Highlights

Georgetown, Ministry of Finance, September 3, 2022: According to the Ministry of Finance’s recently released Mid-Year Report 2022, Guyana recorded an overall real Gross Domestic Product (GDP) growth of 36.4 percent in the first half of the year, with the non-oil economy growing by 8.3 percent, reflecting Government’s supportive policy stance. The outlook for the second half continues to be favourable. For the full year, real GDP growth in 2022 is now projected at 56 percent overall, and non-oil GDP growth at 9.6 percent, maintaining Guyana’s position of global leader in economic growth.    

“Led by President Ali and fueled by the rapid economic growth, we have embarked on a period of rapid transformation, and our Government has laid out a masterplan for the rapid development and transformation of Guyana. More importantly, we have demonstrated the capacity and commitment to working assiduously to make this vision a reality so that benefits can redound to citizens in the shortest possible time,” Dr. Singh had indicated.

Senior Finance Minister Dr. Ashni Singh had noted that upon the assumption to office by the President Irfaan Ali-led Government, the administration recognised the importance of a strong, diversified economic base and, as such, even in the early days of oil production, placed the highest level of importance on a resilient non-oil economy. The aim, therefore, was to modernise the economy’s traditional pillars and catalyze ‘a rapidly growing and highly competitive non-oil economy. This is evident in the nation’s non-oil economic growth at the end of the first half. The continued growth projected for 2022 builds on the 4.6 percent growth recorded last year.

The key macroeconomic highlights are as follows:

SECTORAL PERFORMANCE

Agriculture, Forestry and Fishing 

The agriculture, forestry and fishing sector is estimated to have expanded by 10.9 percent in the first six months of 2022, driven by higher output from the other crops, forestry and livestock, notwithstanding weaker performances in the sugar, rice and fishing industries. The sector is now expected to grow by 11.9 percent.

Extractive Industries

The mining and quarrying sector is estimated to have grown by 64.6 percent in the first half of the year, with a revised 2022 forecast of 99.9 percent driven by growth in the petroleum and other mining industries.

The petroleum sector expanded by an estimated 73.5 percent, with 34.6 million barrels of oil produced in the first half of the year. This was the result of the commencement of oil production at the Liza Unity FPSO in February. Also on the upside, the bauxite industry is estimated to have grown by 31.9 percent, and the other mining and quarrying (sand, stone, diamonds, manganese) industries by 36.3 percent, in the first half of 2022.

Manufacturing, Services and Construction

The service industries are estimated to have expanded by 7.6 percent, driven largely by increases in wholesale and retail trade, and transport and storage. The overall 2022 growth rate for the services sector is now forecasted to be 6.3 percent. While the manufacturing sector is estimated to have contracted by 11.4 percent in the first half of the year, it is now projected to grow by 7.5 percent for 2022.

The construction sector is estimated to have grown by a strong 20.4 percent in the first half of 2022, reflecting intensified activity in both the public and private sector.

BALANCE OF PAYMENTS

The overall balance of payments recorded a US$100 million deficit at the end of the first half of 2022, reflecting primarily higher cost of fuel and capital imports.

With respect to trade, export receipts expanded by US$2,330.2 million, outweighing the US$506.6 million increase in imports. Notably, these receipts grew largely as a result of higher export earnings from oil, while, at the same time, non-oil export earnings increased marginally by 2 percent.

MONETARY DEVELOPMENTS

Consistent with the expansion in the non-oil productive sector, credit to the private sector rose by 7.5 percent to $308.3 billion.

This primarily reflects expanding credit to the services sector, manufacturing sector, for real estate mortgage loans, and to households. These increased by 8.2 percent, 26.7 percent, 3.2 percent, and 5.1 percent, to $110.3 billion, $34.2 billion, $98.6 billion, and $38.5 billion, respectively.

PRICES

The Russian invasion of Ukraine has exacerbated supply disruptions to commodity markets, resulting in surging commodity prices, the effects of which are being felt globally. Guyana has not been spared. Consumer prices were 4.9 percent higher than levels recorded at the end of 2021 and this was due largely to higher food and energy prices.

Recognising the consequences of these inflationary pressures, Government implemented a suite of measures to ease the burden on the population. The excise tax on petroleum was reduced from 20 percent to 10 percent at the time of Budget 2022 presentation, and reduced even further from 10 percent to zero in March. Additionally, Government also utilised $1 billion for the purchase and distribution of fertilizer to farmers across the country, $800 million to provide cash grants to households in hinterland and riverain communities, among a number of other interventions.

Given the existing geopolitical tensions globally, inflation is now projected to be 5.8 percent for 2022.

NATURAL RESOURCE FUND

During the first six months of the year, Government had five lifts of profit oil from the two producing FPSOs. Further, Government received US$307 million in revenue from their share of profit oil, along with royalties to the tune of US$37.1 million, in the first half. The cumulative balance on the NRF, inclusive of interest income, was US$753.3 million, after withdrawing US$200 million in May.

Government anticipates 13 lifts of profit oil for 2022, and subject to the evolution of world market oil prices, now projects US$1.1 billion from the sale of the country’s share of profit oil, and US$147.7 million in royalties.

In just over 24 months of this Government’s current term in office, implemented policies and programmes have already laid a solid foundation for realising the commitments made in the 2020 Manifesto, on the basis of which this Government was elected to office. Government remains steadfast in its efforts to continue to grow the economy and improve the wellbeing of all Guyanese, thereby building a modern and prosperous One Guyana.

To view the entire Mid-Year Report 2022, click here: https://finance.gov.gy/wp-content/uploads/2022/09/Mid-Year-Report-2022-FINAL-compressed.pdf

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.

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.”