Month: May 2018

30 May
By: Tanika Jones 0

Minister of Finance signs Technical Assistance Grant with CDB; University of Guyana to construct modern library

Minister of Finance, Hon. Winston Jordan, on Tuesday, May 29, 2018 signed a Technical Assistance Grant for the infrastructural enhancement of the University of Guyana’s library. The CDB had previously assisted the institution with a Technical Assistance to examine its governance and other structures.

Other signatories to the agreement were President of the Caribbean Development Bank (CDB) Dr. Warren Smith, and the Vice Chancellor of the University of Guyana (UG), Dr. Ivelaw Griffith.

The US$149,985.00 grant was approved by the Board of Directors of the CDB at its Annual meeting held in March this year. It will fund a comprehensive assessment of, and prepare final designs and cost estimates for the construction of a modern, gender-responsive, socially-inclusive and environmentally resilient facility. This grant will also help to   address the adequacy and suitability of the current infrastructure. The new library will be situated on a plot of land west of the current library. The Government of the Cooperative Republic of Guyana and UG will contribute approximately US$26,000 towards the full realization of the project.

Over the years, UG has had difficulty accessing funds to maintain the present library, its other buildings or to construct newer buildings to cope with its ballooning student population. Despite this though, UG has made incremental changes to the library including the removal and disposal of asbestos from certain areas of the library in 2009; the construction of a fire escape in 2010; the renovation of the roof of the new wing of the library and grilling of windows in and general reading room in 2012; the rewiring of the library in 2015 and the physical upgrade of the learning resource centre in 2017. However, the library still suffers from infrastructural challenges and weaknesses in staff capacity.

The infrastructural enhancement project which will begin immediately will be implemented by UG through the Office of the Deputy Vice-Chancellor, Planning and International Engagement. A Project Steering Committee (PSC) will have responsibility for the coordination and overall guidance of the project.

The partnership between Guyana and the CDB most recently resulted in an agreement by the Bank to blend its resources with that of the United Kingdom/Caribbean Infrastructure Fund (UKCIF) to fund the waterfront renewal in Georgetown; upgrade the first phase of the much anticipated Linden to Lethem Highway; and construct a bridge across the Essequibo River, at Kurupukari.

It has also committed an estimated US$6.145 M to the 9th Cycle of the Basic Needs Trust Fund, which will be expended on projects and activities that contribute to inclusive and sustainable economic growth, reduce poverty in poor and rural communities, improve access to critically-needed services; and enhance the quality of life in the remote and interior areas of Guyana.

The CDB is currently hosting its 48th Board of Governor’s meeting in Grenada. In attendance are Minister Jordan, Dr. Griffith and other senior functionaries of the Ministry of Finance.

To view all the photos from this signing visit our Flickr Gallery or go directly to the album here.

 

 

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30 May
By: Tanika Jones 0

New Russian Ambassador calls on Finance Minister

His Excellency Alexander Kurmaz, Ambassador of the Russian Federation to Guyana makes courtesy call on Minister of Finance, Hon. Winston Jordan

The Ambassador of the Russian Federation to Guyana, His Excellency Alexander Kurmaz called on the Minister of Finance, Hon. Winston Jordan earlier this week.

The Ambassador who is new to Guyana assured the Finance Minister of his government’s continued collaboration and support for the development of Guyana. He emphasized that his government is not only interested in strengthened trade relations with Guyana, but,  is willing and ready to provide assistance in key areas such as, aviation, health care, information technology and border security, among others

Ambassador Kurmaz  also noted the similarities between the two countries, particularly in respect to the size of Guyana and the abundance of water and discussed innovative ways through which his country can assist Guyana in the management of its water, using advanced technology.

Minister Jordan in response assured Ambassador Kurmaz of his confidence in the benefits that will accrue to Guyana through the measures discussed and thanked the Ambassador and the government of the Russian Federation for its offer of  assistance to Guyana.

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17 May
By: Tanika Jones 0

Minister of Finance hosts reception for World Bank Team

To view the complete album of this event visit here.

To view more galleries, visit our Flickr account at https://www.flickr.com/financegy/

 

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09 May
By: Tanika Jones 0

Guyana: Staff Concluding Statement of the 2018 Article IV Mission

May 9, 2018

A Concluding Statement describes the preliminary findings of IMF staff at the end of an official staff visit (or ‘mission’), in most cases to a member country. 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.The authorities have consented to the publication of this statement. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF Executive Board for discussion and decision.

A staff team from the International Monetary Fund (IMF), led by Mr. Marcos Chamon, visited Georgetown during April 23–May 3 to hold discussions for the 2018 Article IV Consultation. The team met with Finance Minister Winston Jordan, Natural Resources Minister Raphael Trotman, Central Bank Governor Gobind Ganga, other senior officials, representatives from the private sector, the opposition party, labor unions, and other stakeholders. 

Economic growth slowed in 2017, but became more broad-based. Real GDP grew by 2.1 percent, down from 3.4 percent in 2016, on the account of weaker than expected mining output and weak performance in the sugar sector. Nonetheless, non-mining growth rebounded to 4.1 percent following a contraction in 2016. Construction expanded significantly, buoyed by higher public and private investments, and rice production recovered from weather-related shocks in the previous year. In 2018, the mission projects real economic growth of 3.4 percent, driven by continued strength in the construction and rice sectors, and a recovery in gold mining. Inflation remained subdued at 1.5 percent at end-2017, largely driven by food items, while core inflation was close to zero.

Weaker than expected export growth and higher oil prices contributed to the current account balance turning negative. In 2017, the current account recorded a deficit of 6.7 percent of GDP from a 0.4 percent surplus in 2016. That deficit was largely financed by FDI, particularly in the oil and gas sector, and higher loan disbursements to the public sector. Reserves stood at 3.2 months of imports, and the mission projects it to remain around that level in 2018–19.

The fiscal deficit remained stable in 2017. 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. In 2018, the deficit is projected to widen to 5.4 percent of GDP due to the cost of restructuring the sugar industry, including severance payments to displaced workers, as well as an increase in infrastructure related capital expenditure.

Guyana’s medium-term prospects are favorable. The commencement of oil production in 2020 will be a turning point. The main direct effect on the domestic economy will be through higher fiscal revenue, and spillovers to supporting activities. The balance of payments will swing sharply to positive after 2020. Oil revenue significantly improves the fiscal outlook, and is expected to place the public debt on a downward trajectory. The mission welcomed the progress made on establishing a comprehensive fiscal framework for managing oil wealth.

Debt sustainability concerns are attenuated by future oil revenues, but the financing of short-term deficits should be carefully managed. The mission supports the authorities’ prudence towards private external borrowing. The authorities were encouraged to rely to the extent possible on Development Banks, including non-concessional financing, and to follow-up on their plans to develop the domestic bond market. The mission stressed the importance of settling government balances at the Bank of Guyana (BoG), which will be achieved by the issuance of Treasury Bills.

The mission supports continued efforts by the authorities to enhance the quality and efficiency of government expenditure and tax administration. It commended the steps taken in response to the Public Investment Management Assessment (PIMA) in 2017, but cautioned that scaling up public investment without addressing remaining shortcomings could undermine its effectiveness. The mission also recommended moderating spending increases and the consideration of an expenditure review which could provide opportunities for safety net reform and more effective action on inclusive growth. The mission welcomed the authorities’ intent to conduct their third Public Expenditure and Financial Accountability (PEFA) assessment during 2018. In addition, reforms to modernize revenue administration and strengthen public financial management capacity ahead of oil production remain critical near-term priorities for the authorities, and are being supported by IMF Technical Assistance.

Productivity-enhancing reforms are needed to improve competitiveness, and facilitate inclusive growth. Infrastructure bottlenecks and high energy costs remain obstacles to growth. Meanwhile, notwithstanding significant upside benefits, the prospect of revenue from the oil sector could lead to real exchange rate appreciation, eroding competitiveness in some sectors. Therefore, regulatory and administrative measures should aim to reduce the relatively high costs of doing business in Guyana. The mission noted the small improvement in the World Bank’s Doing Business indicator that measures the Distance to Frontier of regulatory best practice. Accessing Guyana’s natural gas for power generation could provide a cleaner and more affordable energy alternative, meeting immediate needs while renewable energy initiatives are pursued. The reduction of economic and social disparities between the coast and the Hinterland remains a priority for the authorities. The mission welcomed the ongoing restructuring of the sugar sector, but underscored the importance of training displaced workers and providing an adequate safety net to contain the short-term economic and social costs.

Amid the slowdown in economic activity in 2017, the BoG’s accommodative monetary policy stance is appropriate. However, as the economic recovery strengthens, monetary policy should gradually revert to a neutral stance. Exchange rate flexibility should continue to help cushion external shocks.

The authorities continue to strengthen financial sector resilience. 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.

The IMF Executive Board is expected to discuss Guyana’s Article IV consultation in June 2018. The mission expresses its sincere thanks to the authorities and other Guyanese stakeholders for their warm hospitality, cooperation and candor.

IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: RAPHAEL ANSPACHPHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG

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08 May
By: Tanika Jones 0

Minister of Finance signs 2 year concession renewal with GGDMA and GWMO, ties concessions to output

Georgetown – President of the Guyana Women Miners Organisation (GWMO), Urica Primus and President of the Guyana Gold and Diamond Miners Association (GGDMA), Terrence Adams, today signed a 2 year concession renewal agreement with the Government of Guyana. This agreement boasted many firsts for the relationship between the two private sector bodies:

  1. It was the first time that the GWMO signed the agreement as an individual entity;
  2. For the first time, the agreement has been renewed for a two year period rather than annually, and
  3. The concessions granted are tied to various levels of declarations.

 

Other signatories to the agreement were Hon. Winston Jordan, Minister of Finance; Godfrey Statia, Commissioner General, Revenue Authority (GRA); Newell Dennison, Commissioner General, Guyana Geology and Mines Commission; and Dr. Mahender Sharma, Chief Executive Officer, Guyana Energy Agency. Also present at the signing ceremony was Hon. Raphael Trotman, Minister of Natural Resources.  

Minister Jordan in brief remarks pointed out that, “The agreement is the third that has been signed by Government but that it was more comprehensive and was accomplished through evidence-based negotiations.” He also said that it comes on the heels of other budgetary measures that were put in place as a mark of the Government’s unwavering support for the sector and appreciation for the invaluable contribution that miners make to the country’s economy. He appealed to the miners to always be cognisant of Government’s support and urged that they in turn ensure that declarations are made in the same spirit.

The Mining sector has benefited from significant interventions, since 2015, by way of tax concessions on machinery, equipment, fuel and vehicles for small and medium scale miners; a reduction in the Tributor’s Tax from 20% to 10% and a sliding scale percentage based on the price of gold, which replaced the 2% of gross proceeds. Additionally, more than $1 billion was allocated in the 2018 Budget for the upgrade of key roadways in the Hinterland, so as to provide easier travel and transportation access for miners and loggers, in particular, within hinterland communities.

The Ministry of Finance, in further efforts to provide support for the sector, has facilitated several consultations and collaborations between Government and stakeholders. These have resulted in a more timely resolution to challenges within the sector.

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