THE Guyana Manufacturing and Services Association (GMSA) has complained bitterly about the strain the imposition of Value-Added Tax (VAT) on electricity continues to place on the manufacturing sector.

The issue was raised by GMSA President, Shyam Nokta during the organisation’s annual dinner and awards ceremony Thursday evening.

Said he: “One of the major challenges to manufacturing is energy; the high cost coupled with issues of stability and reliability has pushed many manufacturers off the grid and to self-generate.”

Yet for all this, he said, the economy continues to do reasonably well, since according to the mid-year financial report, it grew by 4.5 per cent during the first half of 2018, compared to 2.5% for the corresponding period in 2017.

“This growth,” Nokta said, “was led by continued efforts from the private sector, including our members. We should commend those active in the forestry sector, which saw an increase by 18.1%, primarily driven by the production of logs and roundwood.”

Underscoring that infrastructure and access proved to be key challenges to the sector in the first half of the year, Nokta said that the extended rainy season, coupled with the lack of maintenance rendered many key roads to the interior virtually impassable.

SEVERE CHALLENGES
“This led to severe challenges in getting goods to hinterland locations overland, and also affected the forestry and mining sectors in a major way,” he said, adding:

“The recent proposed increase in tolls for the Berbice River Bridge has raised concerns in the manufacturing sector, since it would certainly result in increased commodity prices.
“Perhaps even more concerning is the action by the government to take over control of the bridge’s operations, albeit temporarily. If as a country we are going to promote Public-Private Partnerships for major projects, there must be an alternate way of doing things, which includes finding workable solutions.”

He said the GMSA is hoping, however, that Budget 2019 will be crafted in a such a way as to help the sector overcome its many challenges, and stimulate the economy to put the country back on track to a five per cent or more growth.
Noting that the GMSA has put forward a menu of some 50 measures for Budget 2019, Nokta said they cover broad areas such as Taxation, Access to Finance, Public Procurement, Energy, Standards and Regulations among others.

Sector-specific measures were also proposed covering Forestry and Wood Products, Agro-processing, Construction and Engineering and Services.
“We believe these measures, if considered,” Nokta said, “can help to provide a much- needed stimulus for the manufacturing and services sector and ultimately a stronger, economically diversified Guyana.”

OTHER INITIATIVES
Noting that there are a number of other initiatives the association has taken to support its members, as well as a number of national processes they are playing a key role in, Nokta said:

“No doubt, these have helped to raise the profile of the GMSA; to spark renewed interest among existing members, and to encourage new members.
“I am pleased to say that in 2018 so far, we have welcomed 35 new members, bringing our total membership to 132 businesses, a first for the GMSA.”

He said that on the oil and gas front, Guyana continues to receive international attention, and there is the movement of investors looking for opportunities here. Said he: “This is good for business and good for Guyana. We need to benefit from those who have experience and expertise in oil and gas.”

But for all this, he said there are still concerns within the business community that in this new sector, local businesses could be vulnerable, or worse yet, not be part of the value chain in a meaningful way.
This has fuelled discussion on Local Content, with some advocating for legislation to ensure Guyanese businesses benefit.

“The GMSA shares the concerns that we need to have a strong local-content framework in place sooner than later, and with government playing its part in ensuring Local-Content Plans are implemented,” he said, adding:
“We also believe there is the need to adopt a systematic approach and not be too prescriptive too early.

“Even as we push to ensure there is a framework to facilitate mutually beneficial partnering and joint ventures between foreign and local businesses, we, as Guyanese businesses, also need to raise the bar in terms of our preparedness for this new sector.”

He said that in the same way the GMSA had fruitful engagements and working relationships with several important stakeholders in 2018, they want to do even better in the coming year. “We want to advance this further, while being hopeful that we can see wider cooperation and collaboration among all major stakeholders: Government, the opposition, private sector, labour and civil society,” he said, adding:

“We also want to advance mutually beneficial collaboration with our neigbouring countries. As members of the Single Market and Economy, it is only logical that we turn our eyes towards our sister CARICOM countries.”