ON August 2, 2020, the PPP/C Administration regained power to serve the people of Guyana. The new government did the impossible and made history in preparing an emergency budget in just under 29 days amid the prolonged transitioning from the previous administration, while battling a global pandemic which our country was unprepared to handle.

Many Guyanese have been greatly affected by the pandemic, which also had an impact on the economy. Citizens were faced with challenges such as the loss of jobs resulting in a decline of their spending power which affected the business and banking sectors immensely. Hundreds if not thousands of households were unable to provide the basic necessities needed to survive on a daily basis. The interior regions of the country suffered the most of all since they are isolated from the city and had limited supplies of goods to survive upon as the lockdown was enforced. The entire economy was basically at a standstill.

Under the previous administration, limited relief was offered to the country. As such, it was left upon the private sector to come to the rescue of the country by providing food supplies, along with cleaning materials for the less fortunate homes.

On September 25, 2020, an emergency budget to the tune of $330B was passed by the National Assembly. Of this $330B, $4.5B was set aside to provide relief to all households which amounted to $25,000 per family. Guyana has an estimated population of 750,000. If on average there are 500 households in one village that is $12.5M that will be injected back into the village economy through spending on consumption goods and services. Guyana has many villages. If we estimate that there are about 200 well populated villages, then that will amount to $2.5B.

By providing cash grants to these families, they, in turn, will go to the stores to stock up their homes with essentials which would encourage businesses to reopen and rehire staff as demand and supply increase. This results in rising spending power along with increased domestic incomes as jobs are recreated and families are able to earn again to invest into the economy in getting their needs, along with paying bills and settling outstanding bank loans and credit terms.

The emergency budget also provided many tax reliefs to the citizens on items which were taxed by the previous government. These include all medical supplies, hinterland travel and cellphones, building and construction materials, exports, as well as machines and equipment (duties have also been removed, though tax concessions have been granted to the mining, agricultural and forestry sectors).

The corporate tax on private education and healthcare has also been removed and the ban on importing vehicles older than eight years (introduced by the former government in 2016) has also been lifted. Many can now better benefit from the services provided privately by schools and hospitals that the government is unable to provide on a larger scale. This will also increase spending as persons are better able to afford these services.
The government has also made it easier for persons to be able to afford themselves a vehicle. The banks and dealerships will be the top beneficiaries of this relief, as interest will be earned and more vehicles will be sold, respectively.

The Ministry of Public Works was allocated $34.4B to improve infrastructure such as working on the Ogle Bypass Road and the East Coast Railway Embankment Road to relieve the heavy traffic along the East Bank areas. This will help to facilitate all the new vehicles also joining the roads.
The Health Ministry received $51.7B, of which $14.3B was set aside to procure drugs and medical supplies to provide better health care for the people of Guyana and to help combat the deadly virus that we all currently live with.

Also, allocated to the Housing Ministry was $3B. This will be used to open new housing communities to provide thousands of house lots across the country. With the removal of taxes on construction and building materials, this sector will soon be on a booming trajectory.
With taxes being removed from all exports, this will help the manufacturing and agricultural industries to take advantage of expanding their markets regionally and internationally, thereby increasing the country’s GDP and earning the country foreign exchange.

In conclusion, it can be seen that the emergency budget and COVID-19 relief cash grant have been set with the aim of revitalising the economy. The COVID-19 cash grant will help the country greatly in having the businesses up and running again and having jobs recreated to contribute back to the economy. Based on this analysis, one can agree that the government has put forward a realistic and achievable approach in handling the situation in turning the economy around in 2020, despite the rough landing on August 2, 2020 and formidable challenges in a pandemic environment.

With such a foundation having been set, the economy is set to take off in 2021 as we remain on the edge of our seats for the 2021 budget which, one can anticipate, will position Guyana for resilient and vibrant growth and development – especially with the high steam of foreign investments to the tune of billions of U.S. dollars flowing in. Investors’ confidence is on the rise, evidently and demonstrably so. Guyana has a bright future over the next decade!