Shandy was also discussed whereby the current structure is not in line with other Caribbean territories and has therefore disadvantaged Guyana’s producers.

The GMSA remains encouraged by the Commissioner General’s willingness to engage and that the GRA will give active consideration to the issues raised and make recommendations to the Minister of Finance on the way forward.

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28 Jul
By: Tanika Jones 0

Ministry of Finance responds to Stabroek News article on vacancies

Dear Editor,

The Ministry notes your article “Finance seeks new Chief Planning Officer, Deputy Finance Secretary after resignations” (SN 2018-07-28) and wishes to provide some context to the subject. We are concerned that the personal matters of former employees of the Ministry have been included in the article seemingly without their consultation.

As a result, please note the following:

  1. Former Deputy Finance Secretary, Louise Bouyea opted not to have her contract renewed through a direct request to the Minister of Finance. We thank her for her service to the Ministry and the country.
  2. Former Chief Executive Officer of the National Procurement and Tender Administration Board Donald DeClou’s contract was not renewed. Among other considerations for the non-renewal of his contract was the fact that he had attained the age of retirement both the Public sector age of 55 and what obtained for workers of the former State Planning Secretariat, age 60.We thank him for his service to the Ministry and the country.
  3. Former Chief Planning Officer, Dr. Nelson Modeste resigned in June of this year. Similarly, we thank him for his service.
  4. The policy of the Ministry under the stewardship of Hon. Winston Jordan is that employees who reach the age of retirement are not kept on unless they bring some special skill that is critical to the work of the Ministry, or, where suitable replacement cannot be found within the Ministry. We see this as part of giving younger civil servants the opportunities to build careers with us. It is also the case that in many other countries, individuals start a second career after they have retired. Guyanese retirees should begin to plan accordingly so that they can continue to be employed once they can parlay their skills to other areas. We do not view the public service as a rest home. This will be counterproductive to the vision that this government has for its Public Service.
  5. As with any dynamic organisation, the loss of staff is inevitable. The competence and efficiency of our middle and senior employees are well known, but alas! They are often poached by local and international agencies including sister Ministries. We accept this reality and remain proud of the work ethic and the level of skills acquired by employees of the Ministry. Since 2015, many of our middle and senior employees whose progress was stymied previously for frivolous reasons have been sent for training both locally and overseas, and received scholarships to Universities abroad. The Ministry is investing in employees who by both their achievements and commitment to their duties show that they are keen to contribute to the development of Guyana. This, despite the ever present challenge of losing them to other employers.

The Ministry of Finance believes that it is especially important that the skills employed can meet the new demands of the services to be provided by Government Ministries and Agencies. The advent of oil production in 2020 will test the ability and capacity of almost all government departments. We are keenly aware of the unique challenges the Ministry of Finance will face, and we are making important and necessary changes to build both the capacity of our ministry and to identify individuals with the requisite skills. Therefore, we see the current changes as very positive and part of our plan to create a dynamic, responsive ministry for the exciting transformation of our economy and country.

Yours sincerely

Wanita Huburn
PRO
Ministry of Finance

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