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Minister Singh Chairs CARICOM Council on Finance and Planning

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Progress Made on Key Longstanding Issues

Georgetown, Ministry of Finance, April 5, 2021:

Senior Finance Minister Dr. Ashni K. Singh last Thursday attended and chaired the Eighth Special Meeting of the CARICOM Council for Finance and Planning (COFAP). The meeting was held virtually in accordance with the decision of the 32nd Inter-Sessional meeting of the Conference of CARICOM Heads of Government held in February 2021, which examined the supporting macroeconomic environment for the CARICOM Single Market and Economy (CSME).

Thursday’s meeting involved Ministers of Finance exchanging views on joint advocacy positions that they may wish to adopt during the upcoming International Monetary Fund (IMF) – World Bank Spring Meetings 2021. The meeting also addressed and reached agreement on a number of longstanding issues related to the CSME, including the CARICOM Policies on Credit Reporting, Deposit Insurance, Development and Regulation of the Regional Securities Market, as well as the CARICOM Financial Services Agreement and the intra-CARICOM Double Taxation Agreement.

In his opening remarks at the meeting, Minister Singh pointed out that the meeting was taking place at a time when the Region was facing unprecedented economic challenges, resulting from the ongoing COVID-19 pandemic, which have brought into sharp focus the importance of speaking with a single unified voice on issues of shared interest at the upcoming IMF/World Bank Spring Meetings. He also highlighted the urgency with which progress is needed on many of the long outstanding issues that need to be addressed to advance the supportive architecture for the CSME, and urged that these matters be dealt with conclusively and in a timely manner.

The meeting subsequently saw significant progress made on many of these issues, and agreement was reached on the way forward with a number of the pending policies, while there was also consensus on the way forward with other items that require further discussion and consultation among Member States.

The meeting saw participation from several Prime Ministers, Finance Ministers, Central Bank Governors, and senior finance officials from around the region.

Finance Minister Outlines Plans to Develop Human Capital

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Georgetown, Ministry of Finance, April 5, 2021:

Senior Finance Minister Dr. Ashni K. Singh earlier this morning attended and addressed a Ministerial Conclave on Human Capital convened by the World Bank Group as part of the International
Monetary Fund and World Bank Group’s 2021 Spring Meetings which are currently being held virtually. The Conclave was held under the theme ‘Investing in Human Capital for a Green, Resilient and Inclusive Recovery’.

Minister Singh spoke on the topic of promoting economic opportunities while ensuring environmental and fiscal sustainability. His address focused on the country’s Low Carbon Development Strategy (LCDS) which is soon to be expanded and which will set out a comprehensive development agenda for the country along a low carbon trajectory. He also focused on the high priority being placed by the Government of Guyana on various initiatives to promote human capital development.

In his address, the Minister highlighted Guyana’s bright economic prospects as well as the country’s vulnerabilities and development challenges.

He stated that “Guyana is indeed rich in natural resources, including oil, minerals, and forests that cover 85 percent of our territory. Our economic prospects are currently very bright. Despite COVID-19 and domestic political issues which caused a sharp contraction in non-oil GDP in 2020, we were still the fastest growing economy in the world as a result of us starting to produce oil, and we will remain amongst the fastest growing economies in the next few years. But we also face extreme vulnerabilities to climate change, as well as significant development challenges. We are well aware of the magnitude of these challenges. They include avoiding the resource curse, promoting a strong and competitive non-oil economy, addressing our infrastructure gap, and improving human development outcomes.”

On the issue of environmental sustainability, Minister Singh highlighted the role of both the original LCDS as well as the soon to be expanded LCDS.

He stated that “Guyana’s commitment to low carbon or green growth is longstanding. In 2008, we published what we believe was the first low carbon development strategy for a developing country. The LCDS reflected that Guyana is at the intersection of many different aspects of the climate challenge. On the one hand, our low-lying coast means we are heavily impacted by climate change. For example, in 2005, floods caused economic damage equivalent to 60 percent of GDP. On the other hand, our forests make a very substantial contribution in the global fight against climate change. The LCDS paved the way for us to join with Norway in 2009 in the world’s third largest international forest partnership under which the climate services provided by our forests were remunerated for the first time – making available US$250 million of performance-based payment for climate services to finance climate-friendly investments. We are now preparing an expanded LCDS which will build on the original LCDS and outline a comprehensive low carbon development agenda for our country.”

Minister Singh also pointed out that the Government places the highest level of importance on investing in human capital development, and elaborated the Government’s emphasis on education. He explained that “despite the many competing calls on our finite fiscal resources, we are investing heavily in the social sector – education, health, etc. – as well as in facilitative infrastructure such as information and communications technology. For example, in education, we are investing heavily in early childhood education, universal primary and secondary education, improving access to and quality of tertiary education, strengthening technical and vocational education, improving learning outcomes at all levels, and ensuring lifelong learning – supported with the use of information and communication technology based on lessons learnt during COVID-19 – and all with the aim of improving production and productivity as well as individual and household wellbeing.”

He added that “on many of these initiatives we are collaborating with the Bank, and we expect the education sector to dominate our portfolio of projects with the Bank in the next programming cycle… this will be in keeping with our emphasis on human capital development both as an input to, and an outcome of, sustainable economic growth.” The Minister added that the Government of Guyana views human capital development “as both a critical prerequisite for, and a critical objective of, economic growth”.

This morning’s Conclave on Human Capital saw participation from the World Bank Group President David Malpass, other senior executives of the Bank, as well as several Ministers of Finance from around the world.

Finance Ministry warns businesses of stern action against those still illegally charging VAT

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Georgetown, Ministry of Finance, March 24, 2021:

Senior Minister in the Office of the President
with Responsibility for Finance Dr. Ashni Singh is sending a stern warning to businesses that should they continue to flout the laws and unscrupulously attach a 14 percent Value Added Tax (VAT) to items on which the VAT has been removed or has been reduced, they will face the full force of the law as this illegal practice is denying consumers the right to ultimately enjoy reduced prices on various commodities including construction materials.

The Minister is reminding the public that when the last 2021 Budget was passed in the National Assembly on March 4, 2021, it would have outlined a number of measures including the VAT zero- rating or reduction of VAT or duty previously charged on a number of commodities.

Consequently, Order Number 6 of 2021 of the Value Added Tax Act Cap.81:05 of the Laws of Guyana came into effect immediately for VAT zero-rating of certain construction materials namely stone imported for construction and housing from Caribbean Community (CARICOM) countries, locally produced pre-stressed concrete piles and locally fabricated mild steel beams for building construction and locally manufactured roofing and PVC products for building construction. Import Duty on Industrial Grade Cement was also reduced from 15 percent to 5 percent.

Additionally, the VAT zero-rate was also restored to basic food items and household necessities that were previously zero-rated up to May 2015 but switched to ‘standard-rate’ or ‘exempt’ over the past five years, e.g., basic wheaten flour, basic breads, oats, unflavoured cracker biscuits, cooking oil, locally produced bed sheets and pillowcases and toothbrushes.

Prior to this, an emergency Budget was also passed in Parliament on September 25, 2020. This Budget also stipulated the VAT zero rate or removal of VAT on other commodities including the overall removal of VAT on electricity and water. Therefore, since then, VAT would have also been removed from hinterland travel and cell phones, as well as building and construction materials.

The Senior Finance Minister recalled that all of these measures were intended to benefit consumers and ease the expense aligned to these previously burdensome tax measures and with their removal or reduction, the expectancy was that it would have ultimately allowed for the reduction in the cost of living of Guyanese generally.

It has come to my attention through various reports from members of the public that a number of hardware stores have since refused to comply and are still unscrupulously charging VAT on several items,” the Minister said.

Dr. Singh added that he is therefore warning such establishments that this illegality will not be tolerated. As such, he pointed out that he has already instructed the relevant agency-the Guyana Revenue Authority (GRA) to ensure that countrywide checks are made to enforce compliance.

The Senior Finance Minister then warned that the businesses found flouting the laws and continuing to deprive consumers and customers of these benefits will be dealt with according to Law.

Bank of Baroda designated as Mortgage Finance Company

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Finance Minister encourages Baroda to seek out further opportunities to expand

Georgetown, Ministry of Finance, March 17, 2021:

During a simple ceremony today at the Arthur Chung Conference Centre, the Bank of Baroda was designated as a Mortgage Finance Company which will allow the financial institution to also offer home loans to prospective borrowers as well as provide another choice to those considering applying for a loan to construct homes. The event formed yet another aspect of Government’s housing drive and signaled its intention to ensure that its manifesto promise of providing 50,000 house-lots and assistance in providing homes for Guyanese is fulfilled.

Speaking at the event, Minister of Housing and Water Collin Croal welcomed the bank on board as he also encouraged other financial institutions to join in the current development process while noting that investor confidence in the country is at an all-time high.

Minister Croal also spoke of the positive trickle-down effect investment in the sector would have on employment, the business and construction sectors.

Managing Director of the Bank of Baroda, Mr. Arun Kumar Gupta reflected on the Bank’s interest in participating in Government’s housing drive. He also noted that the bank has its historic presence in Guyana dating back to 1966.

Today is a special day for us after being in Guyana for the past 55 years….Bank of Baroda (Guyana) being registered as a Mortgage Finance Company, this is one of our greatest milestones,” Mr. Gupta stated.

While commending Guyana’s Government on their promise of distributing 50,000 house lots within the next five years, the Managing Director said the main reason the Bank joined in the drive was to assist in increasing access to mortgage financing for prospective home owners.

This will not only benefit home owners, but it will also boost the construction sector. Bank of Baroda looks forward to working hand in hand with the Government of Guyana to make its people comfortable homeowners and to continue with the development of the housing sector,” he added.

Meanwhile, Indian High Commissioner to Guyana, His Excellency Dr. K.J. Srinivasa recalled that the Bank of Baroda had recognized Guyana becoming a growth and development story and that India decided that it could not miss the opportunity of playing a role in this process.

The High Commissioner posited that the countries would continue to work on various bilateral projects as he listed a wide range of projects for which his country is working closely with Guyana on implementing. Only recently India donated 80,000 Covid-19 vaccines to this country.

In the meantime, Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh said the designation of the bank as a Mortgage Finance Company proved to be another important step aimed at improving access to financing by Guyanese households for the purposes of acquiring and/ or constructing their own homes.

These various elements amongst others …form the parts of a comprehensive policy agenda articulated by this People’s Progressive Party/Civic Government with the objective of ensuring that Guyanese families can afford their own homes, can afford to have access to a plot of land, can afford to access the financing for the purposes of constructing their home and can therefore construct and occupy their own home. …we remain convinced that the acquisition of one’s own home is perhaps the single biggest achievement for any family,” the Senior Finance Minister noted.

Minister Singh expressed gratitude to the Bank and to the Indian Government for ensuring that it played a role in Guyana’s development process which will be moving ahead at a rapid pace.

I am pleased that High Commissioner took the time to also speak of the plans that are being rolled out in India with a similar objective to promote home ownership because this serves to demonstrate the universality of recognition given to how important it is for a family to own their own home. This is not something that we whimsically came up with. This is not something that we chose to do by chance …this is a carefully studied position,” the Senior Finance Minister explained as he reminded that there was a time when communities like Eccles, Diamond, Parfait Harmonie, Good Hope, Onderneeming…. ‘did not exist’.

Minister Singh concluded that those communities were a testimony to what can be achieved with ‘the right Government policies along with effort at the personal and individual or household level’ while adding that the financial institutions have played an important part as well.

Alluding to the housing drive events most recently at which Bank of Baroda officials were present, the Senior Finance Minister said, “we are pleased to know that the Bank of Baroda banner was present at those events….the Bank of Baroda has a special place in the Guyanese economic and financial landscape….it came to Guyana before Guyana gained independence and the bank stayed in Guyana throughout all of those years.”

Dr. Singh summed up his remarks by encouraging the bank to ensure that it continued to seek more opportunities to expand and participate in the vast development course being experienced currently in the country.

The Bank of Baroda’s designation as an approved Mortgage Finance Company was done in accordance with Section 15 of the Income Tax Act, Cap. 81:01 of the Laws of Guyana.

Approval granted to NBS by Senior Finance Minister for increase in mortgage ceiling

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Persons can now borrow up to $15M

NBS also announces decreased interest rates

Georgetown, Ministry of Finance, March 10, 2021:

As part of the implementation process of some of the Budget 2021 measures, Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh handed over the approval for an increased mortgage ceiling to Chairman of the New Building Society Limited (NBS), Floyd McDonald. With this approval, the mortgage ceiling for the financial institution now moves to $15 Million up from $12 Million, allowing for persons to acquire mortgages up to this higher amount.

The handing over took place during a simple ceremony in the eastern conference room of the Arthur Chung Conference room today in the presence of the media, other officials of the NBS and both Senior and Junior Ministers of the Ministry of Housing and Water.

President Irfaan Ali’s Government has repeated and reiterated, since our assumption of office, our firm conviction that home ownership is perhaps the single most important achievement for almost every family, and that acquiring one’s own home will perhaps for many of us be the single most important investment we would make in our entire lives,” Minister Singh noted.

Minister Singh reiterated, “Our commitment to promoting and facilitating home ownership is because we recognize how important home ownership is to the individual family, but we also recognize how important home ownership and home construction and construction activities are to the economy as a whole…the generation and creation of jobs, the generation of income …the
improvement of livelihoods.”

The Senior Finance Minister, while lauding the NBS for the important part they play in the facilitation of home loans, reminded that the Society has come a long way in terms of their loan offers to the public, recalling that in 1991, NBS granted only 125 new loans while by 2014 the Society had granted 896 new loans, having achieved an all-time high of 1,234 in 2012. Unfortunately, over the past five years, the number of new loans granted annually fell sharply to 400 by 2020. He added that in 1992, the NBS was offering loans at a rate of 18 percent per annum reflecting the state of the economy and the financial sector at the time, but that since then favourable government policies had facilitated a steady reduction of interest rates to the point where today the NBS is able to offer its low income loans at 4 percent.

Meanwhile, Minister of Housing and Water Collin Croal said that the 2021 Budget measures are expected to significantly boost the housing sector.

This signals from Government’s perspective our deep underlying intention of ensuring we bring greater relief to our home owners, potential borrowers but also… walking the walk,” Minister Croal added.

He noted that more persons would be able to access financing for home loans as well as be able to afford to build their homes with more choices available in terms of types of homes to be constructed as he alluded to the other budgetary measures that would assist in this regard, especially the reduction of duty and zero-rating of specific construction material. He posited that with the increase in the loan ceiling, it will not only allow for Government to achieve its overall goal of distributing 50,000 house lots but also encourage home ownership.

Also speaking at the ceremony was Chairman of the NBS Mr. Floyd McDonald who expressed NBS’ pleasure at receiving the approval since as part of its corporate social responsibility, the NBS could now offer further reduced interest rates to borrowers. In this vein, the Chairman announced that NBS will now offer loans up to $6M at a rate of 4 percent per annum reduced from 4.25 %. As regards to loans between $6M to $12M the interest rate will now be 5.95% down from 6.15 and 6.75% while loans above $12M up to $15 M will be offered at a rate of 6.25% per annum.

The Society is indeed appreciative of the improved ceiling approved by Government. We know that our collective efforts will redound to an improved standard of living for Guyanese,” the NBS Chairman added.

On handing over the approval to the NBS Chairman, Minister Singh congratulated NBS on its decision to reduce interest rates for prospective borrowers as well as the remarkable role played by NBS over the years to facilitate home ownership countrywide.