–reflects 41.6% increase when compared to first half of 2020
–Go-Invest CEO says growth an indication of Guyana’s stable political, macroeconomic environment
FOREIGN interest in Guyana continues to increase rapidly, with investors not just exploring the available opportunities, but also taking the next step forward by injecting funds into the local economy, which, from January to June this year, attracted foreign direct investments valuing over US$1.3 billion (roughly G$273 billion).
The economic performance of the country was outlined by the Ministry of Finance in its Mid-Year Report, which was released recently.
Included in the ministry’s analysis was an aggregation of the foreign direct investments (FDIs) made locally.
According to the Organisation for Economic Cooperation and Development (OECD), foreign direct investment is a category of cross-border investment in which an investor resident in one economy establishes a lasting interest in, and a significant degree of influence over, an enterprise in another economy.
Based on the Ministry of Finance’s Mid-Year Report, the exact value of FDIs in the first half of this year was US$1,332,200,000. This was 41.6 per cent higher than the US$940 million recorded at the end of June 2020.
Those investments and other key sectoral performances added to the country’s positive outcome in the first half of this year. At the end of June, Guyana recorded real Gross Domestic Product (GDP) growth of 14.5 per cent, and a growth of 4.8 per cent in the non-oil economy.
Chief Executive Officer (CEO) of the Guyana Office for Investment (Go-Invest), Dr. Peter Ramsaroop, in an invited comment to the Sunday Chronicle, said: “Our GDP growth for 2021, and the projections for 2022 demonstrate to the nation and the world that we have a stable political and macroeconomic climate, a developing strong financial sector, our strategic location, and a productive workforce.”
The improved investment climate, in his view, is evidenced by the many agreements signed this year among authorities, the local private sector, and foreign investors.
According to Dr. Ramsaroop, within the period August 2020 to April 2021, approximately 25 projects were initiated, all of which have the potential to create 1,678 jobs when completed.
“The agency has, in spite of the COVID-19 restrictions, been able to facilitate significant investment from both local and foreign,” Dr. Ramsaroop had said.
Of the 25 projects which were initiated within the established period, 16 are local, six are FDIs, and three are joint ventures.
In speaking further about those projects, he said: “These projects have all started. Local investments presented the largest portion of this investment, and I am elated to make this point.”
Based on a breakdown of the local investments, four were in the agriculture sector; six in the service sector; two in light manufacturing; and one each in Information and Communication Technology (ICT), tourism, forestry, and energy.
Of the six FDI projects, three are service- related; two are in manufacturing; and one in agriculture. The joint ventures account for two in manufacturing, and one agriculture-related project.
Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh had said that Guyana would this year become one of the fastest-growing economies in terms of real GDP, and see rapid transformation in a number of sectors, especially since the government would make efforts to boost the non-oil economy as well.
“We’re anticipating a rapid expansion in the services sector, including transport and logistics, construction of infrastructure, including roads, bridges, office buildings in the private sector, etc, along with expansion in other services such as financial services, all of which will contribute to rapid expansion in real output,” Dr. Singh had said.
On Saturday, Dr. Ramsaroop said: “Our economic transformation, led by our President, [Dr. Irfaan Ali] demonstrates to investors that we are increasing competitiveness, and building global partnerships. We are committed to providing the investment framework in which all enterprises can develop and expand.
“I see us moving rapidly to manufacturing and agro-processing, as we bring our energy cost down, through an integrated energy plan.”
Having recorded a favourable economic performance in the first half of this year, Guyana is well on the path to ending the year on a positive note.
“The favourable economic performance at the end of the first half of 2021 in the non-oil economy bodes well for the upcoming second half of 2021 and beyond,” the Ministry of Finance related in its recent report.
It is expected that advances in key investments, in both the public and private sectors, will buttress the performance of the economy in the second half of 2021.
The outlook is, however, subject to significant risk, including the consequences of a protraction of the pandemic, as well as the fallout of a flood that is still to be brought fully under control.
Despite those vulnerabilities, the Ministry of Finance stated that continued efforts to implement preventative measures, including vaccines, are expected to support the realisation of continued growth and delivery of expanded services to all Guyanese, as the government continues to chart a path to recovery, economic dynamism and resilience.